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Summer training project REPORT

ON

“PERCEPTION OF INVESTORS TOWARDS INVESTING IN


UTI MUTUAL FUND”
AT

Submitted in partial fulfillment of bachelor’s degree in business


administration (banking and finance)

Of

SUBMITTED BY,
Priya Sharma
A50057914003

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DECLARATION
I Priya Sharma, hereby declare that this project report
entitled “perception of investors towards investing in
UTI mutual fund” submitted in the partial fulfillment of
degree bachelors of business administration (BBA -
banking&finance) of AMITY UNIVERSITY, HARYANA is based
on primary and secondary research .Used data founded &
collected by me in various books, websites under guidance of
my project guide MR. MANU GUPTA.

20th june2016 Priya Sharma


Student
ABS (Amity business school)

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ACKNOWLEGMENT
“Life is journey, it’s not the years in your life
that counts”
But life can’t be completed without the support of peoples.
Any accomplishment requires the efforts of many people and this work is not
different. I would like to take this opportunity to thanks UTI, MUTUAL
FUND for giving me an opportunity to be a part of their esteem organization
and enhance my knowledge by granting permission to do summer training
project.

I am very grateful to MR. MANU GUPTA (SENIOR MANAGER) AT


UTI AMC, LTD, GURGOAN for giving me his valuable time and
guidance. He helped me while providing necessary information and
suggestions

I am highly thankful to MR. GAURAV BALI (head of the


branch) who helped me gaining knowledge and also give me chance to
interact with agents and investors
Lastly a big thank to my parents who support me in every step.

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PREFACE
“GIVE A MAN A FISH, HE WILL EAT IT,

TRAIN A MAN TO FISH,HE WILL FEED HIS


FAMILY”
The above saying highlights the importance of practical knowledge. Practical
training is an important part of the theoretical studies. It is of an immense
important in the field of management. It offers the students to explore the
valuable treasure of experience and an exposure to real work culture followed
by the industries, companies and thereby helping the students to bridge gap
between the theories explained in the book and their practical
implementation.
Research project plays an important role in building future
and knowledge of an individual so that he/she better understand the words
in which he has to work in future. The theory greatly enhances our
knowledge and provides opportunity to blend theoretical with the practical
knowledge.
Hence to fulfill this requirement, I have completed my project on the
topic – “perception of investors towards investing in uti
mutual fund, at UTI AMC ltd, gurgoan”

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Table of content
Topics page no.

 CERTIFICATE OF COMPLETION…………………………………………………………………………. 02
 DECLARATION…………………………………………………………………………………………………………… 03
 ACKNOWLEGMENT………………………………………………………………………………………………….... 04
 PREFACE……………………………………………………………………………………………………………………………… 05

1. COMPANY OVERVIEW………………………………………………………………………………………………. (05-

 Mutual fund industry in India………………………………………………………………… 6-8


 evolution……………………………………………………………………………………………….8-12
 company profile………………………………………………………………………………………13-18
 systematic investment plan (SIP)……………………………………………………………….18-19
 products available…………………………………………………………………………………….20
 SWOT analysis………………………………………………………………………………………………

2. INTRODUCTION OF THE STUDY……………………………………………………………………………….

 Scope of the study…………………………………………………………………..


 Objective of the study………………………………………………………………………………
 Limitations of the study…………………………………………………………………………..

3. RESEARCH METHODOLOGY………………………………………………………………………………………

 Introduction………………………………………………………………..
 Steps involved in research…………………………………………………………………………
 Research design………………………………………………………………………………………
 Type of research………………………………………………………………………………………

4. ANALYSIS & INTERPRETATION………………………………………………………………………………

 Data analysis…………………………………………………………………………………………

5. RESULTS & FINDINGS…………………………………………………………………………………………………

6. RECOMMONDATIONS…………………………………………………………………………………………………..

7. CONCLUSIon…………………………………………………………………………………………………………………

8. BIBLIOGRAPHY……………………………………………………………………………………………………………….

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CHAPTER: 1
COMPANY OVERVIEW
 MUTUAL FUND INDUSTRY IN INDIA:
The origin of mutual fund industry in India is with the introduction of the concept of
mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated
from the year 1987 when non-UTI players entered the industry. In the past decade,
Indian mutual fund industry had seen a dramatic improvement, both qualities wise as
well as quantity wise. Before, the monopoly of the market had seen an ending phase,
the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the
fund family rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it reached
the height of 1,540 bn

Putting the AUM of the Indian Mutual Funds Industry into comparison, the
total of it is less than the deposits of SBI alone, constitute less than 11% of the total
deposits held by the Indian banking industry.

