Shailesh Shukla

Transcript

PROJECT REPORT ON PREFER PREF EREN ENCE CE OF TH THE E AD ADVI VISO SORS RS TO TOWA WARD RDS S MU MUTU TUAL AL FUNDS  A Dissertation submitted to Submitted bySHAILESH KUMAR SHUKLA P.G.P.B.M., M.B.A. SESSION 2008-2010 Corporate guide: Academic guide: Miss Sheela Kathane Manager (HR) M.O.S.L NAGPUR  Khandala Prof. Meghendra Gajpal Kohinoor Business School, KOHINOOR BUSINESS SCHOOL KHANDALA ACKNOWLEDGEMENT Firstly I would like to acknowledge our institute Kohinoor Business School for providing me an opportunity to work on the field of marketing. I am also thankful to Dr. B. P. Verma, allotting ing his valuable valuable time time for interact interaction ion that that helps helps in attaini attaining ng proper  proper  Director, Director, KBS on allott orientation to the study. With due respect, I am sincerely thankful to Miss Sheela Kathane (HR) and Mr. Prashant Pimpalwar (Managing Director) of Motilal Oswal Securities Ltd. (Nagpur) for supporting, motivating, guiding and providing kind co-operation to me throughout my training period. I am also Thankful to Prof. Sayeed Javed and Prof. Meghendra Gajpal for guiding, inspiring, and motivating me to work in this area. Without their line of action, invaluable guidance and support it would not have been bee n possible for me to complete this project work. SHAILESH KUMAR SHUKLA DECLARATION This This Projec Projectt Report Report is submit submitted ted in partia partiall fulfil fulfilmen mentt of the requir requireme ements nts for a degree degree at Kohinoor Business School, Khandala. I declare that this Project Report is my own work and that it does not contravene any academic offence as specified in the College's Co llege's regulations. Retention I agree that, should the College wish to retain it for reference purposes, a copy of my Project Report may be held by Kohinoor Business School normally for a period of 3 academic years. I understand that my Project Report may be destroyed once the retention period has expired. I am also aware that the College does not guarantee to retain this Project Report for any length of time (if at all) and that I have been advised to retain a copy for my future reference. Confidentiality I confirm that this Project Report does not contain information of a commercial or confidential nature or include personal information other than that which would normally be in the public domain unless the relevant permissions have been obtained. In particular any information which identifies identifies a particular particular individual individual's 's religious religious or political political beliefs, beliefs, informati information on relating relating to their  health, ethnicity, criminal history or personal life has been anonymised unless permission for its  publication has been granted from the person to whom it relates. Copyright The copyright for this Project Report remains with me. Requests for Information I agree that this Project Report may be made available as the result of a request for information under the Freedom of Information Act. Signature: …………………………………………………………………………… Name: …………………………………………………………………………… Date: …………………………………………………………………………… Program : …………………………………………………………………………… EXECUTIVE SUMMARY India’s economy is highly developing. The development is taken place due to the growth in the financial system. This financial system provides the background to various investors regarding varied options to invest. Thus, development of the economy depends on how these investors invest for the well being in long run. As financial markets become more sophisticated and complex, investors need a financial intermediary who provides the required knowledge and professional expertise on successful investing. Mutual Funds represent perhaps the most appropriate investment opportunity for investors. No wonder the concept of  Mutual Fund was initially developed in the U.S. market, but the entry of the concept in the Indian Financial Market was in the year 1964 with the formulation of the UTI, at the initiative of the RBI and Govt. of India. For most people, money is a delicate matter and when it comes to investing they are wary. Simply  because there are many investment options out there, each out promising the other. An important question facing many investors is whether to invest in Banks, National Savings, Post office, Non-banking finance companies, Fixed deposits, and shares etc. or to invest distinctively in Mutual Funds. It has been percei perceived ved that there there is hug hugee poten potentia tiall market market in the region region of VIDARB VIDARBHA HA Thus Thus an exploratory research with the hypothesis “The region of VIDARBHA being progressively industrializing & developing should provide a large & wider market share for Mutual Fund” has been done. Thus the purpose of this research was to find why people do not actively invest in mutual fund in spite of  various benefits like Professional management, Diversification, Convenience liquidity, Flexibility, Tax  benefits etc. as well as to find out potential of business of MOTILAL OSWAL SECURITIES LIMITED in distribution of Mutual Fund in NAGPUR City. After After perfor performin ming g the detail detailed ed explor explorato atory ry resear research ch by inter intervie viewin wing g diffe differen rentt person personss who act as investment advisor like Insurance advisor and Post office advisor etc. with the help of questionnaire, certain facts were revealed regarding the view about Mutual Funds in the mind of investors. I have observed that approximately 60% of the people are unaware of Mutual Funds but most of them are interested to know about Mutual Funds and ready to attend seminar arranged by M.O.S.L. They are also interested to work with M.O.S.L. if sufficient information is provided to them about Mutual Fund and M.O.S.L. A PERSON FROM SERVICE CLASS PREFERS safety of income plus the regular income as well as tax  benefits while on the other hand Professional and Businessman focus on high return with some risk. For growth and development of the Mutual Fund Industry, the misconception regarding Mutual Fund should be removed & the awareness for the same should be made CONTENTS Acknowledgement Declaration Executive Summary 1 COMPANY PROFILE 2 COMPETITOR’S DETAIL 3 INTRODUCTIONS OF MUTUAL FUNDS 4 OBJECTIVES AND SCOPE 5 RESEARCH METHODOLOGY METHODOLOGY 6 DATA ANALYSIS AND INTERPRETATION 7 FINDINGS AND CONCLUSIONS 8 SUGGESTIONS & RECOMMENDATIONS BIBLIOGRAPHY COMPANY PROFILE Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for    professio professionalis nalism, m, research-ba research-based sed value investin investing g and implement implementation ation of cutting-e cutting-edge dge technolog technology y has enabled us to blossom into an almost 2000 member team. Today we are a well diversified financial services firm offering a range of financial products and services such as • Wealth Management • Broking & Distribution • Commodity Broking • Portfolio Ma Management Se Services • Institutional Equities • Private Equity • Investment Banking Services and • Principal Strategies We have a diversified client base that includes retail customers (including High Net worth Individuals), mutual mutual funds, funds, foreig foreign n instit instituti utiona onall invest investors ors,, financ financial ial instit instituti utions ons and corpo corporat ratee client clients. s. We are headquartered in Mumbai and as of March 31st, 2009, had a network spread over 548 cities and towns comprising 1,289 Business Locations operated by our Business Partners and us. As at March 31st, 2009, we had 5, 41,372 registered customers. In 2006, the Company placed 9.48% of its equity with two leading private equity investors based out of  the US – New Vernon Private Equity Limited and Bessemer Venture Partners. The company got listed on BSE and NSE on September 9, 2007. The issue which was priced at Rs.825  per share (face value Rs.5 per share) got a overwhelming response and was subscribed 27.18 times in turbulent market conditions. The issue gave a return of 21% on the date of listing. As of end of financial year 2008, the group net worth was Rs.7 bn and market capitalization as of March 31, 2008 was Rs.19 bn. For year ended March 2008, the company showed a strong top line growth of 91% to Rs.7 bn as compared to Rs.3.68 bn, last year. New businesses like investment banking, asset management and fund  based activities have contributed to this growth. Rs. Crores FY 2007- 08 Growth (YoY) Tota Totall Reve Revenu nues es 701 701 91% 91% EBID EBIDTA TA 270 270 97% 97% PAT 156 100% Credit rating agency Crisil has assigned the highest rating of P1+ to the Company’s short-term debt  program. Shareholding Pattern at on 31st December 08 As of December 31st, 2008; the total shareholding of the Promoter and Promoter Group stood at 70.37%. The shareholding of institutions stood at 10.07% and non-institutions at 19.56%. (click here for detailed shareholding pattern) Our Business Streams Our businesses and primary products and services are: Wealth Management Financial planning for individual, family and business wealth creation and management needs. These are  provided to customers through our Wealth Management service called ‘Purple’ Broking & Distribution services • Equity (cash and derivatives) • Commodity Broking • Portfolio Ma Management Se Services • Distribution of financial products • Financing • Depository Services • IPO distribution We offer these services services through our branches, branches, Business Business Partner locations, locations, the internet and mobile mobile channels. We also have strategic tie-ups with State Bank of India and IDBI Bank to offer our online trading platform to its customers. Commodity Broking Through Motilal Oswal Commodities Broker (P) Ltd our fully owned subsidiary; we provide commodity trading facilities and related products and services on MCX and NCDEX. Besides access to the best of  research in the form of Daily Fundamentals & Technical Reports on highly traded commodities, our  clients also get access to our exclusive Customized Trading Advice on both the trading platforms. We offer these services through our branches, Business Partner locations, the internet and mobile channels Portfolio Management Services Motila Motilall Oswal Oswal Portfo Portfolio lio Manage Managemen mentt Service Servicess offer offer a range range of invest investmen ments ts solut solution ionss throug through h discretionary services. We at Motilal Oswal have helped create wealth for our customers through our  Portfolio Management Services. Our knowledge of the markets together with our understanding of our  customers and their risk profiles has helped us design a range of portfolio offerings for our clients. These in0clude in0clude the Value Value Strategy, Strategy, Bulls Eye Strategy, Trillion Trillion Dollar Dollar Opportun Opportunity ity Strategy Strategy and Focused Strategy Series I. As of March 31st, 2009, the Assets under Management of our various portfolio schemes stood at Rs.4.77 bn. Motilal Oswal group has applied to the regulatory bodies for a license to operate as a Domestic Asset Management Company (Mutual Fund) and we expect e xpect to begin operations soon. Institutional Institutional Equities We offer equity broking services in the cash and derivative segments to institutional clients in India and overse overseas. as. These These client clientss includ includee compan companies ies,, mutua mutuall funds funds,, banks, banks, financ financial ial instit instituti utions ons,, insur insuranc ancee companies, and FIIs. As at March 31st, 2009, we were empanelled with over 300 institutional clients including 200 FIIs. We service these clients through dedicated sales teams across different time zones. Investment Banking We offer financial advisory services relating to mergers and acquisitions (domestic and cross-border), divestitu divestitures, res, restructu restructurings rings and spin-offs spin-offs through through Motilal Motilal Oswal Oswal Investment Investment Advisors Advisors Private Private Ltd. (MOIAPL) We also offer capital raising and other investment banking services such as the management of public offerings, private placements (including qualified institutional placements), rights issues, share buybacks, open offers/delisting and syndication of debt and equity. MOIAPL has closed 23 transactions in 2007-08 worth US$ 1.8 billion and had 18 mandates in hand as at March 31, 2008. Private Equity In 2006, our private equity subsidiary, Motilal Oswal Private Equity Advisors Private Ltd (MOPEAPL) was appointed as the investment manager and advisor to a private equity fund, India Business Excellence Fund, which was launched with a target of raising US$100 mn. The fund is aimed at providing growth capital to small and medium enterprises in India, with investments typically in the range of US$3 mn to US$7 mn. MOPEAPL will manage and advise the fund and other private equity funds, which may be raised in the future. In its final closing, in December 2007, the fund obtained commitments of US$125 mn (Rs.4, 875 mn) from investors in India and overseas. The Fund has deployed/ committed $ 58 mn across 8 deals. MOPEAPL has recently launched an INR 750 crores domestic Real Estate Private Equity Fund called “India Realty Excellence Fund” sponsored by Motilal Oswal Financial Services Ltd. Principal Strategies Group For effective management of treasury operations and to capitalize on market opportunities, the Group has set up a 30 member team which would be responsible for effective deployment of funds into different trading and arbitrage strategies. Focus on Research Research is the solid foundation on which Motilal Oswal Securities advice is based. Almost 10% of  revenue is invested on equity research and we hire and train the best resources to become advisors. At   present we have 22 equity analysts researching over 27 sectors. From a fundamental, technical and derivatives research perspective; Motilal Oswal's research reports have received wide coverage in the media (over a 1000 mentions last year). Our