MUTUAL FUND AWARENESS AND INVESTOR BEHAVIOUR IN

CHANDIGARH

In partial fulfillment of the requirements for the award of the

degree of
MASTERS OF BUSINESS ADMINISTRATION (Capital
Markets)
(2022-24)

Submitted by-
NAMAN THAKUR
25123
UNIVERSITY INSTITUTE OF APPLIED MANAGEMENT SCIENCES
PANJAB UNIVERSITY, CHANDIGARH
 DECLARATION

I, Naman Thakur, student of MBA(Capital Markets) Roll No.-

25123 do hereby certify that the project work titled- Mutual
Fund Awareness and Investor Behavior in Chandigarh is a
bonafide work carried out by me.

Signature–
Name– Naman Thakur
Class- MBA (Capital
Markets)

DATE- 08/07/2023 PLACE- Chandigarh

 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my

trainer ‘Mr. Sidhant Batra’ for their able guidance and support
in completing my internship.
I would also like to extend my gratitude to CA Anand Sabharwal
and Mrs. Amarpreet Kaur for providing me with all the facilities
that were required.
Finally, I would like to thank almighty and my parents who
always helped me to achieve greater heights in my life.

Date:

Name:
Naman Thakur
MBA (Capital Markets)
25123
 ABSTRACT

➢ This paper aims to enhance mutual fund awareness

among investors by providing a comprehensive analysis
of the concept, benefits, and key considerations
associated with mutual fund investments. The study
emphasizes the importance of informed decision making
and empowers investors with the knowledge required to
navigate the mutual fund landscape effectively.
➢ The paper begins by introducing the concept of mutual
funds, highlighting their role as investment vehicles that
pool money from multiple investors to create diversified
portfolios managed by professionals. It emphasizes the
potential benefits of mutual funds, such as diversification,
professional management, and liquidity.
➢ Furthermore, the study delves into the various types of
mutual funds available, including equity funds, bond
funds, money market funds, and index funds. It explains
the investment strategies, risk profiles, and potential
returns associated with each type, enabling investors to
choose funds that align with their investment goals and
risk tolerance.
• The complexities of investment behaviour are also
examined by various factors that influence individuals'
decision making when it comes to investing. The study
aims to enhance our understanding of investment
 behaviour and its implications for individuals' financial
well-being.
• The psychological aspects of investment behaviour,
emphasizing the role of cognitive biases, emotions, and
heuristics in shaping individuals' investment decisions. It
examines the impact of behavioural biases, such as loss
aversion, overconfidence, and herd mentality, on
investment choices and portfolio management.
 INDEX
1 – Introduction to the organization
CHAPTER 1- 1.1 – INTRODUCTION
1.2 – HISTORY OF MUTUAL FUND
1.3 – TYPES OF MUTUAL FUNDS
1.4 – WHY TO BUY MUTUAL FUNDS?
1.5 – BENEFITS AND RISKS OF MUTUAL FUNDS
1.6 – HOW TO INVEST IN MUTUAL FUNDS?
1.7 – KYC -A PRE-REQUISITE BEFORE
INVESTING IN MUTUAL FUNDS
CHAPTER 2 – THEORETICAL FRAMEWORK
2.1 – PERFORMANCE EVALUATION OF MUTUAL
FUNDS
2.1.1 – WHAT IS PAST PERFORMANCE?
CHAPTER 3 - MUTUAL FUND AWARENESS IN CHANDIGARH
CHAPTER 4 - REVIEW OF LITERATURE
CHAPTER 5 - OBJECTIVE
CHAPTER 6 - RESEARCH METHODOLOGY
CHAPTER 7 - OBSERVATIONS, ANALYSIS AND DISCUSSION
CHAPTER 8 - CONCLUSION
CHAPTER 9 - BIBLIOGRAPHY
 INTRODUCTION OF ORGANISATION

Livewell FinServ Private Limited is a Private Limited Indian

Non-Government Company incorporated in India on 09 June
2022 (One year old). Its registered office is in Chandigarh,
Chandigarh,India.
The Company is engaged in the Financial Services Industry.
The Company's status is Active It's a company limited by shares
with an authorized capital of Rs 15.00 Lakh and a paid-up
capital of Rs 1.00 Lakh, as per the Ministry of Corporate Affairs
(MCA) records.
A purpose led organization helping clients with-
A. Financial Goals Calculations, Retirement Corpus and
Insurance Need analysis
B. Assessment of Risk Profile
C. Monitor Investments and Periodically Reviewing their
Portfolios
D. Tax Calculations
 CHAPTER 1

