93

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION

The objective of the research is to provide set of factors which are to be

in individuals that interprets Small Investor’s Perception on Mutual Funds. To
achieve this objective, the factors, which have come across during the literature
survey has been listed. On completion of CFA (Confirmatory Factor Analysis), the
questionnaires have been floated for final survey. This chapter explains the analysis
and interpretation of the results that has been incorporated. It also covers, testing of
all Hypothesis and the outcome supported with the theory base.

4.2 DATA ANALYSIS

Data collection, analysis and interpretation of results are the critical and
core section in the research process. The aim of analyze is to organize, classify and
to summarize the data that has been collected, such that they can be comprehended
and interpreted to give the solutions to the queries that triggered the research.
Without interpretation, analysis of findings is not fulfilled and interpretation cannot
be preceded without analysis. Both are directly correlated.

In this chapter, based on the objectives stated earlier, a detailed analysis of the

collected data has been done. Hypothesis were tested based on the findings of the

study, and the interpretations and conclusions were drawn.

 94

4.3 RELIABILITY

Research requires dependable measurement. Measurements are reliable

to the extent that they are repeatable and that any random influence which tends to

make measurements different from occasion to occasion or circumstance to

circumstance is a source of measurement error. Reliability is the degree to which a

test consistently measures whatever it measures. Errors of measurement that affect

reliability are random errors and errors of measurement that affect validity are

systematic or constant errors.

4.4 SPLIT-HALF RELIABILITY

Split Half Reliability requires only one administration. Especially,

appropriate when the test is very long. The most commonly used method to split the

test into two is using the odd-even strategy. Since longer tests tend to be more

reliable, and since split-half reliability represents the reliability of a test only half as

long as the actual test, a correction formula must be applied to the coefficient. Split-

half reliability is a form of internal consistency reliability.

 95

Table 4.1 Reliability Analysis

Scale Scale Corrected
Mean Variance Item- Alpha
if Item if Item Total if Item
Deleted Deleted Correlation Deleted
MUTUAL_F 118.5629 40.3429 .4019 .8938
EASY_ENT 118.6048 39.0205 .5704 .8902
INVESTME 118.5539 38.9445 .5873 .8898
FUND_WIT 118.6257 38.3310 .5964 .8894
UNIQUENE 118.6018 39.7118 .4612 .8926
V57 118.6527 41.1163 .2342 .8974
V58 118.6287 40.4864 .2845 .8970
CUSTOMIZ 118.5419 40.8196 .3402 .8949
GUIDING 118.6228 39.1305 .5409 .8908
V61 118.6108 39.9622 .4411 .8931
FUND_MAN 118.5778 39.9984 .4639 .8926
THE_VALU 118.5539 38.6082 .6651 .8882
V64 118.5778 39.9924 .4487 .8929
CHANGE_I 118.5808 38.8989 .5829 .8899
DISCLOSU 118.6287 39.4113 .4774 .8923
V67 118.6108 39.9622 .4411 .8931
V68 118.5778 39.9984 .4639 .8926
V69 118.5539 38.6082 .6651 .8882
V70 118.5778 39.9924 .4487 .8929
V71 118.5808 38.8989 .5829 .8899
V72 118.6138 39.9855 .4148 .8937
DAILY_DI 118.6048 39.4890 .4977 .8918
V74 118.5659 41.3455 .2240 .8972
GRIEVANC 118.6078 39.1100 .5453 .8907
V76 118.6168 40.7176 .2901 .8964
V77 118.6976 38.4038 .5704 .8900
SPLIT HALF METHOD
No. of Cases = 334.0
Reliability Coefficients 26 items
Alpha (Reliability Coefficients) = .8961
Correlation between forms = .8397
Equal-length Spearman-Brown = .9129
Guttmann Split-half = .9125
Unequal-length Spearman-Brown = .9129
Alpha for part 1 = .8006
Alpha for part 2 = .8143
13 items in part 1
13 items in part 2
 96

Reliability of Twenty Six (26) items listed in the questionnaire is

assessed using Reliability Co-efficient Alpha. Table 4.1 shows that Reliability of the
listed items is nearly 90%, (i.e.) Reliability Co-efficient is found to be .8961.

4.5 INVESTOR PERCEPTION ON MUTUAL FUND WITH RESPECT

TO DEMOGRAPHIC FACTOR

Table 4.2 shows that thirty eight percent of the respondents are less than
40 years of age, forty six percent of the respondents are in the age group of 41 – 50
years and the remaining fifteen percent is above 50 years of age. Figure 4.1 shows
the age group wise distributions.

Table 4.2 Distribution of Respondents on Age

Number of
Age Percentage
Respondents
Less than 30 Years 28 8.4
31 to 40 Years 100 29.9
41 to 50 Years 155 46.4
51 to 60 Years 19 5.7
Above 60 Years 32 9.6
Total 334 100.0
Number of Respondents

200 155
150 100
100
32 Frequency
28 19
50
0
Less than 31 to 40 41 to 50 51 to 60 Above 60
30 Years Years Years Years Years

Figure 4.1 Age Group Wise Distributions

 97

Table 4.3 shows that more than two-third of the respondents is male
respondents and only one-third is female respondents. Figure 4.2 shows the
distribution of Gender.

Table 4.3 Distribution of Respondents on Gender

Gender Number of Respondents Percentage

Male 250 74.9
Female 84 25.1
Total 334 100.0

Female
25%

Male
75%

Figure 4.2 Distribution of Gender

Table 4.4 shows that twenty nine percent of the respondents have
professional degree, twenty four percent have graduate degree as their educational
qualification and six percent of the respondents have other degrees as their
educational qualification. Figure 4.3 shows the Educational wise distributions.
 98

97

Number of Respondents
100 82
80
44 51
60 41
40 19
20
0

Figure 4.3 Distribution of Respondents – Educational Wise

Table 4.4 Distribution of Respondents on Educational Qualification

S.No. Educational / Academic Number of

Percentage
Qualification Respondents
1 Matriculation/SSLC 44 13.2
2 HSc/Intermediate 51 15.3
3 Graduate 41 12.3
4 Post Graduate 82 24.6
5 Professional 97 29.0
6 Others 19 5.7
Total 334 100.0

Table 4.5 shows that fifty nine percent of the respondents belong to
salaried category, twelve percent of the respondent belongs to service category, nine
percent of the respondent belongs to business category. Figure 4.4 shows the
distribution of respondents in occupation wise.
 99

Table 4.5 Distribution of Respondents on Occupation

S.No. Occupation Number of Respondents Percentage

1 Service 41 12.3
2 Business 29 8.7
3 Professional 16 4.8
4 Salaried 199 59.6
5 Retired 32 9.6
6 Self employed 17 5.1
Total 334 100.0

334
350
Number of Respondents

300
250 199
200
150
100
41 29 32
50 16 17
0

Figure 4.4 Distribution of Respondents – Occupation

Table 4.6 shows that sixty six percent of the respondents belong to
private sector, eleven percent of the respondent belongs to government sector.

Table 4.6 Distribution of Respondents on Working Sector

S.No. Working Sector Number of Respondents Percentage

1 Private 219 65.6
2 Public 43 12.9
3 Banks 35 10.5
4 Government 37 11.1
Total 334 100.0
 100

Table 4.7 shows that sixty eight percent of the respondents are married
and thirty two percent of the respondents are unmarried. Figure 4.5 shows the
distribution of respondents for marital status.

Table 4.7 Distribution of Respondents on Marital Status

Marital Status Number of Respondents Percentage

Married 226 67.7
Unmarried 108 32.3
Total 334 100.0

Table 4.8 shows that sixty three percent of the respondents have the
family type as nuclear and thirty eight percent of the respondents having the family
type as Joint.

Table 4.8 Distribution of Respondents on Family Type

Type of Family Number of Respondents Percentage

Joint 125 37.4
Nuclear 209 62.6
Total 334 100.0

108

226 Married
Unmarried

Figure 4.5 Distribution of Respondents – Marital Status

 101

Table 4.9 shows that sixty three percent of the respondents have number

of dependents as two dependents and thirty seven percent of the respondents having

the number of dependents as three dependents.

Table 4.9 Distribution of Respondents having Number of Dependents

Family Members Number of Respondents Percentage

2 209 62.6
3 125 37.4
Total 334 100.0

Table 4.10 shows that sixty six percent of the respondent belongs to Rs.

30001- Rs. 60000 Income group and thirty four percent of the respondent belongs to

Rs. 10001- Rs. 30000 income group.

Table 4.10 Distribution of Respondents by Income wise Classification

Monthly Income (Rs.) Number of Respondents Percentage

10001-30000 114 34.1
30001-60000 220 65.9
Total 334 100.0

Table 4.11 shows that seventy eight percent of the respondents have the
family income from Rs. 30001- Rs. 60000 and four percent of the respondents have
the family income from Rs. 60001- Rs. 100000.

Table 4.11 Distribution of Respondents by Family wise Income Classification

Family Income (Rs.) Number of Respondents Percentage

10001-30000 60 18.0
30001-60000 260 77.8
60001-100000 14 4.2
Total 334 100.0
 102

Table 4.12 shows that seventy two percent of the respondents save their
money every month, thirteen percent of the respondents save their money by every
half yearly.

Table 4.12 Distribution of Respondents on Frequency of Savings

Frequency of saving Number of Respondents Percentage

Monthly 239 71.6
Quarterly 53 15.9
Half yearly 42 12.6
Total 334 100.0

Table 4.13 shows that sixty eight percent of the respondents chooses
child education as their savings objective, forty six percent of the respondents
chooses all of the above (Child Education, Marriage, Retirements and Asset
Purchase) as their savings objective, , and twelve percent of the respondents choose
marriage as their savings objective.

