PROJECT REPOR REPORT T ON COMPARATIVE ANALYSIS OF INVESTMENT AVENUES Submitted in Partial fulllment of two year full time MBA Programme (2008-2010) Under te !u"er#i!ion of
Submitted $o% Submitted By% &uru'!etra Uni#er!ity ame % &iran Mongia &uru'!etra *oll o%
0
PREFACE In this volatile capital market it has become very difficult for the investors that where they should invest so as to have maximum profit. Since January, 2008 market has crashed from 2000 points to !000 so investors could not decide of investment avenues. "he brokin# houses who are in the business of providin# investment opportunities and options to its clients are in trouble that how to make their portfolio so that clients can #ain.
"his pro$ect takes you throu#h with the #reat investment avenues available for the investors, their comparative analysis so as to understand various investment oppo opport rtun unit itie iess and and sati satisf sfy y inve invest stors ors.. "his "his pro$e pro$ect ct helps helps unde unders rsta tand ndin in# # the the differences between the different investment options and also #uides you to choose one of them as Investment %venue. %venue.
So, it helps or#ani&ation to improve their offerin#s in this volatile market and take them towards development of their customer base.
%ll these steps help me to understand how to cope up with different types of people and there diversified need and satisfaction level.
DECLARATION I, 'iran 'iran (on#ia (on#ia studen studentt of, study study,, )udha )udha *olle# *olle#ee of mana# mana#eme ement, nt, 'arnal 'arnal +ambha-, hereby declare that the summer trainin# report on Comparative Analys Analysis is of Investm Investment ent Avenue venuess/ subm submit itte ted d to 'uru 'uruks kshe hetr traa niv niver ersi sity ty,,
'uru 'uruks kshe hetr traa in part partia iall fulf fulfil illm lmen entt of 1e#r 1e#ree ee of (ast (aster ers s of )usi )usine ness ss %dministration is the ori#inal work conducted by me.
"he informa rmation and findin#s pres resented in this report are #enuine, comprehensive and reliable based on the data collected by me. "he pro$ect was undertaken as a part of the course curriculum of ()% full time pro#ram of 34 days for the fulfillment of the de#ree.
"he matter presented in this report will not be used for any other purpose and will be strictly confidential.
(KIRAN MONGIA)
2
ACKNOWLEDGEMENT Summer trainin# is one of the most vital and active part of the curriculum of mana#ement students. Its basic idea behind this is to stren#then the students concept throu#h practical trainin# and make them ac5uainted with actual method and procedures. % pro$ect includes various fields of study which need a proper analysis and which is not possibly done by an individual, it re5uires help from various persons. I would like to extend my heartfelt #ratitude to Mr. Ali Mohd. Choudhary (A.V.)! Mr. Ganesh Kr. Chaurasia ("usiness #ead)! Mr. an$a% Kumar (&enior Relationship Mana'er), for their proper #uidance throu#hout the
pro$ect. 6ithout their support and co7operation I would have failed in my endeavors and tar#ets in the summer trainin#.
I would also thank my faculty of )udha *olle#e of (ana#ement for providin# me the #reat platform.
Table of Contents !
•
Pefa!e
•
De!laat"on
•
A!#no$le%&e'ent
•
Co'(an) Po*le
•
Po+e!t Into%,!t"on
•
Ob+e!t"-e of st,%)
•
S!o(e of st,%)
•
Resea!. 'et.o%olo&)
Met.o% of %ata !olle!t"on
/,est"onna"e %es"&n
Sa'(le s"0e
Sa'(l"n& te!.n"1,e
•
Data Anal)s"s 2 Inte(etat"on
•
S,&&est"ons an% e!o''en%at"ons
•
L"'"tat"on of st,%)
•
3"bl"o&a(.)
•
Anne4,e
3
Co'(an) Po*le
Company Profile_______________________________
4
nicon Investments is a service sector company, providin# financial services, which has now emer#ed now as a one7stop investment solutions provider. (r. a$endra 9a#pal and (r. am (. upta, who had #reat expertise and vision in the field of finance, founded the company in 2003. "he :ead5uarter of the company is in 9ew 1elhi and its has its *orporate ;ffices in (umbai, 'olkata, *hennai, :yderabad and 9oida.
nicon, a professionally mana#ed company, is lead by a team with unparallel mana#erial acumen and an experience of more than 200 years in the financial markets. "he company boasts of havin# more than !400 employees, 00 branches, more than <00 partner locations and 2400 remisers providin# it with a national footprint.
"he company has a customer base of more than 200000 customers. It caters to both7 the short term as well as lon# term financial needs throu#h a comprehensive diversification of investment services. "hese services include offline = online tradin# in e5uity, commodities, currency derivatives to debt markets to corporate finance = portfolio mana#ement services. "he company has a humun#ous presence in the distribution of the !rd party financial products like mutual funds, property brokin# and insurance products. It also has prolific expertise on %dvisin# on >ife Insurance, eneral Insurance, (utual ?unds = I@;. "he distribution network is backed by in7house back7office support to provide prompt and efficient customer services.
MISSION & VISION OF UNICON SECURITIES PVT.LTD. Mission
<
"o create lon# term value by empowerin# individual investors throu#h superior financial services supported by culture based on hi#hest level of teamwork, efficiency and inte#rity.
Vision
"o provide the most useful and ethical Investment Solutions 7 #uided by values driven approach to #rowth, client service and employee development.
MANAEMENT TEAM __________________________________
Mr. Ga%endra Na'pal
A
8
ROUP COMPANIES_____________________________________
B
he *ompany proposes the follo+in' to the *ustomers
,. ersonal Relationship Mana'er
0
"his facility is provided to the customer on openin# a tradin# account with the company. % @ersonal elationship (ana#er is provided to the customer who can be reached 23xA and not only for instructin# him in the tradin# affair but also #et speciali&ed and customi&ed advice and tips about the market which is their competitive advanta#e.
-. Competitive "ro$era'e and Char'es
"he *ompany offers a brokera#e of 0.40C +ne#otiable- on 1elivery and 0.0C +ne#otiable- on Intraday and ?=; transactions plus Service "ax, SS" and "ransaction *har#es.
•
;nly one time account openin# char#es and no annual maintenance char#es.
•
(ar#in ?inancin# D 8C
•
(ar#in tradin# of 3 times the cash deposited for delivery based trade.
•
(ar#in tradin# of 0 times the cash deposited for intra7day based trade.
•
)uy today Sell tomorrow for all securities facility.
•
(ana#ement of portfolio and advises.
•
Electronic transfer of funds can also be provided.
