A Project Report on Identification of gap between the exiting service and the expected service, at W by Babasab Patil

Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Executive Summary Introduction A bubble in the history of Indian capital market that created type in the retail investors in the month of July 2007 when the inflow into the capital market by FIIâ&#x20AC;&#x2122;s increased considerably (i.e. p notes) the aggressive and sudden bull run orally in the nifty and sensex was led by Reliance group. These fringy behaviors of investors lead to more than 300% growth in some of the stocks like reliance (RNRL, RPL, RIL). This sudden change in the stock market was characterized by kills like FIIâ&#x20AC;&#x2122;s, DII mutual fund but not by most retail investors. But later when the stock market continued its big rally retail investors started participating into it, perhaps it was that event which made the chunk of new retail investors to enter the capital market by opening their demat. But still there are so many retailers, who know very little about stock markets and capital market, but equally tempted to enter the market so they started opting for mutual funds, which also out performed their previous average returns of 20%-30% and instead grew by 40%-70% in a short span of time. Reliance power, which is biggest IPO in the country also created a type fringy mood into the retail investors and made a huge band of investors to open highest number of demats in the recent month. So these things lead into the emerging of the new Investment Consultancy and also a huge rise in the number of investors. So the topic deals with the factors what makes the investors to stick on the one Investment Consultancy and others expected factors of investors.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Gap Analysis. Formal means to identify and correct gaps between desired levels and actual levels of performance Used by organizations to analyze certain processes of any division of their company. Service Gap Expected level of service vs. Actual level of service provided

Need for study  Company want to know that at what level it is providing the service to the investors, and what are the future expectations of the investors regarding the Investment Consultancy. So as to stay in the better positions then the other players in the market.  The project will also be the guide to new entrepreneurs who want to set up their own Investment Consultancy.

Scope of study:  Study on Mutual Funds Industry  Investor appetite with respect to various factors at his Investments.  Need to start up the Investment Consultancy.  Retaining the investors

Objective: Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Sub objectives: 1. To know the factors that influence investors while taking Investment decisions. 2. To know at what level the company is providing the service to its investors. Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. 3. To study what are the future expectations of the investors related to Investment Consultancy.

Methodology Research instrument: Questionnaire

Sampling method: The sample is selected based on convenience sampling method with the help of Customer database collected by the company.

Sampling size: 100 numbers.

Sampling unit: Retail or individual investors

Sampling frame Investors of Dharwad city only were considered for collecting the Data.

Time frame: From 10th Dec 2007 to 19th April 2008, total numbers of the days for the project were 60.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Findings. •

Based on survey it states that 40% of the investors belong to the Professional like

advocate, doctor’s officer’s etc, 32% of the investors belongs to retired persons, 24% of the investors belongs to employee (govt or private) and only 4% of the investors are business people. •

According to the survey it states that 29% of investors tend to invest monthly. 17 %

of investors want to invest quarterly. 10%investors wants to invest half yearly. And 44% of the investors want to invest yearly. •

According to survey 38% of the investors are investing from less than one year. 18%

of investors are investing from 1-2 years. Where as 44% of investors are investing from more than 2 years. •

As per the findings 24% of the investors are taking Consultancy from less than 1 year. 42% of the investors from 1-2years and 34 % of investors from more than 2 years.

•

According to the survey 36% of the customer are satisfied with the ambience of the provided by the Way to Gain Investment Consultancy Pvt.Ltd. 34% of investors are satisfied with the knowledge provided about Investment where as 18% of the investors are satisfied with the materials given for the observation. And only 12 % of the investors are satisfied with the Follow up done by the company.

•

According to the survey 54% of the investors are satisfied with the portfolio managed by the Consultancy and 46 % investors are satisfied by the New Fund offerings information given by the company.

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It states that the major investors who fall in the age group on 31-50 yrs will invest monthly and yearly basis.

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After computing the weighted average of the satisfaction level of the pre Investment service provided it states that 30.1 % is the satisfaction level.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. •

After computing the weighted average of the satisfaction level of the post Investment service provided it states that 51.6 % is the satisfaction level.

Recommendations: •

As per my findings the major investors are professionals so it’s, on company to satisfy their needs and understand their financial sources. And give the second preference to the employees.

•

As per my observation still some of the investors even though they are investing in the mutual funds, are not completely aware of the benefits of investing in the mutual funds.

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The large number of the investors, want to invest once in a year followed by investors who invest monthly. So the company should concentrate on the Investments, which performs better on the yearly basis and also on SIP’s, which help the investors who want to invest on monthly basis, such plans should be made well aware to investors.

•

According to the survey the Risk and the Returns are the major factors why the investors wants to invest in Mutual funds its better for the company to guide such schemes in which risk is diversified and returns are more.

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After computing the weighted average of the satisfaction level of the pre- Investment service provided it stated that 30.1 % is the satisfaction level. So the company has to work on the remaining 69.9% of the gap. Where the company requires the training. Which company has look after.

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After computing the weighted average of the satisfaction level of the post Investment service provided it stated that 51.6 % is the satisfaction level so the company should fill the gap of the 48.6%. Where the training is required.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Conclusion The Investment Consultancy is the total service based company so the core difference between one company from other will be only service. As Way to Gain Investment Company is one of the Major players but to still remain in the market it should fill the various Gaps in the service. As per my analysis the large number of investors are investing from more than one year the post Investment service is more important. Risk and the Returns are the major factors for the Investment, we as a Business student to start up a Consultancy should provide such schemes. As well as the existing players in the market should provide. As per my study analysis and finding out the difference only on service is tough compared to products in the market. Public is getting aware of the capital market and various other Investment policies and schemes by various resources so it is the time to start Investment Consultancy during short available period. Before the market get saturates.

Limitations  The survey was carried only in the Dharwad city.  Since Sample size is only 100, which is not a true representative of the population as a whole.  The time period was between 10th of Dec 2007 to 19th of April 2008, For 60 days Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Industry Profile Emergence of Mutual Funds: Mutual funds now represent perhaps the most appropriate Investment opportunity for most small investors. As financial markets become more sophisticated and complex, investors need a financial intermediary who provides the required knowledge and professional expertise on successful investing. It is no wonder that in the birth place of mutual funds the USA the fund industry has already over taken the banking industry, with more money under mutual fund management than deposited with bank. Despite the expected continuing growth in the industry, mutual fund is still a new financial intermediary in India. Hence, it is important that the investors, the mutual fund agents/distributors, financial planners, Investment advisors and even the fund employees acquire the better knowledge of what mutual funds are, what they can do for investors and what they cannot, and how they function differently from other financial intermediaries such as banks.

Mutual Fund: A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable Investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

Important characteristics of Mutual Fund: •

A mutual fund actually belongs to the investors who have pooled their funds. The ownership of the mutual fund is in the hands of the investors.

