A literature review has been done of 15 research papers related to investment in mutual fund through systematic investment plan in india

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SEMINAR REPORT
ON
“INVESTMENT IN MUTUAL FUNDS THROUGH
SYSTEMATIC INVESTMENT PLAN”
Submitted by
Abhishek Shrivastava
Under the Guidance of
Dr. Verma
Assistant Professor
DEPARTMENT OF MANAGEMENT STUDIES
MAULANA AZAD NATIONAL INSTITUTE OF TECHNOLOGY

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TABLE OF CONTENT
S.no TOPIC PAGE
1. INTRODUCTION 6
2. SWOT ANALYSIS 7-8
3. OBJECTIVES OF THE STUDY 8
4. RESEARCH METHODOLOGY 8
5. REVIEW OF LITERATURE 8-13
6. CONCLUSION 14
7. LIMITATIONS 14
8. REFERENCES 15

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INVESTMENT IN MUTUAL FUNDS THROUGH
SYSTEMATIC INVESTMENT PLAN
Abstract
Mutual funds have emerged as a strong financial intermediary and are the fastest growing
segment of the financial services sector in India. Mutual funds play a very significant role in
channelizing the savings of millions of individuals. A mutual fund is the most suitable
investment for the common person as it offers an opportunity to invest in a diversified,
professionally managed portfolio at a relatively low cost. There are wide varieties of mutual
fund schemes that cater to investor needs. Whether as the foundation of one’s investment
program or as a supplement, mutual fund schemes can help the investors to meet their
financial goals. A host of factors has contributed to this explosive growth of the industry. The
industry has made significant strides in terms of its variety, sophistication, and regulation. Due
to the economic boom, entry of foreign asset management companies, favorable stock markets
and aggressive marketing by mutual funds, the asset management industry in India is
witnessing dramatic growth in terms of new fund openings, the number of mutual fund
families, and in the total assets under management in recent years. Despite various attractions
offered, the total net assets of mutual funds are very less as compared to other developed
countries. In the product offering too, the Indian fund industry is not close to the developed
countries. To achieve this, the Indian mutual fund industry needs to widen its range of products
with affordable and competitive schemes that combine various elements of liquidity, return
and security in making mutual fund products the best possible alternative for the small
investors in the Indian market. In this paper it has been tried to find out the pattern of
investments in mutual funds through systematic investment plan and factors affecting this
decision.
1.Introduction
The SEBI (Mutual Funds) Regulations 1993 define a mutual fund (MF) as “A fund established in
the form of a trust by a sponsor to raise monies by the Trustees through the sale of units to the
public under one or more schemes for investing in securities in accordance with these
regulations.” MF is set up in the form of a trust. The trust has sponsor, trustee, Asset
Management Company (AMC) and custodian. It has to be registered with Securities exchange
board of India (SEBI). MF is regulated under the SEBI (MF) Regulation, 1996.Mutual Fund is a
tool for small investors and for people who cannot invest directly in equity shares and debt
instruments. Small investors can take benefits of stock market growth by investing in equity and

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debt instruments through MF. Though it is a convenient way of investment for the people who
do not have knowledge, time or inclination to invest directly in stocks, it does not guarantee
return or value of the original investment. The appreciation of investment depends on the
performance of fund and stock market. MFs are Financial Intermediaries that pool the financial
resources of investors and invest in diversified portfolio of assets. It is a mechanism for pooling
resources by issuing units to the investors and investing funds in securities. It is a vehicle for
collective investment, where the unit holders become part owners of the investment done
under a scheme. The profit or losses are shared by the investors in proportion to their
investments.
Systematic Investment Plan (SIP) is a smart financial planning tool that helps you to create a
wealth by investing small sum of money every month over a period of time. SIP is a planned
approach to investments and an investment technique that allows you to provide for the future
by investing small amount of money in mutual fund scheme of our choice. Systematic
investment plans is a plan of mutual fund, in which the investments are done by paying a fixed
amount at every predetermined date. Systematic Investing in a Mutual Fund is the answer to
preventing the drawbacks of equity investment and still enjoying the high returns. Mutual Fund
SIP is a monthly based investment plan through which an investor could invest a fixed sum into
mutual funds every month at pre-decided dates. This hedges the investor from market
instability and derives maximum benefit as the investment is done at regular basis irrespective
of market conditions. SIP is a feature especially designed for investors who wish to invest small
amounts on a regular basis to build wealth over a long term.
2.SWOT Analysis of SIP
2.1 STRENGTH
1. Small investors can also enter into capital market through Systematic Investment plan.
2. The process of investing in SIP is very easy.
3. SIP helps to inculcate financial discipline.
4. SIP provides opportunities for investing early and to keep investing regularly.
2.2 WEAKNESS
1. Companies charge entry and exit loads.
2. SIP returns are lower in consistently rising markets.
3. Does not suit people with unpredictable cash flows.