PRODUCTS OFFERED___________________________________
E5uity
*ommodity
1epository
1istribution
9I Services
)ack ;ffice
?ixed Income
@ortfolio "racker
(utual ?unds
eneral Insurance
>ife Insurance
he snapshots of produ*ts of /NICON are
E!UIT"________________________________________________
9I*;9 facilitates tradin# in secondary market in e5uity tradin# = derivative +future = options- tradin# throu#h its corporate membership of premier exchan#e of the country namely 9ational Stock Exchan#e +9SE-, )ombay
Stock Exchan#e +)SE-. nicon provides e5uity tradin# to the clients online as well as off7line service. nicon offers the uni5ue feature where the customers #et to trade on 9SE, )SE and 1erivatives all on one screen.
2
rodu*ts offerin's for radin'
I. nicon @lus
It enables users to #et a browser based tradin# terminal that can be accessed by a uni5ue I1 and password. "his facility is available to all the customers of the company the moment they #et re#istered with it.
II. nicon Swift
Self directed investors #et an application based terminal which is replica of 9E%" terminal for tradin# actively with more speed, #reater analytical features and priority access to relationship mana#er to trade over the phone
COMMODIT"___________________________________________
;FE9(E9" of I91I% has been #iven the permission to the multi commodity tradin# after approximate thirty years of #lobali&ation = liberali&ation in world. )y inspirin# from the 9.S.E., = ).S.E. many other stock exchan#e >I*, I*I*I )ank, 9SE, *entral 6arehousin#, %#riculture Industries etc. had setup the ;nline (ulti7*ommodity Exchan#e. "his exchan#e will provide the present rate of the commodity to the on line market these exchan#e
will control by the forward market commission which do work under ministry of consumer affair,food = public distribution ,#overnment of I91I%.
/NICON is the mem0er of the t+o *ommodity e1*han'e at present
!
I . NCDE#____________________________________________________
9ational *ommodity = 1erivatives Exchan#e >imited +9*1EG- is a professionally mana#ed online multi commodity exchan#e incorporated on %pril 2!, 200! under the *ompanies %ct, B4<. It obtained its *ertificate for *ommencement of )usiness on (ay B, 200!. It has commenced its operations on 1ecember 4, 200!. 9*1EG currently facilitates tradin# of thirty six commodities 7 *ashew, *astor Seed, *hana, *hilli, *offee, *otton, *otton Seed ;ilcake, *rude @alm ;il, Expeller (ustard ;il, old, uar #um, uar Seeds, ur, Jeera, Jute sackin# ba#s, (ild Steel In#ot, (ulberry reen *ocoons, @epper, apeseed 7 (ustard Seed ,aw Jute, )1 @almolein, efined Soy ;il, ice, ubber, Sesame Seeds, Silk, Silver, Soy )ean, Su#ar, "ur, "urmeric, rad +)lack (atpe-, 6heat, Hellow @eas, Hellow ed (ai&e = Hellow Soybean (eal. %t subse5uent phases tradin# in more commodities would be facilitated.
II. MC#__________________________________________________________
(*G an independent and de7mutulised multi commodity exchan#e has permanent reco#nition from overnment of India for facilitatin# online tradin#, clearin# and settlement operations for commodity futures markets across the country. :ead5uartered in (umbai, (*G is led by an expert mana#ement team with deep domain knowled#e of the commodity futures markets. Inau#urated in 9ovember 200! by Shri (ukesh %mbani, *hairman = (ana#in# 1irector, eliance Industries >td, (*G offers futures tradin# in the followin# commodity cate#ories %#ri *ommodities, )ullion, (etals7 ?errous = 9on7ferrous, @ulses, ;ils = ;ilseeds, Ener#y, @lantations, Spices and other soft commodities.
DEPOSITOR"_________________________________________________ 3
1epository offer a safe, convenient way to hold securities as compared to holdin# securities in paper form. "heir service provides an inte#rated sin#le platform for all the clients ensurin# a risk free, efficient and prompt depository process.
2a*ilities rovided 0y /ni*on
e3materiali4ation
@hysical shares can be converted into
electronic form throu#h demateriali&ation at any of the nicon )ranch.
Re3materiali4ation
Electronic shares on re5uest of e7
materiali&ation enables one to convert 1emateriali&ed shares into physical form.
ransfer
;ne can transfer shares throu#h inter and intra
depository services.
IO sin# the demat account details one can apply for I@; and
on allotment the securities are transferred directly to the demat account.
Corporate A*tions In case one is eli#ible for any bonus and ri#ht
issues while holdin# the stock in 1emat %ccount then allotment would be transferred to the account.
4
5asi "his facility empowers the clients to view, download, print
updated holin#s with respective valuations over the internet thou#h 1emat %ccount and avail host of services.
DISTRI$UTION_________________________________________________
/ni*on is fast emer#in# as a leader in the Insurance and (utual ?unds
distribution space. nicon has over 00 branches and a hu#e number of )usiness 1evelopment Executives/ who help to source and service the customers throu#hout the country. nicon is fast becomin# the preferred Fendor Independent/ distribution houses because of providin# efficient service like free pick7up of collection of che5ues11s, 'eepin# track of the premiums etc to its customers.
MUTUAL FUNDS________________________________________________
(utual fund is a trust that pools the savin#s of a number of investors who share a common financial #oal. "he money thus collected is invested into a variety of securities, includin# stocks, bonds, and money7market instruments. (utual funds issue units to the investors, which represent an e5uitable ri#ht in the assets of the mutual fund. "hus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally mana#ed basket of securities at a relatively low cost.
INSURANCE____________________________________________________ General Insuran*e
nicon offers all the products of #eneral Insurance under one umbrella. nicon comprises of a team of distin#uished professionals from insurance, finance and <
other mana#ement disciplines who have vast business = mana#erial experience. nicon team evaluates the clientKs business environment and studies the risk profile. based on the results of these evaluations, nicon team then su##ests the most cost effective , inte#rated insurance packa#e that is perfectly suited to the clientKs risk profile.
6ife Insuran*e
nicon offers you a @eace of (ind by offerin# various life insurance plans for your uni5ue = specific needs. ?or every financial problem, there is a solution also is the philosophy of nicon. %nd is here to #ive one a complete financial solutions. ;ne can always have an access to their 8! )ranch ;ffices situated at prime locations of the city, or can call to their elationship (ana#er for #uide to Investments. ?ollowin# is the #limpse of >ife Insurance @lans 3
@rotection @lans
3
*hild @lans
3
Investment @lans
3
Savin# @lans
3
etirement and @ension @lans
3 9I @lans 3
:ealth @lans
PROPERT"_____________________________________________________
A
/ni*on is a speciali&ed property brokin# company. It offers a total solution to
the clients inclusive of market research, marketin# strate#y, interaction with the professional teams and sales or leasin# of the property.
NRI SERVICES__________________________________________________
nicon offers a convenient and hassle7free way of Investin# in the Indian Securities (arket to the people who are livin# outside India and wish to participate in the Indian rowth story. ro*edure for NRI operations in Indian Capital Mar$ets
"he 9I can deal with only one bank at any point of time.