consistent efforts towards quality equity research has reflected in an increase in the ratings and rankings across various categories in the Asia Money Brokers Poll over the years Our unique Wealth Creation Study, authored by Mr. Raamdeo Agrawal, Managing Director, is now in its 13th year. Investors keenly await this annual study for the wealth of information it has on the companies that created wealth during the preceding five years. Awards and Accolades Motilal Oswal Financial Services has received many accolades in the year gone by. Some of them are: •  poll Rate Rated d ‘Be ‘Best st Over Overal alll Coun Countr try y Rese Resear arch ch’’ for for a Loc Local al Brok Broker erag agee in in the the 200 2007 7 Asi Asiaa Mone Money y Brok Broker erss • Rate Rated d Indi India’ a’ss top top brok brokin ing g hous housee in ter terms ms of of tota totall numb number er of of trad tradin ing g term termin inal alss by the the Dun Dun & Bradstreet survey • Rate Rated d ‘Ou ‘Outs tsta tand ndin ing g Com Commo mod dity ity Bro Broki king ng Hous Housee-20 2007 07’’ by by Glo Globo boil il Indi Indiaa • Rank Ranked ed seco second nd bes bestt for for Custo Custome merr Respo Respons nsiv iven enes esss in the the Finan Financi cial al Sec Secto torr at the the Avay Avayaa Glob Global al Connect Customer Responsiveness awards Strong Management Team The organization finds its strength in its team of young, talented and confident individuals. Qualified professionals carry out different functions under the able leadership of its promoters, Mr. Motilal Oswal and Mr. Raamdeo Agrawal. Our talented pool of people comprises qualified and and exper experie ienc nced ed prof profes essi sion onal alss with with an esta establ blis ished hed trac track k reco record rd.. We beli believ evee that that our  our  management's entrepreneurial spirit, strong technical expertise, leadership skills, insight into market / customer needs provide us with a competitive strength which will help us implement our business strategies. WHERE M.O.S.L. STAND IN THE MARKET M.O.S.L. is a legendary name in financial services, M.O.S.L. credit is defined by its mission to succeed, succeed, passion passion for professionalis professionalism, m, excellent excellent work ethics ethics customer customer centric centric values and its research and advice. Today Today M.O.S. M.O.S.L L is well well kno known wn as a premi premier er financ financial ial servic services es enterp enterpris rise, e, offeri offering ng a broad broad spectrum of customized services to its clients, both corporate and retail. Services that M.O.S.L. constantly upgrade and improve are because of company’s skill in leveraging technology. Being one of the most techno-savvy organizations around helps company to deliver even more cost effective financial solutions in the shortest possible time. What bears ample testimony to success of Motilal Oswal is the faith reposed in company by valued investors and customers, all across the country. Indeed, with Motilal’s wide network  touching every corner of the country, even the most remote investor can easily access Motilal’s services and benefit from company’s expert advice. Mission Statement of ‘M.O.S.L.’-: An organization exists to accomplish something or achieve something. The mission statement indicates what an organization wants to achieve. The mission statement may be changed periodically to take advantage of new opportunities or respond to new market conditions. M.O.S.L’s mission statement is “To Bring Industry, Finance and People together.” M.O.S.L. is work as intermediary between industry and people. M.O.S.L. work as investment advisor and helps people to invest their money same wayM.O.S.L. Helps industry in achieving finance from people  by issuing shares, debentures, bonds, mutual funds, fixed deposits etc. Company’s mission statement is clear and thoughtful which guide geographically dispersed employees to work independently yet collectively towards achieving the organization’s goals. Vision of M.O.S.L-: Company’s vision is crystal clear and mind frame very directed. “To be pioneering financial services company. And continue to grow at a healthy pace, year after year, decade after decade.” Company’s foray into IT-enabled services and internet business has provided an opportunity to explore new frontiers and business solutions. To build a corporate that sets benchmarks for others to follow. Behind the Picture: Picture : What Customers matter for M.O.S.L.? Market Power Brand Preference Customer Value Relationship is our Competitive Advantage Every Every year year with with this this pictur picturee keepin keeping g in mind mind M.O.S.L M.O.S.L.. acceler accelerate ate with with Recove Recovery, ry, Reviva Revivall and Reappearance. M.O.S.L. Values: Integrity Responsibility Reliability Unity Understanding Excellence Confidentiality M.O.S.L. has adequate internal control systems and procedures commensurate with the size natu nature re of its its busi busines ness. s. Th Thes esee syst system em and and proc procedu edure ress prov provid idee reas reason onabl ablee assu assura ranc ncee of  maintenance maintenance of proper accounting accounting records, records, reliabilit reliability y of financial financial information, information, protection protection of  resources and safeguarding of assets against unauthorized use. MARKETING STRATEGY OF M.O.S.L. Market Positioning: Market positioning statements of M.O.S.L. are “At M.O.S.L. we give you single window service” and “We also ensure your comfort”. So, M.O.S.L. focus on the consumers who prefer almost all investment investment activities activities at same place  by providing number of various financial services. At M.O.S.L. a person can purchase or  sell shares, debentures etc. and at the same place also demat it. M.O.S.L also provides other  investment option to the same person at same place like Mutual Fund, Insurance, Fixed Deposit, and Bonds etc. and help the person in designing his portfolio. By this way M.O.S.L  provides comfort to its customers. M.O.S.L is also positioned according to  Ries and Trout . M.O.S.L is promoted as a no. 1 investment product distributor and R & T agent of India. Target Market: demographic segmentation segmentation stra strate tegy gy and and segm segmen entt peopl peoplee base based d on thei their  r  M.O.S.L. uses demographic occupation M.O.S.L uses selective specialization strategy for market targeting. Target person for  the M.O.S.L Stock Broking and M.O.S.L Investment Service are persons who can work as sub broker for the companies. Companies focus on Advisors of Insurance and post office, Tax consultants and CAs for making sub-broker. Marketing channel System: M.O.S.L. uses one level  marketing channel for investment product distribution. Sub-brokers work work as inte interm rmedi ediar ary y betw betwee een n cons consum umer er and compa company ny.. Comp Compan any y has has both both forw forwar ard d and   backward backward flow of activity activity through channel. channel. Company distributes distributes