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2.3 OPPORTUNITY
1. The benefit of rupee cost averaging in an SIP is more useful in case of an equity fund.
2. SIP helps to adjust volatility.
2.4 THREATS
1. Investments in Lump sum can provide greater returns if major transformation happens in the
. market.
2. The Opportunity cost involved in investing meager amount is high.
3.OBJECTIVES OF THE STUDY
The main objectives of the study include various factors that affect the investment in
systematic investment plan. The other objectives include the study of (a) Sustainability and
consistency in returns through SIP (b) Adaptability due to marketing of mutual funds in diverse
areas (c) Sociological factors affecting investment in SIPs (d) Investor Sentiments of tier 2 cities.
4.RESEARCH METHODOLOGY
A thorough review of literature has been done as part of secondary research in which 13
research papers are been examined, on the basis of which conclusion regarding investments in
mutual funds through systematic investment plan is drawn.
5.REVIEW OF LITERATURE
5.1 Sustainability and Consistency in Returns
According to Sindhu,K.P.&Kumar who have discussed that “the stock market provides higher
returns than any of the investment options available in the financial market”. A prudent
investor can earn a lot from the stock market operations. But there is a chance of high risk and
uncertainty. As we know, higher the return, higher will be the risk. Those investors with lack of
knowledge and expertise may lose their money while investing in financial assets, especially in
securities. This is where mutual funds come into picture. Mutual Fund is the most suitable
investment for a common man as it offers an opportunity to invest in a diversified

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professionally managed basket of securities at a relatively low cost. A mutual fund is an
investment company or a trust that pools the resources of a large number of its’ shareholders
and invest on behalf of them in diversified portfolios to attain the objectives of the investors
which in return achieve income or growth or both. Thus mutual funds become a major
investment vehicle for mobilization of savings particularly from small and household sectors for
the investment in security market. At present the importance of mutual funds in India has been
increasing in the capital market by expanding the investors’ base. Nowadays, there are different
types of investment plans are available for mutual fund investors. At the same time, investment
in mutual fund is to be considered as a long term investment.
In the views of Malkiel his study utilizes a unique data set including returns from all equity
mutual funds existing each year. These data enable us more precisely to examine performance
and the extent of survivorship bias. In the aggregate, funds have underperformed benchmark
portfolios both after management expenses and even gross of expenses. Survivorship bias
appears to be more important than other studies have estimated. Moreover, while
considerable performance persistence existed during the 1970s, there was no consistency in
fund returns during the 1980s.
As Amitabh Gupta put his views in the words, At present the industry has four types of players
viz.(a) UTI, (b) Public Sector Banks, (c) Financial institutions, and (d) the Private Sector. Of the
total 36 players, 11 are in the public sector including the UTI, while the remaining 25 are in the
private sector. The total assets under management of the industry stood at Rs. 91,811 crore (as
on September 30, 2001) out of which, UTI alone accounts for Rs. 49,213 crore (53.60 per cent),
while the share of public sector funds is Rs. 7,564 crore (8.23 per cent). The remaining
resources of Rs. 35,034 crore (38.15 per cent) are with the private sector funds. As on 30th
September 2001, the total number of schemes offered by all the mutual funds stood at 411, of
which 283 are open-ended while the remaining 128 are closed-ended. It is estimated that 1.5
crore or nearly 9 per cent of all Indian households have invested in units of mutual funds and
there are likely to be 2.3 crore unit holders in mutual funds.”
According to Saudagar Godase he cloped in his paper titled “Long Term Performance of Equity
Based Mutual Funds (Systematic Investment Plan)”. Most of the information was collected from
the factsheet of different mutual fund houses by using various websites like
www.valueresearchonline.com, www.moneycontrol.co, www.mutualfundindia.com, etc. and
also from the various publications of government of India, RBI, SEBI, AMFI and also from
relevant reports, periodicals, and newspapers are collected and analyzed. From this research it
is quite clear that the equity based mutual fund schemes have lot of potential to give high
returns but investors should be aware about the Schemes those are really operating & giving
high returns. Here some suggested funds are small & midcap funds i.e. DSP-BR micro-cap fund
(G), Can Robeco Emerg. Equity (G) & Religare Invesco mid and small cap (G) & in Sector funds
i.e. into UTI Transport & logistic fund (G), SBI FMCG Fund & SBI Pharma which provide high
returns of equity based mutual funds schemes. Investors have options to invest by way of SIP or
to invest by lump sum amount. Small investors can invest through Systematic Investment Plan
by way to build high capital to reduce investment as risk in Equity based Mutual fund Schemes.