:e is allowed to invest only 4C of the paid up capital of a company. "he a##re#ate paid up value of e5uity of any company purchased by all 9IKs and ;*)s cannot exceed 0 percent of the paid up capital of the company and in the case of convertible debentures, the a##re#ate paid up value of each series of debentures purchased by all 9IKs and ;*)s cannot exceed 0 C of the paid up value of each series of convertible debentures.
:e can enter only into delivery based trades, all deliveries must only be routed throu#h beneficiary accounts and not directly throu#h the broker.
Shares bou#ht by him cannot be sold unless the payout of the same is received from exchan#e.
%ll purchase and sale transactions have to be reported to the )I by the desi#nated bank.
;ri#inal brokers contract notes have to be submitted to the desi#nated )ank branch, within 23 hours of the transaction.
:e will be re5uired to make bill to bill payments settlements. 9o ad$ustments of purchase a#ainst sale consideration should be done. 8
Shares cannot be bou#ht a#ainst the shares sold in the same settlement.
%ll @urchase and Sales will be dealt separately for payments receipts.
Sale proceeds of any transaction not reportedapproved by the )I are allowed
to be credited to the 9E9; savin#sdemat account. "he
transaction will have to be reversed in the account and losses if any will be borne by the client.
%ll tax liabilities arisin# out of buyin# and sellin# of securities will be handled by the desi#nated bank.
____________________________________________ $AC%OFFICE
/ni*on throu#h its online back7office aims to increase the transparency and
provides the link to view the details of the account online anytime and anywhere. "he followin# reports can be viewed online Sauda details 2 ?inancial >ed#er ! 9et @osition fot the day 3 9et position 1etail
FI#ED INCOME_________________________________________________
"he ?ixed Income vertical of 9I*;9 roup deals in Soverei#n @aper, (oney (arket ?ixed Income Instruments and (erchant )ankin# %ctivities. )roadly, it undertakes the followin#
a.
1ealin# in all types of money market instruments vi&. *ommercial paper +;ri#ination = @lacement-, *ertificate of 1eposit and "reasury )ills both in @rimary and Secondary market. B
b.
1ealin# in overnment Securities +includin# securities of ;il, ?ertili&er = ?ood )onds- and other @S *orporate )onds with counterparties like )anks, @rimary 1ealers, (utual ?unds, Insurance *ompanies, e#ional ural )anks, *o operative )anks, *entral = State @Ss, :ousin# ?inance *ompanies, 9)?* = *orporates.
c.
etailin# of *entral, State overnment Securities and )onds to @? "rusts, niversities = *olle#es.
d.
%dvisory Services to @? "rusts.
e.
%rran#ers for @rivate placement of )onds = placin# it with )anks, (utual funds, Insurance *ompanies = *orporates.
f.
aisin# of capital by way of Initial @ublic ;ffers +I@;- and ?ollow7on @ublic ;fferin#s +?@;-
#.
Securiti&ation
of
receivable
portfolio
of
:ousin#
?inance
*ompanies, )anks = 9)?*s by way of @ass throu#h certificates.
PORTFOLIO TRAC%ER_________________________________________
"he @ortfolio "racker is a simple yet powerful tool that lets you monitor the value of your investments and other securities youKve #ot your eye on. "o set up your portfolio, all you need to do is enter the 5uantities of your investments
in different thin#s, and the price you made your purchases and sales at. @ortfolio "racker lets you monitor certain securities, it is not intended to reflect your actual holdin#s or account information at any brokerdealer.
COMPETITORS 20
•
India bulls ?inancial Services >imited
•
India Info line
•
'arvy Securities
•
?ortis Securities + eli#are-
•
Share khan ltd
•
I*I*I Securities ltd
•
(otilal ;swal Securities
•
'otak Securities
•
:1?* Securities
INVESTMENT AVENUES
2
INTRODUCTION Savin#s form an important part of the economy of any nation. 6ith the savin#s invested in various options available to the people, the money acts as the driver for #rowth of the country. Indian financial scene too presents a plethora of avenues to the investors. "hou#h certainly not the best or deepest of markets in the world, it has reasonable options for an ordinary man to invest his savin#s.
22
"he money you earn is partly spent and the rest saved for meetin# future expenses. Instead of keepin# the savin#s idle you may like to use savin#s in order to #et return on it in the future, this is called Investment.
;ne needs to invest and earn return on your idle resoures and #enerate sum of money for a specific #oal in life and make a provision for an uncertain future .;ne of the important reason why people needs to invest wisely is to meet the cost of inflation. Inflation is the rate at which the cost of livin# increases.
"he cost of livin# is simply what it costs to buy the #oods and services you need to live. Inflation causes money to lose value because it will not buy the same amountof a #ood or service in the future as it does now or did in the past. "he sooner one starts investin# the better. )y investin# early you allow your investments more time to #row, whereby the concept of compoundin# increases your income, by accumulatin# the principal and the interest or dividend earned on it, year after year. "ha three #olden rules for all investors are
•
Invest Early
•
Invest re#ularly
•
Invest for lon# term and not for short term
INV5&M5N&
"he dictionary meanin# of investment is to commit money in order to earn a financial return or to make use of the money for future benefits or advanta#es. @eople commit money to investments with an expectation to increase their 2!
future wealth by investin# money to spend in future years. ?or example, if you invest s. 000 today and earn 0 Cover the next year, you will have s.00 one year from today.
%n investment can be described as perfect if it satisfies all the needs of all investors. So, the startin# point in searchin# for the perfect investment would be to examine investor needs. If all those needs are met by the investment, then that investment can be termed the perfect investment. (ost investors and advisors spend a #reat deal of time understandin# the merits of the thousands of investments available in India. >ittle time, however, is spent understandin# the needs of the investor and ensurin# that the most appropriate investments are selected for him.
he Investment Needs of an Investor
)y and lar#e, most investors have ei#ht common needs from their investments . Security of ;ri#inal *apitalL 2. 6ealth %ccumulationL !. *omfort ?actorL 3. "ax EfficiencyL 4. >ife *overL <. IncomeL A. SimplicityL 8. Ease of 6ithdrawalL B. *ommunication.
&e*urity of ori'inal *apital "he chance of losin# some capital has been a
primary need. "his is perhaps the stron#est need amon# investors in India, who have suffered re#ularly due to failures of the financial system. 23
7ealth a**umulation "his is lar#ely a factor of investment performance,
includin# both short7term performance of an investment and lon#7term performance of a portfolio. 6ealth accumulation is the ultimate measure of the success of an investment decision.
Comfort fa*tor "his refers to the peace of mind associated with an
investment. %voidin# discomfort is probably a #reater need than receivin# comfort. eputation plays an important part in deliverin# the comfort factor.
a1 effi*ien*y >e#itimate reduction in the amount of tax payable is an
important part of the Indian psyche. Every rupee saved in taxes #oes towards wealth accumulation.