The mutual fund industry is a lot like the film star of the finance business.
Though it is perhaps the smallest segment of the industry, it is also the most glamorous
– in that it is a young industry where there are changes in the rules of the game every
day, and there are constant shifts and upheavals. The mutual fund is structure around
a fairly simple concept, the mitigation of risk through the spreading of investments

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across multiple entities, this is achieved by the pooling of a number of small
investments into a large bucket. Yet it has been the subject of perhaps the most
elaborate and prolonged regulatory effort in the history of the country.

The main reason of its poor growth is that the mutual fund industry in India is new
in the country. Large sections of Indian investors are yet to be intellectuated with the
concept. Hence, it is the prime responsibility of all mutual fund companies, to market
the product correctly abreast of selling.

Mutual funds are an excellent way to invest in stocks, bonds and other securities.
They are a good choice of investment because:

 They are managed by professional money managers, so most of the investment


research is done for you. (Most investors don’t have the time or know-how to do
all the necessary research.)
 You diversify your investment risk by owning shares in a mutual fund, instead
of buying individual stocks or bonds directly.
 Transaction costs are often lower than what you would pay if you invested in
individual securities (the mutual fund buys and sells large amounts of securities
at a time).

For those who are not adept at understanding the stock market, the task of

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generating superior returns at similar levels of risk is arduous to say the least. This
is where Mutual Funds come into picture. Mutual Funds are essentially investment
vehicles where people with similar investment objective come together to pool their
money and then invest accordingly. Each unit of any scheme represents the proportion
of pool owned by the unit holder (investor). Appreciation or reduction in value of
investments is reflected in net asset value (NAV) of the concerned scheme, which is
declared by the fund from time to time. Mutual fund schemes are managed by
respective Asset Management Companies (AMC). Different business groups/ financial
institutions/ banks have sponsored these AMCs, either alone or in collaboration with
reputed international firms. Several international funds like Alliance and Templeton
are also operating independently in India. Many more international Mutual Fund
giants are expected to come into Indian markets in the near future.

EVOLUTION
The mutual fund industry in India started in 1963 with the formation of Unit trust of
India (UTI),at the initiative of government of India and Reserve bank of India RBI) .
The formation of UTI marked by the evolution of the Indian mutual fund
industry . The primary objective at that time was to attract the small investors and it
made possible through the collective efforts of the government of India and reserve
bank of India.

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The history of mutual fund industry in India can be better understood divided into
following five phases:

Phase :1 (1964-1987) – establishment and growth of

unit trust of India (UTI),

UTI (unit trust of India) was established on 1963 by an act of parliament .it was set
up by the reserve bank of India and functioned under the regulatory and
administrative control of RBI .In 1978 UTI was de-linked from the RBI and the
industrial development bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by UTI was unit
scheme 1964. At the end of 1988 UTI had RS 6,700 crores of assets under
management.UTI enjoyed complete monopoly when it was established .it was setup by
the reserve bank of India. UTI launched more innovative schemes in 1970’s and 1980’s
to suits the need s of different investors. It launched its ULIP scheme in 1971, six
more schemes between 1981-1984,children’s gift first equity growth fund and India
fund ( India ‘s first offshore fund ) in 1986 , master share (India’s first equity
diversified scheme) in 1987, and monthly income schemes (offering assured returns)
during 1990’s. By the end of 1987, UTI’s assets under management grew ten times to
Rs 6700 cr

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Phase :2 (1987-1993) – entry of public sector funds,

1987 marked the entry of non-UTI public sector mutual fund funds set up by public
sector banks and life insurance Corporation of India (LIC) and general Insurance
Corporation of India (GIC). SBI mutual fund was the first non-UTI mutual fund
established in June 1987 followed by canara bank mutual fund (dec 87). Punjab
national bank mutual fund (Aug 89). Indian bank mutual fund (Nov 89). Bank of
India (Jun 90). Bank of Baroda mutual fund (Oct 92) . LIC establishment its mutual
fund in June 1989 while GIC had set up its mutual fund in December 1990.At the end
of 1993, the mutual fund industry had assets under management of Rs 47,004cr.the
Indian mutual fund industry witnessed a number of public sector players entering
.however, UTI remained to be the leader with about 80% market share.