1.1 INTRODUCTION

Mutual funds are investment vehicles that pool money from

multiple investors to invest in a diversified portfolio of
securities such as stocks, bonds, and other assets. These funds
are managed by professional investment firms or asset
management companies.
Here are some key features of mutual funds:
• Diversification: Mutual funds offer diversification by
investing in a wide range of securities. This helps spread
the risk associated with investing in a single security.
• Professional Management: Experienced fund managers
make investment decisions on behalf of the investors.
They conduct research, analyze market trends, and
manage the portfolio to achieve the fund's investment
objectives.
• Variety of Investment Options: Mutual funds come in
various types, such as equity funds (investing in stocks),
bond funds (investing in fixed-income securities), money
market funds (investing in short-term debt instruments),
index funds (tracking a specific market index), and sector-
specific funds, among others. This allows investors to
choose funds that align with their investment goals and
risk tolerance.
• Liquidity: Mutual funds generally offer high liquidity,
allowing investors to buy or sell their shares on any
business day at the current net asset value (NAV) of the
fund.
• Affordability: Mutual funds typically have low investment
minimums, making them accessible to a wide range of
investors. Investors can start with a relatively small
amount and make additional investments over time.
 PARTIES INVOLVED IN MUTUAL FUNDS

SEBI It is the Governing authority of stock market.

Mutual fund legal framework is regulated by
SEBI guidelines.
INVESTOR Investor is Neither a speculator (who takes on
high risks for high rewards) but one whose
primary objectives are to safeguard the
principal investment, a steady income and
capital appreciation.
TRUSTEES The mutual fund has been formed as a public
trust and trustees manage the trust. They are
primarily accountable for protecting the
interest of mutual fund investors.
ASSET SEBI approved Asset management company
MANAGEMENT (AMC) manage the funds by making
COMPANY investment in various types of securities. It
manages the investment portfolios of the
scheme and handles various other routine
activities incidental to the mutual fund
business. Its income comes from the
management fees it charges for the schemes
it manages.
DISTRIBUTORS They earn commission for bringing in
investors into the scheme of a mutual fund.
This commission is an expense for the
scheme.
1.2 HISTORY OF MUTUAL FUND

A strong financial market with broad participation is essential

for a development economy. With this broad objective India’s
first mutual fund was established in 1963, that was UTI at the
initiative of the government of India and reserve bank of India
‘ with a view to encouraging saving and investment and
participation in the income , profit and gains accruing to the
corporation from the acquisition , holding , management and
disposal of securities’
In the last few years the MF industry has grown significantly.
The history of mutual fund in India can be broadly divided into
5 phases as follow :

FIRST PHASE 1964- 1987

Unit trust of India (UTI) was established in 1963 by an act of

parliament. It was set up by the reserve bank of India and
functioned under the regulatory and administrative control of
the reserve bank of India. In 1978 UTI was delinked from the
RBI and the industrial development bank of India (IDBI) took
over the regulatory and administrative control in place of RBI.
The first scheme launched by UTI was unit scheme 1964. At
the end of 1988 UTI had Rs.6700 crores of Assets under
management.

SECOND PHASE 1987-1993(Entry of public sector mutual fund)

1987 marked the entry of non UTI, public sector mutual fund
set up by public sector bank and life insurance Corporation of
India (LIC) and General Insurance Corporation of India (GIC).
SBI mutual fund was the first non UTI mutual fund established
in June 1987 followed by Can bank Mutual fund, Punjab
National Bank Mutual fund, Indian Bank Mutual fund, Bank of
India, Bank of Baroda mutual fund. LIC established its mutual
fund in June 1989 while GIC had set up its mutual fund in
December 1990.
At the end of 1993, the mutual fund industry had assets under
management of Rs47,004 crores.

THIRD PHASE 1993-2003(Entry of private sector mutual fund)

With the entry of private sector fund in 1993, a new era

started in the Indian mutual fund industry, giving the Indian
investors a wider choice of fund families. Also, 1993 was the
year in which the first mutual fund regulations came into
being, under which all mutual funds, except
UTI were to be registered and governed. The erstwhile Kothari
pioneer was the first private sector mutual fund registered in
July 1993.
The 1993 SEBI regulation was substituted by a more
comprehensive and revised mutual fund regulation in 1996.
The industry now functions under the SEBI regulation 1996.
The number of mutual fund houses went on increasing, with
many foreign mutual funds setting up funds in India and also
the industry has witnessed several mergers and acquisitions.
As at the
end of January 2003, there were 33 mutual fund with the total
assets of Rs 1,21,805 crores. The Unit trust of India with Rs
44,541 Crores of assets under management was way ahead of
other mutual funds.
FOURTH PHASE

February 2003 to 2014 UTI was bifurcated into 2 separate

entities. The specified undertaking of the Unit trust of India,
representing the assets of US64 schemes, assured returns and
certain others and the UTI mutual fund, sponsored by SBI,
PNB,BOB and LIC . The industry also witnessed several mergers
and acquisition of schemes of alliance mutual fund by Birla sun
life, Sun F&C mutual fund and PNB mutual fund by Principal
mutual fund.

