A

SUMMER TRAINING PROJECT REPORT

ON

“MUTUAL FUND IS THE BETTER INVESTMENT PLAN”

IN

BONANZA PORTFOLIO LTD, RANCHI

SUBMITTED FOR PARTIAL FULFILMENT OF REQUIREMENT FOR THE AWARD OF

DEGREE

OF

MASTER OF BUSINESS ADMINISTRATION

OF JHARKHAND RAI UNIVERSITY, RANCHI

SESSION 2018-2020

SUPERVISION TO;- SUBMITTED BY;-

NAME- MR. SATYANAND KUMAR NAME- SUJIT TIGGA

DEPARTMENT- SALES MANAGER ROLL NO.-MB/18/043

MBA 3rd SEMESTER

JHARKHAND RAI UNIVERSITY

RANCHI, JHARKHAND
 ACKNOWLEDGEMENT

It is the Metter of great pleasure and privilege to be able to present this project report on the Mutual Fund Is
The Better Investment Plan on BOANAZA PORTFOLIO LTD. RANCHI . I would like to thank Mr.
Satyanand Kumar and Mr. Chandan kumar for this advice and encouragement that guided me throughout
process.

I also take this opportunity to express my deep regards and gratitude to Dr. Khalida Rehman ( Jharkhand
Rai university ranchi )Who gave guidance to take up and pursue the project.

It is my proud privilege expresses my deep sense of appreciation and gratitude to my parents and friends
for their support and cooperation in the course of the project either directly or indirectly involved in time
with their valuable contribution.
 CERTIFICATE

This is to certify the project report is the outcome of the project work entitled MUTUAL FUND IS A
BETTER INVESTMENT PLAN carried out by SUJIT TIGGA bearing enrolment no. MB/18/043 carried
by under my guided and supervision for the awaked degree in master of business administration of
Jharkhand Rai University, Ranchi.

I. Embodies the work of the candidate her

II. Has duly been completed
III. Full fill the requirement of the ordinance relating to MBA degree of the university and
IV. Is up to desired standard for the purpose of which is submitted.

Signature;-

Name;- Mr. Satyanand kumar

Department;- sales and management

Bonanza portfolio ltd. Ranchi

 DECLARATION

This is to certify SUJIT TIGGA, student of Jharkhand rai university ranchi has completed her this project
at bonanza portfolio ltd. Ranchi , on topic “mutual fund is the better investment plan” and submitted the
report in partial fulfillment of Master of Business administration Year 2018-2020.

This is to embodies that the collection and analysis by the candidate under the guidance and direction of
Mr. Satyanand kumar and hereby approved as indicating the proficient of the candidate.

Place;-

Date;-

Signature;-
 Executive Summery

In few years Mutual fund has emerged as a tool for ensuring well-being. Mutual Fund have not only
contributed to the India growth story but have also helped families tap into the success of industry. As
information and awareness is rising more and more people are enjoying the benefits of investing in mutual
funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people
with incomes in India do not know that mutual fund exist. But once people are aware of mutual fund
investment opportunities, the number who decide to invest in mutual funds increases to as many as one in
five people. The trick for concerting a person with no knowledge of mutual funds to a new mutual fund
customer is to understand which of the potential investors are likely to buy mutual funds and to use the
right arguments in the sales process that customers will accept as important and relevant to their decision.

This project gave me a great learning experience and at the same time it gave me enough scope to
implement my analytical ability. The analysis and advice presented in this project report is based on market
research on the saving and investment practices of the investors and preferences of the investors for mutual
fund. This report will help to know about the investors’ Preferences in Mutual fund means are they prefer
any particular Asset Management Company (AMC) ,which type of product they prefer, which option
(growth or dividend) they prefer or which investment Strategy they follow ( Systematic investment plan or
One time plan)
 CONTENT

CHAPTER 1. INTRODUCTION

CHAPTER 2. COMPANY PROFILE

CHAPTER 3. OBJECTIVE AND SCOPE

CHAPTER 4. RESEARCH METHODLOGY

CHAPTER 5. DATA ANALYSIS AND INTERPRETATION

CHAPTER 6. FINDINGS AND CONCLUSION

CHAPTER 7. SUGGETION & RECOMMENDATION

BIBLIOGRAPHY
 CHAPTER 1.