Phase :3 (1993-1996) - Emergence of private sector

funds,

With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice of families. Also, 1993 was
the year in which the first mutual fund regulations come into being ,under which all
mutual funds, except UTI were registered and governed. The erstwhile Kothari pioneer
(now merged with Franklin Templeton) was the first private sector mutual fund
registered in July 1993.

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The 1993 SEBI (Mutual fund) regulations were substituted by a more comprehensive
and revised mutual funds in 1996. The industry now functions under the SEBI
(mutual fund) regulations 1996. The permission given to private sector funds including
foreign fund management companies (most of them entering through joint ventures
with Indian promoters) to enter the mutual fund industry in 1993, provided a wide
range of choices to investors and more competition in the industry. Private funds
introduced innovative products, investment techniques and investor-servicing
technology. By 1994-1995, about 11 private sector funds had launched their schemes
.UTI with Rs 44,541cr of assets under management was away ahead of other mutual
funds.

Phase :4 (1996-2004) – growth and SEBI regulation,

The mutual fund industry witnessed robust growth and stricter regulation from the
SEBI after the year 1996. The mobilization of funds and the number of players
operating in the industry reached new heights as investors started showing more
interests in mutual funds. Investors interest were safeguard by SEBI and the
government offered tax benefits to the investors in order to encourage them. SEBI
(mutual funds) regulations, 1996 were introduced by SEBI that set uniform standards
for all mutual funds in India..The union budget in 1999 exempted all divided incomes
in the hands of investors from income tax

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Various investor awareness programmers’ were launched during this phase. Both by
SEBI and AMFI, with an objective to educate investors and make them informed
about the mutual fund industry.

In February 2003, the UTI Act was repealed and UTI was stripped of its special legal
status as a trust formed by an Act of parliament. The primary objective behind this was
to bring all mutual fund players on the same level.

UTI was re-organized into two parts:

1. The specified undertaking,


2. The UTI mutual fund

Phase :5 (2004 onwards..) – Growth & consolidation,

The industry has witnessed several mergers and acquisition recently, examples of which
are acquisition of schemes of alliance mutual fund Birla sun life, sun F&C mutual
fund and PNB mutual fund by principal mutual fund. Simultaneously, more
international mutual fund players have entered India like fidelity, Franklin Templeton
mutual fund etc. there were 29 funds as at the end of March 2006. This is a continuing
phase of growth of the industry through consolidation and entry of new international
and private sector players.

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Indian mutual fund industry reached Rs1, 50,537cr by March 2004. It is estimated
that by 2010 March end, the total assets of all scheduled commercial banks should be
Rs 40, 90,000 cr. The annual composite rate of growth is expected 13.4% during the
rest of the decade. The last 5 yrs there is an annual growth rate of 9% . According to
the current growth rate, by year 2010, mutual fund India assets will be double.

COMPANY PROFILE

UTI mutual fund:

UTI AMC is a company incorporated under companies act 1956. In UTI AMC the
investment agreement is executed between UTI trustee company ltd and UTI AMC on
December 9, 2002 UTI AMC was registered by SEBI to act as assets management
company for UTI mutual fund vide its letter of January 2003.

The paid up capital of UTI AMC has been subscribed equally by four sponsors: state
bank of India, life insurance Corporation of India, bank of Baroda and Punjab
national bank UTI AMC,

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Apart from managing the schemes of UTI mutual fund, also manages the schemes
transferred/ migrated from the erstwhile unit trust of India. In Accordance with the
provisions of the investment management agreement, the trust deed and the SEBI
(mutual fund) regulations.