FIFTH PHASE SINCE MAY 2014

Since May 2014, the industry has witness a steady inflow and
increased in AUM as well as no of investor accounts.
The industry AUM crossed a mile stone of Rs10 trillion for the
every first time as on may 2014 and in a short span of about
three years the AUM size had increased more than two folds
and crossed Rs 20 Trillion for the first time in august 2017. The
AUM size crossed Rs 30 trillion for the every first time in
November 2020.
The overall size of Indian mutual fund industry has been grown
Rs7.31 trillion as on 31may
2011 to Rs33.06 trillion as on 31May 2021, more than 4
and1/2 Fold increase in a span of 10 years.
The no of investors folios has gone up from 4.84 crore folios
as on 31 may 2016 to 10.04 crore as on 31 may 2021 more
than 2 fold increase in span of 5 years.
On an average 8.66 lakh new folios are added every month in
the last 5 years since may 2016.
The growth size of the industry has been possible because of
the twin effect of the regulatory measures taken by SEBI in re-
energising the MF industry and the support from mutual fund
distributors is expanding the retail base.
MF distributors have also had a major role in popularising
systematic investment plan (SIP) over the years 2016 the no of
SIP account has crossed 1 crore mark and as on 31may 2021
the no of SIP account are 3.88 crore.
1.3 TYPES OF MUTUAL FUND

Mutual fund has 3 board categories

1. On the basis of Flexibility: 1. Open ended 2. Closed ended

3. Interval fund

2. On the basis of Dividend: 1. Growth Funds 2. Dividend

funds

3. On the basis of principle Investment: 1. Equity 2. Debt 3.

Hybrid

4. Solution oriented scheme

5. Other scheme

1. ON THE BASIS OF FLEXIBILITY:

OPEN- ENDED SCHEME

An open ended fund or scheme is one that is available for

subscription and can be
repurchase on a continuous basis. These schemes do not have a
fixed maturity period. Investors
can conveniently buy and sell units of NAV (net Asset Value)
related prices which are declared
on a daily basis. The key feature of open end schemes is
liquidity.

CLOSE –ENDED SCHEME

A close ended fund or scheme has a stipulated maturity period

e.g. 5-7 years. The fund is
open for subscription only during a specific period at the time
of launch of the scheme. Investors
can invest in the scheme at the time of the initial public issue
and thereafter they can buy or sell
the units of the scheme on the stock exchange where units are
listed.
In order to provide an exit route to the investors, some close
ended funds give an option of
selling back the units to the mutual fund through periodic
repurchase at NAV related prices.
SEBI regulations stipulate that at least one of the two exists
route is provided to the investors i.e.
either repurchase facility or though listing on stock exchanges.
These mutual fund schemes
disclose NAV generally on weekly basis.

INTERVAL FUND:
It operates as a combination of open ended and closed ended
scheme; it
allows investor to trade units at predefined intervals. They may
be traded on the stock exchange
or they may even be open for sale or redemption during pre
determined intervals at NAV related
prices. When it comes to selecting a scheme and invest in one
should look for right combination
of growth, Risk, stability and income.

2. ON THE BASIS OF DIVIDEND:

GROWTH FUND:

A growth fund is a mutual fund that invests mostly in

companies with above
Average growth, with the goal being capital appreciation rather
than yield income and dividend
payouts.

DIVIDEND FUND:

Dividend mutual fund are mutual fund that invest in stock that
pay
dividends. Investors in this fund can reinvest the dividend into
more shares of the funds or use
the dividend as an income stream.

3. ON THE BASIS OF PRINCIPLE INVESTMENT

1. EQUITY SCHEME

1. Large cap fund

2. mid cap fund
3. Small cap fund
4. Multi cap fund
5. Sector fund
6. Diversified equity fund
7. Dividend yield schemes
8. ELSS
9. Thematic fund

According to market capitalization companies are divided into

4 category
1. Large cap
2.Midcap
3. Small cap
4. Multicap.

Though market capitalization we get to know whether it is

small, medium, large company.
Large Cap Company has very strong market present. Large cap
companies have capital to survive in bad times, that’s why in
large cap risk is low and whereas in mid cap and small cap risk
is high.

Example of large cap company like reliance, Tcs, L&T etc.

Large Cap Company is already very well stable and the growth
opportunities are limited, whereas in small cap growth &
failure rate both are more. If fund manager invest the money in
large cap then it is known as large cap fund. If funds are
invested in midcap they are known a midcap fund.

Multicap fund:
An equity mutual fund investing across large cap, mid cap,
small cap stocks
5. Sector fund:
Sector funds means funds are invested in specific sector
companies only

For example reliance media and entertainment funds are a

sector which invests the money in
entertainment sector. SBI pharma fund – invest only in pharma
sector.
6. Diversified equity fund- It means investing the money in
different types of sector and different
types of market capitalization

7. Dividend yield fund: Small parts of profit are shared by the

company to their shareholders in
the form of dividend. To give dividend or not this decision are
taken by boards of director. In
dividend yield fund, fund manager invest the money in those
companies which are stable, safe,
consistent, low volatile and also give regular dividend.

