Behaviour of Investors towards Mutual Fund: A Case Study of Hisar City 1 Harshita Garg, 2 Rahul Singal * 1,2 Prannath Pranami Institute For Professional Studies, Hisar, India 1 gargharshita94@gmail.com 2 rahul4485@rediffmail.com Abstract--Investment in mutual fund by the investors is based on their attitude towards it. The objective of the study is to find out the behavior of the investors towards mutual fund and analyze the all positive and negative factors. The study targets the investors of Hisar by adopting the random sampling for 35 respondents. Simple statistical tool is chosen to analyze the respondent behavior. The present study analyzed the positive attitude of investors towards investing in mutual fund because of appreciation and growth in their income. Keywords-- Mutual Fund, Investors, Growth I. INTRODUCTION Mutual pools the money of people with certain investment goals. The mutual fund is a type of professionally managed collective investment scheme which pools money from many investors. The profit gained from investments is shared to unit holders in proportion to the number of units owned by them. Thus a mutual fund is the most suitable investment from the common man as it offers the opportunity to invest in a diversified, professionally managed basket of securities at a relatively cost. The mutual fund sectors are one of the fastest growing sectors in Indian economy and have awesome potential for sustained for future growth. Mutual funds make savings and investing simple, accessible, and affordable. There is considerable amount of research being done regarding investment in mutual fund. However very little research has been done to study the behavior of investor towards mutual funds. Through the study it is examined that the investor having different- different mindset when investing in any field. So here in mutual fund also the investors having different perspectives related towards investment in mutual fund that is tax concession, risk diversion, potential return etc. On the basis of such perception the investor deals in mutual fund to gain potentially. II. REVIEW OF LITERARATURE A. Sikidar and Singh (1996) carried out a survey with an objective to understand the behavioral aspects of the investors of the North Eastern Region towards equity and MF s investment portfolio. The survey revealed that the salaried and self-employed formed the major investors in MF primarily due to tax concessions. B. Singh and Jha (2009) conducted a study on awareness & acceptability of MF s and found that consumers basically prefer MF s due to return potential, liquidity and safety and they were not totally aware about the systematic investment plan. The investor s will also consider various factors before investing in MF s. C. Desigan et al.(2006) conducted a study on women investor s perception towards investment and found that women investor s basically are indecisive in investing in MF s due to various reasons like lack of knowledge about the investment protection and their various investment procedures, market fluctuations, various risks associated with investment, assessment of investment and redressal of grievances regarding their various investment related problems. Geoffrey c. Fri, Travis sapp (2005) have examined the performance of Mutual Fund Flows and Investor Returns: An Empirical Examination of Fund Investor Timing Ability. This paper examine the the timing ability of Mutual Fund investors using cash flow data at the individual Fund level. Over 1991-2004 equity Fund investor timing decisions reduce Fund investor average returns by 1.56% annually. Underperformance due to poor timing is greater in load funds and funds with relatively large risk-adjusted returns. In particular, the magnitude of investor underperformance due to poor timing largely offsets the risk-adjusted alpha gains offered by good-performing funds. Investors in both actively managed funds and index funds exhibit poor investment timing. 2321-3264/Copyright 2016, IJRMST, April 2016 81
M. Swaminathan and V. Buvanmeswaran (2006) have conducted a study on investor s preference towards mutual funds with special reference to Thiruchirapali Town, Tamil Nadu.The investors of Thiruchirapali become more cautious after they lost their saving with incorporated bodies. They are now turning more to mutual funds because of more safety, liquidity, capital gains and transparency. They wish to route their investments through mutual funds. III. RESEARCH METHODOLOGY Problem Statement: To examine the investors behavior towards mutual fund whether positive impact or negative impact. Out of 35 respondents, 30 respondents are interested to invest, and remaining 5 respondents are not. B. SERVICES ADOPTED BY FINANCIAL ADVISOR TOTAL YES NO 30 12 18 The type of research is descriptive in nature and the sample size is 35.The sampling unit is Hissar and the sampling techniques is simple random sampling. The mainly data is used primary which has been collected through questionnaire method. Secondary data is also used somewhere. IV. OBJECTIVE OF THE STUDY To study the investor behavior towards the mutual fund. To find out the factors which influencing the investors to prefer the investment in mutual fund. To suggest the suitable measures for extending the scope for investment in mutual funds based on finding of the study. V. DATA ANALYSIS AND A. INVESTMENT BY THE RESPONDENT TOTAL YES NO Out of 30 respondent, 12 respondent adopted the services availed by the financial advisor and remaining 18 respondent are not availed by the services. C. MONTHLY INCOME SAVED BY PEOPLE BELOW 10% 10%-20% 20%-40% 40% & ABOVE 4 18 6 2 35 30 5 40 30 20 10 0 2321-3264/Copyright 2016, IJRMST, April 2016 82