HISTORY:
Unit trust of India (UTI) was established on 1963 by an act of parliament. it was set
up by reserve bank of India and functioned under the regulatory and administrative
control of reserve bank of India . In 1978, UTI was de-linked from the RBI and the
industrial development bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by UTI was unit
scheme 1964. At the end of 1988 UTI had Rs. 6700 cr, of assets under management.

CATEGORY OF MUTUAL FUNDS SCHEMES OF UTI:

 EQUITY FUNDS CATEGORY-

I. Diversified funds
II. Specialty/ theme based funds

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III. Sector funds
IV. Tax planning funds
V. Arbitrage fund

 INDEX FUND CATEGORY;

I. pure index fund

 BALANCED FUNDS CATEGORY:

I. Pure balanced funds


II. Segment focused fund
III. Monthly income schemes

 INCOME FUND CATEGORY:

I. Segment focused funds

 LIQUID FUNDS CATEGORY

VISSION:

To be most preferred mutual fund.

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MISSION IS TO MAKE UTI MUTUAL FUND:

 The largest and most efficient money manager with global presence.
 The most trusted brand, admired by all stakeholders.
 The best in class customer service provider.
 The most innovative and best wealth creator.
 A socially responsible organization known for best corporate governance.

SPONSORS OF THE COMPANY:

 State bank of India.

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 Life insurance corporation of India

 Bank of Baroda

 Punjab national bank

Subsidiaries:

UTI venture funds;

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UTI International ltd.

Uti mutual fund is one of the largest mutual fund in India, presently
managing AUM .UTI Mutual fund is promoted by the five of the sponsors
via, state bank of India (SBI), life insurance corporation of India (LIC) ,
bank of Baroda, Punjab national bank (PNB) and T.rome price with each of
them presently holding a stake of 18.5% in the paid up capital of UTI AMC
and T.rome price is 26%.

Mutual funds are the easiest and least stressful way to invest in the stock
market.

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SYSTEMATIC INVESTMENT PLAN (SIP) ;
SIP ( systematic investment plan) is a way of investing specifically designed for those
who are interested in building wealth over a long-term and plan out a better future for
themselves who want to invest for long time period. It is useful for those who want to
get their investments going, but don't have a large sum of money to invest. SIP is an
investment option that is presently available only with mutual funds. The other
investment option comparable to SIPs is the recurring deposit schemes from Post office
and banks. Basically, under an SIP option an investor commits making a regular
(monthly) investment in a particular mutual fund/deposit. Investing in SIPs is also
known as Rupee cost averaging. The advantage of rupee cost averaging is that the Net
asset value (NAV) is averaged out, as the investor will be entering the fund at
different NAVs, which may be higher or lower depending on the market condition. An
investor who is not having a lump-sum amount to invest and also does not want to
take much risk on his investment should always select a ‘Systematic Investment Plan’
option. This will enable him to invest regularly i.e. improve investing discipline. Also,
the investor stands to benefit from rupee cost averaging. SIP is a good Habit. SIP is a
smart way to create wealth. It doesn’t demand lump sum investments. Just a little,
every month will do.

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PRODUCTS AVAILABLE

A. EQUITY FUNDS CATEGORY: inception date:

 Diversified funds -:

 UTI master share unit scheme…………………….


 UTI equity fund ………………………………..
 UTI top 100 funds………………………………
 UTI mid cap fund……………………………….

 Specialty/theme based fund-:

 UTI dividend yield fund …………………………


 UTI opportunities fund…………………………..
 UTI blue chip flexi cap fund………………………
 UTI MNC fund………………………………….

 UTI wealth builder fund ser.-ii……………………

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 UTI Mid cap fund………………………………..
 UTI Indian lifestyle fund…………………………
 UTI Infrastructure fund …………………………

 Sector funds-:

 UTI banking sector fund ……………………………


 UTI pharma & healthcare fund………………………

 UTI transportation & logistics funds…………………

 Tax planning funds-:

 UTI Long term equity fund(tax savings)……………….


 UTI MEPUS (not open for sale )……………………...
 UTI long term advantages fund – ser I (not open for sale )..
 UTI long term advantage fund - ser II ( not open for sale )..

 Arbitrage fund -:

 UTI spread fund……………………………………..

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B.INDEX FUNDS CATEGORY

 Pure index funds

 UTI Nifty index fund………………………………....