8. ELSS (Equity linked saving scheme) which is a tax saver

mutual fund. If money which is
invested in this is locked for 3 yrs. In ELSS we can’t invest less
than 3 yrs. It also helps to save
Income tax. That’s why they are also known as Tax-saving
funds.

9. Thematic fund: They invest in Predetermined Theme like

India rural theme, e-commerce
theme etc. Thematic investing allows investors to pursue
market exposure to specific ideas.
Example – HDFC housing opportunity fund is a thematic fund,
these funds buy stock related to
housing.

10. Focused Fund:

A Focused fund is a mutual fund that holds only relative small
variety of
stocks or bonds that are similar along some dimension. A
Focused Mutual fund focuses on a
limited number of sectors. Rather than holding a broad or
diversified mix of positions.

2. DEBT FUND –

With the help of debt instrument government and companies

borrow
money and return with interest.
Debt instrument like debenture, bond, certificate of deposit etc.
In debt fund risk and return are
less than equity. There are about 16 types and are as follows:

1. Overnight funds: Invest in overnight securities having

maturity of 1 day.

2. Liquid fund: Investment in debt and money market securities

with maturity up to 91 days only.

3. Ultra short duration fund: An ultra short duration fund

scheme invests in instrument with Macaulay duration between
3 month and 6 months.

4. Low duration fund: A low duration debt scheme investing in

instruments with Macaulay duration between 6 months and 12
month.

5. Money market funds: A debt scheme investing in money

market instruments. Investment in Money Market instruments
having maturity up to 1 year.
6. Short duration Fund: A short term debt scheme investing in
instruments with Macaulay duration between 1 year and 3
years.

7. Medium duration fund: A medium term debt scheme

investing in instruments with Macaulay duration between 3
years and 4 years.

8. Medium to Long term duration fund: A medium term debt

scheme investing in instruments with Macaulay duration
between 4 years and 7 years.

9. Long duration fund: A debt scheme investing in instruments

with Macaulay duration greater than 7 years.

10. Dynamic Bond: which invest in Debt Instrument of Varying

Maturities based on the interest rate regime.

11. Corporate Bond fund: A debt scheme predominantly

investing in highest rated corporate bonds.

12. Banking and PSU fund: A debt scheme predominantly

investing in Debt instruments of banks, Public Sector
Undertakings, Public Financial Institutions.

13. Credit Risk fund: A debt scheme investing in below highest

rated corporate bonds

14. Gilt fund: which invests a minimum of 80% of its investible

corpus in Government securities across varying maturities.

15. Floater Fund: A debt scheme predominantly investing in

floating rate instruments
16. Gilt Fund with 10 year constant duration: A debt scheme
investing in government securities having a constant maturity
of 10 years

3. HYBRID FUND:

Hybrid fund means those funds which are invested in both debt
and equity.

1. MONTHLY INCOME PLAN: About 60 to 90 % funds are

invested in debt instrument and the rest are invested in equity.
MIP is safe because large proportion of money is invested in
debt instrument that’s why MIP is safer than equity mutual
funds. But it doesn’t mean that MIP is risk free and fixed return
scheme.

2. BALANCED FUND: 65 to 85% of fund are invested in

equity and rest are invested in debt instrument
3. ARBITRAGE FUND: in arbitrage fund more than 65% of
fund is invested in stock market.

4. CONSERVATIVE HYBRID FUND: Investment in equity

& equity related instruments – between 10% and 25% of total
assets; Investment in Debt instruments – between 75% and 90%
of total assets.

5. AGGRESSIVE HYBRID FUND: Equity & Equity related

instruments – between 65% and 80% of total assets; Debt
instruments – between 20% – 35% of total assets. Most of the
balanced funds will fall into this category.
6. EQUITY SAVING: Minimum investment in equity & equity
related instruments – 65% of total assets and minimum
investment in debt – 10% of total assets.

4. SOLUTION ORIENTED SCHEMES:

1. Retirement Fund: A retirement solution oriented scheme

having a lock in of 5 years or till retirement age.

2. Children’s Fund: A fund for investment for children having

a lock in for at least 5 years or till the child attains age of
majority.

5. OTHER SCHEMES

1. Index fund / ETFs: Minimum investment in securities of a

particular index (which is being replicated ) 95% of total assets.

2. FOF’S: Minimum investment in the underlying fund 95% of

total assets.
1.4 WHY TO BUY MUTUAL FUNDS?

