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Report on Summer Training

A STUDY

ON

“CUSTOMER PERCEPTION TOWARDS

MUTUAL FUNDS”

At

In partial fulfillment of the requirements for the award of

Degree of Master of Business Administration

Submitted by:

Arun Kumar, Reg. No. 10804509

LOVELY PROFESSIONAL UNIVERSITY

PUNJAB

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DECLARATION

I, Arun Kumar student of M.B.A program at Lovely School of Business (LPU). I

hereby declare that all the information ,facts and figures produce in this report are

based on my own experience and study during my study on “Customer

perception towards mutual fund” at Karvy Stock Broking Ltd. Dehradun.

The matter embodied in this project report has not been submitted to any other

University or Institution for the award of degree.

Date: (ARUN KUMAR)

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PREFACE

“Give a man a fish, he will eat it.

Train a man to fish, he will feed his family.”

The above saying highlights the importance of Practical knowledge. Practical

training is an important part of the theoretical studies. It is of an immense

importance in the field of management. It offers the student to explore the valuable

treasure of experience and an exposure to real work culture followed by the

industries and thereby helping the students to bridge gap between the theories

explained in the books and their practical implementations.

Research Project plays an important role in future building of an

individual so that he/she can better understand the real world in which he has to

work in future. The theory greatly enhances our knowledge and provides

opportunities to blend theoretical with the practical knowledge.

I have completed the Research Project on “Customer perception

towards mutual fund”. I have tried to cover each and every aspect related to the

topic with best of my capability.

I hope research would help many people in the future.

(Arun kumar)

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ACKNOWLEDGEMENT

It is with deep sense of gratitude that I would like to thanks Karvy Stock Broking

(DEHRADUN) for providing me with an opportunity to take up a project in

KARVY on “Customer perception towards mutual funds”. I am very grateful

to Mr. TRIBHUVAN MALL (Branch Head) for being able to give me some of

his valuable time and able guidance. Without his guidance, support and

encouragement it would not have been possible to complete this project

successfully.

I would also like to express my sincere work of gratitude and heartiest thanks to

my faculty guide Mr. Lokesh Jasrai who helped me in some manner or other and

this have been a constant source of inspiration throughout the project.

(ARUN KUMAR)

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CONTENTS

Topic Page No.

Company Profile…....…………………………………………………….6

Introduction…..………………………………………………………......23

Background……..………………………………………………………..27

Objectives of the study………………………………………………......29

Mutual fund for whom…………………………………………………...34

Why mutual fund………………………………………………………..35

Types of investors………………………………………………………..37

Marketing strategies……………………………………………………...40

Research Methodology…………………………………………………..54

Findings………………………………………………………………….57

Data Analysis & interpretation………..………………………………….63

Conclusion……………………………………………………………….72

Recommendation………………………………………………………...74

Bibliography……………………………………………………………..75

Questionnaire……………..……………………………………………..76

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INTRODUCTION

Mutual funds are financial intermediaries, which collect the savings of investors and invest them

in a large and well-diversified portfolio of securities such as money market instruments,

corporate and government bonds and equity shares of joint stock companies. A mutual fund is a

pool of common funds invested by different investors, who have no contact with each other.

Mutual funds are conceived as institutions for providing small investors with avenues of

investments in the capital market. Since small investors generally do not have adequate time,

knowledge, experience and resources for directly accessing the capital market, they have to rely

on an intermediary, which undertakes informed investment decisions and provides consequential

benefits of professional expertise. The raison d‟être of mutual funds is their ability to bring down

the transaction costs. The advantages for the investors are reduction in risk, expert professional

management, diversified portfolios, and liquidity of investment and tax benefits. By pooling their

assets through mutual funds, investors achieve economies of scale. The interests of the investors

are protected by the SEBI, which acts as a watchdog. Mutual funds are governed by the SEBI

(Mutual Funds) Regulations, 1993.

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MUTUAL FUND OPERATIONS FLOW CHART

The flow chart below describes broadly the working of a Mutual Fund:

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THE GOAL OF MUTUAL FUND

The goal of a mutual fund is to provide an individual to make money. There are several thousand

mutual funds with different investments strategies and goals to chosen from. Choosing one can

be over whelming, even though it need not be different mutual funds have different risks, which

differ because of the fund‟s goals fund manager, and investment style.

The fund itself will still increase in value, and in that way you may also make money therefore

the value of shares you hold in mutual fund will increase in value when the holdings increases in

value capital gains and income or dividend payments are best reinvested for younger investors

Retires often seek the income from dividend distribution to augment their income with

reinvestment of dividends and capital distribution your money increase at an even greater rate.

When you redeem your shares what you receive is the value of the share.

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ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the organizational set

up of a mutual fund:

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BACKGROUND

HISTORY AND STRUCTURE OF INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the

initiative of the Government of India and Reserve Bank. The history of mutual funds in India can

be broadly divided into four distinct phases:

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the

Reserve Bank of India and functioned under the Regulatory and administrative control of 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 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and

Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by

Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank

Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC

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)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 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 Pioneer (now merged with

Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993