stationery, stationery, brokerage, and information forward to its sub-broker. The sub-brokers send filled forms, queries, amount of  investment etc. back to the company. Training Channel Members: M.O.S.L. provides training to the sub-brokers because they will be viewed as the company by the investors. The executives of M.O.S.L. explain various new schemes of investment to the sub brokers  brokers with its objective, objective, risk factors and expected expected return. return. Company Company also periodically periodically arrange seminar to guide sub-brokers. Advertising and Promotion: The objective of advertising of M.O.S.L is to create awareness about services of M.O.S.L among investors and sub-brokers and increase sub-brokers of M.O.S.L. Compan Company y doesn’t doesn’t give give adverti advertisem sement ent in media media like like TV, Newspa Newspaper pers, s, and Magazi Magazines nes etc. etc. M.O.S.L.’s advertisement is made indirectly by the companies associate with it. M.O.S.L is R & T agent of around 700 companies. They publish name, address and logo of M.O.S.L on their  annual report. HR POLICY OF M.O.S.L Recruitment and Selection Policy: The upper level members like zonal managers, regional managers, branch managers and senior  execut executive ivess are recrui recruited ted by pub publis lishin hing g recrui recruitme tment nt adverti advertisem sement ent in leadin leading g nation national al level level newspaper. The qualified applicant are then called for interview and selected. The regional manager has authority to select lower level employee like peon, marketing executives, accountant etc. by approval of zonal manager. Training and Development: Development: Continuous training and upgrading technical, behavioral and managerial skills is a way of life in M.O.S.L. M.O.S.L encourages employees to hone their skills regularly to enable them to face the challenges of the changing requirements of customers that fit market up and down. Training needs analysis is done on a regular basis and systematic methodologies are ensured that skills and capabilities of all employees are constantly upgraded to enable them to perform in the challenging work environment.  New employee has given training under experienced employee. The new employee work under  experience employee and observe his all activities. When company employs new technology or  there is any change in the working of company the training program is arranged. Employee Motivation: M.O.S.L.’s employees are highly empowered. They don’t have to report any person of the same  branch but they report upper level branch. i.e. Marketing executive of NAGPUR branch directly reports Senior Marketing executive of PUNE zonal zon al office. If particular branch earn certain profit then M.O.S.L gives them special incentives. E.g. last year  M.O. M.O.S.L S.L had arra arrang nged ed two two days days tour tour for for thei theirr empl employ oyee eess of Nagpu Nagpur, r, Th This is also also help helpss in maintaining co-operation between employees. Quality Policy Of Of MO.S.L. MO.S.L. : To achieve and retain leadership, M.O.S.L. shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, M.O.S.L will strive to exceed Customer’s expectations. Quality Objectives of M.O.S.L • • • • Build Build in-hou in-house se proces processes ses that that will will ensure ensure transp transpare arent nt and harmon harmoniou iouss relationships with its clients and investors to provide high quality of services. Establ Establish ish a partne partnerr relati relations onship hip with with its invest investor or servic servicee agents agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer's needs. Cont Contin inue ue to upho uphold ld the the valu values es of hones honesty ty & inte integr grit ity y and stri strive ve to establish unparalleled standards in business ethics. • • • Use Use stat statee-of of-t -the he art art info inform rmat atio ion n tech technol nolog ogy y in devel developi oping ng new new and innovative financial products and services to meet the changing needs of investors and clients. Strive Strive to be a reliab reliable le source source of value-a value-adde dded d financi financial al produc products ts and servic services es and constan constantly tly guide guide the indivi individua duals ls and insti institut tution ionss in making making a judici judicious ous choice of same. Stri Strive ve to keep keep all all stak stakee-ho hold lder erss (sha (share reho hold lder ers, s, clie client nts, s, inve invest stor ors, s, employees, suppliers and regulatory authorities) proud and satisfied. SWOT ANALYSIS OF M.O.S.L. Strengths: Employees are highly empowered. Strong Communication Network. Good co-operation between employees.  Number 1 Registrar and Transfer agent in India.  Number 1 dealer of Investment Products in India. • • • • • Weaknesses: High Employee Turnover. Global Recession • • Opportunity: • • Growth rate of mutual fund industry is 40 to 50% during last year and it expected that this rate will be maintained in future also. Marketing at rural and semi-urban areas. Threats: • • Increasing number of local players. Past image of Mutual Fund. COMPETITORS DETAIL 1. Bajaj Capital-: It was established in 1964 at Delhi. In 1965 it innovates a new financial instrument ‘Companies Fixed Deposits’ and becomes the first company to raise Fixed Deposits. The objective of  company is to provide professional guidance to investors on where, when and how to invest and to assist the corporate sector in its resource raising activities. Bajaj Capital became the first company to set up ‘Investment Centers’ all over India for this purpose. Today, Bajaj Capital has 90 offi office cess in over over 40 impo import rtan antt Indi Indian an Citi Cities es and and has has a team team of aroun around d 500 empl employ oyee eess nationwide Services provided •Merchant banking •Buying and Selling of Money Market Investments •Distribution of financial products •Investment Advisory Service » Company fixed deposits » Bonds » Mutual funds » Life insurance » General insurance » Pension schemes » Post office schemes » Tax saving schemes » Insurance linked investment schemes » Initial public offerings » Housing loans » NRI schemes » Car insurance •Financial Planning » Investment planning » Retirement planning » Insurance planning » Children's future planning » Tax planning » Short-term cash flow planning 2. MCS Ltd. It is established in 1985 in Delhi. It is one of the largest Data Processing House employing more than 600 people. MCS Ltd. has 8 branches all over India including 2 in Gujarat, Ahmadabad and Baroda. Volumes Handled •Share registry activities for over 100 corporate servicing over 10 million investors. •Mutual fund operations for 25 funds, servicing over 4.5 million investors. •Billing & settlement plan for Indian operations of IATA Geneva for 1.2 million tickets  per annumm covering (26 airlines & over 1200 agents). Services Offered: •Registrars and Transfer Agents •Registrars to IPO’s /Right Issues •Registrars to Open Offers •Registrars to Mutual Funds •Data Processing for Airlines •Print Shop Services MCS is a major player in these activities in the Country with a market share of about 25%. MCS today provides these services to over 140 Corporate and Mutual Funds for a total investor base of  15 million. 