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In case of mutual fund the contributors and the beneficiaries of the fund are the same class of people namely the investors

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A mutual fund is managed by Investment professionals and other service providers, who earn a fee they provide services, from the fund.

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The Investment portfolio of the mutual fund is created according to the stated Investment objectives of the fund.

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The pool of fund is invested portfolio of marketable Investments. The value of the portfolio is updated everyday.

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The investor’s share in the fund is denominated by “units “. The value of the unit’s changes with in the portfolio’s value, everyday. The value of one unit of Investment is called as the net asset value or NAV.

History of Mutual Fund Industry: The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year1987when non-UTI players entered the industry. In the past decade, Indian mutual fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it reached the height of 1,540 bn. Put-ting the AUM of the Indian Mutual Funds Industry into

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry. The main reason of its poor growth is that the mutual fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling. The mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under.

Role of SEBI in Mutual Fund Industry: As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual fund to protect the interest of the investors. SEBI notified regulation for the mutual fund in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital market. The regulations were fully revised in 1996 and have been amended thereafter from time to protect the interest of investors. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of regulations. There is no distinction in regulatory requirements for these mutual fund and all subjects to monitoring and sponsored by these entities are similar type.

How Mutual Funds setup: A mutual fund is set up in the form of trust, which has sponsor, trustees, Asset Management Company (AMC) and custodian.

Sponsor: What a promoter is to a company, a sponsor is to a mutual fund. The sponsor initiates the idea to set up a mutual fund. it could be financial services company, a bank or a financial institution. It could be Indian or Foreign. It could do it alone or through a joint venture. In order to run a mutual fund in India, the sponsor has to obtain a license from SEBI. For this, it has to satisfy certain conditions, such as on capital and profits, track record, default, free dealings and a general reputation for fairness

Asset Management Company (AMC): An AMC is the legal entity formed by the sponsor to run a mutual fund. Itâ&#x20AC;&#x2122;s the AMC that employs fund managers and analysts, and Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. other personnel. Itâ&#x20AC;&#x2122;s the AMC that handles all operational matters of mutual fund- from launching schemes to managing them to interacting with investors.

Trustees: Trustees are like internal regulators in a mutual fund, and their job is to protect the interest of unit holders. Sponsors appoint trustees. Trustees appoint the AMC, which, subsequently seek their approval for the work it does, and reports periodically to them on how the business is being run. Trustees float and market schemes, and secure necessary approvals.

Custodian:

A custodian handles the Investment back office of a mutual fund. Its

responsibilities include receipt and delivery of securities, collection of income, distribution of dividends, and segregation of assets between schemes. The sponsor of a mutual fund mutual fund cannot act as a custodian to the fund. This condition, formulated in the interest of investors, ensures that the assets of mutual fund are not in the hands of its sponsor.

Registrar: Registrars, also known as transfer agents, handle all investor-related services. This includes issuing and redeeming units, sending fact sheet and annual reports. Some fund houses handle such functions in-house.

Structure of Mutual Fund in India: Trustees

Operations

SEBI

Sponsor

AMC

Fund Manager

Market / Sales

Mutual Fund

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Schemes

Investor

Mutual Fund, Flow chart:

•

First investors pool their money in Mutual fund through franchisee or agents or himself in particular scheme.

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Fund manager collect that money and diversify that money in different securities.

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Then those securities generate return.

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That returns will pass back to the investors.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Types of mutual fund Schemes Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry. Organization of a Mutual Fund Advantages The advantages of investing in a Mutual Fund are:  Diversification: The best mutual funds design their portfolios so individual Investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value.  Professional Management:Most mutual funds pay topflight professionals to manage their Investments. These managers decide what securities the fund will buy and sell.  Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud. Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.  Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and you've got the cash.  Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet.  Low cost: Mutual fund expenses are often no more than 1.5 percent of your Investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index

Drawbacks

Mutual funds have their drawbacks and may not be for everyone:  No Guarantees: No Investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.  Fees and commissions: All funds charge administrative fees to cover their day-today expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund.  Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. money you made. 

Management risk: When you invest in a mutual fund, you depend on the fund's

manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your Investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.

Following are the factors, which influence investor while taking Investment decisions: Stability of income: Even though the return is less investor go for that Investment which gives uniform/stable income. Capital growth: Some investors go for those Investments where there is a scope for capital growth. Liquidity: Liquidity is the one more factor which investor consider before investing .So that he can meet his emergency easily. Tax benefits: To plan an Investment programme without regard to one’s tax status may be costly to the investor. There are really two problems involved here, one concerned with the amount of income paid by the Investment & the other with the burden of income taxes upon that income . When investors’ incomes are small, they are anxious to have maximum cash returns on their Investments, & are prone to take excessive risks. On the other hand, investors who are not pressed for cash income often find that income taxes deplete certain types of Investment incomes less than others, thus affecting their choices. Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Purchasing power stability: Investment involves the commitment of current funds with the objective of receiving greater amounts of future funds, because of this they consider the purchasing power stability, and for this they study the degree of price level inflation in future. Risk: Risk appetite of the investor also influence investor while taking Investment decisions: Following are the two type of risk that investor face 1. systematic risk 2. unsystematic risk Systematic risks are out of external & uncontrollable factors, arising out of the market, nature of industry7 the state of economy etc. Unsystematic risks emerge out of the known & controllable factors, internal to the issuer or the companies. Examples of Systematic risks i.

Market risk: This arises out of changes in demand & supply pressures in the markets, following the changing flow of the information or expectations.

ii.

Interest rate risk:

the return on an Investment depends on the interest rate

promised on it & the changes in the market rates of interest from time to time iii.

Purchase power risk: The return expected by investors will change due to change in real value of returns. One more reason for investing is not to earn but to preserve their economic position over time, they utilise Investment outlets whose values vary with the price level. They select Investments whose market values change with consumer prices which compensates them for cost of living increase. If they do not, they will find that their total wealth has been diminished.

Examples of Unsystematic risks:

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. i.

Business risk: This relates to the variability of the business, sales, income, profits etc., which in turn depends on the marked condition for the product mix, input supplies, strength of the competitors, etc.

ii.

Financial risk: this relates to the method of financing, adopted by the company, high leverage leading to larger debt servicing problems or short-term liquidity problems due to bad debts, delayed receivables & fall in current assets or rise in current liabilities. These problems could be solved but they may lead to fluctuations in earnings, profits & dividends to shareholders.

Default or insolvency risk: the borrower or issuer of securities may become insolvent or may default, or delay the payments due, such as interest installments or in principal repayments. In such cases, the investor may get no return or negative returns.

