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A Study of Preferences of Investeror’s For Investment in

MUTUAL FUND

Under

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INTRODUCTION

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Board of Director of Axis

AMCShikha Sharma - Associate Director &Chairperson

T S Narayanasami – Independent Director

Pranesh Mishra – Independent Director

U R Bhatt – Independent Director

Sonu Bhasin – Associate Director

Rajiv Anand – Associate Director & MD &CEO

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vision OF AXIS amcThe vision of this company is to have

“AXIS MUTUAL FUND

in every home”

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Mutual fund working

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Mutual fund working(cont……)

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NAV

The value of each unit of the mutual fund, known as the net asset value (NAV), ismostly calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding. The value of all the securities in the portfolio incalculated daily. From this, all expenses are deducted and the resultant value divided bythe number of units in the fund is the fund’s NAV.

NAV = Total value of the fund……………….

No. of units currently issued and outstanding

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RISK V/S. RETURN:

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Distribution channels:

1. Direct marketing by the AMC’s

2. Broker/ sub broker arrangements

3. Individual agents, Banks, NBFC (non banking financial corp.)

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OBJECTIVES OF THE STUDY

ü To find out the Preferences of the investorsfor Asset Management Company.

ü

To know the Preferences for the portfolios.ü To know why one has invested or not

invested in Axis Mutual fund

ü To find out the most preferred channel.ü To find out what should do to boost Mutual

Fund Industry.

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Research methodology

Research type- descriptive

Data collection:

Ø

Primary data-Methods adopted for surveys :

1. Personal meeting with customer’s and

visitor’s.2. Analysis of response of customer’s and visitor’s.

3.Questionnaire method

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Durarion of Study

The study was carried out for a

period of two months, from 30thMay to 30th July 2010.

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Kind of Investments No. of Respondents

Saving A/C 195

Fixed deposits 148

Insurance 152

Mutual Fund 120

Post office (NSC) 75

Shares/Debentures 50

Gold/Silver 30

Real Estate 65

Investors invested in different kind of investments.

Interpretation: From the above graph it can be inferred that out of 200 people, 97.5% peoplehave invested in Saving A/c, 76% in Insurance, 74% in Fixed Deposits, 60% in Mutual Fund,37.5% in Post Office, 25% in Shares or Debentures, 15% in Gold/Silver and 32.5% in Real

Estate.

(was aimed to check the awareness level of respondent about various investment avenues)

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Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of Respondents 40 60 64 36

Preference of factors while investing

20%

30%32%

18%

Liquidity Low Risk High Return Trust

Interpretation:Out of 200 People, 32% People prefer to invest where there is High Return, 30% prefer to invest

where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Trust

(was open ended ques. To find out imp. Factor while inv.)

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Response Yes No

No. of Respondents 135 65

Awareness about Mutual Fund and its Operations

Interpretation:From the above chart it is inferred that 67% People are aware of Mutual Fund and its operations

and 33% are not aware of Mutual Fund and its operations.

(was aim to check about the awareness of mutual fund)

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Source of information No. of Respondents

Advertisement 18

Peer Group 25

Bank 30

Financial Advisors or Relationship 62

Source of information for customers aboutMutual Fund

Interpretation:From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. Out of 135 Respondents, 46% know about Mutual fund ThroughFinancial Advisor or relationship, 22% through Bank, 19% through Peer Group and 13% through

Advertisement.

(was asked to find out the availability sources for various mutual fund)

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Reason No. of Respondents

Not Aware 65

Higher Risk 5

Not any Specific Reason 10

Reason for not invested in Mutual Fund

Interpretation:Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund,

13% said there is likely to be higher risk and 6% do not have any specific reason.

(open ended question aim to check why respondent not invested in mutual fund)

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Name of AMC No. of Investors

Axis MF 55

UTI 75

HDFC 30

Reliance 75

ICICI Prudential 56

Kotak 45

Sbi 70

Investors invested in different Assets ManagementCo. (AMC)

Interpretation:In Patiala most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120 Investors62.5% have invested in each of them, only 46% have invested in Axis MF, 47% in ICICI

Prudential, 37.5% in Kotak and 25% in HDFC.