C.BALANCED FUNDS CATEGORY

 Pure balanced funds-:

 UTI Balanced fund……………………………………

 Segment focused funds -:

 UTI Unit linked insurance plan……………………….


 UTI charitable & religious trusts & registered societies….
 UTI children’s career balanced plan…………………….
 UTI retirement benefits pension funds………………….
 UTI mahila unit scheme……………………………….
 UTI CCP advantages fund…………………………….

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 Monthly income scheme -:

 UTI monthly income scheme…………………………..


 UTI MIS advantage plan…………………………….

D. INCOME FUNDS CATEGORY

 Segment focused funds -:

 UTI bond fund……………………………………….


 UTI short term income fund…………………………...
 UTI Dynamic bond fund……………………………...
 UTI floating rate fund………………………………….
 UTI treasury advantage fund……………………………
 UTI gilt advantages fund –LTP…………………………
 UTI G-sec fund…………………………………………
 UTI income opportunities fund…………………………..
 UTI Banking and PSU debt fund………………………..

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 UTI Medium term fund………………………………

E. LIQUID FUNDS CATEGORY

 UTI Money market fund……………………………..

 UTI liquid cash plan………………………………….

S.W.O.T ANALYSE

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INTRODUCTION OF STUDY

 Concept
Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The flow chart below describes broadly the working of a mutual
fund:

Mutual Fund Operation Flow Chart

Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them.

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SCOPE OF THE STUDY
The research involves a general study related to the perception of investors
towards investing in UTI Mutual fund. The research would reveal results regarding
the percption of various investors about UTI mutual funds and thus in turn helps the
organization to identify the attitude of various investors and to improve the marketing
of mutual funds.

The study has helped to gain real time experience by interacting with the
investors and has helped to analyze “the perception of the investors towards UTI
Mutual Funds”. The study has been done with a motive to change the attitude and
perception of the investors and help them gain more knowledge towards investing in
mutual funds.

The main aim for doing this study is to get some practical knowledge and experience
about mutual funds, schemes and their investment strategy.

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OBJECTIVE OF THE SYUDY

PRIMARY OBJECTIVES:

 To know the perception of investors towards investing in UTI Mutual fund


 To enhance our knowledge about mutual fund.
 To measure the satisfaction level of customers regarding mutual fund.
 To measure the awareness of different services of UTI mutual fund in investors.
 To find out reason, why choosing UTI mutual fund for investment purpose.

SECONDARY OBJECTIVES:

 To know customers perception about different investment instruments which are


available for them in market.
 To know the investors priority level between different criteria of investment like
safety level, returns, liquidity, tax benefits and maturity of investments
 To compare various investment options with respect to growth, returns, risk etc.
 To know various assets classes which are available for investors in India.

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LIMITATIONS TO STUDY
 The project done in UTI Mutual funds in gurgoan and to the outside investors of
uti mutual fund.
 As the survey was pertaining to investment perception of investors, biased
information may restrict validity of inference possible.
 The study was constrained by limitations of time.
 The raw data was collected with the help of structured questionnaire technique.
Therefore study is bounded by the limitation of this technique.
 Some of the investors don’t show any response in filling up the questionnaires.
 Project is totally based on practical techniques

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RESEARCH METHODOLOGY
Research is an original contribution to the existing stock of knowledge making for its
advancement. It is the pursuit of truth with the help of study, observation, comparison
and experiment. In short, the search for knowledge through objective and systematic
method of finding solution to a problem is research.
A research method refers to the methods, which researchers use in performing research
operations. Research Methodology is a way to systematically solve the research
problem. By research methodology not only the research methods are considered but also
the logic behind the methods used in the context of the research study and explanations
are given on why a particular technique is used.

RESEARCH DESIGN :
The research design that is adopted in this study is descriptive design. Descriptive
research is used to obtain information concerning the current status of the phenomena
to describe, "What exists" with respect to variables or conditions in a situation
The focus of this study was on self-reported decisions made by various investors
regarding the investment patterns in mutual funds. Thus it involves Statement of the
problem, Identification of information needed to solve the problem, Selection or
development of instruments for gathering the information, Identification of target
population and determination of sampling procedure, Design of procedure for
information collection, Collection of information, Analysis of information.

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