Growth Prospect in Mutual Fund Industry A Summary of Summer Project in Bajaj Capital Saket Sogani

Some Basic Concepts Mutual Funds

Mutual Fund Operation Flow Chart

3 years plus Aggressive investors with long term out look. Stocks High Risk Long-term Capital Appreciation Equity Funds 12 months & more Salaried & conservative investors Government securities Interest Rate Risk Security & Income Gilt Funds More than 9 - 12 months Salaried & conservative investors Predominantly Debentures, Government securities, Corporate Bonds Credit Risk & Interest Rate Risk Regular Income Bond Funds (Floating - Long-term) 3 weeks - 3 months Those with surplus short-term funds Call Money, Commercial Papers, Treasury Bills, CDs, Short-term Government securities. Little Interest Rate Liquidity + Moderate Income Short-term Funds (Floating - short-term) 2 days - 3 weeks Those who park their funds in current accounts or short-term bank deposits Treasury Bills, Certificate of Deposits, Commercial Papers, Call Money Negligible Liquidity + Moderate Income + Reservation of Capital Money Market Investment horizon Who should invest Investment Portfolio Risk Objective Mutual Fund Type

Continue .. 2 years plus Moderate & Aggressive Balanced ratio of equity and debt funds to ensure higher returns at lower risk Capital Market Risk and Interest Risk Growth & Regular Income Balanced Funds 3 years plus Aggressive investors. Portfolio indices like BSE , NIFTY etc NAV varies with index performance To generate returns that are commensurate with returns of respective indices Index Funds

Growth Analysis Growth in Asset under management

Findings: Out of total respondents a huge percentage is of male respondents, which mainly reflects the dominance of male decision makers.

Age : 5 42 150 53 Above 55 (Years) 40-55 (Years) 25-40 (Years) 18-25 (Years)

Educational Background: Finding: Large portion of investors were highly educated with Post Graduates and Professionally qualified respondents at equal percentage of 23% and 2% respondents were Graduates and rest with other qualifications. 6 158 28 58 Others Professional Post-Graduate Graduate

Findings: 75% a very large number of respondents were from the service/salaried class while 20% were from the business and the rest were professionals.

Finding: 19% respondents have monthly income below 10000, 38% respondents had income between 10000-15000, 12% respondents had income between 15000-25000 and 31% respondents had income above 25000 .

Purpose of your investment? Finding: For 51% respondents the purpose was saving and for 49% the purpose was wealth creation and investment. 122 128 WEALTH CREATION/INVESTMENT SAVINGS

If you prefer investment, then in which of the following type? Finding: 24% respondents preferred Mutual funds and investors equally preferred other investments. With increasing gold prices and real estate prices they were getting less popular as investment options. 38 32 34 58 65 75 REAL ESTATE GOLD INSURANCE GOVT. BONDS/BANK FD’S/POST OFFICE DEPOSITS SHARES MUTUAL FUNDS

Finding: 30% respondents had proper knowledge about the Mutual Funds and 14% did not have knowledge about the Mutual Funds. 56% respondents wanted to know about the Mutual Funds as they had partial knowledge about the Mutual Funds.

Rank these consultancy firms, as per your preference of (1-4 in descending order) Finding: Karvy Consultant was ranked as the most preferred firm, followed by India bulls than Bajaj Capital. 4 1 2 3 OTHERS KARVY INDIABULLS BAJAJ CAPITAL