(was aim to understand the type of AMC where people have invested)

f i i A i

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Associated with Axis 35

Better return 5

Agents Advice or relationship 15

Reason for invested in Axis Mutual Fund

64%

9%

27%

Associated with Axis Better return Agent Adv./relationship

Interpretation:Out of 55 investors of Axis MF 64% have invested because of its association with Brand Axis,

27% invested on Agent’s Advice or Relationship Advice, 9% invested because of better return.

(was aimed to understand the imp. Of brand in making decision about various investment schemes)

R f i d i A i M l F d

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Not Aware 25

Less Return 18

Agent’s Advice, Not in reach 22

Reason for not invested in Axis Mutual Fund

Chart Title

Interpretation:Out of 65 people who have not invested in Axis MF, 38% were not aware with Axis MF, 28% do

not have invested due to less return and 34% due to Agent’s Advice or Not in Reach.

(was aimed to understand that which are the reason’s of not investment in AxisMF)

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Name of AMC No. of Investors

Axis 76

UTI 45

HDFC 35

Reliance 82ICICI Prudential 80

Kotak 60

SBI 75

Preference of Investors for future investment inMutual Fund

Interpretation:Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential, 63% in Axis

MF, 62.5% in SBI, 50% in Kotak, 37.5% in UTI and 29% in HDFC Mutual Fund.

Ch l P f d b h I f

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Channel Financial Advisor or

Relationship

Bank AMC

No. of Respondents 72 18 30

Channel Preferred by the Investors forMutual Fund Investment

Chart Title

Interpretation:Out of 120 Investors 60% preferred to invest through Financial Advisors or in Relaionship , 25%

through AMC and 15% through Bank.

(was aimed to understand the most preferred mode of investment)

M d f I t t P f d b th I t

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Mode of Investment One time Investment Systematic Investment Plan (SIP)

No. of Respondents 78 42

Mode of Investment Preferred by the Investors

Interpretation:Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through Systematic

Investment Plan.

P f d P tf li b th I t

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Portfolio No. of Investors

Equity 56

Debt 20

Balanced 44

Preferred Portfolios by the Investors46%

17%

37%

Equity Debt Balance

Interpretation:From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17% preferred

Debt portfolio

O ti f tti R t P f d b th

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Option Dividend Payout Dividend

Reinvestment

Growth

No. of Respondents 25 10 85

Option for getting Return Preferred by theInvestors

Interpretation:From the above graph 71% preferred Growth Option, 21% preferred Dividend Payout and 8%

preferred Dividend Reinvestment Option.

P f f I t h th t i t i

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Response No. of Respondents

Yes 25

No 95

Preference of Investors whether to invest inSectoral Funds

Interpretation:Out of 120 investors, 79% investors do not prefer to invest in Sectoral Fund because there is

maximum risk and 21% prefer to invest in Sectoral Fund.

FINDINGS

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FINDINGS

•In Patiala in the Age Group of 36-40 years were more in numbers. Thesecond most Investors were in the age group of 41-45 years and the leastwere in the age group of below 30 years.•In family Income group, between Rs. 20,001- 30,000 were more innumbers, the second most were in the Income group of more than

Rs.30,000 and the least were in the group of below Rs. 10,000.•About all the Respondents had a Saving A/c in Bank, 76% Invested inFixed Deposits, Only 60% Respondents invested in Mutual fund.•Mostly Respondents preferred High Return while investment, thesecond most preferred Low Risk then liquidity and the least preferredTrust.•Only 67% Respondents were aware about Mutual fund and itsoperations and 33% were not..