INTRODUCTION
 INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to
invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual funds are
operated by professional money managers, who allocate the fund's assets and attempt to produce capital
gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match
the investment objectives stated in its prospectus.

Mutual funds give small or individual investors access to professionally managed portfolios of equities,
bonds and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of
the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the
change in the total market cap of the fund—derived by the aggregating performance of the underlying
investments.

The Basics of a Mutual Fund

Mutual funds pool money from the investing public and use that money to buy other securities, usually
stocks and bonds. The value of the mutual fund company depends on the performance of the securities it
decides to buy. So, when you buy a unit or share of a mutual fund, you are buying the performance of its
portfolio or more precisely, a part of the portfolio's value. Investing in a share of a mutual fund is different
from investing in shares of stock. Unlike stock, mutual fund shares do not give its holders any voting
rights. A share of a mutual fund represents investments in many different stocks (or other securities)
instead of just one holding.

That's why the price of a mutual fund share is referred to as the net asset value (NAV) per share, sometimes
expressed as NAVPS. A fund's NAV is derived by dividing the total value of the securities in the portfolio
by the total amount of shares outstanding. Outstanding shares are those held by all shareholders,
institutional investors, and company officers or insiders. Mutual fund shares can typically be purchased or
redeemed as needed at the fund's current NAV, which—unlike a stock price—doesn't fluctuate during
market hours, but is settled at the end of each trading day.

CONCEPTS OF MUTUAL FUND

Many investors with common financial objectives pool their money

Investors, on a proportionate basis, get mutual fund units for the sum contributed to the
pool
 The money collected from investors is invested into shares, debentures and other
securities by the fund manager

The fund manager realize gains or losses, and collects dividend or interest income

Any capital gains or losses from such investment are passed on to the investor in
proportion of the number of units held by them

Types of Mutual Funds

Mutual funds are divided into several kinds of categories, representing the kinds of securities they have
targeted for their portfolios and the type of returns they seek. There is a fund for nearly every type of
investor or investment approach. Other common types of mutual funds include money market funds, sector
funds, alternative funds, smart-beta funds, target-date funds, and even funds-of-funds, or mutual funds that
buy shares of other mutual funds.

Equity Funds

The largest category is that of equity or stock funds. As the name implies, this sort of fund invests
principally in stocks. Within this group is various sub-categories. Some equity funds are named for the size
of the companies they invest in small-, mid- or large-cap. Others are named by their investment approach:
aggressive growth, income-oriented, value, and others. Equity funds are also categorized by whether they
invest in domestic (U.S.) stocks or foreign equities. There are so many different types of equity funds
because there are many different types of equities.

Fixed-Income Funds
Another big group is the fixed income category. A fixed income mutual fund focuses on investments that
pay a set rate of return, such as government bonds, corporate bonds, or other debt instruments. The idea is
that the fund portfolio generates interest income, which then passes on to shareholders.

Sometimes referred to as bond funds, these funds are often actively managed and seek to buy relatively
undervalued bonds in order to sell them at a profit. These mutual funds are likely to pay higher returns than
certificates of deposit and money market investments, but bond funds aren't without risk. Because there are
many different types of bonds, bond funds can vary dramatically depending on where they invest. For
example, a fund specializing in high-yield junk bonds is much riskier than a fund that invests in
government securities. Furthermore, nearly all bond funds are subject to interest rate risk, which means that
if rates go up the value of the fund goes down.

Index Funds
Another group, which has become extremely popular in the last few years, falls under the moniker "index
funds." Their investment strategy is based on the belief that it is very hard, and often expensive, to try to
beat the market consistently. So, the index fund manager buys stocks that correspond with a major market
index such as the S&P 500 or the Dow Jones Industrial Average (DJIA). This strategy requires less
research from analysts and advisors, so there are fewer expenses to eat up returns before they are passed on
to shareholders. These funds are often designed with cost-sensitive investors in mind.