Name of SEBI registered Mutual Funds:

ABN AMRO Mutual Fund

2. Alliance Capital Mutual Fund

Benchmark Mutual Fund

4. BOB Mutual Fund,

Birla Mutual Fund

6. BOI Mutual Fund

Canbank Mutual Fund

8. CRB Mutual Fund(suspended)

Chola Mutual Fund,

10. Deutsche Mutual Fund

11. DSP Merrill Lynch Mutual Fund,

12. Dundee Mutual Funds,

13. Escorts Mutual Fund,

14. Fidelity Mutual Fund

15. GIC Mutual Fund

16. HDFC Mutual Fund,

17. HSBC Mutual Fund,

18. ICICI Securities Fund,

19. IL & FS Mutual Fund,

20. ING Vysya Mutual Fund,

21. J M Financial Mutual Fund

22. Kotak Mahindra Mutual Fund,

23. KJMC Mutual Fund,

24. LIC Mutual Fund

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. 25. Morgan Stanley Mutual Fund

26. PNB Mutual Fund

27. Principal Mutual Fund

28. Prudential ICICI Mutual Fund

29. Reliance Mutual Fund

30. Sahara Mutual Fund,

31. SBI Mutual Fund

32. Shriram Mutual Fund

33. Sun F&C Mutual Fund

34. Standard Chartered Mutual Fund,

35. Sundaram Mutual Fund,

36. Taurus Mutual Fund

37. Tata Mutual Fund,

38. Franklin Templeton Mutual Fund

39. UTI Mutual Fund

Types of Mutual Fund Schemes

 By Structure o

Open - Ended Schemes

Close - Ended Schemes

Interval Scheme

 By Investment Objective o

Growth Schemes

Income Schemes

Balanced Schemes

Money Market Schemes

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

 Other Schemes o

Tax Saving Schemes

Special Schemes  Index Schemes  Sector Specific Schemes

Mutual Fund Types: All mutual funds would be either closed-end or open-end, and either load or no-load. These classifications are general. For example all open-end funds operate the same way; or in case of a load fund a deduction is made from investors' subscription or redemption and only the net amount used to determine his number of shares purchased or sold.

Funds are generally distinguished from each other by their Investment objectives and types of securities they invest in. a) Broad Fund Types by Nature of Investments Mutual funds may invest in equities, bonds or other fixed income securities, or short-term money market securities. So we have Equity, Bond and Money Market Funds. All of them invest in financial assets. But there are funds that invest in physical assets. For example, we may have Gold or other Precious Metals Funds, or Real Estate Funds. Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

b) Broad Fund Types by Investment Objective Investors and hence the mutual funds pursue different objectives while investing. Thus, Growth Funds invest for medium to long term capital appreciation. Income Funds invest to generate regular income, and less for capital appreciation. Value Funds invest in equities that are considered under-valued today, whose value will be unlocked in the future. c) Broad Fund Types by Risk Profile The nature of a fund's portfolio and its Investment objective imply different levels of risk undertaken. Funds are therefore often grouped in order of risk. Thus, Equity Funds have a greater risk of capital loss than a Debt Fund that seeks to protect the capital while looking for income. Money Market Funds are exposed to less risk than even the Bond Funds, since they invest in short-term fixed income securities, as compared to longer-term portfolios of Bond Funds.

c) Broad Fund Types by Risk Profile The nature of a fund's portfolio and its Investment objective imply different levels of risk undertaken. Funds are therefore often grouped in order of risk. Thus, Equity Funds have a greater risk of capital loss than a Debt Fund that seeks to protect the capital while looking for income. Money Market Funds are exposed to less risk than even the Bond Funds, since they invest in short-term fixed income securities, as compared to longer-term portfolios of Bond Funds. 1. Money Market Funds Often considered to be at the lowest run in the order of risk level, Money Market Funds invest in securities of a short-term nature, which generally means securities of less than oneyear maturity. The typical, short-term, interest-bearing instruments these funds invest in include Treasury Bills issued by governments, Certificates of Deposit issued by banks and Commercial Paper issued by companies. In India, Money Market Mutual Funds also invest in the inter-bank call money market. Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

The major strengths of money market funds are the liquidity and safety of principal that the investors can normally expect from short-term Investments.

2. Gilt Funds Gilts are government securities with medium to long-term maturities, typically of over one year (under one-year instruments being money market securities). In India, we have now seen the emergence of Government Securities or Gilt Funds that invest in government paper called dated securities (unlike Treasury Bills that mature in less than one year). Since the issuer is the Government/s of India/States, These funds have little risk of default and hence offer better protection of principal. However, investors have to recognize the potential changes in values of debt securities held by the funds that are caused by changes in the market price of debt securities quoted on the stock exchanges (just like the equities). Debt securities' prices fall when interest rate levels increase (and vice versa). 3. Debt Funds (or Income Funds) Next in the order of risk level, investor has Debt Funds. Debt funds invest in debt instruments issued not only by governments, but also by private companies, banks and financial institutions and other entities such as infrastructure companies/utilities. By investing in debt, these funds target low risk and stable income for the investor as their key objectives. However, as compared to the money market. funds, they do higher price fluctuation risk, since they invest in longer-term securities. Similarly, as compared to Gilt Funds, general debt funds do have a higher risk of default by their borrowers. Debt Funds are largely considered as Income Funds as they do not target capital appreciation, look for high current income, and therefore distribute a substantial part of their surplus to investors. Income funds that target returns substantially above market levels can face more risks a) Diversified Debt Funds Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. A debt fund that invests in all available types of debt securities, issued by entities across all industries and sectors is a properly diversified debt fund. While debt funds offer high income and less risk than equity funds, investors need to recognise that debt securities are subject to risk of default by the issuer on payment of interest or principal. A diversified debt fund has the benefit of risk reduction through diversification and sharing of any default-related losses by a large number of investors. Hence a diversified debt fund is less risky than a narrowfocus fund that invests in debt securities of a particular sector or industry.

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b) Focused Debt Funds Some debt funds have a narrower focus, with less diversification in its Investments. Examples include sector, specialized debt funds. One category of specialised funds that invests in the housing sector, but offers greater security and safety than other debt instruments, is the Mortgage Backed Bond Funds that invest in special securities created after securitisation of (and thus secured by) loan receivables of housing finance companies c) High Yield Debt Funds Usually, Debt Funds control the borrower default risk by investing in securities issued by borrowers who are rated by credit rating agencies and are considered to be of "Investment grade". There are, however, High Yield Debt Funds that seek to obtain higher interest returns by investing in debt instruments that are considered "below Investment grade". Clearly, these funds are exposed to higher risk. In the U.S.A., funds that invest in debt instruments that are not backed by tangible assets and rated below Investment grade (popularly known as junk bonds) are called Junk Bond Funds. These funds tend to be more volatile than other debt funds, although they may earn higher returns as a result of the higher risks taken. d) Assured Return Funds UTI and other funds have offered "assured return" schemes to investors. The most popular variant of such schemes is the Monthly Income Plans of UTI. Returns are indicated in advance for all of the future years of these closed-end schemes. If there is a shortfall, it is borne by the sponsors. Assured Return or Guaranteed Monthly Income Plans are essentially Debt/Income Funds. Assured return debt funds certainly reduce the risk level considerably, as compared to all other debt or equity funds, but only to the extent that the guarantor has the required financial strength. Hence, the market regulator SEBI permits only those funds whose sponsors have adequate net-worth to offer assurance of returns. If offered, explicit guarantee is required from a guarantor whose name has to be specified in advance in the offer document of the scheme. Babasabpatilfreepptmba.com

