expectat ancy: a key for investment product choice ... · expectat ancy: a key for investment...

EXPECTATANCY: A KEY FOR INVESTMENT PRODUCT CHOICE DECISIONS

AMONG WOMEN EMPLOYEES OF TAMILNADU

Presented by

K. Muthuselvi1

Dr. G .Murugesan2

Dr. S.C.Sivasundaram Anushan3

Dr. V. Vijay Anand4

1Research scholar, Madurai Kamaraj University.

2Associate Professor, BBA Department,VHNSN.College, Virudhunagar

3Visiting Professor, Department of Management Studies, Madurai kamaraj University, Madurai.

4Assistant Professor, School of Management Studies, SASTRA Deemed University, Thanjavur.

Abstract

The role of expectancies in the choice of investment products among Women employees

of Tamilnadu was carried out in Tamilnadu among 348 respondents. The first ranked investment

expectancy was tax benefits the second ranked expectancy was returns, the third ranked

expectancy was safety and the fourth ranked expectancy was liquidity. The investment products

that were significant in the estimation of tax benefits were Life Insurance Policies, Bank

deposits, Mutual funds, Government Bonds and debentures, ULIPs, and Postal Schemes. The

investment products that were significant in the estimation of returns were Company deposits

NCDs, Chit funds, Commodities, Equity shares, Mutual funds, Futures/options/derivatives and

Real estate. The investment products that were significant in the estimation of safety were Life

Insurance Policies, Postal Schemes, Bank deposits, Government Bonds and debentures, Gold,

and Real estate. The investment products that were significant in the estimation of liquidity were

Chit funds, Equity shares, Mutual funds, Foreign exchange, Gold, and

Futures/options/derivatives.

Introduction to the study

In an attempt to study the role of expectancies in the choice of investment products

among Women employees of Tamilnadu, the researcher was able identify four expectancies

namely tax benefits, returns, safety and liquidity. The investment products taken for the study

were Life Insurance Policies, Company deposits NCDs, Postal Schemes, Chit funds,

Commodities, Equity shares, Bank deposits, Mutual funds, Government Bonds and debentures,

International Journal of Pure and Applied MathematicsVolume 119 No. 7 2018, 2813-2825ISSN: 1311-8080 (printed version); ISSN: 1314-3395 (on-line version)url: http://www.ijpam.euSpecial Issue ijpam.eu

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Gold, ULIPs, Foreign exchange, Futures/options/derivatives and Real estate. The study covered

entire Tamilnadu and the results are furnished.

2. Need for the study

Several investment product choices are available to investors. The choice of a product

depends upon their expectancies from the investments. There is a need to identify the investment

product that suits the specific investor expectancy.

3. Literature Review

Ambrose Jagongo, Vincent S. Mutswenje (2014), found that factors that influence

individual investment decisions were 1.Reputation of the firm, 2.Firm‟s status in industry, 3.

Expected corporate earnings, 4. Past performance firms stock, 5. Price per share, 6.Feeling about

the economy and 7. Expected dividend.

Awais et al. (2016) dealt with the process of investors which influence the decision

making. It depends upon the degree of the risk factors. They found that for managing investment

efficiently the investor should increase the level of financial knowledge, increase the ability to

analyze financial information, and improve the capacity to earn high returns even through risky

investments.

Gaurav Kabra , et al. (2010) has stated that the risk taking ability of the investors depends

on their age.

Jeet Singh, Preeti Yadav(2016) advice that investors should use fundamental analysis,

technical analysis and financial analysis before investing in the equity shares. Investors should

invest their funds in different assets.

Dr. V.G.Jisha, & V. Gomathi(2017) in their research they found that the relationship

between the factors influencing the level of awareness of various investment and factors

influencing the benefits. For choosing an investment investors described the priority was safety

of funds.

Kevin M Musundi (2014), in his research work he found that how financial literacy has

an effect on investment decision making by real estate investors shows that a high percentage of

investors considers financial concepts such as returns, investment risks, investment portfolio

management and trends in interest rates at a great extent.

PritiMane (2016) discussed how the mutual funds types were preferred by the customer

perception and dealt with different investment options, such as bonds, postal saving schemes,

shares, and recurring deposits.

International Journal of Pure and Applied Mathematics Special Issue

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Mustabsar Awais, et al. (2016), they concluded that their study has constructed a

theoretical model for the decision making process for investors that help them to make the right

decision and hence losses can be avoided or reduced in the future.

Sreelatha Reddy K, Lalitha Narayanan(2015) in their study examined that the awareness

and preferences among working women towards different investment options available and

studied the factors affecting their perceived preferences.