Balanced Funds
Balanced funds invest in both stocks and bonds to reduce the risk of exposure to one asset class or another.
Another name for this type of mutual fund is "asset allocation fund." An investor may expect to find the
allocation of these funds among asset classes relatively unchanging, though it will differ among funds. This
fund's goal is asset appreciation with lower risk. However, these funds carry the same risk and can be as
subject to fluctuation as other classifications of funds.

A similar type of fund is known as an asset allocation fund. Objectives are similar to those of a balanced
fund, but these kinds of funds typically do not have to hold a specified percentage of any asset class. The
portfolio manager is therefore given freedom to switch the ratio of asset classes as the economy moves
through the business cycle.

Money Market Funds

The money market consists of safe (risk-free) short-term debt instruments, mostly government Treasury
bills. This is a safe place to park your money. You won't get substantial returns, but you won't have to
worry about losing your principal. A typical return is a little more than the amount you would earn in a
regular checking or savings account and a little less than the average certificate of deposit (CD). While
money market funds invest in ultra-safe assets, during the 2008 financial crisis, some money market funds
did experience losses after the share price of these funds, typically pegged at $1, fell below that level and
broke the buck.

Income Funds
Income funds are named for their purpose: to provide current income on a steady basis. These funds invest
primarily in government and high-quality corporate debt, holding these bonds until maturity in order to
provide interest streams. While fund holdings may appreciate in value, the primary objective of these funds
is to provide steady cash flow to investors. As such, the audience for these funds consists of conservative
investors and retirees. Because they produce regular income, tax-conscious investors may want to avoid
these funds.
 Global/International Funds

An international fund (or foreign fund) invests only in assets located outside your home country.
Global funds, meanwhile, can invest anywhere around the world, including within your home country. It's
tough to classify these funds as either riskier or safer than domestic investments, but they have tended to be
more volatile and have a unique country and political risks. On the flip side, they can, as part of a well-
balanced portfolio, actually reduce risk by increasing diversification since the returns in foreign countries
may be uncorrelated with returns at home. Although the world's economies are becoming more interrelated,
it is still likely that another economy somewhere is outperforming the economy of your home country.

Specialty Funds

This classification of mutual funds is more of an all-encompassing category that consists of funds
that have proved to be popular but don't necessarily belong to the more rigid categories we've described so
far. These types of mutual funds forgo broad diversification to concentrate on a certain segment of the
economy or a targeted strategy. Sector funds are targeted strategy funds aimed at specific sectors of the
economy such as financial, technology, health, and so on. Sector funds can, therefore, be extremely volatile
since the stocks in a given sector tend to be highly correlated with each other. There is a greater possibility
for large gains, but also a sector may collapse (for example the financial sector in 2008 .

Regional funds make it easier to focus on a specific geographic area of the world. This can mean
focusing on a broader region (say Latin America) or an individual country (for example, only Brazil). An
advantage of these funds is that they make it easier to buy stock in foreign countries, which can otherwise
be difficult and expensive. Just like for sector funds, you have to accept the high risk of loss, which occurs
if the region goes into a bad recession.

Socially-responsible funds (or ethical funds) invest only in companies that meet the criteria of
certain guidelines or beliefs. For example, some socially responsible funds do not invest in “sin” industries
such as tobacco, alcoholic beverages, weapons or nuclear power. The idea is to get competitive
performance while still maintaining a healthy conscience. Other such funds invest primarily in green
technology such as solar and wind power or recycling.

Exchange Traded Funds (ETFs)

A twist on the mutual fund is the exchange traded fund (ETF). These ever more popular investment
vehicles pool investments and employ strategies consistent with mutual funds, but they are structured as
investment trusts that are traded on stock exchanges and have the added benefits of the features of stocks.
For example, ETFs can be bought and sold at any point throughout the trading day. ETFs can also be sold
short or purchased on margin. ETFs also typically carry lower fees than the equivalent mutual fund. Many
ETFs also benefit from active options markets where investors can hedge or leverage their positions. ETFs
also enjoy tax advantages from mutual funds. The popularity of ETFs speaks to their versatility and
convenience .
Advantages of Mutual Funds

There are a variety of reasons that mutual funds have been the retail investor's vehicle of choice for
decades. The overwhelming majority of money in employer-sponsored retirement plans goes into mutual
funds.