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While Assured Return Funds may certainly be considered to be the lowest risk type within the debt funds category, they are still not entirely risk-free, as investors have to normally lock in their funds for the term of the scheme or at least a specified period such as three years. During this period, changes in the financial markets may result in the investor losing the opportunity to obtain higher returns later in other debt or equity funds. Besides, the investor does carry some credit risk on the guarantor who must remain solvent enough to honour his guarantee during the lock in period. 4 .Equity Funds As investors move from Debt Fund category to Equity Funds, they face increased risk level. However, there is a large variety of Equity Funds and all of them are not equally risk-prone. Equity funds invest a major portion of their corpus in equity shares issued by companies, acquired directly in initial public offerings or through the secondary market. Equity funds would be exposed to the equity price fluctuation risk at the market level, at the industry or sector level and at the company-specific level. Equity Funds' Net Asset Values fluctuate with all these price movements. These price movements are caused by all kinds of external factors, political and social as well as economic. The issuers of equity shares offer no guaranteed repayment as in case of debt instruments. Hence, Equity Funds are generally considered at the higher end of the risk spectrum among all funds available in the market. On the other hand, unlike debt instruments that offer fixed amounts of repayments, equities can appreciate in value in line with the issuer's earnings Potential, and so offer the greatest potential for growth in capital.

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Equity funds adopt different Investment strategies resulting in different levels of risk. Hence, they are generally separated into different types in terms of their Investment styles. a) Aggressive Growth Funds There are many types of stocks/shares available in the market; Blue Chips that are recognized market leaders, less researched stocks that are considered to have future growth potential, and even some speculative stocks of somewhat unknown or unproven issuers. Fund managers seek out and invest in different types of stocks in line with their own perception of potential returns and appetite for risk. As the name suggests, aggressive growth funds target maximum capital appreciation, invest in less researched or speculative shares and may adopt speculative Investment strategies to attain their objective of high returns for the investor. Consequently, they tend to be more volatile and riskier than other funds. b) Growth Funds Growth funds invest in companies whose earnings are expected to rise at an above average rate. These companies may be operating in sectors like technology considered having a growth potential, but not entirely unproven and speculative. The primary objective of Growth Funds is capital appreciation over a three to five year span. Growth funds are therefore less volatile than funds that target aggressive growth. c) Specialty Funds These funds have a narrow portfolio orientation and invest in only companies that meet predefined criteria. For example, at the height of the South African apartheid regime, many funds in the U.S. offered plans that promised not to invest in South African companies. Some funds may build portfolios that will exclude Tobacco companies. Funds that invest in Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. particular regions such as the Middle East or the ASEAN countries are also an example of specialty funds. Within the Specialty Funds category, some funds may be broad-based in terms of the types of Investments in the portfolio. i. Sector Funds Sector funds' portfolios consist of Investments in only one industry or sector of the market such as Information Technology, Pharmaceuticals or Fast Moving Consumer Goods that have recently been launched in India. Since sector funds do not diversify into multiple sectors, they carry a higher level of sector and company specific risk than diversified equity funds. ii. Offshore Funds These funds invest in equities in one or more foreign countries thereby achieving diversification across the country's borders. However they also have additional risks - such as the foreign exchange rate risk - and their performance depends on the economic conditions of the countries they invest in. Offshore Equity Funds may invest in a single country (hence riskier) or many countries (hence more diversified).

iii.Small-Cap Equity Funds These funds invest in shares of companies with relatively lower market capitalization than that of big, blue chip companies. They may thus be more volatile than other funds, as smaller companies' shares are not very liquid in the markets. We can think of these funds as a segment of specialty funds. In terms of risk characteristics, small company funds may be aggressive-growth or just growth type. In terms of Investment style, some of these funds may also be "value investors"

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

d) Diversified Equity Funds A fund that seeks to invest only in equities, except for a very small portion in liquid money market securities, but is not focused on anyone or few sectors or shares, may be termed a diversified equity fund. While exposed to all equity price risks, diversified equity funds seek to reduce the sector or stock specific risks through diversification. They have mainly market risk exposure. Such general purpose but diversified funds are clearly at the lower risk level than growth funds. i.

Equity Linked Savings Schemes: an Indian Variant

In India, the investors have been given tax concessions to encourage them to invest in equity markets through these special schemes. Investment in these schemes entitles the investor to claim an income tax rebate, but usually has a lock-in period before the end of which funds cannot be withdrawn. These funds are subject to the general SEBI Investment guidelines for all 'equity' funds, and would be in the Diversified Equity Fund category. However, as there are no specific restrictions on which sectors these funds ought to invest in, investors should clearly look for where the Fund Management Company proposes to invest and accordingly judge the level of risk involved. e) Equity Index Funds An index fund tracks the performance of a specific stock market index. The objective is to match the performance of the stock market by tracking an index that represents the overall market. The fund invests in shares that constitute the index and in the same proportion as the index. Since they generally invest in a diversified market index portfolio, these funds take only the overall market risk, while reducing the sector and stock specific risks through diversification.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

f) Value Funds In contrast to the growth investing, other funds follow Value Investing approach. Value Funds try to seek out fundamentally sound companies whose shares are currently underpriced in the market. Value Funds will add only those shares to their portfolios that are selling at low price-earnings ratios, low market to book value ratios and are undervalued by other yardsticks. Value Funds have the equity market price fluctuation risks, but stand often at a lower end of the risk spectrum in comparison with the Growth Funds. Value Stocks may be from a large number of sectors and therefore diversified. However, value stocks often come from cyclical industries. g) Equity Income Funds Usually income funds are in the Debt Funds category, as they target fixed income Investments. However, there are equity funds that can be designed to give the investor a high level of current income along with some steady capital appreciation, investing mainly in shares of companies with high dividend yields. As an example, an Equity Income Fund would invest largely in Power l Utility companies' shares of established companies that pay higher dividends and whose prices do not fluctuate as much as other shares. These equity funds should therefore be less volatile and less risky than nearly all other equity funds.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