Dr. Taqadus Bashir, AaqibaJaved, Arslan Ali Butt, NazishAzam, Ayesha Tanveer,

IrtazaAnsar (2013) identified the major influences on Pakistani investor. They identified the

most and the least influential factors.

4. Objective of the study

To identify the choice of investment products among the women employees those are

influenced by their financial expectancies.

5. Research methodology

A descriptive research using primary data collected using a structured undisguised

questionnaire, adopting area sampling method among 348 respondents was carried out.

Analytical tools like Descriptive statistics, one way ANOVA, and multiple regression were used.

6. Analysis and interpretation

The analysis consists of demographics, investment details, investment products,

investment expectancies, Estimation of various investor expectancies.

6.1. Demographic characteristics of the respondents

The table below summarizes the personal characteristics such as age, income, education,

civil status, occupation sector, religion, type of family, and number of dependents.

Table: 1

Summary of Demographic characteristics of the respondents

Age 20 - 30 yrs. 31 - 40 yrs 41 - 50 yrs 51 - 60 yrs

Above 60

yrs

Frequency 146 123 44 23 12

Percentage 41.95 35.34 12.64 6.61 3.45

Marital Status Married Unmarried

Frequency 270 78

Percentage 77.59 22.41

Education Plus 2

Under

graduation

Post

graduation

Other

qualifications

Frequency 12 247 67 22

Percentage 3.45 70.98 19.25 6.32

Occupied in Public Private


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sector sector

Frequency 167 181


Type of family Nuclear Joint Family

Frequency 180 168


Number of

dependents None One Two More than two

Frequency 102 89 124 33

Percentage 29.31 25.57 35.63 9.48

Earnings per

month in Rs.

Less than

10,000

10,000 to

30,000

30,000 to

50,000 Above 50,000


Percentage 15.80 74.43 3.45 6.32

Religion Hinduism Islam Christianity

Frequency 235 46 67

Percentage 67.53 13.22 19.25

(Source primary data)

6.2. Investment details of the respondents

The table below presents the details such as annual amount invested, source of

investment information, Investment period, and the time frequency of making a churn in the

investment.

Table: 2

Summary of Investment details of the respondents

Annual investment in Rs. Less than

50,000

50,000 to

100,000

100,000 to

500000

Frequency 180 23 145

Percentage 51.72 6.61 41.67

Source of investment

information Friends Relatives Newspapers Consultants


Percentage 25.86 41.67 22.70 9.77

Horizon of Investment Long term Medium term Short term

Frequency 158 101 89

Percentage 45.40 29.02 25.57

Frequency of investment

churn 1 month 1-6 months 1 year

Above 1

year


Percentage 16.09 19.83 41.67 22.41 (Source primary data)

6.3. Investment Expectations

The table below presents the descriptive statistics for the expectancy for returns, safety,

tax benefits, and liquidity. It also presents the F values and their significance for one way

analysis of variance with age, income and annual amount invested by the respondents.


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Table: 3

Investment Expectations

Expectations

Descriptive

statistics of

rank

Age of the

respondents

Income of the

respondents

Annual

investment

Mean S.D F Sig. F Sig. F Sig.

1. Tax benefits 4.28 0.64 8.34 .000 8.873 .000 .379 .685*

2. Returns 4.01 0.78 17.48 .000 3.798 .011 23.356 .000

3. Safety 3.54 1.08 22.88 .000 86.282 .000 72.396 .000

4. Liquidity 2.92 0.66 4.67 .001 20.187 .000 1.089 .338*

(Calculated from the primary data)

(*=H0 accepted at 5% level)

From the mean value of the expectations it can be noted that ‘tax benefits’ is the most

expected expectation with a mean of 4.28and ‘liquidity’ is the least expectation with a mean of

4.01. The second placed expectation was ‘returns’ with a mean of 2.92. The third placed

expectation was ‘safety’ with a mean of 3.54.

Further the expectations from investment such as returns, safety, tax benefits and

liquidity were subjected to one way ANOVA with age, income and amount invested by the

respondents.

Ho: The expectations from investment do not vary with age, income and amount invested

by the respondents at 5%.

The significance of „F‟ is less than 0.05, so the expectations from investment such as returns,

safety, tax benefits and liquidity do vary with age, and earnings. The „F‟ significance is less than

0.05, so the expectations from investment such as safety, and tax benefits do vary with the

amount invested by the respondents. As the significance of „F‟ is more than 0.05, the

expectations from investment such as returns, and liquidity do not vary with the amount invested

by the respondents.

6.4. Investment products

The table below summarizes the descriptive statistics for the 14 investment products

prefereed by the respondents

Table: 4

Descriptive statistics for the Investment products preferred

Investment options and products Mean Std. Dev.