Mutual funds are a popular choice among investors because

they generally offer the following features:

• Professional Management. The fund managers do the

research for you. They select the securities and monitor
the performance.
• Diversification or “Don’t put all your eggs in one basket.”
Mutual funds typically invest in a range of companies and
industries. This helps to lower your risk if one company
fails.
• Affordability. Most mutual funds set a relatively low
dollar amount for initial investment and subsequent
purchases.
• Liquidity. Mutual fund investors can easily redeem their
shares at any time, for the current net asset value (NAV)
plus any redemption fees.
1.5 BENEFITS AND RISKS OF MUTUAL FUNDS

Mutual funds offer professional investment management and

potential diversification. They also offer three ways to earn
money:

• Dividend Payments. A fund may earn income from

dividends on stock or interest on bonds. The fund then
pays the shareholders nearly all the income, less
expenses.
• Capital Gains Distributions. The price of the securities in
a fund may increase. When a fund sells a security that has
increased in price, the fund has a capital gain. At the end
of the year, the fund distributes these capital gains,
minus any capital losses, to investors.
• Increased NAV. If the market value of a fund’s portfolio
increases, after deducting expenses, then the value of the
fund and its shares increases. The higher NAV reflects the
higher value of your investment.

All funds carry some level of risk. With mutual funds, you may
lose some or all of the money you invest because the securities
held by a fund can go down in value. Dividends or interest
payments may also change as market conditions change.

A fund’s past performance is not as important as you might

think because past performance does not predict future
returns. But past performance can tell you how volatile or
stable a fund has been over a period of time. The more volatile
the fund, the higher the investment risk.
1.6 HOW TO INVEST IN MUTUAL FUNDS?

One can invest in mutual funds by submitting a duly completed

application form along with a cheque or bank draft at the
branch office or designated Investor Service Centres (ISC) of
mutual Funds or Registrar & Transfer Agents of the respective
the mutual funds.
One may also choose to invest online through the websites of
the respective mutual funds.
Further, one may invest with the help of / through a financial
intermediary i.e., a Mutual Fund Distributor registered with
AMFI OR choose to invest directly i.e., without involving or
routing the investment through any distributor.
A Mutual Fund Distributor may be an individual or a non-
individual entity, such as bank, brokering house or on-line
distribution channel provider.
Note:
As per SEBI Mutual Fund Regulations, all MFDs must fulfil the
following two requirements before engaging in sale and/or
distribution of mutual fund products, namely
Obtain the relevant certification of National Institute of
Securities Management (NISM); AND
Register with Association of Mutual Funds in India (AMFI) and
obtain AMFI Registration Number (ARN).
Likewise, before being employed in sale and/or distribution of
mutual fund products, employees of MFDs are also required to
obtain the relevant NISM certification and register with AMFI
and obtain Employee Unique Identification Number (EUIN).
One may also invest either online mode or via conventional
paper-based mode through MF Utilities Pvt. Ltd. (MFU) – a
technology based shared service platform for MF transactions
promoted by the mutual fund industry in respect participating
mutual funds
One can also buy mutual funds units through NSE – MFSS and
BSE - Star MF just like a company stock. To avail this facility,
one must complete a one-time online registration with NSE or
BSE, as the case may be. For more information on NSE – MFSS
and BSE - Star MF, please visit www.nseindia.com /
www.bseindia.com
1.7 KYC - A PRE-REQUISITE BEFORE INVESTING IN MUTUAL
FUNDS.

Before investing in a mutual fund scheme, whether through

online mode or via conventional paper-based mode, one must
first complete the KYC process by filling up the prescribed KYC
form.
KYC stands for "Know Your Customer" and is a term used for
Customer Identification Process as a part of account opening
process with any financial entity. KYC establishes an investor’s
identity & address through relevant supporting documents
such as prescribed photo id. (e.g., Passport, Aadhaar or PAN
card) and address proof. KYC compliance is mandatory under
the Prevention of Money Laundering Act, 2002 and Rules
framed thereunder.
CHAPTER 2: THEORETICAL FRAMEWORK

2.1 PERFORMANCE EVALUATION OF MUTUAL

FUND

Investors and investment managers need timely and accurate

information on the performance of their investment portfolios.
Performance evaluation provides such information. Without it,
investors and investment managers would find it increasingly
difficult to meet stakeholders’ current and future needs in a
very competitive investment management industry. In the
investment management industry, performance evaluation
broadly refers to the measurement,
analysis, interpretation, assessment, and presentation of
investment results. In particular, performance evaluation
provides information about the return and risk of investment
portfolios over specified periods. Selection of investment
managers is a closely related topic.
By providing accurate data and analysis on investment
decisions and their consequences, performance evaluation
allows investment managers (and the portfolio managers they
employ) to take corrective measures to improve investment
decision-making and management processes.
Performance evaluation information helps in understanding
and controlling investment risk and should, therefore, lead to
improved risk management. For asset owners and prospective
clients,
performance evaluation communicates portfolio managers’
results. Broadly, it permits asset owners and prospective
clients to make better decisions (including selection,
continuance, and dismissal) about investment managers by
providing relevant information on performance and its drivers.
Accurate performance presentations are especially important
for asset owners and prospective clients in facilitating accurate
analysis. Performance evaluation in its feedback role may have
a large impact on investment managers, asset owners, and other
stakeholders. An effective performance evaluation process
facilitates the following outcomes:

For investment managers:

Prompt attention to potential performance issues and

unintended business or investment risks.