4. Hybrid Funds - Quasi Equity/Quasi Debt In terms of the nature of financial securities held, there are three major mutual fund types: money market, debt and equity. Many mutual funds mix these different types of securities in their portfolios. Thus, most funds, equity or debt, always have some money market securities in their portfolios as these securities offer the much-needed liquidity. However, money market holdings will constitute a lower proportion in the overall portfolios of debt or equity funds. There are funds that, however, seek to hold a relatively balanced holding of debt and equity securities in their portfolios. Such funds are termed "hybrid funds" as they have a dual equity & bond focus. Some of the funds in this category are described below. a) Balanced Funds A balanced fund is one that has a portfolio comprising debt instruments, convertible securities, and preference and equity shares. Their assets are generally held in more or less equal proportions between debt/money market securities and equities. By investing in a mix of this nature, balanced funds seek to attain the objectives of income, moderate capital appreciation and preservation of capital, and are ideal for investors with a conservative and long-term orientation. b) Growth-and-Income Funds Unlike income-focused or growth-focused funds, these funds seek to strike a balance between capital appreciation and income for the investor. Their portfolios are a mix between companies with good dividend paying records and those with potential for capital appreciation. These funds would be less risky than pure growth funds, though more risky than income funds. Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

c) Asset Allocation Funds Normally, an Equity Fund would have its primary portfolio in equities most of the time. Similarly, a Debt Fund would not have major equity holdings. In other words, their "asset allocation" is predetermined within certain parameters. However, there do exist funds that follow variable asset allocation policies and move in and out of an asset class (equity, debt, money market, or even non-financial assets) depending upon their outlook for specific markets. In many ways, these funds have objectives similar to balanced funds and may seek to diversify into foreign equities, gold and real estate backed securities in addition to debt instruments, convertible securities, preference and equity shares. Asset allocation funds that follow more stable allocation policies (which hold relatively fixed proportions of specific categories) are more like balanced funds. On the other hand, funds that follow more flexible allocation policies (which vary their weightings depending on the fund manager's outlook) are more akin to aggressive growth or speculative funds. The former are for investors who prefer low risk and stable return. The latter carry higher risk and potential for higher return because of the flexibility enjoyed by the fund managers. 6. Commodity Funds While all of the debt/equity/money market funds invest in financial assets, the mutual fund vehicle is suited for Investment in any other - for example - physical assets. Commodity funds specialise in investing in different commodities directly or through shares of commodity companies or through commodity futures contracts. Specialized funds may invest in a single commodity or a commodity group such as edible oils or grains, while diversified Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. commodity funds will spread their assets over many commodities.

A most common example of commodity funds is the so-called Precious Metals Funds. Gold Funds invest in gold, gold futures or shares of gold mines. Other precious metals funds such as Platinum or Silver are also available in other countries. 7. Real Estate Funds Specialised Real Estate Funds would invest in Real Estate directly, or may fund real estate developers, or lend to them, or buy shares of housing finance companies or may even buy their securitised assets. The funds may have a growth orientation or seek to give investors regular income. There has recently been an initiative to offer such an income fund by the HDFC.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

2.Organization Profile Way to Gain Investment Consultancy Pvt Ltd P.B. Road, Opp. Canara Bank, Achuta Complex, Dharwad.

Brief History: The company is founded by N.S. Kongi, Ishwar Yenagi and Ningappa Yenagi with a share of 40%, 40% and 20% respectively. Company was established on April 2006. It was Ishwar Yenagi at first who initiated this initiative to establish the company with a dealership certificate of AMFI in hand. So he involved two more persons to build this company i.e., N.S. Kongi, Ningappa Yenagi. So it is a collective effort from all the three personalities to venture into this Way to Gain. The company is mainly dealing into Mutual Funds of all AMCâ&#x20AC;&#x2122;s.

Organizational chart:

DIRECTORS

N.S. KONGI

ISHWAR YENAGI

NINGAPPA YENAGI

BACK OFFICER HEMA

MARKETING PERSON Sashidahar MARKETING PERSON Sashidahar Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Service offered by Company: The company is mainly into Mutual Fund which forms the chunk of its revenue. And as a subsidiary business they provide stock broking of equities. And this broking is fraternized from Kotak Securities.

Charges and Commissions: As per SEBI regulations an AMFI qualified agents can charge upto 2% on the Investment into Mutual Fund. And usually this 2% is paid by AMCâ&#x20AC;&#x2122;s of the respective Mutual Fund Companies.

Service Promotions: Marketing and Promotional activities of the company are done by circulating pamphlets and also through local News Paper advertisements.

Targeted Segment The company and its operations are confined to the region of Hubli-Dharwad, Haveri and Belgaum.

Sales and Profitability of the Company Wayto Gainis making approximately 30 lac sales from sale of Mutual Funds for every month.

Competitors

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Wayto Gainis growing at a faster rate in the twine city but at the same time facing many competitors like Karvy, Reliance money, wealth point and various others.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Literature Review Gap Analysis Means to identify, correct gaps between desired levels and actual levels of performance, Used by organizations to analyze certain processes of any division of their company.

Service Gap Analysis Expected level of service / Actual level of service provided. SERVQUAL A gap analysis research instrument â&#x20AC;˘ Created by Parasuraman, Zeithamel, and Berry â&#x20AC;˘ Introduced in 1988

SERVQUAL Model

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

SERVQUAL Model Gaps Gap 1

–

The difference between actual customer expectations and management’s idea or

perception of customer expectations Gap 2

–

Mismatch between manager’s expectations of service quality and service quality

specifications Gap 3

–

Poor delivery of service quality

Gap 4

–

Differences between service delivery and external communication with customer

Gap 5

–

Differences between Expected and Perceived Quality

Gaps Model

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Gaps Model

•

There are 22 items which can be rated

–

i.e. modern looking equipment, prompt service, understanding of needs, etc.

These items are broken up into 5 dimensions: •

Tangibles

(Items 1-4)

•

Reliability

(Items 5-9)

•

Responsiveness

(Items 10-13)

•

Assurance

(Items 14-17)

•

Empathy

(Items 18-22)

Perceptions and Expectations are given a rating for certain dimensions

–

Ratings scale

•

1 (Strongly Disagree) to 7 (Strongly Agree)

Average expectation rating is then subtracted from the average perception rating

•

High Negative

Training needed = in certain

Rating

dimension

ISO 9001-2000 Gap Analysis Tool Phase 1: Identify Gaps Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Phase 2: Fill Gaps

Identify Gaps:

•

Tool lists the five sets of requirements from the ISO 9001 2000 as questions

–

Systematic

–

Management

–

Resource

–

Realization

–

Analytical

Each time “NO” is answered, there is a column to help organization identify which processes need to be fixed 22 total processes which can be fixed Fill Gaps:

•

Preparation and Implementation of System Development Forms

•

Each of the 22 processes listed in Phase one has a system development form

•

These system development forms are used to prepare System Development Plans

•

The Gap Analysis questions are turned into action statements

•

These action statements formulate remedial actions which will fill in the gaps

•

Once all actions are performed and gaps are filled, the organization will have a

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Summary of Gap Analysis •

Gaps can be found in any process of an organization’s operations

•

Tools like SERVQUAL, Two-Dimensional Analysis, and ISO 9001 2000 can all be

used to perform gap analysis

•

Gap Analysis is one of the best procedures to help lead a company to not only

improve their processes, but recognize which processes are in need of improvement.