Table 4.13 Distribution of Respondents Savings Objective

Yes No Total
Savings
Number of Number of Number of
Objective Percentage Percentage Percentage
Respondents Respondents Respondents
Child
226 67.7 108 32.3 334 100.0
Education
Marriage 41 12.3 293 87.7 334 100.0
Retirement 120 35.9 214 64.1 334 100.0
Asset
125 37.4 209 62.6 334 100.0
Purchase
All of the
152 45.5 182 54.5 334 100.0
above
 103

Table 4.15 shows that sixty two percent of the respondents ranked PF /
Saving Scheme as their long term investment as the first preference and fifty eight
percent of the respondents ranked Real Estate as their long term investment as the
last preference.

Table 4.15 Respondents Ranking on Long Term Investment Preference

PF / Saving Scheme Life Insurance Gold / Silver Chits Real Estate

Rank1 Rank2 Rank3 Rank4 Rank5
62.0% 58.0% 56.0% 53.0% 50.0%

Table 4.16 shows that sixty one percent of the respondents ranked bank
deposits as their short term investment as the first preference and thirty six percent
of the respondents ranked shares as their short term investment as the last
preference.

Table 4.16 Respondents Ranking on Short Term Investment Preference

Bank Deposits Company Deposits Mutual Fund Units Shares

Rank1 Rank2 Rank3 Rank4
61.0% 55.0% 55.0% 36.0%

Table 4.17 shows that fifty five percent of the respondents invest in
mutual funds from their present income and forty six percent of the respondents
invest in mutual funds from their past savings.

Table 4.17 Table showing sources of income for investing in Mutual Funds

S.No. Particulars Number of Respondents Percentage

1 Present income 182 54.5
2 Past savings 152 45.5
Total 334 100.0
 104

Table 4.18 shows that fifty two percent of the respondents expect ten
percent to twenty percent returns on mutual funds and fifteen percent of the
respondents expect twenty one percent to thirty percent returns from mutual funds.

Table 4.18 Table showing investors who expects Minimum rate of return to
invest in Mutual Funds

S.No. Particulars Number of Respondents Percentage

1 < 10 % 110 32.9
2 10% - 20% 175 52.4
3 21% - 30% 49 14.7
Total 334 100.0

Table 4.19 shows that sixty five percent of the respondents prefer one to
two years to invest in mutual funds, twenty seven percent of the respondents prefer
less than 1 year to invest in mutual funds and nine percent of the respondents prefer
two to three years to invest in mutual funds.

Table 4.19 Table showing preference of investors on time frame to invest in

mutual funds

S.No. Particulars Number of Respondents Percentage

1 < 1 Year 89 26.6
2 1 - 2 Years 215 64.4
3 2 - 3 Years 30 9.0
Total 334 100.0

Table 4.20 shows that seventy seven percent of the respondents prefer
brokers as intermediary to invest in mutual funds, thirteen percent of the respondents
prefer mutual fund website as intermediary to invest in mutual funds, nine percent of
the respondents prefer direct investment as intermediary to invest in mutual funds
 105

and two percent of the respondents prefer banks as intermediary to invest in mutual
funds.

Table 4.20 Table showing the Intermediaries preferred by investors to invest

in mutual funds

S.No. Particulars Number of Respondents Percentage

1 Direct investment 29 8.7
2 Brokers 256 76.6
3 Banks 7 2.1
4 Mutual fund Website 42 12.6
Total 334 100.0

Table 4.21 shows that forty two percent of the respondents prefer
investments in balanced fund among mutual fund investments, twenty eight percent
of the respondents prefer investments in equity fund among mutual fund
investments, twenty six percent of the respondents prefer investments in debt fund
among mutual fund investments and four percent of the respondents prefer
investments in commodity fund among mutual fund investments.

Table 4.21 Distribution of Respondents who prefers the Investments in

Mutual Funds

S.No. Particulars Number of Respondents Percentage

1 Equity fund 95 28.4
2 Debt fund 84 25.1
3 Balanced fund 141 42.2
4 Commodity 14 4.2
Total 334 100.0
 106

Table 4.22 shows that forty three percent of the respondents prefer
dividend reinvestment option in mutual fund investments, thirty eight percent of the
respondents prefer dividend payment option in mutual fund investments; fourteen
percent of the respondents prefer growth option in mutual fund investments
followed by four percent of the respondents prefer monthly income scheme option in
mutual fund investments.

Table 4.22 Distribution of Respondents who prefers the option Investments

in Mutual Funds

S.No. Particulars Number of Respondents Percentage

1 Growth option 47 14.1
2 Dividend Payment option 128 38.3
3 Dividend re-investment option 145 43.4
4 Monthly income scheme 14 4.2
Total 334 100.0

Table 4.23 shows that seventy one percent of the respondents prefer
monthly returns from mutual fund investments, seventeen percent of the respondents
prefer quarterly returns from mutual fund investments, eleven percent of the
respondents prefer half yearly returns from mutual fund investments, one percent of
the respondents prefer annual returns from mutual fund investments.

Table 4.23 Distribution of Respondents who prefers the frequency of returns

from Mutual Funds

S.No. Particulars Number of Respondents Percentage

1 Monthly 237 71
2 Quarterly 57 17.1
3 Half yearly 36 10.8
4 Annual 4 1.2
Total 334 100.0
 107

Table 4.24 shows that eleven percent of the respondents prefer sector
specific equity fund types in mutual funds, nine percent of the respondents prefer
larger cap equity fund types from mutual funds and four percent of the respondents
prefer small cap and mid cap specific equity fund types from mutual funds.

Table 4.24 Distribution of Respondents who prefers the Equity Fund Types
from Mutual Funds

S.No. Particulars Number of Respondents Percentage

1 Large cap equity fund 30 9.0
2 Mid cap equity fund 14 4.2
3 Small cap equity fund 14 4.2
4 Sector specific 37 11.1
NA 239 71.6
Total 334 100.0

Table 4.25 shows that sixty seven percent of the respondents prefer IT
sector funds, sixteen percent of the respondents prefer FMCG sector funds, nine
percent of the respondents prefer Banking and Social Media sector funds and less
than one percent of the of the respondents prefer Pharma sector funds.

Table 4.25 Distribution of Respondents who prefers the Specific Sectors to

Invest in Mutual Funds

S.No. Particulars Number of Respondents Percentage

1 IT 222 66.5
2 FMCG 52 15.6
3 Media 30 9.0
4 Banking 29 8.7
5 Pharma 1 0.3
Total 334 100
 108

Table 4.26 shows that majority of the respondents sixty percent ranked
tax exemption as their objective of investment in mutual funds in the first place and
forty nine percent of the respondents ranked flexibility as their last item in objective
of investment in mutual funds.

Table 4.26 Respondents Ranking on Investment Objective to Invest in

Mutual Funds

Tax Risk Capital Professional

Flexibility
Exemption Diversification Appreciation Management

Rank1 Rank2 Rank3 Rank4 Rank5

59.6 58.1 52.7 50.3 49.1

From the above, it is evident that most of the respondents prefer mutual fund as their
short term investment next to bank deposits. The respondents invest in mutual funds
from their present income and prefer one to two years to invest in mutual funds.
Most of them prefer brokers as intermediaries to invest in mutual funds, The
respondents prefer investments in balanced fund and prefer dividend reinvestment
option with monthly returns from mutual fund investments. They prefer sector
specific equity fund types specifically IT sector funds. They ranked tax exemption
as their objective of investment in mutual funds in the first place.

4.5.1 Factors Affecting Mutual Fund Product Awareness among Investors

The following factors are listed as part of Mutual Fund Product

Awareness among Investors

1. Mutual Fund yields / gives maximum returns

2. Easy entry and exit to and from MF with Minimal Initial

Investment options
 109

3. Investment Philosophy / Objective of the Fund is important while

investing

4. Fund with good Capital Appreciation and NAV value is attractive

5. Uniqueness of the Mutual Fund (Scheme) and innovative features

attracts to invest in Mutual funds

It is evident from Table 4.27 that nearly 99 percent of respondents either

strongly agree or agree to the statement “mutual fund yields / gives maximum
return”. For the statement “easy entry and exit to and from mutual funds with
minimal initial investment options”, 76 percent strongly agreed, 22 percent agreed
and about two percent remained neutral to the statement. It is evident from Table
4.27 that nearly 88 percent of respondents either strongly agree or agree to the
statement “that investment philosophy / objective of the fund are important while
investing”. For the statement “fund with good capital appreciation and NAV (Net
Asset Value) value is attractive” 76 percent strongly agreed, 20 percent agreed, three
percent remains neutral and less than one percent disagreed to the statement.

Table 4.27 Respondents Awareness on Mutual Fund Products

Strongly Strongly
Mutual Fund Product Disagree Neutral Agree Total
Disagree Agree
Awareness
N % N % N % N % N % N %
Mutual Fund yields / gives
0 0.0 0 0.0 2 0.6 70 21.0 262 78.4 334 100.0
Maximum Return
Easy entry and exit to and
from MF with Minimal 0 0.0 0 0.0 7 2.1 74 22.2 253 75.7 334 100.0
Initial Investment options
Investment Philosophy /
Objective of the Fund is 0 0.0 2 0.6 5 1.5 55 16.5 272 81.4 334 100.0
important while investing
Fund with good Capital
Appreciation and NAV 0 0.0 2 0.6 11 3.3 67 20.1 254 76 334 100.0
value is attractive
Uniqueness of the Mutual
Fund (Scheme) and
0 0 0 0 6 1.8 75 22.5 253 75.7 334 100
innovative features attracts
to invest in Mutual funds
 110

It is evident from Table 4.27 that nearly 98 percent of respondents either

strongly agree or agree to the statement “uniqueness of the mutual fund (scheme)
and innovative features attracts to invest in mutual funds”.