Effective monitoring of risk and return in relation to the

investor’s objectives and the designated benchmark.

An effective internal management information system.

Effective internal monitoring and oversight

management/mechanisms.

For both investment managers and asset owners:

Clear understanding of the different activities and decisions

within the investment
management process, as well as their performance
contributions.
 Reduction in non- fact- based discussions by using more
objective and less subjective
investment performance information during the performance
assessment process.

Dialogue among stakeholders that may lead to innovation,

change in practices, strengthened brand and reputation, and
new attractive investment products for investors.

For asset owners:

Finding evidence of skill (or lack thereof)

Because of different perspectives held by participants in the
investment management process, performance evaluation
sometimes involves emotional discussions among the
concerned
stakeholders. Such discussions often hinder achieving
appropriate solutions and may lead to unintended
consequences. To minimize the chance of such discussions,
performance evaluation should follow appropriate guiding
principles. Such principles include the following:

The intended user and the expected use of the performance

information are taken into account in deciding what types of
performance evaluation analysis to conduct and what
methodologies to use.
 The performance evaluation considers and provides
information on changes in investment strategy, investment
style, or investment restrictions.

The performance evaluation is an accurate and unbiased

representation of the investments made, results achieved, risks
taken, and taxes and fees incurred.

The performance evaluation is relevant and appropriate for

the presented asset classes, investment strategies, investment
styles, and investment products.

The performance evaluation takes into account both risk and

return.

The performance evaluation provides information on past (ex

post) and expected (ex ante) investment risks and compares ex
post realized risk with the ex ante forecast of risk (risk
efficiency).
The performance evaluation analyses taxes and their effect
on investment portfolio performance, where such analysis is
feasible and relevant.

The performance evaluation analyses fees and associated

remuneration (e.g., commissions and referral fees) received for
management or administration of the investment portfolio, as
well as transaction costs and trading expenses incurred in the
portfolio.

The performance evaluation provides comparatives, such as

an appropriate benchmark, to enable assessment of the
investment portfolio’s relative performance.
Besides attention to these principles, other factors promoting
effective performance evaluation include commitment by
senior management, well- educated and experienced staff, and
an appropriate budget for necessary information technology
projects. It is also very important that the performance
evaluation process itself be well defined and structured.
2.1.1 WHAT IS PAST PERFORMANCE

Performance measurement answers the first question, the

calculation of risk and return of the portfolio. Performance
may either address a past time period (ex post performance)
or look
forward to a future time period (ex-ante performance). “Ex
post” and “ex ante” are Latin words that mean, respectively,
“after the fact” and “before the fact.”
“Return” may be defined as the percentage gain or loss in
wealth resulting from holding an investment over a specified
period. Risk means different things to different stakeholders
at different times. The Oxford English Dictionary provides a
good definition of risk: “the potential impact of an event
determined by combining the likelihood of the event occurring
with the impact should it occur.” Risk is the combination of
exposure and uncertainty. Risk within asset
management may be broadly categorized into
compliance risk,
operational risk,
liquidity risk,
counterparty risk, and
Portfolio risk.

Performance measurement is concerned with portfolio risk.

Are the risks of the portfolio of assets—for example, market
risk, interest rate risk, credit risk, and currency risks—
managed to the client’s expectations? Both return and risk can
be viewed from ex post or ex ante perspectives. Ex post, or
historical, risk is the analysis of risk after the event; it answers
the question, How risky was the portfolio in the past? Ex ante,
or prospective, risk is forward looking, based on a snapshot of
the current securities and instruments in the portfolio and
their historical relationship with each other. It is an estimate
or forecast of the future risk of the portfolio.
 CHAPTER 3

Mutual Fund Awareness in Chandigarh

Mutual awareness and investor behaviour are crucial aspects
of financial markets. Here's why they are important:
• Market Efficiency: Mutual awareness refers to the
understanding and knowledge investors have about the
market conditions, trends, and relevant information.
When investors are aware of relevant information, it
contributes to market efficiency. Efficient markets reflect
the true value of securities, as prices incorporate all
available information.
• Informed Investment Decisions: Investors' behaviour is
influenced by their awareness of market conditions,
economic indicators, company news, and other factors.
Being aware of such information allows investors to make
informed investment decisions. For example, if investors
are aware of a company's strong financial performance,
they may be more likely to invest in its stock. Conversely,
negative news or poor market conditions might lead to a
more cautious approach.
• Risk Management: Mutual awareness also plays a role in
risk management. When investors have a good
understanding of market dynamics, they can identify
potential risks and take appropriate measures to mitigate
them. This might involve diversifying their portfolios,
adjusting their investment strategies, or adopting risk
management techniques like stop-loss orders. By being
 aware of market conditions and their implications,
investors can make more informed decisions to protect
their investments.
Overall, mutual awareness and investor behaviour are
interconnected and crucial for the proper functioning of
financial markets. By being aware of market conditions,
investors can make informed decisions, manage risks,
contribute to market efficiency, and maintain market stability.
 CHAPTER 4
REVIEW OF LITERATURE