Need for study:  Company want to know that at what level it is providing the service to the investors, and what are the future expectations of the investors regarding the Investment Consultancy. So as to stay in the better positions then the other players in the market.  The project will also be the new entrepreneurs who want to set up their own Investment Consultancy.

Objective: Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Sub objectives: Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.  To know the factors that influence investors while taking Investment decisions.  To know at what level the company is providing the service to its investors.  To study what are the future expectations of the investors related to Investment Consultancy.

Methodology Research instrument: Questionnaire Sampling method: The sample is selected based on convenience sampling method with the help of Customer database collected by the company. Sampling size: 100 numbers. Sampling unit: Retail or individual investors Sampling frame Investors of Dharwad city only were considered for collecting the Data. Time frame: From 10th Dec 2007 to 19th April 2008, total numbers of the days for the project were 60.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Data Collection Methods Sources of Data Collection method. The data is collected through both primary and secondary method. The primary data will be collected through administrating the questionnaire and through personal interviews. The secondary data was collected through various websites and articles

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

ANALYASIS AND INTERPRETATION Q.1. Age:

age

Valid

18-30 31-50 above -51 Total

Frequency 14 48 38 100

Percent 14.0 48.0 38.0 100.0

Valid Percent 14.0 48.0 38.0 100.0

Cumulative Percent 14.0 62.0 100.0

above -51 38.00 / 38.0% 18-30 14.00 / 14.0%

31-50 48.00 / 48.0%

Interpretation: From the above graph it is clear that 14% of respondents age lies between 18-30 yrs, 48% of Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. them are 31-50 yrs and remaining 38% of them are above 51 yrs age.

Q.2. Occupation occupation

Valid

Business Employee Professionals Retired person Total

Frequency 4 24 40 32 100

Percent 4.0 24.0 40.0 32.0 100.0

Valid Percent 4.0 24.0 40.0 32.0 100.0

Cumulative Percent 4.0 28.0 68.0 100.0

Retired person 32.00 / 32.0%

Business 4.00 / 4.0% Employee 24.00 / 24.0%

Prof essionals 40.00 / 40.0%

Interpretation:Based on survey it states that 40% of the investors belong to the Professional like advocate, Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. doctorâ&#x20AC;&#x2122;s officerâ&#x20AC;&#x2122;s etc, 32% of the investors belongs to retired persons, 24% of the investors belongs to employee (govt or private) and only 4% of the investors are business people.

Q.3 Do you believe in savings? As I have selected my samples of only respondents who are already well aware of mutual funds and invested in that. Q.4.How do you rate the following Investment avenues? (Rank 1 for most preferred and 9 for least preferred) how do you rate the following investment avenues?

Valid

share Mutual Fund Bank FD's PPF post office saving Govt funds Real estate insurance Chit funds Total

Frequency 27 20 19 11 6 3 3 10 1 100

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Percent 27.0 20.0 19.0 11.0 6.0 3.0 3.0 10.0 1.0 100.0

Valid Percent 27.0 20.0 19.0 11.0 6.0 3.0 3.0 10.0 1.0 100.0

Cumulative Percent 27.0 47.0 66.0 77.0 83.0 86.0 89.0 99.0 100.0

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Chit funds 1.00 / 1.0% insurance 10.00 / 10.0% Real estate 3.00 / 3.0% Govt funds 3.00 / 3.0% post office saving

share 27.00 / 27.0%

6.00 / 6.0% PPF 11.00 / 11.0% Bank FD's

Mutual Fund 20.00 / 20.0%

19.00 / 19.0%

Interpretation According to the survey 27% of the investors rated shares as their first preferred option for Investment, followed by mutual Funds rated by 20% of the investors. Where as 19% investors preferred Bank FDâ&#x20AC;&#x2122;s as their Investment option followed by 11% by PPF and 10% in insurance.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Q 4&Q5 Cross tab calculation: how do you rate the following investment avenues? * How often do you invest in a financial year? Crosstabulation Count

how do you rate the following investment avenues?

share Mutual Fund Bank FD's PPF post office saving Govt funds Real estate insurance Chit funds

Total

How often do you invest in a financial year? Monthly Quaterly Half yearly Yearly 6 5 2 14 7 1 1 11 4 4 1 10 6 1 4 2 1 1 2 2 1 1 1 1 2 4 2 2 1 29 17 10 44

Total 27 20 19 11 6 3 3 10 1 100

Interpretation: According to the survey there are 6% of investors who invest in shares on Monthly Basis. And 14% investors invest on yearly basis but when compared to Mutual funds 7% in 11% on yearly basis. Followed by Bank FDâ&#x20AC;&#x2122;s, PPF and insurance.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Q.5.

How often do you invest in a financial year?

Valid

Monthly Quaterly Half yearly Yearly Total

Frequency 29 17 10 44 100

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Percent 29.0 17.0 10.0 44.0 100.0

Valid Percent 29.0 17.0 10.0 44.0 100.0

Cumulative Percent 29.0 46.0 56.0 100.0

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Count

0 Monthly

Quaterly

Half yearly

Yearly

How often do you invest in a financial year? Interpretation According to the survey it states that 29% of investors tend to invest monthly. 17 % of investors want to invest quarterly. 10%investors wants to invest half yearly. And 44% of the investors want to invest yearly.

Q.6. Have you invested in mutual funds? As I collected the customer Database and then went on for Random sampling. All the 100 investors were invested in mutual funds. Q.7.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. If yes, since how long you are investing in mutual funds?

Valid

Less than one year one - two years more than two years Total

Frequency 38 18 44 100

Percent 38.0 18.0 44.0 100.0

Valid Percent 38.0 18.0 44.0 100.0

Cumulative Percent 38.0 56.0 100.0

since how long are you investing?

45 40 35 30 No of 25 investors 20 15 10 5 0

44 38

Less than one one - two years more than two year years Number of years

Interpretation According to survey 38% of the investors are investing from less than one year. 18% of investors are investing from 1-2 years. Where as 44% of investors are investing from more than 2 years. Q.8.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. which factors do you normally consider while investing in Mutual fund market?

Valid

Market Rate Returns Risk liquidity safety Total

Frequency 17 32 35 11 5 100

Percent 17.0 32.0 35.0 11.0 5.0 100.0

Valid Percent 17.0 32.0 35.0 11.0 5.0 100.0

Cumulative Percent 17.0 49.0 84.0 95.0 100.0

safety 5.00 / 5.0% liquidity 11.00 / 11.0%

Risk 35.00 / 35.0%

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Market Rate 17.00 / 17.0%

Returns 32.00 / 32.0%

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Interpretation According to the survey 35% of the investors consider Risk as the major factor for their Investment.32% consider Returns as the factor for their Investment. Where as 17% of the investors consider market rate as the factor while investing in the Mutual funds followed by 11% and 5% consider Liquidity and safety respectively as the key factors for Investment in mutual funds. Q.9. Statistics For how long youare taking onsultancy from the company? N Valid 100 Missing 0

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. For how long youare taking onsultancy from the company?

