BHARATA MATA JOURNAL of Multidisciplinary Studies
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Volume III Issue II July 2016 BHARATA MATA JOURNAL of Multidisciplinary Studies Peer Reviewed National Research Journal Bharata Mata College Thrikkakara, Kochi-21 Kerala, India Rev. Fr. Jacob G. Palackappilly Chairman Managing Director, Bharata Mata College Dr. Aype Thomas P Chief Editor Principal, Bharata Mata College Associate Editors Dr. Laly Mathew Dr. ShinyPalatty Dr. Mary Joseph Dr. Priyalakshmi G Dr. Seena Augustine Dr. Jinsa Mary Jacob Editorial Advisory Board Rev. Dr. Varghese Kalapparampath Former Manager, Bharata Mata College Dr. Babu Joseph Former Vice Chancellor, CUSAT, Kochi Dr. P. M. Chacko Former HOD, Department of English, U C College, Aluva Dr. Joseph Injody Principal, Rajagiri College of Social Sciences, Kalamassery Dr. Sivan Nair Indian Institute of Technology, Guwahati Dr. Litty Allen Varghese National Institute of Technology, Calicut Dr. Anoop Anand DRDO, Ministry of Defence, Govt. of India, Pune Dr. Honey John Professor, CUSAT, Department of PS & RT Dr. N. R. Menon Emeritus professor, School of Marine Science, CUSAT Dr. Mathew J. Manimala Professor and Chairperson OBHRM, IIM, Bangalore Printed and published by Dr. Aype Thomas P., Principa,l, Bharata Mata Colleg,, Thrikkakara ISSN 2348 - 3571 Management – Reasons for Investor’s Reluctance in Mutual Fund Investments – A Study ..........................................................................................................01 S. Rajitha Kumar & Sindhu K. P. – Line Item Analysis of Quality Earning in Banking Industry ........................15 B. Sudheer Kumar Science – Fumed and Precipitated Silica Reinforced Unsaturated Polyester Composites: Mechanical and Morphological Properties ..............................28 Remya Suresh, Philip Kurian & Rani Joseph – A comparative study on the structural, optical and antibacterial properties of nano Zinc oxide via different routes ......................................35 Sreekala S Sharma & Shiny Palatty Humanities – Brevity- The Soul of Wit? : Emergence of Nanofiction ...................... 44 Varsha V Varma – A study on the status and utility of governmental services of slum dwellers in Ernakulam District, Kerala. ................................ 52 Sheena Rajan Philip Commerce – Agriprenuership: A conceptual framework of agricultural entrepreneurship in India ..............................................................................64 Gimson D Parambil – Switching Behaviour in Retail Banking ...................................................... 77 L.P. Ramalingam – Performance Analysis of MGNREG Scheme with special reference to Arpookkara Panchayat, Kottayam ................................................................87 Mathew Abraham & Alice Mani – Financial Inclusion – A Myth or Reality .................................................... 102 Jaya K. R. BHARATA MATA JOURNAL of Multidisciplinary Studies REASONS FOR INVESTORS’ RELUCTANCE IN MUTUAL FUND INVESTMENTS- A STUDY Sindhu K. P. Dr. S. Rajitha Kumar SMS,CUSAT. SMS, CUSAT, Kochi-22. Kochi-22 Mail: [email protected] Mail:[email protected] ABSTRACT Purpose: The Indian financial service sector provides lots of investment opportunities to the investors for allocating their surplus funds. Mutual Funds are one among such investment avenues for the investors. Today, there are lots of mutual funds companies playing in the market that provide more than thousands of schemes to cater to the needs of the investors. But investors are least warm up with this industry. Those investors who put money in the funds are not willing to invest further more in the funds. In this situation, it is necessary to know the reasons for the investors’ reluctance in mutual fund investments. This paper aims to examine the reasons for withdrawal or non investment in mutual funds by investors. Research Methodology: Both secondary and primary data were used. The secondary data sources include books, journals, periodicals, publication of various mutual fund organisations, website of AMFI, website of SEBI, government publications and websites of various mutual fund companies. Primary data were collected from 900 individual investors in Kerala who have investments in mutual funds. Multi-stage sampling was adopted for selection of respondents for the study. Mean and ranks, wilcoxon signed rank test, Friedman Repeated measure on ranks were used for analysis purpose. Implications: The findings of the study help the Asset Management Companies (AMCs) to know the reasons for low investments in mutual funds which can help them rectify their problems. Thus AMCs can attract more mutual fund investments. Limitations: The study is based on the information collected from investors of