4.5.2 Factors Affecting Awareness of Asset Management Company

Reputation among Investors

The following factors are listed as part of Awareness of Asset

Management Company Reputation among Investors

1. Investment in mutual funds will be made based on the AMC

Reputation or Brand Name
2. Investments will be made based on Company’s past
performance/track record
3. Customized Goal Planner options based on the individual needs are
getting provided by AMC
4. Guiding Investors about Projection of Economic Factors that may
affect Fund Performance in next 12 months

Table 4.28 Respondents Awareness on Asset Management Company Reputation

Awareness of Asset Strongly Strongly

Disagree Neutral Agree Total
Management Company Disagree Agree
Reputation N % N % N % N % N % N %
Investment in mutual funds
will be made based on the
0 0.0 0 0.0 0 0.0 104 31.1 230 68.9 334 100.0
AMC Reputation or Brand
Name
Investments will be made
based on Company’s Past 0 0.0 3 0.9 5 1.5 77 23.1 249 74.6 334 100.0
performance/track record
Customized Goal Planner
options based on the
0 0.0 0 0.0 0 0.0 67 20.1 267 79.9 334 100.0
individual needs are getting
provided by AMC
Guiding Investors about
Projection of Economic
Factors that may affect 0 0.0 0 0.0 7 2.1 80 24 247 74.0 334 100.0
Fund Performance in next
12 months
 111

Table 4.28 shows that sixty nine percent of the respondents strongly
agree that investment in mutual funds will be made based on the AMC reputation or
brand name, and thirty one percent of the respondents agree that investment in
mutual funds will be made based on the AMC reputation or brand name.

Seventy five percent of the respondents strongly agree that investments

will be made based on company’s past performance/track record, twenty three
percent of the respondents agree that investments will be made based on company’s
past performance/track record, two percent of the respondents remain neutral to this
statement and nearly one percent of the respondents disagree that investments will
be made based on company’s past performance/track record.

Eighty percent of the respondents strongly agree that customized goal

planner options based on the individual needs are getting provided by AMC and
twenty percent of the respondents agree that customized goal planner options based
on the individual needs are getting provided by AMC

Seventy four percent of the respondents strongly agree that guiding

investors about projection of economic factors that may affect fund performance in
next 12 months and nearly two percent of the respondents remain neutral to this
statement.

4.5.3 Factors Affecting Understanding of Mutual Fund Risks among

Investors

The following factors are listed as part of Understanding of Mutual Fund

Risks among Investors

1. Investment in Mutual Fund helps to diversify risks

2. Fund Managers are better place to manage portfolio

 112

3. The value of its investments may decline because of market risk

4. The value of an investment declines because of political changes or

instability in the country

5. Change in currency value against global market may impact

investments

6. Disclosure of Standard / Scheme Specific Risk Factors

Table 4.29 Respondents Awareness on Understanding Mutual Fund Risks

Strongly Strongly
Understanding of Disagree Neutral Agree Total
Disagree Agree
Mutual Fund Risks
N % N % N % N % N % N %
Investment in Mutual
Fund helps to diversify 0 0.0 0 0.0 2 0.6 86 25.7 246 73.7 334 100.0
risks
Fund Managers are
better place to manage 0 0.0 0 0.0 1 0.3 77 23.1 256 76.6 334 100.0
portfolio
The value of its
investments may
0 0.0 0 0.0 9 2.7 53 15.9 272 81.4 334 100.0
decline because of
market risk
The value of an
investment declines
because of political 0 0.0 0 0.0 3 0.9 73 21.9 258 77.2 334 100.0
changes or instability
in the country
Change in currency
value against global
0 0.0 0 0.0 10 3.0 60 18.0 264 79.0 334 100.0
market may impact
investments
Disclosure of Standard
/ Scheme Specific Risk 0 0.0 0 0.0 9 2.7 78 23.4 247 74.0 334 100.0
Factors
 113

Table 4.29 shows that seventy four percent of the respondents strongly
agree that investment in mutual fund helps to diversify risks, twenty six percent of
the respondents agree that investment in mutual fund helps to diversify risks and
nearly one percent of the respondents remain neutral to this statement.

Seventy seven percent of the respondents strongly agree that fund

managers in better place to manage portfolio, twenty three percent of the
respondents agree that fund managers are better place to manage portfolio and
nearly less than one percent of the respondents remain neutral to this statement.

Eighty one percent of the respondents strongly agree that the value of its
investments may decline because of market risk; sixteen percent of the respondents
agree that the value of its investments may decline because of market risk and three
percent of the respondents remain neutral to this statement.

Seventy seven percent of the respondents strongly agree that the value of
an investment declines because of political changes or instability in the country;
twenty two percent of the respondents agree that the value of an investment declines
because of political changes or instability in the country and nearly one percent of
the respondents remain neutral to this statement.

Seventy nine percent of the respondents strongly agree that change in

currency value against global market may impact investments; eighteen percent of
the respondents agree that change in currency value against global market may
impact investments and three percent of the respondents remain neutral to this
statement.

Seventy four percent of the respondents strongly agree that disclosure of

standard / scheme specific risk factors; twenty three percent of the respondents agree
that disclosure of standard / scheme specific risk factors and nearly three percent of
the respondents remain neutral to this statement.
 114

4.5.4 Factors Affecting Respondents Awareness on Qualities of Investment

Advisors

The following factors are listed as part of Respondents Awareness on

Qualities of Investment Advisors

1. Investment Advisors needs to have good relationship including

good rapport with investors

2. Investment Advisor should have General awareness about the

markets

3. Investment Advisor should make specific recommendations and

tailor plans to suit needs for investing

4. Investment Advisor should not be biased on his approach

5. Investment Advisor should redraw the investment strategies from

time to time, keeping investors preferences

6. Disclosure of Repurchase / Redemption / Switch Procedures /

Penalties

Table 4.30 shows that seventy four percent of the respondents strongly
agree that an investment advisor needs to have good relationship including good
rapport with investors; twenty six percent of the respondents agree that an
investment advisor needs to have good relationship including good rapport with
investors and nearly one percent of the respondents remain neutral to this statement.

Seventy seven percent of the respondents strongly agree that an

investment advisor should have general awareness about the markets; twenty three
percent of the respondents agree that investment advisor should have general
awareness about the markets and less than one percent of the respondents remain
neutral to this statement.
 115

Eighty one percent of the respondents strongly agree that an investment

advisor should make specific recommendations and tailor plans to suit needs for
investing; sixteen percent of the respondents agree that investment advisor should
make specific recommendations and tailor plans to suit needs for investing and three
percent of the respondents remain neutral to this statement.

Table 4.30 Respondents Awareness on Qualities of Investment Advisors

Strongly Strongly
Qualities of Investment Disagree Neutral Agree Total
Disagree Agree
Advisors
N % N % N % N % N % N %
Investment Advisors needs
to have good relationship
0 0.0 0 0.0 2 0.6 86 25.7 246 73.7 334 100.0
including good rapport
with investors
Investment Advisor should
have General awareness 0 0.0 0 0.0 1 0.3 77 23.1 256 76.6 334 100.0
about the markets
Investment Advisor should
make specific
recommendations and 0 0.0 0 0.0 9 2.7 53 15.9 272 81.4 334 100.0
tailor plans to suit needs
for investing
Investment Advisor should
not be biased on his 0 0.0 0 0.0 3 0.9 73 21.9 258 77.2 334 100.0
approach
Investment Advisor should
redraw the investment
strategies from time to 0 0.0 0 0.0 10 3.0 60 18.0 264 79.0 334 100.0
time, keeping investors
preferences.
Disclosure of Repurchase /
Redemption / Switch 0 0.0 0 0.0 5 1.5 81 24.3 248 74.3 334 100.0
Procedures / Penalties
 116

Seventy seven percent of the respondents strongly agree that an

investment advisor should not be biased in his approach; twenty two percent of the
respondents agree that an investment advisor should not be biased in his approach
and nearly one percent of the respondents remain neutral to this statement.

Seventy nine percent of the respondents strongly agree that an investment

advisor should redraw the investment strategies from time to time, keeping
investor’s preferences; eighteen percent of the respondents agree that an investment
advisor should redraw the investment strategies from time to time, keeping
investor’s preferences and three percent of the respondents remain neutral to this
statement.

Seventy four percent of the respondents strongly agree that an investment

advisor should disclose of repurchase / redemption / switch procedures / penalties;
twenty four percent of the respondents agree that an investment advisor should
disclose of repurchase / redemption / switch procedures / penalties and nearly two
percent of the respondents remain neutral to this statement.

4.5.5 Factors Affecting Respondents Awareness on Understanding Asset

Management Company Services

The following factors are listed as part of Respondents Awareness on

Understanding Asset Management Company Services

1. Daily disclosure of NAV (Net Asset Value)

2. Disclosure of Deviation of Investment from Original Pattern

3. Grievance Redressal Machinery by AMC (Asset Management

Company)
 117

4. Mutual Fund Investment can be made through online (Websites) –

without help of brokers

5. Disclosure of Investor’s Rights & Services

Table 4.31 shows that seventy five percent of the respondents strongly
agree that an asset management company should disclose NAV (Net Asset Value)
daily; twenty nine percent of the respondents agree that an asset management
company should disclose NAV (Net Asset Value) daily and nearly two percent of
the respondents remain neutral to this statement.

Table 4.31 Respondents Awareness on Understanding Asset Management

Company Services

Understanding Asset Strongly Strongly

Disagree Neutral Agree Total
Management Disagree Agree
Company Services N % N % N % N % N % N %
Daily disclosure of
NAV (Net Asset 0 0.0 0 0.0 6 1.8 76 22.8 252 75.4 334 100.0
Value)
Disclosure of
Deviation of
0 0.0 0 0.0 0 0.0 75 22.5 259 77.5 334 100.0
Investment from
Original Pattern
Grievance Redressal
Machinery by AMC
0 0.0 0 0.0 8 2.4 73 21.9 253 75.7 334 100.0
(Asset Management
Company)
Mutual Fund
Investment can be
made through online 0 0.0 0 0.0 5 1.5 82 24.6 247 74.0 334 100.0
(Websites) – without
help of brokers
Disclosure of
Investor’s Rights & 0 0.0 2 0.6 9 2.7 95 28.4 228 68.3 334 100.0
Services
 118

Seventy eight percent of the respondents strongly agree that an asset

management company should disclose the deviation of investments from the original
pattern and twenty three percent of the respondents agree that an asset management
company should disclose the deviation of investments from the original pattern

Seventy six percent of the respondents strongly agree that an asset

management company should have grievance Redressal machinery; twenty two
percent of the respondents agree that an asset management company should have
grievance Redressal machinery and nearly two percent of the respondents remain
neutral to this statement.