6ife Cover (any investors look for investments that offer #ood return with
ade5uate life cover to mana#e the situations in case of any eventualities.
In*ome "his refers to money distributed at intervals by an investment, which
are usually used by the investor for meetin# re#ular expenses. Income needs tend to be fairly constant because they are related to lifestyle and are well understood by investors.
5ase of +ithdra+al "his refers to the ability to invest lon# term but
withdraw funds when desired. "his is stron#ly linked to a sense of ownership. It is normally tri##ered by a need to spend capital, chan#e investments or cater to chan#es in other needs. %ccess to a lon#7term investment at short notice can only be had at a substantial cost. 24
Communi*ation "his refers to informin# and educatin# investors about the
purpose and pro#ress of their investments. "he need to communicate increases when investments are threatened.
•
Security of ori#inal capital is more important when performance falls.
•
@erformance is more important when investments are performin# well.
•
?ailures en#ender a desire for an increase in the comfort factor.
@erfect investment would have been achieved if all the above7mentioned needs had been met to satisfaction. )ut there is always a trade7off involved in makin# investments. %s lon# as the investment strate#y matches the needs of investor accordin# to the priority assi#ned to them, he should be happy. "he Ideal Investment strate#y should be a customi&ed one for each investor dependin# on his risk7return profile, his satisfaction level, his income, and his expectations. %ccurate plannin# #ives accurate results. %nd for that there must be an efficient and trustworthy roadmap to achieve the ultimate #oal of wealth maximi&ation.
C'oo(in) *'e Ri)'* In+e(*men* Op*ion(
%fter understandin# the concept of investment, the investors would like to know how to #o about the task of investment, how much to invest at any moment and when to buy or sell the securities, "his depends on investment process as investment policy, investment analysis, valuation of securities, portfolio construction and portfolio evaluation and revision. Every investor tries to derive maximum economic advanta#e from his investment activity.
2<
?or evaluatin# an investment avenues are based upon the rate of return, risk and uncertainty, capital appreciation, marketability, tax advanta#e and convenience of investment. "he followin# "able should #ive the clear picture relatin# to the investors investment decisions in various financial market instruments. "he choice of the best investment options will depend on personal circumstances as well as #eneral market conditions. ?or example, a #ood investment for a lon#7term retirement plan may not be a #ood investment for hi#her education expenses. In most cases, the ri#ht investment is a balance of three thin#s >i5uidity, Safety and eturn.
In+e(*men* Op*ion( in In,ia
2A
Some of *'e mo(* preferre, In+e(*men* A+en-e( NoN5MARKETA3LE FINANCIAL ASSETS
% #ood portion of the financial assets of individual investors is held in the form of non7marketable financial assets like bank deposits, post office deposits, company deposits, provident fund deposits. "he main feature of these assets is that they represent personal transactions between the investor and the issuer. ?or Example, when you open a savin# bank ac , you deal with bank personally. In contrast, 6hen you buy e5uity shares in the stock market you do not know who is the seller. •
"an$ eposits
)ank deposit simply refers to openin# a bank ac = depositin# money in it. "here are various kind of bank %*s current %c, savin# ac, ?ixed deposit ac. 28
6hile a deposit in current %c does not earn any interest, deposits in other bank ac earn Interest.
•
Company eposits
(any companies, lar#e and small, solicit fixed deposits from the public.?ixed deposits mobili&ed by manufacturin# companies are re#ulated by )I. 'ey feature of co. deposits are as . ?or a manufacturin# co. the term of deposits can be one to three years, whereas for a non7bankin# finance co. it can vary between 24 months to 4 years. 2. "he interest rate on it are hi#her than those on bank deposits. !. *ompany deposit represent unsecured loans. 3. It offers the facility for premature withdrawal to attract deposits.
•
u0li* provident fund s*heme
Individuals = :?s can participate in this scheme. % @@? ac may be opened at any branch of the S)I or its subsidiaries or at specified branches of other nationali&ed banks. "he subscriber to a @@? ac is re5uired to make a min. deposit of rs.00 per year. "he max. permissible deposit per year is rs.A00007.@@? currently earn a compound interest rate of 8C p.a. which is totally exempt from taxes.
F"4e% InCOME SECURITIES It includes the followin# •
overnment Securities
•
Savin# )onds
•
@rivate sector 1ebentures 2B
•
@ublic sector undertakin# bonds
Government &e*urities
1ebt securities issued by the central #overnment, state #overnment and 5uasi7#overnment a#encies are referred to as #ovt. securities or #ilt7 ed#ed securities. ovt. securities have maturities ran#in# from !720 years and carry interest rates that usually vary between 8 and 0 C.
R"I &avin's "onds
Individuals, :?s, and 9Is can invest in these bonds. "he minimum amount of investment is rs.0007. "here is no upper limit. "he maturity period is 4 years from the date of issue. "he interest rate is 8C p.a., payable half7yearly. "hese bonds can be offered as security to banks for availin# loans.
rivate se*tor de0enture
%kin to promissory notes, debentures are instruments meant for raisin# >on#7term debt. "he obli#ation of a co. towards its debenture holders is similar to that of a borrower who promises to pay interest and principal at specified times. 6hen a debenture issue is sold to the investin# public, a trustee is appointed throu#h deed. "he trustee is usually a bank or financial institution.
u0li* &e*tor /nderta$in' "onds
@Ss issue debentures that are referred to as @S bonds. "here are two broad varieties of @S bonds taxable bonds and tax7free bonds. "here is no deduction of tax at source on the interest paid on these bonds. "hey !0
are transferable by mere endorsement and delivery. "here is no stamp duty applicable on transfer. "hey are traded on stock exchan#es.
F"4e% De(os"ts
It same as a term or time deposit. (oney may be placed with a bank, merchant bank, buildin# society or credit union for a fixed term at a fixed rate of interest which remains unchan#ed durin# the period of the deposit. 1epositors may have to accept an interest penalty if they break the deposit, ie, ask to take the money out before the a#reed period has expired.
?ew points which ?1 investors must consider at the time of investment, ,. &afety
?1s have conventionally been the premier choice for investors with a low risk appetiteL assured returns is the key factor which attracts investors towards deposits. Stick to ?1s of the hi#hest credit ratin# i.e. those with a %%%/ ratin# even if their rates seem modest vis7M7vis those offered by company deposits.
-. enure
Short tenured fixed deposits continue to be your best bet. 6ith interest rates on the ascent, a further hike in rates offered by fixed deposits cannot be ruled out. >ockin# your investments in lon#er tenured instruments may lead to an opportunity loss.
8. 6i9uidity
?ind out how ?1 fares on the pre7mature encashment front i.e. how easily can your investment be li5uidated. %lso en5uire about the penalty clauses, e.#. do !
you suffer a loss of interest andor principal amount. *ompare how various ?1s rank on this parameter and pick the best dealL thereby try to minimise the impact of illi5uidity which is typically associated with ?1s.
