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Introduction
In financial markets, “expectations” of the investors play a vital role. They influence the price of the securities, the volume traded and determine quite a lot of things in actual practice. These ‘expectations’ of the investors are influenced by their “perception” and humans generally relate perception to action. The beliefs and actions of many investors are influenced by the dissonance effect and endowment effect. The tendency to adjust beliefs to justify past actions is a
Psychological phenomenon termed by Festinger (1957) as Cognitive Dissonance. We find ample proof for the wide prevalence of such a psychological state among Mutual Fund (MF) investors in India. For instance, UTI had a glorious past and had always been perceived as a safe, high yield investment vehicle with the added tax benefit. Many UTI account holders had justified their beliefs by staying invested in UTI schemes even after the 1999 bail out and many have still
not lost faith in UTI, even after the July 2001 episode. “Endowment Effect” is explained by Thaler Kahneman and Knetsch (1992) as “People are more likely to believe that something they own is better than something they do not own”. We have evidence for the influence of this effect also among Indian MF investors, for, how else can we explain the reason for the existence of many poor performing funds without investors staying invested with them.
Objectives of the study:
The primary objective of this study is to understand the investor’s perception towards mutual funds in India. In addition to this the study also examines the following objectives:
• Study of different schemes available at Axis AMC.
• To know the investor awareness about Mutual Funds.
• To study and understand the structure of Mutual Fund industry.
Hypotheses of the study:
• Diversified risk is the predominant factor that influences the Mutual fund investor.
• Professional management is also play a prominent role in influencing the Mutual Fund investors.
• Quick response of the AMC leads to investor satisfaction.
Scope of the study:
• The study conducted in twin cities of Hyderabad and secunderabad selected investors to know their perception.
• From here we can able to know the different factors which influence the investment decision of the investor.
Methodology of the study:
• Conducting a survey of 200 Mutual Fund investors with a Questionnaire.
• Field visit to know the customer intention towards Mutual Funds.
Source of data collection:
• Primary data from the investor who comes from Banking, Financial service and individual advisor’s channel.
• Already existing research papers and different text books, articles.
Limitations of the study:
• The survey is limited to only the investors who are in Hyderabad.
• Only a segment of investors are surveyed.
Why Mutual Funds:
Mutual Fund industry has been developing in a fast phase since its inception in India I.e 1964 by UTI. Mutual funds are far better than Bank deposits in terms of returns and much better than stock markets in terms of risk involved. So, there is large population still who are not covered in to investment area. There is a big scope to cover and develop the industry by capturing huge population which is present in India.
Why Axis Mutual Funds:
• Axis AMC is a newly established AMC. Here is lot of scope to learn and I can directly observe their penetration into the market.
• I can able to know how to develop a new business like Mutual Funds.
• Here they are providing me an opportunity to meet and interact with corporate directly.
• As the company is in penetration stage, I can also understand how to establish and maintain the relationships with corporate, HNIs, and individuals.
• I can learn what the requirements are and what the management strategies to develop a business are.
Sampling method: Simple random sample
Analysis and interpretation:
After collection of the data from various investors, the data will be analyzed and interpreted with the help of following statistical tools:
• Frequency analysis
• Chi-square Tests