PUNE INSTITUE OF BUSINESS MANAGEMENT

A RESEARCH REPORT ON

THE CONSUMER PERCEPTION OF MUTUAL FUND INVESTMENT IN

RURAL MARKET (EAST CHAMPARAN, BIHAR)

Submitted by

Name of student: Himanshu Jeet

PGDM 1 (2018-20)

PRN: DM18A20
 Background of the study

As you probably know, Mutual Fund has become extremely popular over the last 20 years. What
was once just another obscure financial instrument being now a part of our daily lives. More than
80 million people, or one half of the households in America, invest in mutual funds. That means
that in the United States alone, trillions of dollars are invested in Mutual Funds.

In fact, too many people, investing means buying mutual funds. After all, it’s common
knowledge that investing in mutual funds is (or at least should be) better than simply letting your
cash waste away in a savings account, but for most people, that’s where the understanding of
funds ends. It doesn’t help that mutual fund salespeople speak a strange language that is
interspersed with jargon that many investors don’t understand.

Originally, mutual funds were heralded as a way for the little guy to get a piece of the
market. Instead of spending all your free time buried in the financial pages of the Wall Street
Journal, all you had to do was buy a mutual fund and you’d be set on your way to financial
freedom. As you might have guessed, it’s not that easy. Mutual funds are an excellent idea in
theory, but in reality, they haven’t always delivered. Not all mutual funds are created equal, and
investing in mutual isn’t as easy as throwing your money at the first salesperson who solicits
your business.

Mutual Fund Quarterly Average AUM Trend

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 study will help to know the preferences of the customers, which company, portfolio, mode
of investment, option for getting return and so on they prefer. This project report may help the
company to make further planning and strategy.

Objective of the study

a. To find out the Preference of the investors for Asset Management of company.

b. To know the preference of the portfolios.

c. To know why one has invested in Mutual Funds.

d. To find out the most preference channel.

e. To find out what should do to boost Mutual Fund Industry.

LITERATURE OF REVIEW
Review of literature is very important to give better understanding and insight
Necessary to develop a broad conceptual framework in which a particular problem
Can be examined. It helps in the formation of specific problem and helps acquaint the
Investigator to what is already known in relation to the problem under review and it also
provides a basis for assessing the feasibility of the research.

Martin P. and McCann B. (1998) in their book titled “The Investor’s Guide to
Fidelity Funds – Winning Strategies for Mutual Fund Investing” have very nicely
guided investors regarding issues related with mutual fund investing.
They have advised that Investors should focus on sectors of the global economy
that have the greatest potential for profit in order to beat the market averages. By
combining this approach with the safety provided by mutual funds’ inherent
diversification, mutual funds become an investment vehicle with all the
advantages of trading individual securities and none of the disadvantages.
Like any other investment, it is essential to develop a strategy for selecting which
funds to buy and sell – and when. These decisions should not be left to the
emotions or to chance.

Gremillion L (2005) in his book “Mutual Fund Industry Handbook – A

Friend, et al., (1962) made an extensive and systematic study of 152 mutual funds found that
mutual fund schemes earned an average annual return of 12.4 percent, while their composite
benchmark earned a return of 12.6 percent. Their alpha was negative with 20 basis points.
Overall results did not suggest widespread inefficiency in the industry. Comparison of fund
returns with turnover and expense categories did not reveal a strong relationship. Irwin, Brown,
FE (1965) analyzed issues relating to investment policy, portfolio turnover rate, performance of
mutual funds and its impact on the stock markets. They identified that mutual funds had a
significant impact on the price movement in the stock market. They concluded that, on an
average, funds did not perform better than the composite markets and there was no persistent
relationship between portfolio turnover and fund performance.
 Research Methodology

Primary Research Objectives – To determine the consumer perception for mutual fund in rural
market.

Then I identify the variable of interest. In this there are two steps:

1st- Review of literature

Research Design

The research design is the plan and structure of investigation so conceived as to obtain answer to
research questions. Since the problem of the research is already known, the researcher has the
study, which is descriptive in nature.

SENODARY RESEARCH OBJECIVES

Management
opportunity/ Situation Analysis Model Specification Required
problem Development
Understanding Communicate properly
High Risk& Return 40% Regular updates of new rules and
Safety & Security
Security regulation

Discounts
Provd. Extra share 35% Price is low but return is good
Price conscious
Low price

Customer
Responsiveness
25% Good return from low investment
Good profit
Value for Money

DATA COLLECTION
A. PRIMARY DATA

B. SECONDARY DATA

A. PRIMARY DATA

A study on brand preference among the customer using question in our area was done through
field survey. Questionnaire method was used for the field survey. Questionnaire method was used
and the information was collected from the 40 sample respondents.

QUESTION TYPE

The question contains open-ended multiple-choice questions and also dichotomous questions.

OPEN-ENDED QUESTIONS

Questions than the respondent can answer in a free-flowing format without restricting the range
of choices to a set of specific alternatives suggested by the researcher.

MULTIPLE CHOICE QUESTIONS

It is formed with a view that the respondents can answer from among the given choices. This
type of questions can save valuable time of the respondents.

B. SECONDARY DATA

Secondary sources of information are obtained through observation and analysis of records such
as company profile, product profile, and websites.

SAMPLING METHOD
Sampling is a process of selecting a sufficient number of clients from the population, so that a
study of sample and understanding of its properties would make it possible for us to generate
such properties and characteristics. In the study, the researcher has adopted the convenience
sampling technique- “Conveniently available to provide”.

In this study, the researcher has selected 40 sampling size from the unknown population.

Sampling Plan & unit: Walk-in customers in House

Sample Population: Sample population cannot be defined because no. of customer is not
educated and they don’t take a risk in this type of investment and my research location is rural
area and education percentage rate is very low so sample population is undefined.

Sample Size: 40 because there are 2 methods to desire sample size. The first one is depends
upon sample population and the 2nd is depends upon no. of question in questionnaire (1:5).
Sample size based on no. of question in questionnaire.

Sample Frame: As sample population is not defined then researcher will not use any process
in sample frame.

Method of selecting Sample: Questionnaire, face to face interview.

Sample Technique: As sample population is known research should use non probality
sampleing technique.

Problem
1. The most vital problem spotted is of ignorance. Investors should be made aware of the
benefits. Nobody will invest until and unless he or she is fully convinced. Investors should be
made to realize that ignorance is no longer bliss and what they are losing by not investment.

2. Mutual Fund company needs to give the training of the Individual Financial Advisors about
the Fund/Scheme and its objectives, because they are the main source to influence the investors.

3. 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.

4. Customers with Graduate level education are easier to sell to and there is a large unstrapped
market there. To succeed however, advisers must provide sound advice and high quality.

5. Mutual Fund offers 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 see it as just
another investment option. So 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.

QUESTIONARE

Name………………………………….

Designation……………………….

Organization……………………….

Contact…………………………….

Email Id (if any) ………………….

Quest 1. What is your occupation?

Business ( ) Govt. Service ( )

Retired ( ) Student ( )

Quest2. What is your monthly Income?

10000-20000 ( ) 20000-40000 ( )

40000-80000 ( ) More than 80000 ( )

Quest3.Where do you Invest your money?

FD’s/RD’s ( ) Insurance ( )

Mutual Funds ( ) Equity Market ( )

Quest4. Do you know Mutual funds?

Yes ( ) No ( )

Quest5. If Yes, from where you come to know about Mutual Funds?

Bank ( ) Media ( )

Distributer ( ) Friends ( )