29-05-2013, 04:36 PM
ANALYSIS OF INVESTORS’ PERCEPTIONS TOWARDS MUTUAL FUND SCHEMES (WITH REFERENCE TO AWARENESS AND ADOPTION OF PERSONAL AND FAMILY CONSIDERATIONS)
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ABSTRACT
The behavioral finance has been recognized as an important area in the study of recent finance literature. It implicit objective is to discover and remedy the deviation from the rational decision making in the investment process. The purpose of this study is to examine the role of various social-economic factors affectively the investment decision of the investors. The results an obtained from a survey and has been analyzed by the chi-squire test. The result shows that, socio- economic factors are significantly influence the investment behaviour of the investors.
INTRODUCTION
Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared 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.
MUTUAL FUND OPERATION
The simplest mutual funds definition is that they are an investment group set up by professional investors and headed by an investment manager. Individuals are then able to invest small amounts of money into the fund for making a reasonable profit. There are an incredibly large number of mutual funds. While some mutual funds aim to produce short term, high yield profits, others look for the long term profit. But, large segment of people are scared to invest in the capital market. Some personal and family factors are pulling them in deciding different type of investments. Age, Gender and marital status are some of the socio demographic factors that share the investors’ decision and preference in making investments. Many studies have shown that age interact with financial information and issues differently. The surveyed literature indicates that younger have different attitudes towards financial decisions than elder ones. The majority of the published research studies examining the relationship between age and risk tolerance have found that risk tolerance decreases with age.
REVIEW OF LITERATURE
Rajarajan (2000)1 has attempted to identify predictors of individual investors' expected rate of return by investigating relationship of demographic variables such as age, income, occupation, employment status and stage in life cycle with investment behavior of an individual in the paper titled, "Predictors of Expected Rate of Return by Individual Investors". The study was conducted by administering questionnaire to a sample size of 405 investors. The investigation was made across 12 variables. Multiple regression analysis was used by the researcher to examine the relationship between expected rate of return on investments by individual investors and their demographics. Some investment related characteristics (including risk bearing capacity of investor) were also studied. The study found that factors like investment size, portfolio choice, and risk bearing capacity are positively related to rate of returns. The variable locus of control was inversely related to rate of return. The paper concluded that the rate of return was not strongly related to any socio economic variable except age. The author has empirically proved the significant relationship between expected rate of return on investments and demographic variables.
OBJECTIVES AND METHODOLOGY
The present study is undertaken with the following specific objectives. To assess the investors’ Awareness of the Mutual Fund schemes and To study the investors’ Adoption of the Mutual Fund schemes.
The present study attempts to evaluate the investor’s awareness and adoption towards the mutual fund schemes. For the purpose, individual mutual funds investors have been selected. The individual investors’ perception has been confined to the Visakhapatnam, Vizianagaram and East Godavari districts in Andhra Pradesh only. This study is based on only primary data sources. For the studying the perception of investors has been administered of structured questionnaire of the respondents.
350 respondents have been selected for this study, for Visakhapatnam, Vizianagaram and East Godavari districts only. From the total population of the investors of different MF schemes, different segments are taken in to consideration.
CONCLUSION
In my concluding words, I have the opinion that the three leading categories of agencies involved i.e., (i) the Regulatory authorizes like SEBI, IRDA; (ii) AMFI and (iii) MF Asset Management Companies have to conduct educational and orientation programmes in collaboration with yet other three kinds of leading organizations i.e., (i) Universities, (ii) Institutes and (iii) Stock Exchanges, on various aspects of MF Schemes, so that the investors will enhance their knowledge for making more prudent investment decisions. Further studies may be undertaken to unfold various other aspects like Performance and Challenges of Mutual Funds. Such studies will provide guidance to the Investors on the changes and challenges faced by the Mutual Funds. This kind of integrated effort will produce a lot of value addition to the Wealth of the Nation.