In this case different respondent having different level of saving from income i.e. 4 person saves less than 10%,whereas in the category of 10-20% the criteria is at peak by 18 persons, in 20-40% category 6 person and 40% and above category having only 2 persons. D. SOURCE OF MUTUAL FUND PREFERRED OPEN ENDED CLOSE ENDED 22 8 Every investor having different objectives on their investment, here in this also there are certain objectives like appreciation, tax benefit, liquidty and the respondents responds towards it as 10,15,5 respectively. E. SOURCES OF INFORMATION INTER NET MAGZ INE NEWSPA PER FINANC IAL ADVISO R FRIE NDS 10 2 2 6 10 While adopting source of mutual fund, open ended scheme is well preferred then close ended, like out of 30 respondent 22 are with open ended and remaining with close ended. 1. OBJECTIVE OF INVESTMENT APPRECIATION TAX BENEFIT LIQUIDITY 10 15 5 Various sources are there through which person know about the investing criteria. There are sources like internet, magazine, newspaper, financial advisor and friends. 2. MUTUAL FUND INVESTING IN EQUITY YES NO DON T KNOW 12 8 10 2321-3264/Copyright 2016, IJRMST, April 2016 83
Out of 30 respondents,12 respondents are in favour to deal in equity investing in mutual fund and 8 respondents not interested in equity investing and remaining are not aware about it. 3. REGULAR VS NEW INVESTOR when investor investing in mutual fund then the preferred feature is differ like 6 person preferring regular return, 7 person for flexibility, 5 person for less expensive, 5 for risk diversion and remaining 7 person because of managed by professional people. REGULAR NEW 5. TYPE OF RETURN PEOPLE EXPECT 20 10 MONTHL Y QUARTEL Y SEMI ANNUA L ANNUA L 10 5 6 9 As per study it is examined that 20 investors are regularly dealing in mutual fund and remaining 10 are new ones. REGU LAR RETU RN 4. FEATURE OF MUTUAL FUND WHICH IS PREFERED BY INVESTORS FLEXIB ILITY LESS EXPE NSE RISK DIVER SION MANAGE D BY PROFESS IONAL PEOPLE Expectation of return by the investor is differ like 10 persons expecting monthly return, 5 persons quarterly, 6 persons semi-annually and remaining expecting annually. 6. SATISFIED WITH MUTUAL FUND SERVICES YES NO 25 5 6 7 5 5 7 2321-3264/Copyright 2016, IJRMST, April 2016 84
25 respondents are satisfied with the mutual fund sevices and remaining 5 are not satisfied with the services because of unfavor dealings. NEAR FUTURE LIABILTY FOR WHICH INVESTORS INVEST CHILD MARRIAGE EDUCATION OTHER REASON 3 15 12 management, diversification, and economies of scale, simplicity, and liquidity. It is examined that every investor is having different aspects regarding their requirements on future risk. Each and every investor invested in mutual fund according to their own benefits. In this only professional people are interested to invest the money. People who are not investing the money in mutual fund because of risk involved in this. REFERENCES [1] Sikidar, Sujit, Singh, Amrit Pal, Financial Services: Investment in Equity and Mutual Funds A Behavioural Study, in Bhatia B.S., and Batra G.S.(ed.) Management of Financial Services, Deep and Deep Publications, New Delhi, pp. 136-145. 1996. [2] Singh, B. K., Jha, A.K., An empirical study on awareness & acceptability of mutual fund Presented on Regional Student s Conference, ICWAI, pp. 49-55, 2009 [3] Desigan et al. (2006), Women Investor s Perception towards Investment: An empirical Study, Indian Journal of Marketing. [Oline] [4] https://en.wikipedia.org/wiki/mutual_fund [5] Bhole L.M. Financial Institutions and Market Structure, Growth and Innovations, Tata McGraw Hill Publication, New Delhi, 1995. [6] Chag, EC and Lewellen, WG, Market Timing and Mutual Funds Investment Performance, Journal of Business, Jan. 1984, pp. 57-72. [7] Chandra Prasanna, The Investment Game How to Win, Tata McGraw Hill Publishing Company Ltd.,New Delhi, 1995. [8] Geoffrey c. Fri, Travis sapp (2005) The performance of Mutual Fund Flows and Investor Returns. Every person earns for their future liability like education, marriage etc.in this case out of 30 respondents, 3 investor investing for child marriage other 15 persons for education and remaining person having other reasons. A. Suggestions 1. In this study people are not much aware about mutual fund so firstly we have to tell them clearly about the mutual fund. 2. They should be aware about the risk and return involved in the mutual funds. B. Limitations 1. People are not much aware about the mutual fund. 2. People are not ready to fill the questionnaire. 3. They do not want to invest the money. VI. CONCLUSION A mutual fund brings together a group of people and invests their money in stocks, bonds, and other securities. The advantages of mutual are professional 2321-3264/Copyright 2016, IJRMST, April 2016 85