Seventy four percent of the respondents strongly agree that an asset

management company should leverage the technology by making the investors
invest in mutual funds through online / websites without the help of brokers; twenty
five percent of the respondents agree that an asset management company should
leverage the technology by making the investors to invest in mutual funds through
online / websites without the help of brokers and nearly two percent of the
respondents remain neutral to this statement.

Sixty eight percent of the respondents strongly agree that an asset

management company should disclose investor’s right and services; twenty nine
percent of the respondents agree that an asset management company should disclose
investor’s right and services; three percent of the respondents remain neutral to this
statement and one percent of the respondents disagree that an asset management
company should disclose investor’s right and services.

4.5.6 Summary on Factors Affecting Investor Perception on Mutual Funds

Statements related to five dimensions of the current study namely Mutual

Fund Product Awareness, Awareness of Asset Management Company Reputation,
Understanding of Mutual Fund Risk, Qualities of Investment Advisors and
Understanding Asset Management Company Services are included in the
Questionnaire.
 119

For each statement the respondents is expected to choose one of the five
options namely Strongly Disagree, Disagree, Neutral, Agree and Strongly Agree.

A Score of 1 is given for Strongly Disagree

A Score of 2 is given for Disagree

A Score of 3 is given for Neutral

A Score of 4 is given for Agree

A Score of 5 is given for Strongly Agree

Every respondent is assessed on the basis of the survey obtained in each

one of the five dimensions. Overall summary statistics such as the mean value and
standard deviation is given in the Table 4.32 and Table 4.33.

Table 4.32 Overall Summary Statistics

Factors Mean SD
Product Awareness 4.75 0.35
Company Awareness 4.73 0.30
Understanding of MF 4.75 0.29
Quality of Investment Advisors 4.76 0.29
Understanding Asset Management 4.72 0.32

Table 4.33 Overall Summary Statistics - Percentage

Factors Mean SD
Product Awareness 95.03 6.97
Company Awareness 94.6 6.00
Understanding of MF 95.06 5.84
Quality of Investment Advisors 95.11 5.79
Understanding Asset Management 94.46 6.41
 120

Generally the average awareness in the five Dimensions varies from 4.72
to 4.75 out of a maximum of five points.

As for the variations in responses are concerned, respondents are more

consistent in their responses in understanding of Mutual Fund Product and Quality
of Investment Advisor; Variations are found to be higher in the dimensions Product
Awareness and Understanding Asset Management Company.

4.6 TESTING OF HYPOTHESIS

4.6.1 Hypothesis Testing on Age Groups

The following are the Hypothesis tested on the five dimensions with
respect to age groups

H01 : Mutual Fund Product Awareness is the same among respondents of

different age groups.

H02 : Awareness of Asset Management Company Reputation is the same

among respondents of different age groups.

H03 : Understanding of Mutual Fund Risks is the same among respondents

of different age groups.

H04 : Quality of Investment Advisors is the same among respondents of

different age groups.

H05 : Understanding Asset Management Company Services is the same

among respondents of different age groups.

Table 4.34 shows the relationship between the factors and the age
groups. To test the hypothesis One-way Analysis of Variance (ANOVA) is used.
Test statistic used in ANOVA is “F” statistic. If the significance value of “F”
 121

statistic is less than 0.05, and then null hypothesis has to be rejected. It implies that
at least one group mean value is significantly different from the mean values of the
other groups compared. If the significance value of F statistic is greater than 0.05,
then it is inferred that there is no reason to reject the null Hypothesis.

To test which of the group mean values differ from other groups “Post
Hoc Tests” will have to be carried out. If the variances of the groups compared are
the same then “Tukey’s B Test” is normally used and the variances are different then
“Tamhene Test” (Table 4.35 & 4.36) is used.

Table 4.34 Relationship between Factors and Age Groups

Age
One way
Factors 20-30 31-40 41-50 51-60 > 60 Years
ANOVA
Mean SD Mean SD Mean SD Mean SD Mean SD F Sig.
Mutual Fund Product
91.71 12.83 95.04 5.75 95.56 5.61 98.53 1.98 93.25 9.61 3.637 .006
Awareness
Awareness of Asset
Management Company 91.61 8.39 95.35 5.38 94.55 5.79 93.16 5.82 95.94 5.74 2.874 .023
Reputation
Understanding of Mutual
92.74 10.35 94.97 5.93 95.53 4.96 95.61 3.34 94.79 5.08 1.429 .224
Fund Risks
Quality of Investment
93.57 9.25 94.97 5.73 95.59 5.19 95.96 3.44 94.06 5.85 1.147 .334
Advisors
Understanding Asset
Management Company 92.57 11.40 94.68 6.87 94.81 5.16 95.58 3.50 93.00 5.56 1.319 .262
Services

Respondents of different age groups differ only in two dimensions and

the dimensions are mutual fund product awareness and awareness of asset
management company reputation.
 122

It is evident from the Post hoc Test (Table 4.35), that Mutual Fund
Product awareness is found to be low in the age groups 20 – 30 years and among the
respondents of more than 60 years, and it is found to be very high in the age group
51 – 60 years.

Table 4.5 Post Hoc Tests: Tukey’s B Test - Homogeneous Subsets – Mutual
Fund Product Awareness

Subset for alpha = .05

Age N
1 2
20-30 28 91.71
> 60 Years 32 93.25
31-40 100 95.04 95.04
41-50 155 95.56 95.56
51-60 19 98.52

Awareness of asset management company reputation is found to be low

in the age group 20 – 30 years and found to be high among respondents in the age
group 31 – 40 years or more than 60 years of age (Table 4.36).

Table 4.36 Post Hoc Tests: Tukey’s B Test - Homogeneous Subsets –

Awareness of Asset Management Company Reputation

Subset for alpha = .05

Age N
1 2
20-30 28 91.60
51-60 19 93.15 93.15
41-50 155 94.54 94.54
31-40 100 95.35
> 60 Years 32 95.93
 123

With reference to the Table values (4.34), it is found that the null
hypothesis H01 and H02 are to be rejected and the null hypothesis H03, H04 and H05
are not to be rejected.

4.6.2 Hypothesis Testing on Gender

The following are the Hypothesis tested on the five dimensions with
respect to gender

H06 : There is no difference between males and females as far as mutual

fund product awareness are concerned.

H07 : There is no difference between males and females as far as awareness

of asset management company reputation are concerned.

H08 : There is no difference between males and females as far as

understanding of mutual fund risks are concerned.

H09 : There is no difference between males and females as far as quality of

investment advisors are concerned.

H10 : There is no difference between males and females as far as

understanding asset management company services are concerned.
 124

Table 4.37 Relationship between Factors and Gender

Gender Independent
Factors Male Female Samples t-test

Mean SD Mean SD T Sig.

Mutual Fund Product Awareness 95.57 6.14 93.43 8.86 2.054 .042
Awareness of Asset Management 94.96 5.67 93.51 6.80 1.757 .081
Company Reputation
Understanding of Mutual Fund Risks 95.69 4.59 93.17 8.29 2.651 .009
Quality of Investment Advisors 95.65 4.71 93.49 8.01 2.340 .021
Understanding Asset Management 95.06 5.21 92.67 8.89 2.333 .022
Company Services

Table 4.37 shows the relationship between the factors and gender. To test
the hypothesis Independent Samples “t” Test is used. If the significance value of “t”
test is less than 0.05, the null hypothesis has to be rejected, otherwise it is concluded
that there is no reason to reject the null hypothesis.

With reference to the Table values (4.37), it is found that the null
hypothesis H06, H08, H09 andH10 are to be rejected and the null hypothesis H07 are not
to be rejected.

4.6.3 Hypothesis Testing on Educational Qualification

The following are the Hypothesis tested on the five dimensions with
respect to educational qualification

H11 : Mutual Fund Product Awareness is going to be the same among the
respondents having different educational qualifications
 125

H12 : Awareness of Asset Management Company Reputation is going to be

the same among the respondents having different educational
qualifications

H13 : Understanding of Mutual Fund Risks is going to be the same among

the respondents having different educational qualifications

H14 : Quality of Investment Advisors is going to be the same among the

respondents having different educational qualifications

H15 : Understanding Asset Management Company Services is going to be

the same among the respondents having different educational
qualifications

Table 4.38 Relationship between Factors and Educational Qualification

Educational / Academic Qualification

One Way
Matriculation/ HSc/ Post
Factors Graduate Professional Others ANOVA
SSLC Intermediate Graduate
Mean SD Mean SD Mean SD Mean SD Mean SD Mean SD F Sig.
Mutual Fund
Product 92.91 10.60 94.75 6.27 93.95 8.90 96.00 4.95 95.38 5.93 97.05 4.96 1.734 .126
Awareness
Awareness of
Asset
Management 93.30 7.70 94.80 5.74 95.12 5.30 95.12 5.21 94.54 6.25 93.95 5.67 0.659 .655
Company
Reputation
Understanding
of Mutual 93.18 10.01 95.03 5.31 96.10 4.40 94.84 5.22 95.40 4.89 96.49 2.35 1.497 .190
Fund Risks
Quality of
Investment 93.18 9.32 95.69 5.59 95.53 5.03 94.76 5.13 95.57 4.95 96.32 2.46 1.480 .196
Advisors
Understanding
Asset
Management 91.27 8.64 91.76 7.48 97.07 5.06 95.71 4.98 94.80 5.72 96.21 3.39 6.856 .000
Company
Services
 126

Table 4.38 shows the relationship between the factors and the

educational qualification. To test the hypothesis One-way Analysis of Variance

(ANOVA) is used. Test statistic used in ANOVA is “F” statistic. If the significance

value of “F” statistic is less than 0.05, and then null hypothesis has to be rejected. It

implies that at least one group mean value is significantly different from the mean

values of the other groups compared. If the significance value of F statistic is greater

than 0.05, then it is inferred that there is no reason to reject the null Hypothesis.