FINDINGS (cont )

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•Among 200 Respondents only 60% had invested in Mutual Fund and 40% didnot have invested in Mutual fund.•

Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there isnot any specific reason for not invested in Mutual Fund and 6% told there islikely to be higher risk in Mutual Fund.•Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICIPrudential has also good Brand Position among investors, AXIS MUTUAL

FUND places after ICICI Prudential according to the Respondents.•Out of 55 investors of AXIS MUTUAL FUND 64% have invested due to itsassociation with the Brand AXIS , 27% Invested because of Advisor’s Adviceand 9% due to better return.•Most of the investors who did not invested in AXIS MUTUAL FUND due tonot Aware of AXIS MUTUAL FUND, the second most due to Agent’s adviceand rest due to Less Return.• For Future investment the maximum Respondents preferred Reliance MutualFund, the second most preferred ICICI Prudential, AXIS MUTUAL FUND has

been preferred after them. Payout and then Dividend Reinvestment

FINDINGS (cont…..)

FINDINGS (cont )

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•60% Investors preferred to Invest through Financial Advisors, 25% through

AMC (means Direct Investment) and 15% through Bank.• 65% preferred One Time Investment and 35% preferred SIP out of both typeof Mode of Investment.•The most preferred Portfolio was Equity, the second most was Balance(mixture of both equity and debt), and the least preferred Portfolio was Debt

portfolio.•Maximum Number of Investors Preferred Growth Option for returns, thesecond most preferred Dividend

FINDINGS (cont…..)

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SUGGESTIONS & RECOMMENDATIONS

• The most vital problem spotted is of ignorance. Investors should be madeaware of the benefits. Nobody will invest until and unless he is fully convinced.Investors should be made to realize that ignorance is no longer bliss and whatthey are losing by not investing.•Mutual funds offer a lot of benefit which no other single option could offer. Butmost of the people are not even aware of what actually a mutual fund is? Theyonly see it as just another investment option. So the advisors should try to

change their mindsets. The advisors should target for more and more younginvestors. Young investors as well as persons at the height of their career wouldlike to go for advisors due to lack of expertise and time.• Mutual Fund Company needs to give the training of the Individual FinancialAdvisors about the Fund/Scheme and its objective, because they are the main

source to influence the investors.•Before making any investment Financial Advisors should first enquire aboutthe risk tolerance of the investors/customers, their need and time (how long theywant to invest). By considering these three things they can take the customersinto consideration.

SUGGESTIONS & RECOMMENDATIONS(cont )

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• Younger people aged under 35 will be a key new customer group into the

future, so making greater efforts with younger customers who show someinterest in investing should pay off.• Customers with graduate level education are easier to sell to and there is alarge untapped market there. To succeed however, advisors must provide soundadvice and high quality.•

Systematic Investment Plan (SIP) is one the innovative products launched byAssets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI.Though most of the prospects and potential investors are not aware about theSIP. There is a large scope for the companies to tap the salaried persons.

SUGGESTIONS & RECOMMENDATIONS (cont…)

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CONCLUSION

3737

CONCLUSION

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CONCLUSION

Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of thesmall investors. This study has made an attempt to understand thefinancial behavior of Mutual Fund investors in connection with the

preferences of Brand (AMC), Products, Channels etc. I observed thatmany of people have fear of Mutual Fund. They think their money willnot be secure in Mutual Fund. They need the knowledge of Mutual Fundand its related terms. Many of people do not have invested in mutualfund due to lack of awareness although they have money to invest. As

the awareness and income is growing the number of mutual fundinvestors are also growing.

CONCLUSION (cont )

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“Brand” plays important role for the investment. People invest in thoseCompanies where they have faith or they are well known with them.There are many AMCs in Patiala but only some are performing well dueto Brand awareness. Some AMCs are not performing well althoughsome of the schemes of them are giving good return because of notawareness about Brand. Reliance, UTI, AXIS MUTUAL FUND, ICICIPrudential and SBI Mutual Fund etc. they are well known Brand, theyare performing well and their Assets Under Management is larger than

others whose Brand name are not well known like Principle, Sundram,etc.Distribution channels are also important for the investment in mutualfund. Financial Advisors are the most preferred channel for theinvestment in mutual fund. They can change investors’ mind from one

investment option to others. Many of investors directly invest their money through AMC because those who dontwant to pay Advisry fee.Those people invest directly who know well about mutual fund and itsoperations and those have time.

CONCLUSION (cont….)

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Thank You

ami axis

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