:. Additional 0enefits
?ixed deposits from reputed entities offer additional benefits, e.#. they can be used as collateral a#ainst which loans can be raised. Select a fixed deposit scheme which scores favourably on such parameters7
%ny investment portfolio should comprise the ri#ht mix of safe, moderate and risky investments. 6hile mutual funds and stocks are the favorite contenders for moderate and risky investments,fixed deposits, #overnment bonds etc. are considered safe investments. ?ixed deposits have been particularly popular amon# a lar#e section of investors in India as a safe investment option for a lon# period.
6ith fixed deposits or ?1s as they are popularly known, a person can invest an amount for a fixed duration. "he banks provide interest rates dependin# on this loan amount and the tenure of deposit. :ere are the benefits, drawbacks of fixed deposits and precautions one should take while makin# such investments.
M,t,al f,n%s % (utual ?und is a trust that pools the savin#s of a number of investors who share a common financial #oal. "he money thus collected is then invested in capital market instruments such as shares, debentures and other securities. "he income earned throu#h these investments and the capital appreciation reali&ed is shared by its unit holders in proportion to the number of units owned by them. !2
"hus a (utual ?und is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally mana#ed basket of securities at a relatively low cost. "he flow chart below describes broadly the workin# of a mutual fund
Mutual 2und Operation 2lo+ Chart
ORANISATION OF A MUTUAL FUND
"here are many entities involved and the dia#ram below illustrates the or#ani&ational set up of a mutual fund
!!
(utual fund units are Issued and redeemed by the ?und (ana#ement *ompany based on the fundKs net asset value +9%F-, which is determined at the end of each tradin# session. 9%F is calculated as the value of all the shares held by the fund, minus expenses, divided by the number of units Issued. (utual ?unds are usually lon# term investment vehicle thou#h there some cate#ories of mutual funds, such as money market mutual funds which are short term instruments.
A) E-i*y F-n,( E5uity funds are considered to be the more risky funds as compared to other fund types, but they also provide hi#her returns than other funds. It is advisable that an investor lookin# to invest in an e5uity fund should invest for lon# term i.e. for ! years or more. "here are different types of e5uity funds each fallin#
!3
into different risk bracket. In the order of decreasin# risk level, there are followin# "ypes of e5uity funds7
•
Aggressive Growth funds Growth Funds
•
Equity income /Dividend yield
•
Diversified equity funds
•
Equity Index Funds
•
•
Value Funds
B) Money Mar$et;6i9uid 2unds (oney market li5uid funds invest in short7term +maturin# within one yearinterest bearin# debt instruments. "hese securities are hi#hly li5uid and provide safety of investment, thus makin# money market li5uid funds the safest investment option when compared with other mutual fund types. :owever, even money market li5uid funds are exposed to the interest rate risk. "he typical investment options for li5uid funds include "reasury )ills +issued by #overnments-, *ommercial papers +issued by companies- and *ertificates of 1eposit +issued by banks-.
+) #<"RI 2/N& %s the name su##ests, hybrid funds are those funds whose portfolio includes a blend of e5uities, debts and money market securities. :ybrid funds have an e5ual proportion of debt and e5uity in their portfolio. "here are followin# types of hybrid funds in India • •
alanced Funds Growth!and!Income Funds !4
•
Asset Allocation Funds
,)
GI6 2/N&
%lso known as overnment Securities in India, ilt ?unds invest in #overnment papers +named dated securities- havin# medium to lon# term maturity period. Issued by the overnment of India, these investments have little credit risk +risk of default- and provide safety of principal to the investors. :owever, like all debt funds, #ilt funds too are exposed to interest rate risk. Interest rates and
prices of debt securities are inversely related and any chan#e in the interest rates results in a chan#e in the 9%F of debt#ilt funds in an opposite direction.
Pro( & /on( of in+e(*in) in m-*-al f-n,(
?or investments in mutual fund, one must keep in mind about the @ros and cons of investments in mutual fund. A,+an*a)e( of In+e(*in) M-*-al F-n,(0
%. Profe((ional Mana)emen* 7 "he basic advanta#e of funds is that, they are professional mana#ed, by well 5ualified professional. Investors purchase funds because they do not have the time or the expertise to mana#e their own portfolio. % mutual fund is considered to be relatively less expensive way to make and monitor their investments.
). Di+er(ifi/a*ion 7 @urchasin# units in a mutual fund instead of buyin# individual stocks or bonds, the investors risk is spread out and minimi&ed up to certain extent. "he idea behind diversification is to invest in a lar#e number of assets so that a loss in any particular investment is minimi&ed by #ains in others. !<
* . E/onomie( of S/ale 7 (utual fund buy and sell lar#e amounts of securities at a time, thus help to reducin# transaction costs, and help to brin# down the avera#e cost of the unit for their investors.
1. Li-i,i*y 7 Just like an individual stock, mutual fund also allows investors to li5uidate their holdin#s as and when they want.
E . Simpli/i*y 7 Investments in mutual fund is considered to be easy, compare to other available instruments in the market, and the minimum investment is small. (ost %(* also have automatic purchase plans whereby as little as s. 2000, where SI@ start with $ust s.40 per month basis.
Di(a,+an*a)e( of In+e(*in) M-*-al F-n,(
%. Profe((ional Mana)emen* 7 Some funds doesnt perform in neither the market, as their mana#ement is not dynamic enou#h to explore the available opportunity in the market, thus many investors debate over whether or not the so7called professionals are any better than mutual fund or investor him self, for pickin# up stocks.
). Co(*( N "he bi##est source of %(* income is #enerally from the entry = exit load which they char#e from investors, at the time of purchase. "he mutual fund industries are thus char#in# extra cost under layers of $ar#on. *. Dil-*ion 7 )ecause funds have small holdin#s across different companies, hi#h returns from a few investments often donKt make much difference on the overall return. 1ilution is also the result of a successful fund #ettin# too bi#.
!A
6hen money pours into funds that have had stron# success, the mana#er often has trouble findin# a #ood investment for all the new money.
1. Ta1e( 7 when makin# decisions about your money, fund mana#ers donKt consider your personal tax situation. ?or example, when a fund mana#er sells a security, a capital7#ain tax is tri##ered, which affects how profitable the individual is from the sale. It mi#ht have been more advanta#eous for the individual to defer the capital #ains liability
E1,"t) Ma#et % sto*$ mar$et is a public market for the tradin# of company stock and derivatives at an a#reed priceL these are securities listed on a stock exchan#e as well as those only traded privately. Indian stock markets particularly the )SE and the 9SE, had been a preferred destination not only for the Indian investors but also for the ?orei#n investors. %lthou#h Indian (arkets had been throu#h tou#h times due to various scams, but history shows that they recovered very fast. (any types of scrip had been value creators for the investors. @eople have earned fortunes from the stock markets, but there are people who have lost everythin# due to incorrect timin#s or selection of fundamentally weak companies.