Respondents of different educational qualification differ only in

understanding asset management company services.

Understanding Asset Management Company Services is found to be low

in the educational group’s matriculation / SSLC, and it is found to be very high in

the graduate educational group (Table 4.39).

Table 4.39 Post Hoc Tests: Tukey’s B Test - Homogeneous Subsets-

Understanding Asset Management Company Services

Subset for alpha = .05

Educational / Academic Qualification N
1 2 3

Matriculation/SSLC 44 91.27

HSc/Intermediate 51 91.76 91.76

Professional 97 94.80 94.80

Post Graduate 82 95.71

Others 19 96.21

Graduate 41 97.07
 127

With reference to the Table values (4.38), it is found that the null
hypothesis H15 is to be rejected and the null hypothesis H11, H12, H13, and H14 are not
to be rejected.

4.6.4 Hypothesis Testing on Occupation

The following are the Hypothesis tested on the five dimensions with

respect to occupation

H16 : Mutual Fund Product Awareness is going to be the same among the

respondents of different occupations.

H17 : Awareness of Asset Management Company Reputation is going to be

the same among the respondents of different occupations.

H18 : Understanding of Mutual Fund Risks is going to be the same among

the respondents of different occupations.

H19 : Quality of Investment Advisors is going to be the same among the

respondents of different occupations.

H20 : Understanding Asset Management Company Services is going to be

the same among the respondents of different occupations.

Table 4.40 shows the relationship between the factors and the

educational qualification. To test the hypothesis One-way Analysis of Variance

(ANOVA) is used. Test statistic used in ANOVA is “F” statistic. If the significance

value of “F” statistic is less than 0.05, and then null hypothesis has to be rejected. It

implies that at least one group mean value is significantly different from the mean
 128

values of the other groups compared. If the significance value of F statistic is greater

than 0.05, then it is inferred that there is no reason to reject the null Hypothesis.

Table 4.40 Relationship between Factors and Occupation

Occupation
One way
Self-
Service Business Professional Salaried Retired ANOVA
Factors Employed
Mean SD Mean SD Mean SD Mean SD Mean SD Mean SD F Sig.
Mutual Fund
Product 97.07 3.23 98.07 2.30 95.25 7.19 94.93 6.10 93.25 9.61 89.18 14.75 4.904 .000
Awareness
Awareness of
Asset
Management 95.37 3.94 92.24 6.21 92.81 8.36 95.00 5.53 95.94 5.74 91.18 10.08 3.008 .011
Company
Reputation
Understanding
of Mutual Fund 96.02 3.18 96.09 3.79 96.25 5.69 95.01 5.65 94.79 5.08 90.98 12.63 2.253 .049
Risks
Quality of
Investment 97.40 3.21 96.32 3.82 96.25 6.07 94.82 5.58 94.06 5.85 91.76 11.25 3.208 .008
Advisors
Understanding
Asset
Management 94.93 5.52 96.00 3.38 89.50 5.24 95.06 5.92 93.00 5.56 91.06 13.75 4.110 .001
Company
Services

Respondents of different occupation differ only in mutual fund product

awareness, awareness of asset management company reputation, understanding of
mutual fund risks, quality of investment advisors and understanding asset
management company services (Table 4.41) through (Table 4.45).

Table 4.41 Post Hoc Tests - Homogeneous Subsets - Mutual Fund Product
Awareness

Subset for alpha = .05

Occupation N
1 2
Self employed 17 89.17
Retired 32 93.25 93.25
Salaried 199 94.93
Professional 16 95.25
Service 41 97.07
Business 29 98.06
 129

Table 4.42 Post Hoc Tests - Homogeneous Subsets - Awareness of Asset

Management Company Reputation

Subset for alpha = .05

Occupation N
1 2
Self employed 17 91.17
Business 29 92.24 92.24
Professional 16 92.81 92.81
Salaried 199 95.00 95.00
Service 41 95.36 95.36
Retired 32 95.93

Table 4.43 Post Hoc Tests - Homogeneous Subsets – Understanding Mutual

Fund Risks

Subset for alpha = .05

Occupation N
1 2
Self employed 17 91
Retired 32 94.8 94.792
Salaried 199 95 95.008
Service 41 96.016
Business 29 96.092
Professional 16 96.25

Table 4.44 Post Hoc Tests - Homogeneous Subsets – Quality of Investment

Advisors

Subset for alpha = .05

Occupation N
1 2
Self employed 17 91.8
Retired 32 94.1 94.063
Salaried 199 94.8 94.824
Professional 16 96.25
Business 29 96.322
Service 41 97.398
 130

Table 4.45 Post Hoc Tests - Homogeneous Subsets – Understanding Asset

Management Company Services

Subset for alpha = .05

Occupation N
1 2 3
Professional 16 89.5
Self employed 17 91.1 91.059
Retired 32 93 93 93
Service 41 94.927 94.93
Salaried 199 95.055 95.06
Business 29 96

With reference to the Table values (4.40), it is found that the null
hypothesis H16, H17, H18, H19 and H20 is to be rejected.

4.6.5 Hypothesis Testing on Working Sector

The following are the Hypothesis tested on the five dimensions with
respect to working sector

H21 : Mutual Fund Product Awareness is going to be the same among the
respondents of different sectors

H22 : Awareness of Asset Management Company Reputation is going to be

the same among the respondents of different sectors

H23 : Understanding of Mutual Fund Risks is going to be the same among

the respondents of different sectors

H24 : Quality of Investment Advisors is going to be the same among the

respondents of different sectors

H25 : Understanding Asset Management Company Services is going to be

the same among the respondents of different sectors
 131

Table 4.46 shows the relationship between the factors and the working
sector. To test the hypothesis One-way Analysis of Variance (ANOVA) is used. Test
statistic used in ANOVA is “F” statistic. If the significance value of “F” statistic is
less than 0.05, the null hypothesis has to be rejected. It implies that at least one
group mean value is significantly different from the mean values of the other groups
compared. If the significance value of F statistic is greater than 0.05, then it is to be
inferred that there is no reason to reject the null Hypothesis.

Table 4.46 Relationship between Factors and Working Sector

Working Sector One way

Factors Private Public Banks Government ANOVA
Mean SD Mean SD Mean SD Mean SD F Sig.
Mutual Fund Product
95.07 6.98 97.21 3.21 93.37 9.84 93.84 6.44 2.456 0.063
Awareness
Awareness of Asset
Management 94.06 6.31 95.35 3.84 95.29 5.81 96.22 6.06 1.871 0.134
Company Reputation
Understanding of
94.87 6.42 96.12 3.16 94.76 4.66 95.23 5.64 0.591 0.621
Mutual Fund Risks
Quality of Investment
94.81 6.14 97.44 3.16 94.57 5.37 94.68 5.9 2.735 0.044
Advisors
Understanding Asset
Management 94.41 6.76 94.88 5.4 94.4 6.15 94.27 5.78 0.078 0.972
Company Services

Table 4.47 Post Hoc Tests - Quality of Investment Advisors

(I) Working (J) Working Mean Difference

Std. Error Sig.
Sector Sector (I-J)
Public -2.6321 0.95755 0.000
Private Banks 0.2383 1.04503 1.000
Government 0.1251 1.02039 1.000
Banks 2.8704 1.30692 0.043
Public
Government 2.7572 1.2873 0.080
Banks Government -0.1133 1.35363 1.000
 132

With reference to the table values (4.46), it is found that the null
hypothesis H24 is to be rejected and the null hypothesis H21, H22, H23, and H25 are not
to be rejected.

4.6.6 Hypothesis Testing on Marital Status

The following are the Hypothesis tested on the five dimensions with
respect to marital status

H26 : There is no difference between married and unmarried people as far

as mutual fund product awareness is concerned.

H27 : There is no difference between married and unmarried people as far

as awareness of asset management company reputation is concerned.

H28 : There is no difference between married and unmarried people as far

as understanding of mutual fund risks are concerned.

H29 : There is no difference between married and unmarried people as far

as quality of investment advisors are concerned.

H30 : There is no difference between married and unmarried people as far

as understanding asset management company services is concerned

Table 4.48 shows the relationship between the factors and gender. To test
the hypothesis, independent samples “t” Test is used. If the significance value of “t”
test is less than 0.05, the null hypothesis has to be rejected; otherwise, it is
concluded that there is no reason to reject the null hypothesis.

With reference to the Table values (4.48), it is found that the null
Hypothesis H26, H27, H28, H29 and H30 are not to be rejected.
 133

Table 4.48 Relationship between Factors and Marital Status

Marital Status Independent

Factors Samples t-test
Married Unmarried
Mean SD Mean SD t Sig.
Mutual Fund Product
95.24 6.24 94.59 8.32 0.71 0.47
Awareness
Awareness of Asset
Management 94.58 5.92 94.63 6.18 -0.07 0.94
Company Reputation
Understanding of
95.15 5.19 94.88 7.02 0.35 0.72
Mutual Fund Risks
Quality of Investment
95.21 5.34 94.91 6.64 0.44 0.66
Advisors
Understanding Asset
Management 94.81 5.31 93.7 8.22 1.28 0.2
Company Services

4.6.7 Hypothesis Testing on Type of Family

The following are the Hypothesis tested on the five dimensions with
respect to type of family

H31 : There is no difference between joint and nuclear families as far as

mutual fund product awareness is concerned.

H32 : There is no difference between joint and nuclear families as far as

awareness of asset management company reputation is concerned.

