A critical analysis of the investment patterns of people: A study of Standard Chartered mutual fund

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A critical analysis of the investment patterns of people: A study of Standard Chartered mutual fund

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Abstract

Mutual funds are one of the most important segments of the financial system of the country. The financial system consists of financial institutions, banks, investment bodies, the capital market and money market intermediary instrument used in the capital market through which money resources are mobilized from savers of fund to users of fund. Mutual funds are financial intermediaries that collect funds from the public and invest on behalf of investors. ‘Put your money in trust, not trust in money' entices the small investors, who generally lack the expertise to invest on their own in the securities market and prefer some kind of collective investment vehicles, which can pool their marginal resources, invest in securities and distribute the returns among them on co-operative principles.

The investors benefit is in terms of reduced risk, and higher returns arising from professional expertise of fund managers employed by such investment vehicle. “Mutual fund” is an investment vehicle for investors who pool their savings for investing in diversified portfolio of securities with the aim of attractive yields and appreciation in their value. The scenario of Indian Capital Market has changed drastically. In developed financial markets, mutual funds have overtaken bank deposits and total assets of insurance funds. In the USA, the number of mutual funds far exceeds the number of listed securities. Mutual funds in USA occupy the third position in the financial sector after banks and insurance companies. Annual sales of mutual funds account for more than $ 100 billion.

Introduction
1. Objectives of mutual fund
2. Types of mutual fund
3. NAV concepts and its calculations
4. Recent trends in mutual fund industry
5. Investment trends
Company profile - Standard Chartered
1. Overview of Standard Chartered
2. Establishments of Standard Chartered around the world
3. Strategic alliances and acquisitions in 2005
4. About Standard Chartered mutual fund
5. Standard Chartered products
Equity fund vs stock market
Objective of the study
Methodology of the study
Recommendations and limitations of the study
Questionnaire
Conclusion
Bibliography

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[...] PHASE 4 A Critical Analysis of Investment Patterns of People in Ahmedabad Given the plethora of options on hand, needs and preferences of people differ tremendously. Although everyone is different , most people go through broadly predictable stages of development in their adult lives: Young Adulthood Building a family. Middle age your career peak Retirement Therefore spending is likely to vary enormously at the different life stages, as well as the investment needs of the individual. Also these habits differ in case of serviceman, business person or self-employed professional. [...]

[...] The above finding clearly shows that there should be investment advisor in each mutual fund house who can guide investors regarding their savings since 25% of the investors make investment on the advice of brokers. Brokers can be bias because they are primarily concerned about their brokerage and they might suggest those mutual funds where they can earn more brokerage. Table OCCUPATION WISE PREFERENCE OF INVESTORS REGARDING SOURCE USED TO GET INVESTMENT INFORMATION SOURCE OF INFORMATION OCCUPATION TOTAL SERVICE BUSINESS PROFESSION OTHERS Brokers/sub-brokers 22 8 5 ( 12.5 ) 5 ( 12.5 ) 40 Prospectus 16 6 3 7 32 Newspapers & Magazines 25 12 9 10 56 Television 11 4 3 5 23 Any other 5 1 1 2 9 Figures in bracket indicate the percentage The occupation wise analysis also offers more or less the similar results as are obtained at the overall level and across the various age groups. [...]

[...] If we look at the profile of the Mutual Fund industry as a whole, around 15% are equity investments and the remaining 85% are spread over, debt, G-secs and money market instruments. So, today the Mutual Fund industry investment pattern has been more diversified into all these segments. In last few years we have seen that the debt market has given excellent returns and debt funds will continue to serve as safer investment option for investors. The level of returns which one could expect from debt funds will now be much more moderate than what one has received in the last three years and there has been the tendency of the investors to shy away from the equity markets because of the kind of the loses they have suffered. [...]

[...] RETURNS OF SECTOR FUNDS Returns as on February Absolute Simple Annualized Scheme Name NAV 3 Months 1 Year 3 Years CAGR Since Inception CAGR JM Basic fund UTI Thematic-Auto sector 47.86 Reliance diversified power sector - 69.67 Reliance media & entertainment - 44.13 S&P Nifty - BSE Sensex - Source: data taken from Investors India magazine of April 2006 The aim of these funds is to invest in a particular sector. Since sector funds are relatively new in the market but all the above funds have given good returns from last 1 year. [...]

[...] As per Mutual Fund Book, published by Investment Company Institute of the U.S., mutual fund is a financial service organization that receives money from shareholders, invests it, earns returns on it, attempts to make it grow and agrees to pay the shareholder cash on demand for the current value of his investment.” Mutual funds serve as a link between the saving public and the capital markets, as they mobilize savings from investors and bring them to borrowers in the capital markets. [...]

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