The present study deals with the review of literature on

‘Evaluating the performance of Indian mutual fund schemes’
Review of some of the studies is presented in the following
discussion.
MS. Saranya K, Mr Parthiban (2018) conducted research on
performance evaluation of Indian equity mutual fund schemes.
This paper examines the performance of selected open-ended
Scheme. The performance of this fund is analysed using three-
year NAV and to evaluate the performance these statistical
tools were used (Sharpe ratio, Treynor ratio, Jensen alpha).
Finding of the study reveal that based on the Sharpe method
Kotak Mahindra equity saving fund secured 1st position and
according to the Treynor HDFC mutual fund secured 1st
position and according to Jensen alpha Axis mutual fund secure
1st position. According to this research it says that return is not
only the factor investor should look upon . In order to have
good return investors should have the proper information of the
fund and their asset management company where they are
investing.
Aashak Thakkar 2017 attempts to study the performance of
selected equity mutual fund by using various risk and return
measures i.e., Sharpe ratio, Treynor ratio, Jensen alpha and in
his research
it was concluded that none of the selected fund shows
consistent return. Birla sun life growth scheme have shown
good performance in all three measures, while Tata equity
performed well as per the Sharpe measure but didn’t perform
in other measures.
Dr Vikas Choudhary and Preeti Sehgal chawal 2014 attempt to
analyse the performance of growth-oriented equity diversified
scheme on the basis of risk and return by using various financial
test like average return, Sharpe ratio, Treynor ratio, standard
deviation, beta and coefficient of determination. The entire
selected fund had the beta less than one and positive which
imply that they were less risky than the market portfolio and in
term of coefficient of determination. All the selected 8 funds
were near to one which indicates that higher
diversification. Seven out of eight selected funds have shown
superior performance under the Sharpe as well as Treynor ratio.
Geeta Rani and Dr Vijay Singh Hooda 2016 evaluate the
performance of selected mutual fund scheme by using Sharpe,
Jensen, and Treynor ratio. In the study, it was found that
according to Sharpe, Jensen, Treynor ratio Tata equity P/E
fund, Sundaram rural India fund, Birla sun life India was found
to be top performing fund.
Vikas Kumar and Ankit Srivastav 2016 evaluated the
performance of 20 open –ended equity schemes of private
sector mutual funds. The period of study was from 1st April
2006 till 31 march 2015. The research analysed the data with
the help of various statistical tools. By
comparing overall performance ranking of all schemes it could
have seen that reliance pharma fund has been the best.
Ratnarajan and P. Madhav 2016 analysed the risk and return
relationship and market volatility of the selected mutual fund
and examined the performance of selected schemes from
March 2-12 to
2016 by using Sharpe and Treynor model. the author
investigates the performance of 30 open ended diversification
equity schemes performance of reliance regular saving fund
equity, SBI
contra fund, HDFC equity fund was not found as good. It was
found that the Sharpe ratio was positive for all selected scheme.
DR R. Narayanasamy V. Ratnamani 2013 evaluates the
performance of selected equity large cap mutual fund scheme
in term of risk and return relationship. The performance
analyses of the selected five equity of large cap fund and the
study conclude that all the fund has performed well in high
volatile market movement expect reliance vision.
 CHAPTER 5
Objective

The primary objective of this study is to assess the level of

mutual fund awareness and analyse investor behaviour among
residents of Chandigarh. By examining the knowledge,
attitudes, and behaviours of investors, this study aims to
highlight key factors influencing investment decisions and shed
light on potential areas of concern or improvement.
• Increase Awareness: The primary objective is to create
awareness among potential investors about mutual funds
and their benefits. This includes educating individuals
about how mutual funds work, their various types, risk
factors, potential returns, and costs involved. By
increasing awareness, more individuals can make
informed decisions about investing in mutual funds.
• Promote Understanding: Mutual fund awareness aims to
enhance individuals' understanding of investment
concepts, such as asset allocation, diversification, and risk
management. It educates investors about how mutual
funds can help them achieve their financial goals and
build long-term wealth. By promoting understanding,
individuals can make better investment choices aligned
with their objectives and risk tolerance.
• Encourage Financial Inclusion: Mutual funds offer an
opportunity for individuals from diverse backgrounds to
participate in the financial markets and benefit from
professional investment management. Mutual fund
awareness initiatives aim to encourage financial inclusion
by reaching out to a wider audience, including those who
may have limited exposure to investing or lack financial
literacy.
 CHAPTER 6
Research Methodology

Research design:
Made 1 questionnaire regarding our study and then analysing
the same to know the financial literacy regarding mutual funds
and investment behaviour through statistical tools of excel.
Methods of data collection:

For this study we will use both primary and secondary data.