H33 : There is no difference between joint and nuclear families as far as

understanding of mutual fund risks is concerned.
 134

H34 : There is no difference between joint and nuclear families as far as

quality of investment advisors is concerned.

H35 : There is no difference between joint and nuclear families as far as

understanding asset management company services is concerned

Table 4.49 Relationship between Factors and Type of Family

Type of Family Independent Samples t-

Factors Joint Nuclear test
Mean SD Mean SD t-value Sig.
Mutual Fund Product
95.65 5.73 94.66 7.61 1.25 0.21
Awareness
Awareness of Asset
Management Company 95.36 5.36 94.14 6.32 1.80 0.07
Reputation
Understanding of
95.95 5.48 94.53 5.99 2.15 0.03
Mutual Fund Risks
Quality of Investment
96.03 5.61 94.56 5.83 2.25 0.03
Advisors
Understanding Asset
Management Company 93.66 6.06 94.93 6.58 -1.75 0.08
Services

Table 4.49 shows the relationship between the factors and gender. To test
the hypothesis Independent Samples “t” Test is used. To test the hypothesis
Independent Samples “t” Test is used. If the significance value of “t” test is less than
0.05, the null hypothesis has to be rejected, otherwise it is concluded that there is no
reason to reject the null hypothesis.

With reference to the Table values (4.49), it is found that the null
hypothesis H33 is to be rejected and the null Hypothesis H31, H32, H34, and H35 are not
to be rejected.
 135

4.6.8 Hypothesis Testing on Number of Family Members

The following are the Hypothesis tested on the five dimensions with
respect to family members

H36 : Mutual fund product awareness is the same among respondents

having different sizes of family members

H37 : Awareness of asset management company reputation is the same

among respondents having different sizes of family members

H38 : Understanding of mutual fund risks is the same among respondents

having different sizes of family members

H39 : Quality of investment advisors is the same among respondents having

different sizes of family members

H40 : Understanding asset management company services is the same

among respondents having different sizes of family members

Table 4.50 shows the relationship between the factors and gender. To test
the hypothesis Independent Samples “t” Test is used. To test the hypothesis
Independent Samples “t” Test is used. To test the hypothesis Independent Samples
“t” Test is used. If the significance value of “t” test is less than 0.05, the null
hypothesis has to be rejected, otherwise it is concluded that there is no reason to
reject the null hypothesis.

With reference to the Table values (4.50), it is found that the null
hypothesis H38and H39 is to be rejected and the null Hypothesis H36, H37 and H40 are
not to be rejected.
 136

Table 4.50 Relationship between Factors and Number of Family Members

Family Members Independent

Samples t-test
Factors 2 3

Mean SD Mean SD t-value Sig.

Mutual Fund Product

94.66 7.61 95.65 5.73 -1.25 0.21
Awareness
Awareness of Asset
Management Company 94.14 6.32 95.36 5.36 -1.80 0.07
Reputation
Understanding of Mutual
94.53 5.99 95.95 5.48 -2.15 0.03
Fund Risks
Quality of Investment
94.56 5.83 96.03 5.61 -2.25 0.02
Advisors
Understanding Asset
Management Company 94.93 6.58 93.66 6.06 1.75 0.08
Services

4.6.9 Hypothesis Testing on Monthly Income

The following are the Hypothesis tested on the five dimensions with
respect to monthly income

H41 : Mutual fund product awareness is the same among respondents with
different income levels

H42 : Awareness of asset management company reputation is the same

among respondents with different income levels.
 137

H43 : Understanding of mutual fund risks is the same among respondents

with different income levels.

H44 : Quality of investment advisors is the same among respondents with

different income levels.

H45 : Understanding asset management company services is the same

among respondents with different income levels

Table 4.51 Relationship between Factors and Monthly Income

Monthly Income
Independent
10001-30000 30001-60000 Samples t-test
Factors
t-
Mean SD Mean SD Sig.
value
Mutual Fund Product
94.42 8.13 95.35 6.28 -1.06 0.29
Awareness
Awareness of Asset
Management Company 94.08 6.54 94.86 5.69 -1.08 0.27
Reputation
Understanding of Mutual
94.56 7.28 95.32 4.93 -0.99 0.32
Fund Risks
Quality of Investment
94.82 7.04 95.26 5.02 -0.58 0.56
Advisors
Understanding Asset
Management Company 92.32 7.62 95.56 5.37 -4.057 0.00
Services

Table 4.51 shows the relationship between the factors and gender. To test
the hypothesis Independent Samples “t” Test is used. To test the hypothesis
Independent Samples “t” Test is used. To test the hypothesis Independent Samples
 138

“t” Test is used. If the significance value of “t” test is less than 0.05, the null
hypothesis has to be rejected, otherwise it is concluded that there is no reason to
reject the null hypothesis.

With reference to the Table values (4.51), it is found that the null
hypothesis H45 is to be rejected and the null hypothesis H41, H42, H43 and H44 are not
to be rejected.

4.6.10 Hypothesis Testing on Working Sector

The following are the Hypothesis tested on the five dimensions with
respect to working sector

H46 : Mutual Fund Product Awareness is going to be the same among the
respondents with different family income levels

H47 : Awareness of Asset Management Company Reputation is going to be

the same among the respondents with different family income levels

H48 : Understanding of Mutual Fund Risks is going to be the same among

the respondents with different family income levels

H49 : Quality of Investment Advisors is going to be the same among the

respondents with different family income levels

H50 : Understanding Asset Management Company Services is going to be

the same among the respondents with different family income levels

Table 4.52 shows the relationship between the factors and the working
sector. To test the hypothesis One-way Analysis of Variance (ANOVA) is used. To
test the hypothesis One-way Analysis of Variance (ANOVA) is used. Test statistic
 139

used in ANOVA is “F” statistic. If the significance value of “F” statistic is less than
0.05, and then null hypothesis has to be rejected. It implies that at least one group
mean value is significantly different from the mean values of the other groups
compared. If the significance value of F statistic is greater than 0.05, then it is
inferred that there is no reason to reject the null Hypothesis.

Table 4.52 Relationship between Factors and Family Income

Family Income One way

Factors 10001-30000 30001-60000 60001-100000 ANOVA
Mean SD Mean SD Mean SD F Sig.
Mutual Fund Product
93.27 10.2 95.26 6.1 98.29 2.05 3.64 0.02
Awareness
Awareness of Asset
Management Company 93.17 7.3 94.96 5.63 93.93 5.94 2.29 0.10
Reputation
Understanding of
92.33 9.09 95.65 4.73 95.71 3.31 8.32 0.00
Mutual Fund Risks
Quality of Investment
92.61 8.72 95.63 4.81 96.19 3.89 7.13 0.00
Advisors
Understanding Asset
Management Company 91.53 9.66 94.98 5.27 97.14 4.82 8.73 0.00
Services

Table 4.53 Post Hoc Tests - Mutual Fund Product Awareness

Subset for alpha = .05

Family Income N
1 2
10001-30000 60 93.26
30001-60000 260 95.26 95.26

60001-100000 14 98.28
 140

Table 4.54 Post Hoc Tests - Understanding of Mutual Fund Risks

Subset for alpha = .05

Family Income N
1 2
10001-30000 60 92.33
30001-60000 260 95.65
60001-100000 14 95.71

Table 4.55 Post Hoc Tests - Quality of Investment Advisors

Subset for alpha = .05

Family Income N
1 2
10001-30000 60 92.61
30001-60000 260 95.62 95.62
60001-100000 14 96.19

Table 4.56 Post Hoc Tests - Understanding Asset Management Company

Services

Subset for alpha = .05

Family Income N
1 2
10001-30000 60 91.53
30001-60000 260 94.98
60001-100000 14 97.14

With reference to the Table values (4.52), it is found that the null
hypothesis H46, H48, H49, andH50, is to be rejected and the null Hypothesis H47 are not
to be rejected.
 141

4.6.11 Hypothesis Testing on Frequency of Saving

The following are the Hypothesis tested on the five dimensions with
respect to frequency of saving

H51 : Mutual Fund Product Awareness is going to be the same among the
respondents with different frequency levels of saving

H52 : Awareness of Asset Management Company Reputation is going to be

the same among the respondents with different frequency levels of
saving

H53 : Understanding of Mutual Fund Risks is going to be the same among

the respondents with different frequency levels of saving

H54 : Quality of Investment Advisors is going to be the same among the

respondents with different frequency levels of saving

H55 : Understanding Asset Management Company Services is going to be

the same among the respondents with different frequency levels of
saving

Table 4.57 shows the relationship between the factors and the working
sector. To test the hypothesis One-way Analysis of Variance (ANOVA) is used. To
test the hypothesis One-way Analysis of Variance (ANOVA) is used. Test statistic
used in ANOVA is “F” statistic. If the significance value of “F” statistic is less than
0.05, and then null hypothesis has to be rejected. It implies that at least one group
mean value is significantly different from the mean values of the other groups
compared. If the significance value of F statistic is greater than 0.05, then it is
inferred that there is no reason to reject the null Hypothesis.
 142

Table 4.57 Relationship between Factors and Family Income

Frequency of saving One Way

Factors Monthly Quarterly Half yearly ANOVA
Mean SD Mean SD Mean SD F Sig.
Mutual Fund Product
95.43 6.22 92.53 10.08 95.9 5.62 4.21 0.01
Awareness
Awareness of Asset
Management 94.94 5.77 92.55 7.38 95.24 4.81 3.78 0.02
Company Reputation
Understanding of
95.51 4.77 93.14 9.41 94.92 5.11 3.62 0.05
Mutual Fund Risks
Quality of Investment
95.47 4.89 93.33 8.7 95.32 5.66 3.01 0.06
Advisors
Understanding Asset
Management 95.31 5.33 92.15 9.21 92.48 6.8 7.88 0.00
Company Services

Table 4.58 Post Hoc Tests - Mutual Fund Product Awareness

Subset for alpha = .05

Frequency of saving N
1 2
Quarterly 53 92.52
Monthly 239 95.43
Half yearly 42 95.90

Table 4.59 Post Hoc Tests - Awareness of Asset Management Company

Reputation

Subset for alpha = .05

Frequency of saving N
1 2
Quarterly 53 92.54
Monthly 239 94.93
Half yearly 42 95.23
 143

Table 4.60 Post Hoc Tests - Understanding Asset Management Company

Services
Subset for alpha = .05
Frequency of saving N
1 2
Quarterly 53 92.15
Half yearly 42 92.47
Monthly 239 95.31

With reference to the Table values (4.57), it is found that the null
hypothesis H51, H52 andH55, is to be rejected and the null Hypothesis H53and H54 are
not to be rejected. Most of the Respondents strongly agree that Investment
Philosophy / Objective of the Fund are important while investing. Customized Goal
Planner options based on the individual needs are getting provided by AMC. They
believe that the value of its investments may decline because of market risk.
Investment Advisor should make specific recommendations and tailor plans to suit
needs for investing. AMC must disclose the deviation of Investment from Original
Pattern and Grievance Redressal Machinery must be provided by AMC.