59uity shares
%t the most basic level, stock +often referred to as shares- is ownership, or e5uity, in a company. Investors buy stock in the form of shares, which represent a portion of a companyKs assets +capital- and earnin#s+dividends-. %s a shareholder, the extent of your ownership +your stake- in a company depends on the number of shares you own in relation to the total number of shares available
!8
?or example, if you buy 000 shares of stock in a company that has issued a total of 00,000 shares, you own one per cent of the company. 6hile one per cent seems like a small holdin#, very few private investors are able to accumulate a shareholdin# of that si&e in publicly 5uoted companies, many of which have a market value runnin# into billions of pounds. Hour stake may authori&e you to vote at the companyKs annual #eneral meetin#, where shareholders usually receive one vote per share. In theory, every stockholder, no matter how small their stake, can exercise some influence over company mana#ement at the annual #eneral meetin#. In reality, however, most private investorsK stakes are insi#nificant. (ana#ement policy is far more likely to be influenced by the votes of lar#e institutional investors such as pension funds.
a6 &OCK& &
b6 5R2ORMANC5 INICAOR&
:ere is a list of the standard performance indicators erforman*e Indi*ator
*losin# price
efinition
"he last price at which the stock was bou#ht or sold
:i#h and low "he hi#hest and lowest price of the stock from the previous tradin# day !B
42 week ran#e "he hi#hest and lowest price over the previous 42 weeks Folume
"he amount of shares traded durin# the previous tradin# day
:i#h and low 9et chan#e
"he difference between the closin# price on the last tradin#
day and the closin# price on the tradin# day prior to the last.
#5 &OCK 5=C#ANG5&
% marketplace in which to buy or sell somethin# makes life a lot easier. "he same applies to stocks. % stock exchan#e is an or#ani&ation that provides a marketplace in which investors and borrowers trade stocks. ?irstly, the stock exchan#e is a market for issuers who want to raise e5uity capital by sellin# shares to investors in an Initial @ublic ;fferin# +I@;-. "he stock exchan#e is also a market for investors who can buy and sell shares at any time.
a) radin' shares on the sto*$ e1*han'e
%s an investor in the I91I%, you canKt buy or sell shares on a stock exchan#e yourself. Hou need to place your order with a stock exchan#e member firm +a stockbroker- who will then execute the order on your behalf. "he 9SE %91 )SE are the leadin# stock exchan#e in the I91I%. "radin# is done throu#h computeri&ed systems.
0) he tradin' pro*ess
If you decide to buy or sell your shares, you need to contact a stockbroker who will buy or sell the shares on your behalf. %fter receivin# your order, the stockbroker will input the order on the SE"S or SE%O system to match your order with that of another buyer or seller. 1etails of the trade are transmitted electronically to the stockbroker who is responsible for settlin# the trade. Hou will then receive confirmation of the deal. 30
*) ypes of shares availa0le on the sto*$ e1*han'e
Hou cannot trade all stocks on the stock exchan#e. "o be listed on a stock exchan#e, a stock must meet the listin# re5uirements laid down by that exchan#e in its approval process. Each exchan#e has its own listin# re5uirements, and some exchan#es are more particular than others. It is possible for a stock to be listed on more than one exchan#e. "his is known as a dual listin#.
Derivative Market
Is a product whose value is derived from the value of one or more basic variables, called underlyin#. "he underlyin# asset can be e5uity, index, forei#n exchan#e +forex-, commodity or any other asset. 1erivative products initially emer#ed as hed#in# devices a#ainst fluctuations in commodity prices and commodity7linked derivatives remained the sole form of such products for almost three hundred years. "he financial derivatives came into spotli#ht in post7BA0 period due to #rowin# instability in the financial markets. :owever, since their emer#ence, these products have become very popular and by BB0s, they accounted for about two thirds of total transactions in derivative products.
Type( of ,eri+a*i+e(
"he most commonly used derivatives contracts are forwards, futures and options, which we shall discuss in detail later. :ere we take a brief look at various derivatives contracts that have come to be used.
%. For2ar,( % forward contract is a customi&ed contract between two entities, 3
where settlement takes place on a specific date in the future at todayKs pre7 a#reed price.
). F-*-re(0 % futures contract is an a#reement between two parties to buy or sell an asset at a certain time in the future at a certain price. ?utures contracts are special types of forward contracts in the sense that the former are standardi&ed exchan#e7traded contracts.
*. Op*ion(0 ;ptions are of two types 7 calls and puts. *alls #ive the buyer the ri#ht but not the obli#ation to buy a #iven 5uantity of the underlyin# asset, at a #iven price on or before a #iven future date. @uts #ive the buyer the ri#ht, but not the obli#ation to sell a #iven 5uantity of the underlyin# asset at a #iven price on or before a #iven date.
1. S2ap(0 Swaps are private a#reements between two parties to exchan#e cash flows in the future accordin# to a prearran#ed formula. "hey can be re#arded as portfolios of forward contracts. "he two commonly used swaps are •
Interest rate swaps "hese entail swappin# only the interest related cash flows between the parties in the same currency.
•
*urrency swaps "hese entail swappin# both principal and interest between the parties, with the cash flows in one direction bein# in a different currency than those in the opposite direction.
Ins,an!e @eople need insurance in the first place. %n insurance policy is primarily meant to protect the income of the familys bread earners. "he idea is if any one or both die their dependents continue to live comfortably. "he circle of life be#ins at birth follower by education, marria#e and eventually after a 32
>ife time of work we look forward to life of retirement. ;ur finances too tend to chan#e as we #o throu#h the various phases of life. In the first twenty of our life, we are financially and emotionally dependents on our parents and their are no financial commitments to be met. In the next twenty years we
#ain financial independence and provide financial independence to our families. "his is also the sta#e when our income may be unable to meet the #rowin# expenses of a youn# household. In the next twenty as we see our Investments #row after our children #row and become financially independent. Insurance is a provision for the distribution of risks that is to say it is a financial provision a#ainst loss from unavoidable disasters. "he protection which it affords takes form of a #uarantee to indemnify the insured if certain specified losses occur. "he principle of insurance so far as the undertakin# of the obli#ation is concerned is that for the payment of a certain sum the #uarantee will be #iven to reimburse the insured. "he insurer in acceptin# the risks so distributes them that the total of all the amounts is paid for this insurance protection will be sufficient to meet the losses that occur. Insurance then provide divided responsibility. "his principle is introduced in most stores where a division is made between the sales clerk and the cashiers department the arran#ement dividin# the risks of loss. "he insurance principle is similarly applied in any other cases of divided responsibility. %s a business however insurance is usually reco#ni&ed as some form of securin# a promise of indemnity by the payment of premium and the fulfilment of certain other stipulations
Type( of in(-ran/e A"
erm insuran*e plans
"erm insurance is the cheapest form of life insurance available. Since a term insurance contract only pays in the event of eventuality the life cover comes at 3!
low premium rates. "erm insurance is a useful tool to purchase a#ainst risk of early death and protection of an asset.