Diversification

Diversification, or the mixing of investments and assets within a portfolio to reduce risk, is one of the
advantages of investing in mutual funds. Experts advocate diversification as a way of enhancing portfolio
return while reducing its risk. Buying individual company stocks and offsetting them with industrial sector
stocks, for example, offers some diversification. However, a truly diversified portfolio has securities with
different capitalizations and industries and bonds with varying maturities and issuers. Buying a mutual fund
can achieve diversification cheaper and faster than by buying individual securities. Large mutual funds
typically own hundreds of different stocks in many different industries. It wouldn't be practical for an
investor to build this kind of a portfolio with a small amount of money.

Easy Access

Trading on the major stock exchanges, mutual funds can be bought and sold with relative ease, making
them highly liquid investments. Also, when it comes to certain types of assets, like foreign equities or
exotic commodities, mutual funds are often the most feasible way—in fact, sometimes the only way—for
individual investors to participate.

Economies of Scale

Mutual funds also provide economies of scale. Buying one spares the investor of the numerous commission
charges needed to create a diversified portfolio. Buying only one security at a time leads to large
transaction fees, which will eat up a good chunk of the investment. Also, the $100 to $200 an individual
investor might be able to afford is usually not enough to buy a round lot of the stock, but it will purchase
many mutual fund shares. The smaller denominations of mutual funds allow investors to take advantage of
dollar cost averaging.

Professional Management

A primary advantage of mutual funds is not having to pick stocks and manage investments. Instead, a
professional investment manager takes care of all of this using careful research and skillful trading.
Investors purchase funds because they often do not have the time or the expertise to manage their own
portfolios, or they don’t have access to the same kind of information that a professional fund has. A mutual
fund is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor
investments. Most private, non-institutional money managers deal only with high-net-worth individuals—
people with at least six figures to invest. However, mutual funds, as noted above, require much lower
investment minimums. So, these funds provide a low-cost way for individual investors to experience and
hopefully benefit from professional money management.
Economies of Scale

Because a mutual fund buys and sells large amounts of securities at a time, its transaction costs are lower
than what an individual would pay for securities transactions. Moreover, a mutual fund, since it pools
money from many smaller investors can invest in certain assets or take larger positions than a smaller
investor could. For example, the fund may have access to IPO placements or certain structured products
only available to institutional investors.

Variety and Freedom of Choice

Investors have the freedom to research and select from managers with a variety of styles and management
goals. For instance, a fund manager may focus on value investing, growth investing, developed markets,
emerging markets, income or macroeconomic investing, among many other styles. One manager may also
oversee funds that employ several different styles. This variety allows investors to gain exposure to not
only stocks and bonds but also commodities, foreign assets, and real estate through specialized mutual
funds. Some mutual funds are even structured to profit from a falling market (known as bear funds).
Mutual funds provide opportunities for foreign and domestic investment that may not otherwise be directly
accessible to ordinary investors.

Disadvantages of Mutual Funds

Liquidity, diversification, and professional management, all these factors make mutual funds attractive
options for a younger, novice, and other individual investors who don't want to actively manage their
money. However, no asset is perfect, and mutual funds have drawbacks too.

Fluctuating Returns

Like many other investments without a guaranteed return, there is always the possibility that the value of
your mutual fund will depreciate. Equity mutual funds experience price fluctuations, along with the stocks
that make up the fund. The Federal Deposit Insurance Corporation (FDIC) does not back up mutual fund
investments, and there is no guarantee of performance with any fund. Of course, almost every investment
carries risk. It is especially important for investors in money market funds to know that, unlike their bank
counterparts, these will not be insured by the FDIC.