The awareness level of mutual funds product is not the same among the
respondents belonging to different age groups, gender, occupation types, and family
income. The awareness level of mutual funds product is the same among the
respondents belonging to different educational qualification, working sector, marital
status and income level. The awareness of AMC reputation is the same among the
respondents belonging to different gender, educational qualification, occupation,
working sector, marital status and income level. The understanding of mutual fund
risk is same among the respondents belonging to different age group, educational
qualification, occupation, working sector, marital status and income level. The
qualities of investment advisors are not the same among the respondents belonging
to different gender, working sector and family income. The understanding of AMC
services is the same among the respondents belonging to different age groups,
working sector, marital status.

4.7 CORRELATION ANALYSIS ON FIVE DIMENSIONAL

FACTORS

The results of correlation analysis are given in the following Table 4.61 as follows
 Table 4.61 Correlation Analysis for Five Dimensional Factors

Awareness of Asset Quality of Understanding Asset

Mutual Fund Understanding of
Management Company Investment Management Company
Product Awareness Mutual Fund Risks
Reputation Advisors Services

Mutual Fund Product Awareness 1 0.374(**) 0.607(**) 0.610(**) 0.614(**)

Awareness of Asset Management

0.374(**) 1 0.538(**) 0.477(**) 0.409(**)
Company Reputation

Understanding of Mutual Fund

0.607(**) 0.538(**) 1 0.951(**) 0.519(**)
Risks

Quality of Investment Advisors 0.610(**) 0.477(**) 0.951(**) 1 0.487(**)

Understanding Asset
0.614(**) 0.409(**) 0.519(**) 0.487(**) 1
Management Company Services

** Correlation is significant at the 0.01 level (2-tailed).

144
 145

It is found from the table 4.61 that, the correlation between

Understanding of Mutual Fund Risks and Quality of Investment Advisors is very
high; correlation coefficient is 0.95; the second highest correlation coefficient is
found between Mutual Fund Product Awareness and Understanding Asset
Management Company Services. The third highest correlation coefficient is 0.61
and it is between Mutual Fund Product Awareness and Quality of Investment
Advisors. The fourth in the order is the correlation between Mutual Fund Product
Awareness and Understanding of Mutual Fund Risks has a correlation of 0.53,
whereas the correlation between Understanding of Mutual Fund Risks and
Understanding Asset Management Company Services is 0.51. The other correlation
coefficients are statistically significant that has magnitude of less than 0.5.
Generally, if the investment advisors provide quality service about the
Mutual Fund (MF) products, the investors will have good understanding of the risks
involved in MFs. The present study indicates that understanding of the risks is
found to be high as the quality of investment advisors is good and hence a high
correlation is found between the two aspects. Higher quality of Investment Advisors
creates better awareness about MF products - this scenario is reflected in the present
study and hence the correlation coefficient is found to be significant. Similarly as
the awareness of MFs increases the understanding of MFs risks also increases and
hence the correlation between the two is found to be high. Also higher level of
awareness of MFs creates better understanding Asset Management Company
Services and this is indicated in the correlation coefficient table.
Though the correlation coefficients between MFs awareness and
Awareness about the rapport of Asset management companies, between awareness
about the rapport of asset management companies and quality of investment
advisors as well as understanding asset management company services are
statistically significant, the correlation coefficients are found to be less than 0.05.

4.8 CLUSTER ANALYSIS ON FIVE DIMENSIONAL FACTORS

Cluster Analysis is an advanced statistical technique used to identify
relatively homogeneous groups of cases (or variables) based on selected
characteristics. This technique uses either distance or similarity measures to identify
 146

the groups. Distance or similarity measures are generated by the proximities

between individuals based on multivariate data of the sample respondents. If the
distance is low between any two individuals, they are said to belong to one group or
cluster and when the distance between any two objects is maximum, the two entities
are said to be apart from one another. Similarly two individuals are said to belong to
one cluster if the similarity between the two is the highest. There are several
distance measures listed in the literature. Some of the distance measures are
Euclidean distance, Mahalanobis distance, City Block distance and so on. A number
of clustering procedures have been evolved ever since the concept has been
introduced in data analysis. Some of the methods are single linkage, complete
linkage, average linkage, Ward’s method, Macqueen’s K-means method and so on.
For the present analysis, Macqueen’s K-means method and Squared
Euclidean distance have been used. The method and the measure used in the present
analysis are the most commonly used Clustering method and measure for continuous
data. The basic data used for the analysis are all the items (five items in Mutual
Fund Product Awareness, four in Awareness of Asset Management Company
Reputation, six in Understanding of Mutual Fund Risks, six in Qualities of
Investment Advisors, and five in Understanding Asset Management Company
Services – total 26) included in each one of the five dimensions of Small Investor’s
Perception taken up for the present study.
The cluster analysis as indicated in the Table 4.62 represents the presence
of three clusters in the data set. The first cluster consists of 194 respondents, second
cluster has 22 respondents and the third cluster has 118 respondents.
Table 4.62 Cluster Analysis – Number of Cases in each Cluster

Clusters No. of Cases Percentage

1 194 58.08
2 22 6.59
3 118 35.33
 147

The mean scores and the standard deviations of the five scores of the
three clusters are given in Table 4.63. To test whether the mean values of the three
clusters differ from one another for each one of the items listed in the five
dimensions, ANOVA has been carried out. It is assumed that the mean values are
the same for the three clusters. Test statistic used in ANOVA is “F” statistic. If the
significance value of “F” statistic is less than 0.05, and then null hypothesis has to
be rejected. It implies that at least one group mean value is significantly different
from the mean values of the other groups compared. If the significance value of F
statistic is greater than 0.05, then it is inferred that there is no reason to reject the
null Hypothesis. Cluster 1, Cluster 2 and Cluster 3 has been named as follows:
Cluster 1 as Savvy Investors, Cluster 2 as Naive Investors and Cluster 3 as Normal
Investors.
Table 4.63 Cluster Analysis – Number of Cases in each Cluster
Cluster Number of Case One way
Savvy Naive Normal ANOVA
Investors Investors Investors
Mean SD Mean SD Mean SD F Sig.
Mutual Fund Product 96.89 3.81 75.27 8.61 95.66 4.64 223.850 0.000
Awareness
Awareness of Asset 97.45 3.46 83.18 7.16 92.03 5.36 127.949 0.000
Management Company
Reputation
Understanding of Mutual 98.38 1.99 79.55 6.61 92.49 3.52 435.175 0.000
Fund Risks
Quality of Investment 98.42 2.12 79.70 5.53 92.54 3.59 445.887 0.000
Advisors
Understanding Asset 95.84 4.83 78.00 5.89 95.25 4.18 145.512 0.000
Management Company
Services

Cluster 1 – having good knowledge about mutual funds. Cluster 2 – Low knowledge
about mutual fund. Cluster 3 – average knowledge about mutual fund. To test which
of the group mean values differ from other groups “Post Hoc Tests” will have to be
carried out. Figure 4.6 shows the scatter plot of the sample points.
 148

Discriminant Functions
4

1 Cluster 3
Function 2

0 Cluster 1

Cluster 2 Clusters
-1
Group Centroids
-2
Cluster 3

-3 Cluster 2

-4 Cluster 1
-14 -12 -10 -8 -6 -4 -2 0 2 4

Function 1

Figure 4.6 Scatter Plot of Sample Points

Respondents of different clusters differ in all dimensions studied.

It is evident from the Post hoc Test (Table 4.64), that Mutual Fund
Product awareness is found to be low in the cluster 2 (Naive Investors), and it is
found to be very high in clusters 1 (Savvy Investors) and 3 (Normal Investors).

Table 4.64 Post Hoc Tests Homogeneous Subsets - Mutual Fund Product
Awareness

Cluster Subset for alpha = .05

N
1 2
Naive Investors 22 75.27
Normal Investors 118 95.66
Savvy Investors 194 96.88
 149

It is evident from the Post hoc Test (Table 4.65), that Awareness of Asset
Management Company Reputation is found to be low in the Naive Investors, and it
is found to be very high in Savvy Investors.

Table 4.65 Post Hoc Tests Homogeneous Subsets - Awareness of Asset

Management Company Reputation

Subset for alpha = .05

Cluster N
1 2 3
Naive Investors 22 83.18
Normal Investors 118 92.033
Savvy Investors 194 97.44

It is evident from the Post hoc Test (Table 4.66), that Understanding of
Mutual Fund Risks is found to be low in the Naive Investors, and it is found to be
very high in Savvy Investors.