3. N.J.India Investments Pvt. Ltd.   NJ India Invest (formerly known as NJ Capital stocks) was started in 1994 to cater to the growing financial services sector. NJ India Invest evolved out as a client focused need based investment advisory firm. NJ regards mutual fund as one of the best investment avenue available to satisfy any kind of investment need. 4. ICICI Securities Ltd. ICICI Securities Limited (i-SEC) is a wholly owned investment-banking subsidiary of  ICICI Limited. Limited. ICICI is the only non-Japanese Asian financial institution to be listed on the New York  Stock Stock Exchang Exchangee (NYSE) (NYSE).. ICICI ICICI Securi Securitie tiess was formed formed on 22n 22nd d Feb. 1993, when ICICI's ICICI's Merchant Banking Division was spun off into a new company, ICICI Securities today is India's leading Investment Bank and one of the most significant players in the Indian capital markets. ICICI Brokerage Services Limited (IBSL) set up in March 1995, IBSL is a 100% subsidiary of iSEC. It commenced its securities brokerage activities in February 1996 and is registered with the  National Stock Exchange of India Limited and The Stock Exchange, Mumbai. ICICI has started a website ICICIdirect.com which is the most comprehensive website, which allows you to invest in Shares, Mutual funds, Derivatives (Futures and Options) and other  financial products ICICI has a large network of branches all over India. Services offered: •Merchant Banking •Demat Service •Stock Broking 5. HDFC HDFC is the leading financial company in India. IT has large network of branches all over India. HDFC Securities which is fully subsidiary of HDFC provides demat service. HDFC and its subsidiary provides following services. •Demat Service •Life Insurance •Banking Service •Housing Finance •Vehicle Finance •Education Loan •Personal Loan •Mutual Fund 6. Kotak Securities Ltd. Kotak Securities needs no introduction as one of the largest stock broking houses in the country and a leading distributor of primary market offerings. Kotak Securities limited is a joint venture  between Kotak Mahindra Bank and Goldman Sachs, the international investment banking and  brokerage firm. Kotak Securities is a corporate member of both the BSE and the NSE. It is also a depository  participant with the National Securities Depository Limited (NSDL) for trading and settlement of  dematerialized shares. Services offered: •Stock Broking •Financial Product Distribution •Demat Services •Investment Advisory Services INTRODUCTION OF MUTUAL FUNDS INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS-: Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. This pool of money is invested in accordance with a stated objective. The joint ownership of the fund is thus “Mutual”, i.e. the fund belongs to all investors. The money thus collected is then invested in capital market instruments such as shares, debentures and other  securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities,  bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The fund’s Net Asset value (NAV) is determined each day. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. . When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors. ADVANTAGES OF MUTUAL FUND • Portfolio Diversification • Professional ma management • Reduction / Diversification of Risk  • Liquidity • Flexibility & Convenience • Reduction in Transaction cost • Safety of regulated environment • Choice of schemes • Transparency DISADVANTAGE OF MUTUAL FUND •  No control over Cost in the Hands of an Investor  • No tailor-made Portfolios • Managing a Portfolio Funds • Difficulty in in se selecting a Suitable Fu Fund Schem heme HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY • Thee mutua Th mutuall fund fund ind indus usttry in in Indi India star startted in in 1963 1963 with with the the for form matio ation n of Uni Unitt Trus Trustt of  India, at the initiative of the Government of India and Reserve Bank. Though the growth was slow, but it accelerated from the year 1987 198 7 when non-UTI players entered the Industry. • In the the pas pastt deca decade de,, Indi Indian an mut mutua uall fund fund ind indus ustr try y had had seen seen a dram dramat atic ic imp impro rove veme ment nt,, both both qualities qualities wise as well as quantity wise. Before, Before, the monopoly of the market had seen an ending  phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the fund family raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it reached the height if Rs. 1540 billion. • Thee Mutu Th Mutual al Fun Fund d Indu Indust stry ry is is obvi obviou ousl sly y grow growin ing g at a trem tremen endo dous us spa space ce wit with h the the mutu mutual al fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under. First Phase – 1964-87 • Unit Trus Trustt of Ind India (UTI) was was est established on 1963 by an Act Act of Par Parliament by th the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. Second Phase – 1987-1993 (Entry of Public Sector Funds) • 1987 1987 mar marke ked d the the entr entry y of nonnon- UTI UTI,, publ public ic sec secto torr mutu mutual al fun funds ds set set up up by pub publi licc sect sector  or   banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed  by Canbank Mutual Fund (Dec 87), Punjab National National Bank Mutual Mutual Fund (Aug 89), Indian Bank  Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December  1990.At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores. Third Phase – 1993-2003 (Entry of Private Sector Funds) 1993 was the year in which the first Mutual Fund Regulations came into being, under  which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pionee Pioneerr (now (now merged merged with with Frankl Franklin in Templet Templeton) on) was the first first privat privatee sector sector mutual fund fund registered in July 1993. • • Thee 1993 Th 1993 SEB SEBII (Mut (Mutua uall Fund Fund)) Regu Regula lati tion onss were were sub subst stit itut uted ed by a more more com compr preh ehen ensi sive ve and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. Fourth Phase – since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was  bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India • with assets under management of Rs.29,835 crores as at the end of January 2003, representing  broadly, the assets of US 64 scheme, assured return and certain other schemes The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes CATEGORIES OF MUTUAL FUND Mutual funds can be classified as follow:  • time. based on their structure: Open-ended funds : Investors can buy and sell the units from the fund, at any point of  • Close-ended funds: These funds raise money from investors only once. Therefore, after  the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a periodic pe riodic basis such such as monthl monthly y or weekly weekly.. Redemp Redemptio tion n of units units can be made made during during specif specified ied interv intervals als.. Therefore, such funds have relatively low liquidity.   