Fund Industry In India Research Articles

A Study of Information Needs of Mutual Funds Investors & Implications for Web Based Marketing of Mutual Fund Products

A Study of Information Needs of Mutual Funds Investors & Implications for Web Based Marketing of Mutual Fund Products

Mutual Funds Industry in India: The Branches of Mutual Funds Investments

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time.

Investment Patterns and its Strategic Implications for Fund Managers: An Empirical Study of Indian Mutual Funds Industry

The mutual fund industry in India presents an interesting scenario of 48 million investors, a large variety of product offerings and coexistence of private, public and foreign Asset Managing Companies. The study, adopting the classification of investors and categorization of funds by Association of Mutual Funds in India (AMFI) empirically researches the investment patterns of the five investor groups in the eight fund categories; examines the portfolios of the investor groups to identify their propensity for specific fund categories and identifies the dominant investor groups in terms of quantum of investment and investor folios. Further, in order to examine the common thread among the investment patterns of the investor groups, ten hypotheses have been formulated and tested for statistical significance. The significant findings of the study have been that (a) Corporates are the dominant investor group in the Indian Mutual Fund Industry and they account for almost 48% of the total investment (AUM) in the industry and they are more oriented towards non-equity funds which offer high security & liquidity and hence their propensity towards Liquid/Money Market and Debt-oriented funds; The second dominant group in the industry is the Retail investors’ group which accounts for almost 24% of the total investment (AUM) in the industry, while they account for 98% of the 48 million investors in the industry. The portfolio of this group is highly skewed towards equity oriented schemes (almost 80%) which offer high return, capital appreciation coupled with high risk and 18% of the portfolio accounts for Debt-oriented and Balanced funds. Often, the volatility in Indian stock markets and mutual funds is attributed to Foreign Institutional investors. The study brings to the fore that the FIIs account for only 0.62% of the total assets held by the industry and the FIIs are not in a position to influence the trading patterns in the industry. Statistical evidence has not been established to suggest that there are similarities in the investment patterns of the five investor groups. The mutual fund industry in India is moving more towards equity oriented funds as evident from the ratios of debt-oriented funds to equity-oriented funds during the two time-periods of study (2.4744:1 in March 2009 and 2.0582:1 in September 2009) and the trend may continue if Indian Stocks perform better in the coming years. The findings of the study have significant implications for AMCs and their fund managers in terms of structuring their product offerings, investment philosophies, asset allocation and marketing strategies.

Evaluating Indian Investors Response towards Service Quality of Mutual Funds Companies in India and Studying Changes in their Advertisement Information

Mutual funds are those kinds of services which have heterogeneity at maximum level. For example, Reliance mutual fund has almost same tax planning fund as that of Birla sun life mutual fund. So, perceiving service quality becomes more tiresome task for customer in this industry. In the present paper, we have explored Parasuraman's 5 dimensions of services for mutual funds in India. By doing some statistical analysis, we identified that high familiarity of corporate brand in mutual fund industry in India is more influential than any other factor. So advertising, for increasing this awareness can help in better recall thereby adding value towards perceived service quality for mutual funds in India. Post-liberalization Print advertisements for mutual funds have used risk-return, credibility, transaction cost and convenience information to influence the perception of the prospective investors. We have discovered changes in this information for mutual funds over period of time and reason for dissatisfaction amongst mutual fund holders.

Mutual fund industry in India: development and growth

The Indian mutual fund industry is one of the fastest growing sectors in the Indian capital and financial markets. The mutual fund industry in India has seen dramatic improvements in quantity as well as quality of product and service offerings in recent years. Mutual funds assets under management grew by 96% between the end of 1997 and June 2003 and as a result it rose from 8% of GDP to 15%. The industry has grown in size and manages total assets of more than $30351 million. Of the various sectors, the private sector accounts for nearly 91% of the resources mobilised showing their overwhelming dominance in the market. Individuals constitute 98.04% of the total number of investors and contribute US $12062 million, which is 55.16% of the net assets under management.