Cash Drag

Mutual funds pool money from thousands of investors, so every day people are putting money into the fund
as well as withdrawing it. To maintain the capacity to accommodate withdrawals funds typically have to
keep a large portion of their portfolios in cash. Having ample cash is excellent for liquidity, but money is
sitting around as cash and not working for you and thus is not very advantageous. Mutual funds require a
significant amount of their portfolios to be held in cash in order to satisfy share redemptions each day. To
maintain liquidity and the capacity to accommodate withdrawals, funds typically have to keep a larger
portion of their portfolio as cash than a typical investor might. Because cash earns no return, it is often
referred to as a “cash drag.”
High Costs

Mutual funds provide investors with professional management, but it comes at a cost—those expense ratios
mentioned earlier. These fees reduce the fund's overall payout, and they're assessed to mutual fund
investors regardless of the performance of the fund. As you can imagine, in years when the fund doesn't
make money, these fees only magnify losses. Creating, distributing, and running a mutual fund is an
expensive undertaking. Everything from the portfolio manager's salary to the investors' quarterly
statements cost money. Those expenses are passed on to the investors. Since fees vary widely from fund to
fund, failing to pay attention to the fees can have negative long-term consequences. Actively managed
funds incur transaction costs that accumulate over each year. Remember, every dollar spent on fees is a
dollar that is not invested to grow over time.

Active Fund Management

Many investors debate whether or not the professionals are any better than you or I at picking stocks.
Management is by no means infallible, and, even if the fund loses money, the manager still gets paid.
Actively managed funds incur higher fees, but increasingly passive index funds have gained popularity.
These funds track an index such as the S&P 500 and are much less costly to hold. Actively managed funds
over several time periods have failed to outperform their benchmark indices, especially after accounting for
taxes and fees.

Lack of Liquidity

A mutual fund allows you to request that your shares be converted into cash at any time, however, unlike
stock that trades throughout the day, many mutual fund redemptions take place only at the end of each
trading day.

Taxes

When a fund manager sells a security, a capital-gains tax is triggered. Investors who are concerned about
the impact of taxes need to keep those concerns in mind when investing in mutual funds. Taxes can be
mitigated by investing in tax-sensitive funds or by holding non-tax sensitive mutual fund in a tax-deferred
account, such as a 401(k) or IRA.

Evaluating Funds

Researching and comparing funds can be difficult. Unlike stocks, mutual funds do not offer investors the
opportunity to juxtapose the price to earnings (P/E) ratio, sales growth, earnings per share (EPS), or other
important data. A mutual fund's net asset value can offer some basis for comparison, but given the diversity
of portfolios, comparing the proverbial apples to apples can be difficult, even among funds with similar
names or stated objectives. Only index funds tracking the same markets tend to be genuinely comparable.
HISTORY OF THE 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. Though the growth was slow, but it accelerated from the
year 1987 when non-UTI players entered the Industry.

In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualities wise as
well as quantity wise. 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.

The Mutual Fund Industry is obviously growing at a tremendous space with the mutual 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 Trust of India (UTI) was established on 1963 by an Act of Parliament 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)

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 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive 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.
Category of mutual fund
 Mutual funds can be classified as follow :

 Based on their structure:

 Open-ended funds: Investors can buy and sell the units from the fund, at any point of time.
 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 basis such as monthly or weekly. Redemption of units can be made during
specified intervals. 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 of composition and individual stock weightages.

ii) Equity diversified funds- 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 risk-return
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 risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like
bonds, debentures, Government of India securities; and money market 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.

i) Liquid funds- These funds invest 100% in money market instruments, a large portion being 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.

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 postdated 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.
 CHAPTER 2.

COMPANY PROFILE
 INTRODUCTION OF BONANZA PORFOLIO LTD.

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force for us, every single day.

Transparency

Honesty is our forte. We believe in dealing on thoroughly ethical grounds, being fair and transparent
with our customers.

Meritocracy

We recognize and appreciate efforts put in by our employees. And we, as a matter of fact, reward and
distinguish each one of them, ceaselessly.

Solidarity

We believe in sharing a forthright and respectful relationship with our business partners and
employees. We consider them both as our team associates, who work together and succeed together.
CORPORATE SOCIAL RESPONSIBILITY

Other than being the masters of financial services, Bonanza also believes in the power of giving. We
are a company who is socially responsible towards the community and contributes to the well-being of
others through various welfare initiatives and charities. Because like they say “No act of kindness, no
matter how small, is ever wasted”

CHAPTER. 3

OBJECTIVE AND SCOPE

OBJECTIVES OF THE STUDY

1.To find out the Preferences of the investors for Asset Management Company.