based on their investment objective: Equity funds: These funds invest in equities and equity related instruments. With fluctuating share   prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower  volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can be further classified as: i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark index both in terms terms of composition and individual stock  weightages. ii) Equ Equity ity diversif diversified ied fun fundsds- 100% of the capital is invested in equities spreading across different sectors and stocks. iii|) Dividend yield funds - it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme. e.g. -An infrastructure fund invests in power, construction, cements sectors etc. v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will invest in banking stocks. vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors. Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the riskreturn ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are  balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities. ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt. Debt fund: They invest only in debt instruments, and are a good option for investors averse to idea of taking taking risk associated associated with equities. equities. Therefore, Therefore, they invest exclusively exclusively in fixed-incom fixed-incomee inst instru rume ment ntss like like bonds bonds,, deben debentu ture res, s, Gove Govern rnme ment nt of Indi Indiaa secu securi riti ties es;; and and mone money y mark market et instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs. market instrument instruments, s, a large portion portion being i) Liquid funds - These funds invest 100% in money market invested in call money market. ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills. iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate. iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing  between cash market and derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of  arbitrage opportunities. v) Gilt funds LT - They invest 100% of their portfolio in long-term government securities. vi) Income funds LT - Typically; such funds invest a major portion of the portfolio in long-term debt papers. vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of  10%-30% to equities. viii) FMPs - fixed monthly plans invest in debt papers whose maturity is in line with that of the fund. RISK V/S. RETURN: INVESTMENT STRATEGIES 1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of  a month. Payment is made through post dated cheques or direct debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the  benefit of Rupee Cost Averaging (RCA) 2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund. 3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month. Following are list of Mutual Fund companies in India:- S r . No . M ut ual F u nd Na m e No. of Schemes 1 Alliance Mutual Fund 36 2 Benchmark Mutual Fund 5 3 Birla Mutual Fund 74 4 Bank of Baroda Mutual Fund 17 5 Can Bank Mutual Fund 25 6 Chola Mutual Fund 45 7 Deutsche Mutual Fund 40 8 DSP Merrill Lynch Mutual Fund 40 9 Escorts Mutual Fund 15 10 Franklin Templeton Investments 130 11 GIC Mutual Fund 5 12 HDFC Mutual Fund 79 13 HSBC Mutual Fund 32   14 IL & FS Mutual Fund 43 15 ING Vysya Mutual Fund 55 16 JM Mutual Fund 55 17 Kotak Mutual Fund 56 18 LIC Mutual Fund 35 19 Morgan Stanley Mutual Fund 1 20 Punjab National Bank Mutual Fund 4 21 Prudential ICICI Mutual Fund 124 22 Principal Mutual Fund 68 23 Reliance Mutual Fund 74 24 Sahara Mutual Fund 12 25 State Bank of India Mutual Fund 59 26 Standard Chartered Mutual Fund 100 27 Sundaram Mutual Fund 52 28 SUN F&C Mutual Fund 1 29 Tata TD Mutual Fund 100 30 Taurus Mutual Fund 9 31 Unit Trust of India 42 32 UTI Mutual Fund 66 The graph indicates the growth of assets over the years:- (GROWTH IN ASSET UNDER MANAGEMENT) (SOURCE- www.amfiindia.com) www.amfiindia.com) MUTUAL FUNDS-ORGANISATION: FUNDS-ORGANISATION: There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund: 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 42% 42% 36% 14% 14% 4% 3%     e     m     o     c     n      I      h      t     w     o     r      G      d     e     c     n     a      l     a      B     y      t     e     e     k     n     r     o     a      M     M      t      l      i      G 1%      S      S      L      E Fund Type i ASSET UNDER MANAGEMENT BY FUND TYPE - (source-www.amfiindia.com) 40% 38% 35% 30% 25% 20% 21% 17% 19% 15% 10% 5% 5% 0%       k      n      a       B      s      n      o       i       t      u       t       i       t      s      n       I       F          t      n       i      o       J       I          t      n       i      o       J      e       t      a      v       i      r       P Fund Type Asse ssets www.amfiindia.com) Under nder Mana Manag geme ement By AMC(so (source urce-- REGULATORY BODIES Financial Financial System is basically basically responsible responsible for the major up and downs in the economy So, there are some regulatory bodies on it which ensures effectiveness in the management of fund of the investors and transparency in the transaction. MINISTRY OF FINANCE SEBI -Stock broker -R and T agent -Mutual fund RBI -commercial bank -NBF Co. DEPT.OF I.T. -PAN -TAN - Etds OBJECTIVE AND SCOPE Objective of the study-: 1. To fin find d out out the the Pref Prefer erenc ences es of the the inve invest stor orss for for Asse Assett Man Manage ageme ment nt Com Compan pany. y. 2. To know know the Pref Prefer eren ence cess for for the por portfol folios. ios. 3. To know know why why one one has has inv inves este ted d or or not not inve invest sted ed in Mu Mutu tual al fund fund 4. To fi find out out the most pre preferred ch channel. el. 5. To find find out out wha whatt sho shoul uld d do do to to boo boost st Mu Mutu tual al Fund Fund Indu Indust stry ry.. Scope of the study-: A big boom has been witnessed in Mutual Fund Industry in recent times. A large number of new  players have entered the market and trying to gain market share in this rapidly improving market. The research was carried on in Nagpur. I had been sent at one of the branch of M.O.S.L. Where I completed my Project work. I surveyed on my Project Topic “preference of the advisors towards mutual funds” on the visiting customers of the d ifferent stock broaking companies. The study will help to know the preferences of the customers, which company, portfolio, mode of investment, and option for getting return and so on they prefer. This project report may help the company to make further planning and strategy. RESEARCH METHODOLOGY This report is based on primary as well secondary data, however primary data collection was given given more more import importance ance since it is overhea overhearin ring g factor factor in attitu attitude de studie studies. s. One of the most important users of research methodology is that it helps in identifying the problem, collecting, analyzing the required information data and providing an alternative solution to the problem .It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones. Data sources-: Research is totally based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various journals and websites. Duration of Study: The study was carried out for a period of three months, from 6th April to 30th June 2009 2 009. Sampling-:  Sampling procedure-: The sample sample was select selected ed of them them who are the custom customers ers/vi /visit sitors ors M.O.S.L M.O.S.L., ., V.I.P. V.I.P. Road Road Dharampeth Nagpur irrespective of them being investors or not or availing the services or not. It was also collected through personal visits to persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.  