$3 5ndo+ment plans
Endowment plans are savin#s and protection plans that provide a dual benefit of protection as well as savin#s. Endowment plans pay a death benefit in the event of an eventuality should the customer survive the benefit period a maturity benefit is paid to the life insured.
C3 7hole of life plans
% whole of life plan provides life insurance cover to an individual up to a specified a#e. % whole of life plan is suitable for an individual who is lookin# for an extended life insurance cover and or wants to pay premium over as lon# as tenure as possible to reduce the amount of upfront premium payment.
D3 ension plans
@ension plans allow an individual to save in a tax deferred manner. %n individual can either contribute throu#h re#ular premiums or make sin#le premium investments. Savin#s accumulate over the deferment period. ;nce the contract reaches the vestin# a#e , the individual has the option of choosin# an annuity plan from a life insurance company. %n annuity is paid till the life the lifetime of the insured or a predetermined period dependin# upon the annuity option chosen by the life insured.
E3 /nit 6in$ed Insuran*e lans
nit linked insurance plan +>I@- is life insurance solution that provides for the benefits of risk protection and flexibility in investment. "he investment is denoted as units and is represented by the value that it has attained called as 9et %sset Falue +9%F-. "he policy value at any time varies accordin# to the 33
value of the underlyin# assets at the time. In a >I@, the invested amount of the premiums after deductin# for all the char#es and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled to#ether to form a nit fund. % nit is the component of the ?und in a nit >inked Insurance @olicy. "he returns in a >I@ depend upon the performance of the fund in the capital market. >I@ investors have the option of investin# across various schemes, i.e., diversified e5uity funds, balanced funds, debt funds etc. It is important to remember that in a >I@, the investment risk is #enerally borne by the investor.
In a >I@, investors have the choice of investin# in a lump sum +sin#le premium- or makin# premium payments on an annual, half7yearly, 5uarterly or monthly basis. Investors also have the flexibility to alter the premium amounts durin# the policyKs tenure. ?or example, if an individual has surplus funds, he can enhance the contribution in >I@. *onversely an individual faced with a li5uidity crunch has the option of payin# a lower amount +the difference bein# ad$usted in the accumulated value of his >I@-. >I@ investors can shift their investments across various plansasset classes +diversified e5uity funds, balanced funds, debt funds- either at a nominal or no cost.
E1pen(e( C'ar)e, in a ULIP
•
remium Allo*ation Char'e
% percenta#e of the premium is appropriated towards char#es initial and renewal expenses apart from commission expenses before allocatin# the units under the policy.
•
Mortality Char'es
34
"hese are char#es for the cost of insurance covera#e and depend on number of factors such as a#e, amount of covera#e, state of health etc.
•
2und Mana'ement 2ees
?ees levied for mana#ement of the fund and are deducted before arrivin# at the 9%F. •
Administration Char'es
"his is the char#e for administration of the plan and is levied by cancellation of units.
•
&urrender Char'es
1educted for premature partial or full encashment of units.
•
2und &+it*hin' Char'e
sually a limited number of fund switches are allowed each year without char#e, with subse5uent switches, sub$ect to a char#e.
•
&ervi*e a1 edu*tions
Service tax is deducted from the risk portion of the premium.
3<
COMPARATIVE ANALYSIS of investment avenues
Re*-rn
Safe*y
Vola*ili*y Li-i,i*y
#onvenience
E-i*y
$igh
%ow
$igh
&oderate
$on,(
&oderate
$igh
&oderat &oderate
$igh
&oderate
e &oderat %ow
%ow
Co. De4en*-re( &oderate
$igh
e Co. FD(
&oderate
%ow
%ow
%ow
&oderate
$an5 Depo(i*(
%ow
$igh
%ow
$igh
$igh
PPF
&oderate
$igh
%ow
&oderate
$igh
In(-ran/e
%ow
$igh
%ow
%ow
&oderate
M-*-al F-n,(
$igh
$igh
&oderat $igh e
RESEARCH METHODOLOGY
3A
$igh
RESEARC6 DESIN
% esearch desi#n is purely and simply the framework of plan for a study that #uides the collection and analysis of data. "he study is intended to find the investors preference towards various investment avenues. "he study desi#n is des*riptive in nature.
DESCRIPTIVE RESEARC6
1escriptive study is a fact7findin# investi#ation with ade5uate interpretation. It is the simplest type of research and is more specific. (ainly desi#ned to #ather descriptive information and provides information for formulatin# more sophisticated studies.
MET6ODS OF DATA COLLECTION
rimary data "elephonic survey, Ouestionaire &e*ondary data 9ewspapers, 6ebsites &le &i4e 00 Resear*h Area ha&iabad, 9oida &lin' e*hni9ue
*onvenience method of samplin# is used to collect the data from the respondents. esearchers or field workers have the freedom to choose whomever they find, thus the name convenience/. %bout 00 samples were collected from ha&iabad and noida city.
O$7ECTIVE OF T6E STUD"
38
•
"o understand all about different investment avenues available in India.
•
"o find out how the investors #et information about the various financial instrument
•
"o find out the savin# habits of the different customers and the amount they invest in various financial instruments.
•
In which type of financial instrument they like to invest.
•
:ow lon# they prefer to keep their money invested.
•
6hat is the return that they expect from the investment.
•
6hat are the various factors that they consider before investin#.
•
"o #ive a recommendation to the investors that where they should invest.
SCOPE OF STUD"
"he study enables to have a better knowled#e of investin# option available in the market. "he study hi#hli#hts some of the most important investin# options available with the Indian investors. It #ives an overview of pros and cons of investin# in different avenues and also help in choosin# best from them.
3B
DATA ANALYSIS 2 INTERPRETATION OF T7E STUDY
A. N-m4er of male an, female( in (-r+ey
en,er
Re(pon,en*
Male
89
Female
:;
To*al
:<<
Ta4le :.: 40
Fi)-re :.:
In*erpre*a*ion
"he male respondent are 8! and the females are A which shows the ma$ority of male respondent in survey.
$. eo)rap'i/al Di(*ri4-*ion
eo)rap'i/al ,i(*ri4-*ion
= of re(pon,en*
Noi,a
'(
'a>ia4a,
)' Ta4le :.?
4
Fi)-re :.?
In*erpre*a*ion
%s the samplin# area is 9oida = ha&iabad. :ere, A2C respondent are from ha&iabad = 28C from 9oida.
C. A)e of *'e re(pon,en*
A)e ?<9< 9:< :@< A4o+e @< To*al
= of Re(pon,en* ?@ 9B ?; :? :<< Ta4le :.9
42
2i'ure ,.8
In*erpre*a*ion
"he total total number of respondent are are 00."he C of respondent are 24 C from a#e #roup 207!0, !