Valid

less than 1 year 1-2 yeas more than 2 years Total

Frequency 24 42 34 100

Percent 24.0 42.0 34.0 100.0

Valid Percent 24.0 42.0 34.0 100.0

Cumulative Percent 24.0 66.0 100.0

more than 2 years 34.00 / 34.0% less than 1 year 24.00 / 24.0%

1-2 yeas 42.00 / 42.0%

Interpretation As per the findings 24% of the investors are taking Consultancy from less than 1 year. 42% of the investors from 1-2years and 34 % of investors from more than 2 years.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Q.10.

how is the pre investment service

Valid

Ambience Knowldgs provided Materals given for observations Folow up Total

Frequency 36 34

Percent 36.0 34.0

Valid Percent 36.0 34.0

Cumulative Percent 36.0 70.0

18.0

88.0

12 100

12.0 100.0

100.0

Folow up 12.00 / 12.0%

Ambience Materals given for o

36.00 / 36.0%

18.00 / 18.0%

Know ldgs provided 34.00 / 34.0%

Interpretation: Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. According to the survey 36% of the customer are satisfied with the ambience of the provided by the Wayto GainInvestment Consultancy Pvt.Ltd. 34% of investors are satisfied with the knowledge provided about Investment where as 18%of the investors are satisfied with the materials given for the observation. And only 12 % of the investors are satisfied with the Follow up done by the company. Q.11

how is the post investment service at yor consltant

Valid

managing Portfolio Informing about NFO's Total

Frequency 54 46 100

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Percent 54.0 46.0 100.0

Valid Percent 54.0 46.0 100.0

Cumulative Percent 54.0 100.0

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Informing about NFO' 46.00 / 46.0%

managing Portfolio 54.00 / 54.0%

Interpretation: According to the survey 54% of the investors are satisfied with the portfolio managed by the Consultancy and 46 % investors are satisfied by the New Fund offerings information given by the company. Q1&Q5 Cross tab calculations for Age grout and the Investment.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. age * How often do you invest in a financial year? Crosstabulation Count

age

Total

18-30 31-50 above -51

How often do you invest in a financial year? Monthly Quaterly Half yearly Yearly 5 2 4 3 13 9 4 22 11 6 2 19 29 17 10 44

Total 14 48 38 100

It states that the major investors who fall in the age group on 31-50 yrs will more invest more on yearly basis than monthly. Q10 pre investment service Factors Weight given ambience 0.35 knowledge provided 0.4 materilas Given for observation0.15 Follow up 0.1 1

satisfaction level 36 34 18 12

weighted average 12.6 13.6 2.7 1.2 30.1

After computing the weighted average of the satisfaction level of the pre Investment service provided it states that 30.1 % is the satisfaction level. Q.11.post investment service Factors Weight given Satisfaction level Managing Portfolio 0.7 54 Informing about NFO's0.3 46 1

Weighted average 37.8 13.8 51.6

After computing the weighted average of the satisfaction level of the post Investment service provided it states that 51.6 % is the satisfaction level.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Q.12. Future service expectation. As per the Data collected the 58 investors need Booking information and 22 investors need to service at their work place. 20 investors were neutral without any future service expectation.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd.

Findings •

14% of respondent’s age lies between 18-30 yrs, 48% of them are 31-50 yrs and remaining 38% of them are above 51 yrs age.

•

Based on survey it states that 40% of the investors belong to the Professional like advocate, doctor’s officer’s etc, 32% of the investors belongs to retired persons, 24% of the investors belongs to employee (govt or private) and only 4% of the investors are business people

. •

According to the survey 27% of the investors rated shares as their first preferred option for Investment, followed by mutual Funds rated by 20% of the investors. Where as 19% investors preferred Bank FD’s as their Investment option followed by 11% by PPF and 10% in insurance

•

According to the survey it states that 29% of investors tend to invest monthly. 17 % of investors want to invest quarterly. 10%investors wants to invest half yearly. And 44% of the investors want to invest yearly.

•

According to survey 38% of the investors are investing from less than one year. 18% of investors are investing from 1-2 years. Where as 44% of investors are investing from more than 2 years.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. •

According to the survey 35% of the investors consider Risk as the major factor for their Investment.32% consider Returns as the factor for their Investment. Where as 17% of the investors consider market rate as the factor while investing in the Mutual funds followed by 11% and 5% consider Liquidity and safety respectively as the key factors for Investment in mutual funds.

•

As per the findings 24% of the investors are taking Consultancy from less than 1 year. 42% of the investors from 1-2years and 34 % of investors from more than 2 years.

•

According to the survey 36% of the customer are satisfied with the ambience of the provided by the Wayto GainInvestment Consultancy Pvt.Ltd.34% of investors are satisfied with the knowledge provided about Investment where as 18%of the investors are satisfied with the materials given for the observation. and only 12 % of the investors are satisfied with the Follow up done by the company.

•

According to the survey 54% of the investors are satisfied with the portfolio managed by the Consultancy and 46 % investors are satisfied by the New Fund offerings information given by the company.

•

After computing the weighted average of the satisfaction level of the pre Investment service provided it states that 30.1 % is the satisfaction level.

•

After computing the weighted average of the satisfaction level of the post Investment service provided it states that 51.6 % is the satisfaction level.

•

As per the Data collected the 58 investors need Booking information and 22 investors need to service at their work place. 20 investors were neutral without any future service expectation.

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Recommendations: •

According to my observation the average age of the investors who invest on the large basis is 31-50,so the company has to concentrate more on such age group investors.

•

As per my findings the major investors are professionals so its on company to satisfy there needs and understand there financial sources. And give the second preference to the employees.

•

As per my observation still some of the investors even though they are investing in the mutual funds, are not completely aware of the benefits of investing in the mutual funds.

•

As per the observation the large number of the investors want to invest once in a year followed by investors who invest monthly. So the company should concentrate on the Investments which performs better on the yearly basis and also as SIP is help full for the investors who want to invest on monthly basis such plans should be made well aware to investors.

•

After computing the weighted average of the satisfaction level of the pre Investment service provided it stated that 30.1 % is the satisfaction level. So the company has to work on the remaining 69.9% of the gap. Where the company requires the training. Which company has look after.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. •

•

As per the Data collected the 58 investors need Booking information and 22 investors need to service at their work place. 20 investors were neutral without any future service expectation so the company should involve these services.