Table 4.66 Post Hoc Tests Homogeneous Subsets - Understanding of Mutual

Fund Risks

Subset for alpha = .05

Cluster N
1 2 3
Naive Investors 22 79.54
Normal Investors 118 92.48
Savvy Investors 194 98.38

It is evident from the Post hoc Test (Table 4.67), that Quality of
Investment Advisors is found to be low in the Naive Investors, and it is found to be
very high in Savvy Investors.
 150

Table 4.67 Post Hoc Tests Homogeneous Subsets - Quality of Investment

Advisors

Subset for alpha = .05

Cluster N
1 2 3
Naive Investors 22 79.69
Normal Investors 118 92.54
Savvy Investors 194 98.41

It is evident from the Post hoc Test (Table 4.68), that Understanding

Asset Management Company Services is found to be low in the Naive Investors, and

it is found to be very high in Savvy Investors.

Table 4.68 Post Hoc Tests Homogeneous Subsets - Understanding Asset

Management Company Services

Subset for alpha = .05

Cluster N
1 2
Naive Investors 22 78.00
Normal Investors 118 95.25
Savvy Investors 194 95.83

From the Cluster Analysis, one can infer that Macqueen’s K-means

method clearly identifies the existence of the three groups in the present sample.

The first group has higher perceptional values in all the five dimensions whereas the

second group has significantly lower perception than the third group on these

aspects. Details of the factors affecting in the three clusters are given below:
 151

Table 4.69 Impact of five factors on three clusters

Savvy Naive Normal

Dimensions
Investors Investors Investors
Mutual Fund Product Awareness High Low High
Awareness of Asset Management High Low Medium
Company Reputation
Understanding of Mutual Fund Risks High Low Medium
Quality of Investment Advisors High Low Medium
Understanding Asset Management High Low High
Company Services

An attempt is made to establish a mathematical function that would

differentiate the three groups using Discriminant Analysis for the present study. An

been explained in the following section.

4.9 DISCRIMINANT ANALYSIS FOR FIVE DIMENSIONAL

FACTORS

Discriminant analysis is useful for situations where one wants to build a

predictive model of group membership based on observed characteristics of each

case. The procedure generates a discriminant function (or, for more than two groups,

a set of discriminant functions) based on linear combinations of the predictor

variables that provide the best discrimination between the groups. The functions are

generated from a sample of cases for which group membership is known. The

functions can then be applied to new cases with measurements for the predictor

variables but unknown group membership.

The five dimensions used for the analysis are Mutual Fund Product

Awareness, Awareness of Asset Management Company Reputation, Understanding

 152

of Mutual Fund Risks, Qualities of Investment Advisors, and Understanding Asset

Management Company Services. The procedure has a sequence of steps. The first

step is the assessment of efficiency of the variables for discriminating the groups.

This is done using Wilk’s Lambda. The second step involves the percentage of

efficiency of the classification assessed using Eigen values. The next step is

obtaining the standardized canonical discriminant function coefficients. This is

useful when the variables are measured in different units.

The next step is to form the structure matrix and this matrix contains
within-group correlations of each predictor variable with the canonical function.
When the variables are measured in the same unit, unstandardized discriminate
function may be used. Group centroids based on unstandardized discriminant
coefficients are obtained in the next stage.

These are useful when a new entity has to be assigned one of the known
groups. The last step is testing the efficiency of the discriminant function. Each
sample observation of the current study is assigned to one of the two known groups
by substituting in the discriminant function and using the group centroids. Based on
the number of samples in the data, weights (probabilities) are assigned in the
classification. The steps for the present analysis are explained below Table 4.70.

Wilk’s Lambda is a multivariate test of significance, sometimes called

the U statistic. It ranges between 0 and 1. Values close to 0 indicate that the group
means are different and values close to 1 indicate that the group means are not
different (equal to 1 indicates all means are the same). Wilks’ Lambda and its
degrees of freedom are transformed into an F statistic. If the significance value of
the exact F statistic is small (less than say 0.05) this indicates that group means
differ. If the significance value is large (more than say 0.05) this indicates that group
means do not differ.
 153

Table 4.70 Summary of Canonical Discriminant Functions - Wilk’s Lambda

Test of Function(s) Wilks' Lambda Chi-square df Sig.

1 through 2 0.110 725.052 10 .00
2 0.730 103.55 4 .00

Since the F-statistic value is significant (less than 0.05), it is concluded

that all the five dimensions have significant role to play to differentiate the three

groups.

4.9.1 Eigenvalues

The eigenvalue is the ratio of the between-groups sum of squares to the

within-groups sum of squares. The largest eigenvalue corresponds to the eigenvector

in the direction of the maximum spread of the group’s means. The second largest

eigen value corresponds to the eigenvector in the direction that has the next largest

spread, and so on. The square root of each eigenvalue provides an indication of the

length of the corresponding eigenvector. Small eigenvalues result in eigenvectors of

essentially no length and account for very little of the total dispersion

The following Table 4.71 displays eigenvalues, the percentage of

variance, the cumulative percentage, and canonical correlations for each canonical

variable (or canonical discriminant function).

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Table 4.71 Summary of Canonical Discriminant Functions - Eigenvalues

Function Eigenvalue % of Variance Cumulative % Canonical Correlation

1 5.613 93.8 93.8 0.921
2 0.370 6.2 100.0 0.520

The percentage of variance column allows one to evaluate which

canonical variable accounts for most of the spread. The cumulative percentage is the
percentage of the total dispersion accounted for by the canonical variables. In the
present study, the first canonical variables account for 100 % of the total dispersion.
The canonical correlation measures the association between the discriminant scores
and the groups. Values close to 1 indicate a strong correlation between the
discriminant scores and the groups. The canonical correlation is found to be 0.92
and 0.52 for the present data.

4.9.2 Standardized Canonical Discriminant Function

When variables are measured in different units, the magnitude of an

unstandardized coefficient provides little indication of the relative contribution of
the variable to the overall discrimination. Standardizing the coefficients allows one
to examine the relative standing of the measurements.

Standardization process is as follows:

Let X be the actual score, X-bar is the mean of the scores; and SD be the
standard deviation of the scores obtained by a set of respondents.

L = (X – X-bar)/SD is known as the standardized score for the given X

value.

When there are more than two groups, the number of canonical variables
is k-1 (where k is the number of groups) or p (the number of variables), whichever is
smaller. The coefficients of the canonical variable are used to compute a canonical
variable score for each case.
 155

The canonical discriminant function for the present study is given in the
following Table 4.72.

Table 4.72 Standardized Canonical Discriminant Function Coefficients

Function
1 2
Mutual Fund Product Awareness 0.365 0.594
Awareness of Asset Management Company Reputation 0.529 -0.386
Understanding of Mutual Fund Risks 0.069 -0.161
Quality of Investment Advisors 0.719 -0.309
Understanding Asset Management Company Services 0.276 0.522

The standardized discriminant function can be given in the form:

Function : 1

Z = 0.365 x Mutual Fund Product Awareness Score + 0.529 x

Awareness of Asset Management Company Reputation Score +
0.069 x Understanding of Mutual Fund Risks Score + 0.719 x
Quality of Investment Advisors Score + 0.276 x Understanding
Asset Management Company Services Score

Function : 2

Z = 0.594 x Mutual Fund Product Awareness Score - 0.386 x

Awareness of Asset Management Company Reputation Score -
0.161 x Understanding of Mutual Fund Risks Score - 0.309 x
Quality of Investment Advisors Score + 0.522 x Understanding
Asset Management Company Services Score
 156

4.9.3 Structure Matrix

The structure matrix contains within-group correlations of each predictor

variable with the canonical function. This matrix provides another way to study the
usefulness of each variable in the discriminant function as shown in Table 4.73.

Table 4.73 Structure Matrix

Function
1 2
Quality of Investment Advisors .688(*) -.318
Understanding of Mutual Fund Risks 0.680(*) -0.311
Awareness of Asset Management Company Reputation 0.362(*) -0.320
Mutual Fund Product Awareness 0.459 0.683(*)
Understanding Asset Management Company Services 0.363 0.617(*)

Variables ordered by absolute size of correlation within function are

indicated in the structure matrix.

4.9.4 Unstandardized Discriminant Coefficients

When the variables are of the same nature, it is preferable to

unstandardized discriminant function. This function for the present study is given
below Table 4.74.

Table 4.74 Canonical Discriminant Function Coefficients

Function
1 2
Mutual Fund Product Awareness (MPA) 0.080 0.130
Awareness of Asset Management Company Reputation (AMC) 0.117 -0.086
Understanding of Mutual Fund Risks (MFR) 0.022 -0.052
Quality of Investment Advisors (QIA) 0.238 -0.102
Understanding Asset Management Company Services (UAM) 0.059 0.111
(Constant) -49.009 -0.099
 157

The Discriminant function is given by:

Function # 1

Z1 = - 49.009 + 0.080 x Mutual Fund Product Awareness + 0.117 x

Awareness of Asset Management Company Reputation + 0.022 x

Understanding of Mutual Fund Risks + 0.238 x Quality of

Investment Advisors + 0.5059 x Understanding Asset

Management Company Services.

Function # 2

Z2 = - 0.099 + 0.130 x Mutual Fund Product Awareness - 0.086 x

Awareness of Asset Management Company Reputation - 0.052 x

Understanding of Mutual Fund Risks - 0.102 x Quality of

Investment Advisors + 0.111 x Understanding Asset Management

Company Services

4.9.5 Classification Results

The Table 4.75 measures the degree of success of the classification for

this sample. The number and percentage of cases correctly classified and

misclassified are displayed.

 158

Table 4.75 Classification Results

Predicted Group Membership

Savvy Techi Normal Total
Clusters
Investors Investors Investors
Original Count Savvy Investors 194.0 0.0 0.0 194.0
Techi Investors 0.0 21.0 1.0 22.0
Normal Investors 8.0 0.0 110.0 118.0
% Savvy Investors 100.0 0.0 0.0 100.0
Techi Investors 0.0 95.5 4.5 100.0
Normal Investors 6.8 0.0 93.2 100.0
97.3% of original grouped cases correctly classified.

The discriminant function constructed for the present study has the
efficiency of correct classification of nearly 98%.