D. O//-pa*ion of Re(pon,en*
O//-pa*ion S*-,en* En*reprene-r or5in) Profe((ional Re*ire, To*al a0le a0le ,.:
4!
= of Re(pon,en* * '* +' '+ ,* ,--
Fi)-re 0:.
In*erpre*a*ion
%s the sample si&e is 00, where ma$or responses are from workin# cate#ory i.e. !2C = the rest are 24C from entrepreneur, 2!C from professionals, 4C from retired = 4C from students.
in+e(*men* a+en-e( E. %no2le,)e a4o-* *'e a+aila4le in+e(*men*
Investment Options
<5&
NO
Mutual fund
44
34
59uity mar$et
A4
24
erivatives
!4
<4
2i1ed eposit
00
0
Insuran*e
B8
2
a0le .4
43
2i'ure ,.>
In*erpre*a*ion
"he response responsess menti mention on in *a4l *a4lee :.@ shows that people are more aware about investment as fixed deposits +00- in bank because it is a common type of investment since earlier time, followed by Insurance +B8-. 9ear about A4 people knows about investment in e5uity shares = 44 in mutual funds. ;nly !4 people knows about investment in derivatives because it is common to those people who are risk taker.
Informa*ion re)ar,in) in+e(*men* a+en-e( F. So-r/e of Informa*ion
&our*es of information
Responses in ?
Media
34
Ne+spaper
!0
Co.@s sales for*e
4
Advertisement
0 a0le a0le ,.
44
Fi)-re :.B In*erpre*a*ion
"able .4 shows that media is the most powerful source of information re#ardin# investment avenues, for example Bee "usiness! CN"C Aa+a4. %fter media newspaper is a #ood source of information. *o.s sales force = advertisement are also helpful in providin# such information.
. Ra*in) )i+en *o In+e(*men* A+en-e More preferre,
Mo,era*e
Le(( preferre,
M-*-al F-n,
'*
''
,*
E-i*y Deri+a*i+e(
,' )
,( ,-
'' ++
Fi1e,
(-
,*
*
,epo(i*( In(-ran/e
)*
,*
,-
a0le,.
4<
In*erpre*a*ion
6. = of In/ome A( In+e(*men* ? Of In*ome As Investment "elo+ > ? >3,D ? ,D3-D? A0ove -D?
Responses !A 28 20 4
a0le ,.E
4A
2i'ure,.E
In*erpre*a*ion
I. $a(i( for ma5in) In+e(*men* asis of Investment
esonses in 0
(arket Sentiments ?undamental = technical %nalysis
3! 8
@ast performance
!B Ta4le0 :.
48
Fi)-re0 :. In*erpre*a*ion
%s per the responses obtained from the survey of 00 people shows that 3!C people takes market sentiments as the basis for makin# investment, while there are !BC people, who considers the past performance = only 8C people makes fundamental = technical analysis for makin# Investment .
7. Rea(on for /'oo(in) any par*i/-lar in+e(*men* op*ion
Reason to invest
Responses in ?
Ma1imum Return
34
a1 &avin'
2
&afety
8
Re'ular In*ome 2lo+
!0 Ta4le 0 :.:< 4B
2i'ure ,.,D
In*erpre*a*ion
%s responses obtained from people shows that maximum people makes investment with the aim to #ain max. return =re#ular income flow.;ut of 00 , 3!C people Invest to #ain (ax. return, 2BC for re#ular income flow,AC for safety = C for tax savin#.
SUGGESTIONS 2 RECOMMENDATIONS
"o earn #ood return with less capital risk, a investor have to be active while desi#nin# his portfolio.
Every attributes of investor like his a#e level, income level, his expectation level have effect on their portfolio desi#n.
<0
%n investor should #o with well diversified portfolio in compare to stick on only one or two investment avenue.
Investors should update his knowled#e continuously to #rab #ood opportunities in market.
Investors should take decision carefully because updation of portfolio is a costly affair .
LIMITATION OF T7E STUDY "he pro$ect is based upon various financial instrument that are available in India and the perception level of the customer about these financial instruments. ?or which there will be the need of information from the customers about their knowled#e of these financial products. "he various limitations of the study are
<
"otal number of financial instrument in the market is so lar#e that it needs
a lot of resources to analy&e them all. :andlin# and analy&in# such a varied and diversified data needs a lot of
time and resources. eluctance of the people to provide complete information about
themselves can affect the validity of responses. 1ue to time and cost constraint study is conducted in only area of
ha&iabad and 9oida. "he lack of knowled#e in customers about the financial instruments can
be a ma$or limitation. "he Information can be biased due to the use of 5uestionnaire.
3"bl"o&a(.)
www,nseindia.com www.bseindia.com www.uniconindia.in
<2
www.amfiindia.com www.mcx.com www.mutualfundsindia.com www.scribd.com
Anne4,e
/UESTIONNAIRE
Name: Contact No: E mail id: 1. What is your age ? (a) 20-30 !
(") 31-#0 !
(c) #1-$0 !
2. 'ender (a) ale
!
(") emale <3
!
(d) $1 % a"o&e !
3. *ccu+ation (a) ,tudent !
(") Entre+reneur !
(d) ro/essional !
(e) etired !
+c- Woring
!
#. o you no a"out the /olloing in&estment o+tions a&aila"le in /inancial maret? utual und
es
No
i4ed de+osits
es
No
eri&ati&es
es
No
E5uity
es
No
6nsurance
es
No
$. 7o do you get in/ormation regarding these /inancial instruments? 8d&ertisement !
edia !
Nes+a+er !
Co.9s ,ales /orce ! . lease rate the /olloing in&estment o+tions as +er your +re/erence : utual und !
i4ed e+osits !
E5uity !
6nsurance !
eri&ati&es !
;. 7o o/ten you in&est in these in&estment a&enues? egularly
8s +er mt. cond.
<4
,+eculation
<. What is your 8nnual 6ncome ? 8. 1 to 3 lacs
!
=. 3-$ lacs
!
C. $-10 lacs
!
. ore
!
10. What > o/ 6ncome you in&est in these /inancial instrument ? %. )elow 4C
P Q
). 4 N 0 C
P Q
*. 0 N 20C
P Q
1. %bove 20C
P Q
11. *n hat "asis you in&est in any +articular in&estment o+tion : ast +er/ormance
aret ,entiments
undamentaltech. analysis
others
12. What are the /actors you consider hile in&esting in any o/ the /inancial instrument? a4. return
@a4 sa&ing
,a/ety
egular income /lo
13. 7o long you +re/er to ee+ your money in&ested in any /inancial instrument? Aess than months
months to 1 yr.
1 to 3 yrs.
ore than 3 yrs.
1#. 7o much return you e4+ect /rom in&estment? 8. 10 to 20> !
=. 20 to 30>
C. 30 to $0> !
. a"o&e $0> ! <<
!