2.To know the Preferences for the portfolios.

3.To know why one has invested or not invested in SBI Mutual fund

4.To find out the most preferred channel.

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

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 Ranchi. I had been sent at one of the branch of State Bank of India Ranchi
where I completed my Project work. I surveyed on my Project Topic “A study of preferences of the
Investors for investment in Mutual Fund” on the visiting customers of the SBI Branch.

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.
 CHAPTER . 4

RESEARCH METHODLOGY
 RESEARCH METHODOLOGY
This report is based on primary as well secondary data, however primary data collection was given more
importance since it is overhearing factor in attitude studies. 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.
 Sampling:

Sampling procedure:

The sample was selected of them who are the customers/visitors of State Bank if India, Branch, 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 100 people only. Out of which only 80 people had invested in
Mutual Fund. Other 20 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 have not given actual answers
of my questionnaire.
 Sample size is limited to 100 visitors of State Bank of India , Branch, Ranchi out of these only 80
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 Ranchi.
 CHAPTER .5
DATA ANALYSIS
&
INTERPRETATION
 1. (a) Age distribution of the Investor of ranchi

Age Group <= 30 31-35 36-40 41-45 46-50 >50

No. of Investors12
Investors invested in Mutual Fund 18 30 24 20 16

35

30

25

20

15 30
24
10 20
18 16
5 12

0
<=30 31-35 36-40 41-45 46-50 >50

Age group of the Investors

Interpretati:

According to this chart out of 80 Mutual Fund investors of Ranchi the most are in the age group
of 36-40 yrs. i.e. 25%, the second most investors are in the age group of 41-45yrs i.e. 20% and
the least investors are in the age group of below 30 yrs.
(b). Educational Qualification of investors of Ranchi

Educational Qualification Number of Investors

Graduate/ Post Graduate 88

Under Graduate 25

Others 7

Total 120

6%

23%

71%

Graduate/Post Graduate Under Graduate Others

Interpretation:

Out of 80 Mutual Fund investors 71% of the investors in Ranchi are Graduate/Post Graduate,
23% are Under Graduate and 6% are others (under HSC).
c). Occupation of the investors of Ranchi.

Occupation No. of Investors

Govt. Service 30
.
Pvt. Service 45
Business 35
Agriculture 4
Others 6

50
45
No. of Investors

40
35
30
25
20 45
15 35 30
10
5 6
0 4
Govt. Pvt. Service Business Agriculture Others
Service

Occupation of the customers

Interpretation:

In Occupation group out of 80 investors, 38% are Pvt. Employees, 25% are Businessman, 29%
are Govt. Employees, 3% are in Agriculture and 5% are in others.
(2) Investors invested in different kind of investments.

Kind of Investments No. of Respondents

Saving A/C 195
Fixed deposits 148
Insurance 152
Mutual Fund 120
Post office (NSC) 75
Shares/Debentures 50
Gold/Silver 30
Real Estate 65

65
Kinds of Investment

30
50
75
120
152
148
195
0 100 200 300

No.of Respondents

Interpretation:

From the above graph it can be inferred that out of 100 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) Low Risk (c) High Return (d) Trust

No. of Respondents
25 30 35 10

18% 20%

32% 30%

Liquidity Low Risk High Return Trust

Interpretation:

Out of 100 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 Yes No
No. of Respondents 80 20

33%

67%

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.
 CHAPTER 6.

FINDING & CONCLUSIONS

Findings

 In Ranchi 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 Ranchi 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.
 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.

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),
Products, Channels etc. I observed that 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” plays important role for the investment. People invest in those Companies where they have
faith or they are well known with them. There are many AMCs in Ranchi 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 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.

Distribution channels are also important for the investment in mutual fund. Financial Advisors are the
most preferred channel for the investment in mutual fund. They can change investors’ mind from one
investment option to others. Many of investors directly invest their money through AMC because they
do not have to pay entry load. Only those people invest directly who know well about mutual fund and
its operations and those have time.
 CHAPTER 7.

SUGGETION AND RECOMMENDATION

Suggestions and 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.

 Systematic Investment Plan (SIP) is one the innovative products launched by Assets
Management companies 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