Sample size: The sample size of my project is limited to 200 people only. Out of which only120 people had invested in Mutual Fund. Other 80 people did not have invested in Mutual Fund.  Sample design: Data has been presented with the help of bar graph, pie charts, line graphs etc. Limitation-:  Some of the persons were not so responsive.  Possibility of error in data collection because many of investors may hav e not Given actual answers of my questionnaire.  Sample size is limited limited to 200 visitors of M.O.S.L. V.I.P. Road Dharampeth Nagpur  Branch, out of these only 120 had invested in Mutual Fund. The sample. Size may not adequately represent the whole market.  Some respondents were reluctant to divulge personal information which can Affect the validity of all responses.  The research is confined to a certain part of Nagpur. DATA ANALYSIS AND INTERPRETATION ANALYSIS & INTERPRETATION OF THE DATA-: 1-(a) Age distribution of the Investors of Nagpur Age Group No. <= 30 of   12 31-35 36-40 41-45 46-50 >50 18 30 24 20 16 Investors    d 35   n   u    F 30    l   a   u    t   u 25    M   n    i 20    d   e    t   s 15   e   v   n    i 10   s   r   o    t   s 5   e   v   n 0    I 30 24 18 20 12 <=30 31-35 36-40 41-45 46-50 Age group of the Investors 16 >50 Interpretation According to this chart out of 120 Mutual Fund investors of Nagpur the most are in the age group of 36-40 yrs. i.e. 25%, the second most investors are in the age group of 4145yrs i.e. 20% and the least investors are in the age group of below 30 yrs. (b). (b). Educ Educat atio iona nall Nagpur. Qual Qualif ific icat atio ion n of inve invest stor ors s Educational Qualification Grad Gradua uate te// Post Post Grad Gradua uate te Number Investors 88 Under Graduate 25 Others 7 Total 120 of   of  6% 23% 71% Graduate/Post Graduate Under Graduate Others Interpretation: Out of 120 Mutual Fund investors 71% of the investors in Nagpur are Graduate/Post Graduate, 23% 23% are Under Graduate Graduate and 6% are others others (under HSC). c). Occupation of the investors . Occupation No. Investors Govt. Service Pvt. Service Business Agriculture Others . 30 45 35 4 6 of   50   s   r   o 40    t   s   e 30   v   n    I    f 20   o  .   o 10    N 35 45 30 4 6 Agric gricul ultu ture re Other Others s 0 Govt. Service Pvt. Service Busi Busines ness s Occupation of the customers Interpretation: In Occupation group out of 120 investors, 38% are Pvt. Employees, 25% are Businessman, 29% are Govt. Employees, 3% are in Agriculture and 5% are in others. (d). Monthly Family Income of the Investors of Nagpur. Income Group No. Investors <=10,000 10,001-15,000 15,001-20,000 20,001-30,000 >30,000 5 12 28 43 32 of   50 45 40   s   r   o 35    t   s 30   e   v   n 25    I    f   o 20  .   o 15    N 10 5 0 43 32 28 5 <=10 12 10-15 15 -20 20-30 >30 Income Group of the Investorsn (Rs. in Th.) Interpretation: In the Income Group of the investors of Nagpur, out of 120 investors, 36% investors that is the maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e. 27% investors are in the monthly income group of more than Rs. 30,000 and the minimum investors i.e. 4% are in the monthly income group of below Rs. 10,000 (2) Investors invested in different kind of investments. investments. Kind of Investments Saving A/C Fixed deposits Insurance Mutual Fund Post office (NSC) No . Respondents 195 14 8 1 52 120 75 of   Shares/Debent ures Gold/Silver Real Estate    t   n   e   m    t   s   e   v   n    I    f   o   s    d   n    i    K 50 30 65 65   e  r   v    l    i   /  S   d    l    )    G  o   S  C    N   e  (    c    i    f    f   c  e   O   n   s  t   u  r  a   o    P    I  n  s   /  c   A 0   g     i  n   v   a   S 30 50 75 120 152 148 195 50 100 15 1 50 200 25 2 50 No.of Respondents Interpretation: From the above graph it can be inferred that out of 200 people, 97.5% people have 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. 3. Preference of factors while investing Factors (a) Liquidity (b) Risk Low (c) Return High (d) Trust No. of   40 60 64 36 Respondents 18% 20% 32% 30% Liquidity iquidity Low Risk High Return turn 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 4. Awareness about Mutual Fund and its Operations-: Response No. of Respondents Yes 135 No 65 33% 67%   Ye Yes No 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. 5. Source of information for customers about Mutual Fund-: Source of information Advertisement Peer Group Bank Financial Advisors . No. of Respondents 18 25 30 62   s    t    f   n   e   o   d  .   o  n   o    N  p   s   e    R 70 60 50 40 30 20 25 10 18 0 Advertis rtisementP nt Peer Group roup 62 30 Bank Fina inancial Advisors Source of Inform Information 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 Through Financial Advisor, 22% through Bank, 19% through Peer Group and 13% through Advertisement 6-Investors invested in Mutual Fund-: Response YES No. Respondents 120 NO 80 Total 200 of   No 40%  Yes 60% Interpretation: Out of 200 People, 60% have invested in Mutual Fund and 40% do not have invested in Mutual Fund. 7. Reason for not invested in Mutual Fund-: Reason No. of   Respondents Not Aware Higher Risk Not any Specific 65 5 10 Reason 13% 6% 81% Not Aw Awar are e Higher Risk Not Any Interpretation: Out of 80 people, people, who have not invested invested in Mutual 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. 8. Investors invested in different Assets Management Co. (AMC) Name of AMC No. of Investors 55 75 30 75 56 45 70 SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others Others 70 HDFC    C    M    A    f   o   e   m   a    N 30 Kotak 45 SBIMF 55 ICICI 56 Reliance 75 UTI 75 0 20 40 60 80 No. of Investors Interpretation: In Nagpur most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120 Investors 62.5% have invested in each of them, only 46% have invested in SBIMF, 47% in ICICI Prudential, Prudential, 37.5% in Kotak and 25% in HDFC. 9. Reason for invested in M.F.-: Reason No . Respondents Associated with RBI Better Return Agents Advice 35 5 15 of   27% 64% 9% RBI Better Return turn A ents Advice Interpretation: Out of 55 investors investors of MF 64% have invested because because of its association with with Brand SBI, 27% invested on Agent’s Advice, 9% invested because of better r eturn. 