Perception towards mutual funds Essay

Abstract common Funds provide a platform for a common investor to participate in the Indian nifty market with professional lineage prudence irrespective of the amount invested. The Indian sh atomic number 18d stemma industry is growing rapidly and this is reflected in the step-up in Assets under management of diverse fund houses. Mutual fund investiture is less risky than directly investing in strains and is because a safer option for risk averse investors. periodic Income blueprint bullion offer monthly returns and invest majorly in debt oriented instruments with little photograph to equity. However it has been observed that roughly of the investors are not aware of the benefits of investiture in uncouth funds. This is reflected from the study conducted in this research paper. This paper makes an try on to identify various factors affecting intuition of investors regarding enthronisation in Mutual funds. The bringings will help vulgar fund companies to identi fy the areas required for gain in order to create greater awareness among investors regarding coronation in reciprocal funds.IntroductionA Mutual Fund is a put that pools the savings of a number of investors who share a common pecuniary goal. The money, thus collected, is then investedin capital market instruments such as shares, debentures and different(a) securities. The income earned through these investments and the capital appreciation realized is share by its unit holders in proportion to 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.Monthly Income Plans or MIPs invest maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both(prenominal) equity and debt market. These schemes rank slightly high on the risk-return matrix when co mpared with different debt schemes. There is considerable amount of research being through with(p) regarding investment in common funds. However very little research has been done to study the perception of investors regarding investment in mutual funds particularly MIP funds.Literature ReviewIppolito (1992) states that an investor is ready to invest in those fund or schemes which open resulted in good rewards and most investors are attracted by those funds or schemes that are performing better over the worst. Goetzman (1997) opined that investors psychological science affects mutual fund selection for investment and to withdraw from the fund.De Bondt and Thaler (1985) submitted that mean simple regression in prices of stock is backed by investors retrogression which is establish upon investors psychology to overvalue firms recent execution of instrument in forming future expected results which is also known as endowment effect. Gupta (1994) play alonged household investor to find investors preferences to invest in mutual funds and other available financial assets. The findings of the study were more relevant, at that prison term, to the policy makers and mutual funds to design the financial products for the future. Kulshreshta (1994) in his study suggested some guidelines to the investors that lavatory help them to select needed mutual fund schemes. Shanmugham (2000) conducted a inspect of individual investors with the objective to find out what information source investor depends on. The results explained that they are economical, sociological andpsychological factors which control investment decisions. Madhusudhan VJambodekar (1996) conducted his study to size-up the didactics of mutual funds in investors and to identify factors that influence mutual fund investment decision. The study tells that open-ended scheme is most favored among other things and that income schemes and open-ended schemes are preferred over closed- ended and growth scheme s. intelligence agency papers are used as information source, safety of top dog amount and investor services are priority points for investing in mutual funds.Sujit Sikidar and Amrit Pal Singh (1996) conducted a survey to peep in to the behavioral aspects of the investors of the North-Eastern role in direction of equity and mutual fund investment. The survey showed that because of tax benefits mutual funds are preferred by the salaried and free-lance(a) individuals. UTI and SBI schemes were most preferred in that region of the country over all other fund and the other funds had been proved archaic during the fourth dimension of survey.Syama Sunder (1998) conducted a survey with an objective to get an in-depth view into the trading operations of private sector mutual fund with special reference to Kothari Pioneer. The survey tells that knowledge about mutual fund concept was unsatisfactory during that time in small cities like Visakapatanam. It also suggested that agents can help to catalyse mutual fund culture, open-ended options are much popular than each other schemes, asset management companys brand is top dog consideration to invest in mutual fund. Anjan Chakarabarti and Harsh Rungta (2000) emphasised the impressivenessof brand in ascertaining competence of asset management companies. Shankar (1996) suggested that for penetrating mutual fund culture deep in to society asset management companies have to work and steer the consumer product distribution model. Raja Rajan (1997) underlined naval division of investors and mutual fund products to increase popularity of mutual funds.Objectives of Study1. To study the investment pattern of Indian Investor.2. To find out the awareness level of investors regarding mutual funds.3. To find the type of scheme of mutual fund preferred by investor.4. To find out the importance of factors like liquidity, higher return, company reputation and other factors that influence investment decision of mutual fund hold er.5. To find out awareness level of investors regarding Monthly Income Plan fund.6. To ascertain the most preferred factor for investing in MIP fund.Research MethodologyInvestors main objective is to earn higher returns keeping in header the risk and liquidity factor. With this objective in mind, an investor is looking out for various investment avenues. Mutual funds offer comparatively better returns and have less risk as compared to direct investment in stock market. In this research paper, an attempt has been made to evaluate the perception of investors regarding mutual fund investment with special emphasis on Monthly Income Plan funds.A survey was conducted in Pune city during the period June 2013 to September 2013. A sample of 150 individual mutual fund investors were surveyed through a pre-tested questionnaire. The investors were selected on the basis of those who have made prior investment in mutual funds and have some knowledge about the radical terminologies involved wit h mutual funds. An attempt has been made to find out the perception of investors regarding mutual fund investment and to identify the factors considered to be important by the investors before investing in any mutual fund. The awareness level of investors regarding Monthly Income Plan funds and their benefits is also studied.