Kerala state only. Generalizations may not be possible. Key Words: Mutual Funds, Investors, Reasons for Reluctance, AMCs. ISSN 2348 - 3571 1 Bharata Mata College, Thrikkakara Introduction With the advent of liberalization, privatization and globalization, the Indian economy has opened up and many developments have been taking place especially in the capital and money markets. These developments lead to economic growth and the dynamics of economic growth provide various opportunities for investors to invest their savings in different avenues of investments. But, the main concern for investors is optimum allocation of available funds among different avenues of investments. It is a complex task for investors to find an appropriate investment avenue which satisfies their objectives of investment, to minimize their chance for risk in future and at the same time, ensure reasonable level of growth and income on their investment. In the investment arena, financial markets are constantly becoming more efficient by providing more promising solutions to the investors. The most common investment avenue to all investors namely, the fixed deposits are now too dreary and at the same time investments in stock market are highly complicated to the common man. In this situation, mutual funds turn out to be the most appropriate investment avenue for individual investors as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. In India, mutual fund industry provides reasonable options for common man to invest their savings in the capital market. Need for the Study In India, it is the household sector which occupies dominance over the other institutional sectors like private corporate sector and public sector in terms of generating savings. This sector is defined to comprise individuals, non-government non-corporate enterprise of farm business and non-farm business like sole proprietorship and partnership, and non-profit institutions. If there is higher mobilization of household savings, it means higher 2 ISSN 2348 - 3571 BHARATA MATA JOURNAL of Multidisciplinary Studies availability of resources in the economy for growth and development. Particularly, savings in financial assets by household are more important from the resource mobilization point of view because of their liquidity characteristics compared to physical savings and therefore can be translated into investment more easily. Traditionally India enjoys a very high savings rate. It is approximately 34% in FY11, of which financial household savings were around 11.8%. Though the household sector comprises individuals, non-government non- corporate enterprise of farm business and non-farm business like sole proprietorship and partnership, and non-profit institutions, the share of individual wealth is one of the major elements in the total wealth of India. The total wealth of individuals in India is estimated at 86.5 lakh crore in FY11. It is the sum total of the value of all financial assets. Table 1.1: Individual Investors’ Investments in Various Investment Avenues. Investment avenues in crores Percentage Fixed deposits and bonds 26,76,878 30.95% Direct equity 25,76,317 29.78% Insurance 15,25,735 17.64% Savings deposits 6,16,917 7.13% Small savings 5,23,908 6.06% Provident fund 4,11,901 4.76% Mutual funds 2,88,543 3.34% Alternative assets 29,565 0.34% Source: Karvy Private wealth report, 2012. From this statistics, it is clear that only 3.34 per cent investments are made in mutual funds by the individual investors in India. Ironically, in developed markets, mutual funds constitute a significant proportion of one’s portfolio. ISSN 2348 - 3571 3 Bharata Mata College, Thrikkakara Unfortunately, it is due to the fact that most of the Indian investors are not interested in mutual funds. But it is important to note here that when compared to other financial instruments, investments in Mutual funds are safer and also yields more returns on the portfolio investment. Moreover, as an investment avenue, mutual fund is available to those investors, who are not willing to take any exposure directly to the security markets and it helps the investors to build their wealth over a period of time. At the retail level, investors are unique and highly heterogeneous, and the mutual fund scheme selection also differs depending on their expectations. The success of any mutual fund depends on effective understanding of the reasons for withdrawal or non investment in mutual funds by the investors and rectification of the problems. Hence there is a need to conduct a study on the reasons for investors’ reluctance. Review of available literature also revealed that no detailed study on mutual funds in Kerala has so far been attempted in this direction, hence the present study, is undertaken. Review of Literature