10. Reason for not invested in M.F.-: Reason No. of   Respondents Not Aware Less Return Agent’s Advice 25 18 22 34% 38% 28% Not Aware LessReturn Agent'sAdvice Interpretation: Out of 65 people who have not invested in MF, 38% were not aware with MF, 28% do not have invested due to less return and 34% due to Agent’s Advice. 11. Preference of Investors for future investment in Mutual Fund-: Name of AMC No. of Investors 76 45 35 82 80 60 75 SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others 75 Others 60 Kotak     C Prudential    MICICI Prudential    A    f   o Reliance   e   m   a HDFC    N UTI 80 82 35 45 SBIMF 0 76 20 40 60 80 100 No. of Investors Interpretation: Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential, 63% in SBIMF, 62.5% in others, 50% in Kotak, 37.5% in UTI and 29% in HDFC Mutual Fund. 12. Channel Preferred by the Investors for Mutual Fund Investment-: Channel Financial Advisor Bank AMC No. of  72 18 30 Respondents 25% 60% 15% Financial Advisor Bank AMC Interpretation: Out of 120 Investors 60% preferred to invest through Financial Advisors, 25% through AMC and 15% through Bank. 13. Mode of Investment Preferred by the Investors-: Mode Mode of Inve Invest stme ment nt No. of Respondents One One time time Inve Invest stm ment ent Syst System emat atic ic 78 (SIP) 42 Inve Invest stme ment nt Plan Plan 35% 65% One time Investment SIP Interpretation: Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through Systematic Investment Plan. 14. Preferred Portfolios by the Investors:- Portfolio No. of Investors Equity Debt Balanced 56 20 44 37% 46% 17% Equity quity Debt Balance Interpretation: From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17%  preferred Debt portfolio. 15. Option for getting Return Preferred by the Investors-: Option Dividend Payout No. of  25 Dividend Growth Reinvestment 10 85 Respondents 21 8% 71 DividendPayout Dividend Reinvestment Growth Interpretation: From the above graph 71% preferred Growth Option, 21% preferred Dividend Payout and 8% preferred Dividend Reinvestment Option. 16. Preference of Investors whether to invest in Sectoral Funds-: Response No. of   Yes No Respondents 25 95 21% 79%   Ye Yes No 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. FINDING AND CONCLUSION Findings In Nagpur in the Age Group of 36-40 years were more in numbers. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years.  In Nagpur most of the Investors were Graduate or Post Graduate and below HSC there were very few in numbers.  In Occupation group most of the Investors were Govt. employees, the second most Investors were Private employees and the least were associated with Agriculture.  In family Income group, between Rs. 20,001- 30,000 were more in numbers, 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 in Fixed Deposits, Only 60% Respondents invested in Mutual fund.  Mostly Respondents preferred High Return while investment, the second most preferred Low Risk then liquidity and the least preferred Trust.   Only 67% Respondents were aware about Mutual fund and its operations and 33% were not. Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not have invested in Mutual fund.  Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not any specific reason for not invested in Mutual Fund and 6% told there is likely to be higher risk in Mutual Fund.  Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI Prudential has also good Brand Position among investors, SBIMF places after ICICI Prudential according to the Respondents.  Out of 55 investors of SBIMF 64% have invested due to its association with the Brand RBI, 27% Invested because of Advisor’s Adv isor’s Advice and 9% due to better return.  Most of the investors who did not invested in MF due to not Aware of MF, the second most due to Agent’s advice and rest due to Less Return.  For Future investment the maximum Respondents preferred Reliance Mutual Fund, the second most preferred ICICI Prudential, SBIMF has been preferred after them.  60% Investors preferred to Invest through Financial F inancial Advisors, 25% through AMC (means Direct Investment) and 15% through Bank.  65% preferred preferred One Time Investment and 35% preferred SIP out of both type of 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, the second most  preferred Dividend Payout and then Dividend Reinvestment.  Most of the Investors did not want to invest in Sectoral Fund, only 21% wanted to invest in Sectoral Fund.  Conclusion Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), (AMC), Products, Products, and Channels etc. etc. I observed that many many of people have fear of  Mutual Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of mutual fund investors are also growing. “Brand” “Brand” plays important important role for the investment. investment. People invest invest in those Companies Companies where they have faith or they are well known with them. There are many AMCs in Nagpur but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential H.D.F.C. etc. they are well known Brand, they are  performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle, Sunderam, etc. Distribut Distribution ion channels are also important important for the investment in mutual mutual fund. Financial Advisors Advisors are the most preferred channel for the investment in mutual fund. They can change investors’ mind mind from from one invest investmen mentt option option to others others.. Many Many of invest investors ors directly directly invest their money money through AMC because they do not have to pay entry load. Only those people invest directly who know well about mutual fund and an d its operations and those have time. SUGGESTIONS AND RECOMMENDATIONS RECOMMENDATIONS The most vital problem spotted is of ignorance. Investors should be made aware 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 what they are losing by not investing.  Mutual funds offer a lot of benefit which no other single option could offer. But most of the  people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for  advisors due to lack of expertise and time.  Mutual Fund Company needs to give the training of the Individual Financial Advisors 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 about the risk tolerance of  the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration.  Younger people aged under 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off.  Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality.  System Systemati aticc Invest Investmen mentt Plan Plan (SIP) (SIP) is one the innova innovativ tivee produc products ts launch launched ed by Assets Assets 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 the SIP. There is a large scope for the companies to tap the salaried persons.  BIBLIOGRAPHY  • NEWS PAPERS • OUTLOOK MONEY • TELEVISION CHANNEL (CNBC AAWAJ) • MUTUAL FUND HAND BOOK • FACT SHEET AND STATEMENT • WWW.SBIMF.COM • WWW.MONEYCONTROL.COM • WWW.AMFIINDIA.COM • WWW.ONLINERESEARCHONLINE.COM • WWW. MUTUALFUNDSINDIA.COM