1. Life Insurance Policies 2.94 0.67


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2. Company deposits NCDs 3.50 0.50

3. Postal Schemes 3.90 0.77

4. Chit funds 3.35 0.72

5. Commodities 2.29 0.77

6. Equity shares 3.59 1.11

7. Bank deposits 4.19 0.83

8. Mutual funds 4.52 0.50

9. Government Bonds and debentures 2.95 0.81

10. Gold 3.80 0.68

11. ULIPs 3.12 0.70

12. Foreign exchange 1.95 0.81

13. Futures/options/derivatives 2.17 0.71

14. Real estate 3.50 0.81 (Calculated from the primary data)

The highest agreement is observed for the investment product Mutual funds with a mean

of 4.52, followed by Bank deposits with a mean of 4.19, followed by Postal Schemes with a

mean of 3.90. The lowest agreement is observed for the investment product Foreign exchange

with a mean of 1.95, followed by Futures/options/derivatives with a mean of 2.17, followed by

Commodities with a mean of 2.29.

6.5. Estimation of the expectation tax benefits

When a regression modal for estimation of tax benefits out of the dependent variables of

Real estate, Chit funds, Futures/options/derivatives, Life Insurance Policies , Equity shares ,

Postal Schemes, Commodities, Bank deposits, Mutual funds, Foreign exchange, Company

deposits NCDs, Gold, Government Bonds and debentures, ULIPs was constructed the modal

summary was as follows.

Table: 5

Multiple regression Modal summary for Tax benefits from investment products

R r2 S.V S.S

Deg.

free. M.S F Sig.

0.95 0.90 Regression 28.454 14 2.032 223.694 .000

Residual 3.026 333 .009

Total 31.480 347

An r2

of 0.90 shows that the modal variables are able explain the dependent variable 89.9%

and the significance of F statistic in one way ANOVA of 0.000, shows that the modal is fit.

Table: 6

Modal coefficients and significance of t statistic


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Predictors U.S.C S.C

t Sig. B S.E β

(Constant) 2.901 .934 3.107 0.002

Life Insurance Policies .158 .063 .163 2.487 0.013*

Company deposits NCDs .356 .147 .275 2.421 0.160

Postal Schemes -.153 .098 -.183 -1.568 0.018*

Chit funds -.673 .233 -.518 -2.892 0.604

Commodities .130 .113 .156 1.150 0.251

Equity shares -.027 .053 -.046 -.504 0.614

Bank deposits -.330 .160 -.422 -2.060 0.040*

Mutual funds .685 .107 .528 6.371 0.000*

Government Bonds and debentures -.165 .168 -.205 -.981 0.327

Gold .088 .151 .092 .584 0.560

ULIPs .336 .210 .363 1.600 0.010*

Foreign exchange -.164 .078 -.203 -2.087 0. 438

Futures/options/derivatives .147 .069 .160 2.134 0.334

Real estate -.040 .091 -.050 -.446 0.046 (*=Significant at 5% level)

Life Insurance Policies, Bank deposits, Mutual funds, Government Bonds and

debentures, ULIPs, and Postal Schemes are significant while estimation of Tax benefits.

6.6. Estimation of the expectation returns

When a regression modal for estimation of returns out of the dependent variables of Real

estate, Chit funds, Futures/options/derivatives, Life Insurance Policies , Equity shares , Postal

Schemes, Commodities, Bank deposits, Mutual funds, Foreign exchange, Company deposits

NCDs, Gold, Government Bonds and debentures, ULIPs was constructed the modal summary

was as follows.

Table: 7

Multiple regression Modal summary for estimation of returns from investment products

r r2 S.V S.S Deg. free. M.S F Sig.

.948 .899

Regression 191.533 14 13.681 212.480 0.000

Residual 21.441 333 .064

Total 212.974 347

An r2



Table: 8

Estimation of returns modal coefficients and significance of t statistic


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t Sig. B S.E β

(Constant) -.408 .443 -.919 0.359

Life Insurance Policies -.042 .030 -.036 -1.401 0.162

Company deposits NCDs .103 .070 .066 1.467 0.043*

Postal Schemes .079 .046 .078 1.700 0.090

Chit funds -.329 .110 -.210 -2.975 0.003*

Commodities .157 .054 .156 2.923 0.004*

Equity shares -.004 .025 -.005 -.142 0.007*

Bank deposits .899 .076 .954 11.832 0.430

Mutual funds -.007 .051 -.004 -.136 0.002*

Government Bonds and debentures .080 .080 .082 .996 0.320

Gold .296 .072 .256 4.110 0.263

ULIPs -.115 .100 -.103 -1.158 0.248

Foreign exchange .003 .037 .003 .070 0.944

Futures/options/derivatives -.027 .033 -.024 -.825 0.011*

Real estate .034 .043 .035 .792 0.042* (*=Significant at 5% level)

Company deposits NCDs, Chit funds, Commodities, Equity shares, Mutual funds,

Futures/options/derivatives and Real estate are significant while estimation of returns.