Conclusion  The Investment Consultancy is the total service based company so the core difference between one company from other will be only service.  As Way to Gain Investment Company is one of the Major players but to still remain in the market it should fill the various Gaps in the service.  As per my analysis the large number of investors are investing from more than one year the post Investment service is more important.  Risk and the Returns are the major factors for the Investment, we as a Business student to start up a Consultancy should provide such schemes. As well as the existing players in the market should provide.  As per my study analysis and finding out the difference only on service is tough compared to products in the market.  Public is getting aware of the capital market and various other Investment policies and schemes by various resources so it is the time to start Investment Consultancy during short available period. Before the market get saturates.

Limitations

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 The survey was carried only in the Dharwad city.  Since Sample size is only 100, which is not a true representative of the population as a whole.  The time period was between 10th of Dec 2007 to 19th of April 2008, For 60 days.

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Questionnaire Dear respondent, SEC-1 Name:

______________________________________

Address:

______________________________________ ______________________________________

Phone/mobile:

______________________________________

1. Age: a. 18-30 b. 31- 50 c.

Above 51

2. Occupation: a. Business

b. Employee

c. Professionals

d. Retired Person

3.Do you believe in savings? Yes

4) How do you rate the following Investment avenues? (Rank 1for most preferred &9 for Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Least preferred) Shares Mutual Bank Funds FDâ&#x20AC;&#x2122;S

PPF

Post Office Govt Saving Bonds

Real Estate

Insurance

Chit

5) How often do you invest in a financial year? 1. Monthly

2. Quarterly

3.Half yearly

4. Yearly

6.Have you invested in mutual funds? Yes

7. If yes, since how long you are investing in mutual funds? a. Less than 1 Year b. 1-2 Years c. More than 2 Years 8. Which factors do you normally conceder while investing in mutual fund market? (Rate 17, 1 for high and 7 for low) Market

Returns

Risk

Liquidity

Safety

Rate

SEC -2 9.For how long you have taken Consultancy from the company? a. Less than 1 Year Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. b. 1-2 Years c. More than 2 Years

10.How is the pre-Investment Service at your consultant? Factors

Highly

Satisfied

Neutral

Satisfied

Dis-

Highly Dis-

satisfied

Dis-

Highly

satisfied

Dis-

Ambience Knowledge provided Materials

given

for

observation Follow up 11.

How is the Post Investment Service at your consultant? Factors

Highly Satisfied

Satisfied

Neutral

satisfied Managing Portfolio Informing about NFOâ&#x20AC;&#x2122;s

12. What are the further services you expect from Investment consultant? 1. _____________ 2. _____________ 3. _____________ 4. _____________ 13.Valuable suggestions are welcome.

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THANK YOU

GLOSSARY ON MUTUAL FUNDS: Account Statement A physical document, similar to a bank account statement, representing the mutual fund units owned. Issued to the unit holder every time he/she carries out a transaction. Annual Report Unabridged financial results that comprise historical per unit statistics and complete portfolio of schemes of a mutual fund for a certain period. It is sent to unit holders once in a year. Appreciation An increase in an investment’s value. Asset Allocation The process of diversifying investments among different types of assets like stocks, bonds and cash in order to optimize risk / return tradeoff based on a person’s financial situation and goals. Asset Class Different types of investments such as stocks, bonds, real estate and cash. Asset Management Company A firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives. For a fee, the investment company provides more diversification, Babasabpatilfreepptmba.com

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. liquidity, and professional management service than is normally available to individual investors. Asset-Backed Security A debt instrument backed by loan paper or accounts receivable from banks, companies or other providers of credit. Assets An item of value owned by an individual or an organization. It could be stocks, cash, house or a car. Automatic Investment Plan Periodic investment of a fixed amount by a unitholder, either directly from his bank account or by issuing post-dated cheques, in his mutual fund account. It allows the investor to benefit from rupee cost averaging. Automatic Withdrawal Plan Allows an investor to receive periodic payments of fixed amount or units from his investment in a mutual fund scheme. Retirees who want a regular income supplement often choose this.

Average Portfolio Maturity The average maturity of all the bonds in a bond fundâ&#x20AC;&#x2122;s portfolio. Back-End/Redemption Load One of two possible sales charge imposed by funds that charge fees. Redemption load is a charge an investor pays when units are redeemed or sold back to the fund. It sometimes depends on how long the investment is held -- generally the longer the time period, the smaller the charge.

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Balanced Scheme A mutual fund scheme with an investment objective of both long-term growth and Income, through investment in stocks and bonds. Typically, the stock-bond ratio ranges around 60%40% in an effort to obtain the highest returns consistent with a low risk strategy.

Basis Point (BP) The smallest measure used in quoting yields on fixed income securities. One basis point is one percent of one percent, or 0.01%. Bear Market A prolonged period of falling securities prices in a stock market. Benchmark A standard used for comparison. Usually to provide a point of reference for evaluating a fund's performance. The common benchmarks for equity-oriented funds is the BSE 200 Index or the BSE Sensex. Beta A measure of a fundâ&#x20AC;&#x2122;s volatility in relation to the stock market, as measured by a stated index. By definition, the beta of the stated index is 1; a fund with a higher beta has been more volatile than the market, and a fund with a lower beta has been less volatile than the market. Based on past historical records, a beta higher than 1.0 indicates that when the market rises, the stock will rise to a greater extent than that of the market; likewise, when the market falls, the stock will fall to a greater extent. A beta lower than 1.0 indicates that the stock will usually change to a lesser extent than that of the market. The higher the beta, the greater the investment risk. Blue chip

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Identification of gap between the exiting service and the expected service, at Way to Gain Investment Consultancy Pvt. Ltd. Stock of a nationally known company that has a long record of profit, growth, and dividend payment, and a reputation for quality management, products, and services. Bond A debt security, or an IOU, issued by a company or government agency. A bond investor lends money to the issuer and, in exchange, the issuer promises to repay the loan amount on a specified maturity date; the issuer usually pays the bondholder periodic interest payments over the period of the loan. Bond Scheme A scheme that invests primarily in bonds with the general emphasis on income over growth. Bottom-Up An investment strategy that first seeks individual companies with attractive investment potential, then considers the economic and industry trends affecting those companies. Bull

Market

A prolonged rise in the price of stocks, bonds or commodities characterized by high trading volumes. Business Day A Business Day is any day other than a Saturday, a Sunday or a day on which banks are not required or obligated by law or executive order to remain closed including the occasions when the functioning of the Banks/ RBI is affected due to a strike call made by a Recognized Union/ Management at any part of the country. Call money Money which is loaned in the call market, which can be demanded for repayment on call, which basically means immediately. The term call money is also known as money at short notice as it is repayable in 24 hours. It is also traded in the money market. Babasabpatilfreepptmba.com

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Call Risk The risk that bonds will be redeemed (or "called") before maturity. This possibility increases during periods of falling interest rates.

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BIBLIOGRAPHY

TEXT BOOKS  NCFM AMFI guidance book,  Tull and Hawkins (Marketing research)

MAGAZINES  Business World  India Today

NEWS PAPER  Business Line  Business standards.

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