DATA COLLECTION

Primary Data:
Through filling physical forms regarding the awareness of
people of Chandigarh regarding the investment opportunities
and also some questions regarding their investment pattern
and other few terminologies regarding investment and
savings.

Secondary Data:
Data provided by RBI, articles of various well known
investment giants who have themselves mastered the skill of
investment, and various other websites to gain knowledge
regarding the same.

Pilot Testing:
Test your survey or interview questions with a small group of
participants to identify and address any issues before the
main data collection.

Data Analysis:
Process and analyse the collected data using appropriate
methods:
Quantitative Analysis:
Use statistical tools to analyse numerical data, such as
calculating percentages, averages, and correlations.
Qualitative Analysis:
Analyse open-ended responses to identify common themes,
opinions, and insights.
 CHAPTER 7
Observations, Analysis & Discussion

INVESTMENT BEHAVIOUR OF PEOPLE IN CHANDIUGARH

Mutual Funds FD Insurance Shares

13%
20%

19%

48%
 4.3

Age group doing investment

60

50

40

30

20

10

0
0-20 21-40 41-60 61-100

Shares Mutual Funds Bank FDs

From the above pie chart and graph, we get to know that
different age groups have different investment behaviour. The
other thing that we got to know was people have greater
knowledge about mutual funds and all other investment
opportunities but they fear to invest in them as they think of
it as a gamble.
As the age is young, the capacity of taking risk is still there so
that is why young people are often seen to invest more in
equity and as the age increases the factor of taking risk
decreases so that is why people of older age tend to invest in
mutual funds and FDs which are comparatively less risky than
shares.
 CHAPTER 8
CONCLUSION

Mutual fund is one of the best investment options to the

investor to get better returns with a certain level of risk. This
study will help the investor to understand the performance of
mutual fund before and during covid19. Daily closing NAV
were used to calculate the returns from the fund schemes.
NIFITY50, NIFITY100 TRI, S&P BSE100 have been used for
market portfolio.
The historical performance of the selected schemes was
evaluated on the basis of Sharpe, Treynor, Jensen measure.
In 2019 Franklin India didn’t perform well. And in 2020 Nippon
India blue chip fund didn’t perform well the reason might be
unfavourable market or Wrong combination of stock picking
of fund manager. Canara Robeco blue-chip large cap fund has
been in 1st position in all the three measures in 2020. This
scheme was the best performing large cap fund over the
selected fund. After the Nifty and Sensex Fall in March no one
expected bull in the market.
Definitely there would be some strategies of fund manager
that they perform fared. Schemes that have performed better,
their fund managers might have revisited the portfolio to
analyse the
company that may not survive in 2020. Out of 10 mutual funds
scheme 4 schemes over performed their benchmark gave
better returns to the investors even in high volatile market
Expect 6 mutual fund scheme. Therefore, it is fundamental for
the Investor to consider various parameters like Sharpe ratio,
standard deviation, beta, Treynor ratio, etc.
 The conducted survey aimed to assess the level of
mutual fund awareness among a diverse group of
respondents. The results shed light on various aspects of
mutual fund awareness, understanding, and information
sources. The following conclusions have been drawn from the
survey findings:

1. Awareness Level: The survey revealed that 75% of

respondents were aware of the concept of mutual funds. This
indicates a relatively high level of awareness among the
target audience.

2. Understanding of Key Concepts: While awareness was

high, a significant proportion of respondents demonstrated
limited understanding of fundamental mutual fund concepts.
Only 42% could accurately define diversification, and only
28% understood the concept of expense ratios.

3. Sources of Information: Financial advisors were the most

prominent source of information, cited by 54% of
respondents. Online resources, including financial websites
and educational platforms, also played a significant role in
shaping mutual fund knowledge (38%). Family and friends
were influential for 22% of respondents.
4. Age and Awareness: Younger respondents (18-30 years)
exhibited lower awareness levels compared to older age
groups. This suggests the need for targeted educational
efforts to bridge the awareness gap among younger
individuals.

In conclusion, the survey demonstrated a notable level of

mutual fund awareness among the respondents, indicating
progress in financial literacy efforts. However, there is room
for improvement in enhancing understanding, especially
among younger individuals and those with less investment
experience. The insights gathered from this survey can inform
tailored educational initiatives and communication strategies
to further improve mutual fund awareness and encourage
informed investment decisions.
 CHAPTER 9

Bibliography

• https://www.morningstar.com
• https://www.investopedia.com
• https://in.linkedin.com/in/livewell-finserv-
828542245
• https://www.researchgate.net/publication/342302
694_A_STUDY_OF_SAVING_AND_INVESTMENT_PA
TTERN_OF_SALARIED_CLASS_PEOPLE_WITH_SPECI
AL_REFERENCE_TO_CHANDIGARH_INDIA
• https://www.fisdom.com/objectives-functions-of-
mutual-funds/