6.7. Estimation of the expectation safety

When a regression modal for estimation of safety out of the dependent variables of Real

estate, Chit funds, Futures/options/derivatives, Life Insurance Policies , Equity shares , Postal

Schemes, Commodities, Bank deposits, Mutual funds, Foreign exchange, Company deposits

NCDs, Gold, Government Bonds and debentures, ULIPs was constructed the modal summary

was as follows.

Table: 9

Multiple regression Modal summary for estimation of safety from investment products


.989 .977

Regression 399.239 14 28.517 1023.78 .000

Residual 9.276 333 .028

Total 408.514 347

An r2



Table: 10

Estimation of safety modal coefficients and significance of t statistic


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t Sig. B S.E β

(Constant) .358 .292 1.228 0.220

Life Insurance Policies .016 .020 .010 .818 0.014*

Company deposits NCDs -.078 .046 -.036 -1.704 0.089

Postal Schemes .015 .031 .011 .486 0.027*

Chit funds .163 .073 .075 2.245 0.425

Commodities -.048 .035 -.034 -1.351 0.178

Equity shares .927 .017 .957 55.701 0.568

Bank deposits -.131 .050 -.101 -2.627 0.009*

Mutual funds -.060 .034 -.028 -1.788 0.075

Government Bonds and debentures -.073 .053 -.055 -1.397 0.043*

Gold -.018 .047 -.011 -.383 0.002*

ULIPs .219 .066 .142 3.344 0.301

Foreign exchange -.058 .024 -.043 -2.374 0.118

Futures/options/derivatives .004 .021 .003 .180 0.858

Real estate .042 .028 .031 1.470 0.014* (*=Significant at 5% level)

Life Insurance Policies, Postal Schemes, Bank deposits, Government Bonds and

debentures, Gold, and Real estate are significant while estimation of safety.

6.8. Estimation of the expectation liquidity

When a regression modal for estimation of liquidity out of the dependent variables of

Real estate, Chit funds, Futures/options/derivatives, Life Insurance Policies , Equity shares ,

Postal Schemes, Commodities, Bank deposits, Mutual funds, Foreign exchange, Company

deposits NCDs, Gold, Government Bonds and debentures, ULIPs was constructed the modal

summary was as follows.

Table: 11

Multiple regression Modal summary for estimation of liquidity from investment products


.983 .967

Regression 144.770 14 10.341 691.839 .000

Residual 4.977 333 .015

Total 149.747 347

An r2



Table: 12

Estimation of liquidity modal coefficients and significance of t statistic


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t Sig. B S.E β

(Constant) -.629 .214 -2.942 0.003

Life Insurance Policies .992 .014 1.014 68.400 0.664

Company deposits NCDs .105 .034 .080 3.108 0.072

Postal Schemes -.010 .022 -.012 -.447 0.655

Chit funds -.202 .053 -.154 -3.795 0.000*

Commodities .048 .026 .056 1.838 0.067

Equity shares -.014 .012 -.023 -1.127 0.031*

Bank deposits -.101 .037 -.128 -2.752 0.006

Mutual funds .070 .025 .053 2.829 0.005*

Government Bonds and debentures .043 .039 .053 1.123 0.262

Gold .166 .035 .172 4.797 .000*

ULIPs .068 .048 .072 1.405 0.161

Foreign exchange -.036 .018 -.044 -2.013 0.045*

Futures/options/derivatives -.022 .016 -.024 -1.409 0.020*

Real estate .061 .021 .075 2.946 0.733 (*=Significant at 5% level)

Chit funds, Equity shares, Mutual funds, Foreign exchange, Gold, and

Futures/options/derivatives are significant while estimation of liquidity.

7. Findings and conclusion

‘Tax benefits’ is the most expected expectation and ‘liquidity’ is the least expectation.

„Returns’ and ‘safety’ are the moderate expectations among women employees of Tamilnadu.

Life Insurance Policies, Bank deposits, Mutual funds, Government Bonds and debentures,

ULIPs, and Postal Schemes are significant while estimation of Tax benefits. Company deposits

NCDs, Chit funds, Commodities, Equity shares, Mutual funds, Futures/options/derivatives and

Real estate are significant while estimation of returns. Life Insurance Policies, Postal Schemes,

Bank deposits, Government Bonds and debentures, Gold, and Real estate are significant while

estimation of safety. Chit funds, Equity shares, Mutual funds, Foreign exchange, Gold, and

Futures/options/derivatives are significant while estimation of liquidity.

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2822

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expectat ancy: a key for investment product choice ... · expectat ancy: a key for investment...

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