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5.2 Adaptability due to marketing of mutual funds in diverse areas
According to Kandpa & Kavidayal, they have given the information for restriction of mutual
fund investment in top cities or Urban areas due to the lack of awareness level in the rural and
semi urban areas. The absence of product diversification and confusion in the market has been
enlarged by the lack of marketing initiatives for Mutual Funds. The role of mutual fund agents
or distributors is to educate the investor community. Therefore the spread of Mutual Fund
market has been limited. The mutual funds have not able to make an impact in rural area and
among low income households. The vast rural market is untapped. The mutual fund industry
should come out with innovative schemes especially for rural households with small
investments in a flexible investment plans. The public institutions like panchayat, schools and
colleges, banks, electronic and print media should be used to create awareness about mutual
funds among rural households. The mutual fund industry needs to collaborate with such
agencies and enhance the awareness level of rural people and channelize their savings. Mutual
funds should also collaborate with regional rural banks, cooperative banks to increase
participation of rural people. To gain the confidence of rural investors the public sector banks
can play an important role by highlighting the benefits of mutual funds to the account holders.
According to Mr. Lalit K. Bansal, A Mutual Fund is better understood by the functions it
performs and role it plays. It is a non-depository financial intermediary. Mutual Funds are
mobilizer of saving, particularly from the small and household sector, for investments in stock
and money market. Basically, these institutions are professional fund managers, managing
funds of individuals and institutions that may not have such high degree of expertise or may not
have time sufficient to cope up with complexities of different investment avenues, legal
provisions associated therewith and vagaries and vicissitudes of capital markets. Mutual Funds,
thus, provide an alternative to the investors who instead of making direct investments in share
of bonds through public issues or through secondary market, subscribe to the corpus of mutual
funds. Investor can reap all the benefits of good investing through mutual funds like enjoying
growth in scrip in which he could not have otherwise invested, holding a balanced and well-
diversified portfolio, better return due to specialized and professional management of funds
etc. Mutual funds mobilize funds by selling their own shares also known as units. Thus, Mutual
funds are investment intermediaries which pool investors’ funds to acquire individual
investments and pass on the returns thereof to fund investors. Besides investment business,
mutual funds may also undertake, if permitted, underwriting and other merchant banking
activities.
According to A. P. Kurian, he expressed his views saying about the role of intermediaries in the
Indian Mutual Funds industry, “From the beginning, UTI and other mutual funds have relied
extensively on intermediaries to market their schemes to investors. It would be accurate to say
that without intermediaries, the mutual funds industry would not have achieved the depth and
breadth of coverage amongst investors that it enjoys today. Intermediaries have played a
pivotal and valuable role in popularizing the concept of mutual funds across India. They make

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the forms available to clients, explain the schemes and provide administrative and paperwork
support to investors, making it easy and convenient for the clients to invest. Intermediation
itself has undergone a change over the past few decades. While individual agents provided the
foundation for growth in the early years, institutional agents, distribution companies and
national brokers soon started to play an active role in promoting mutual funds. Recently, banks,
finance companies, secondary market brokers and even post offices have also begun to market
mutual funds to their existing and potential client bases.”
5.3 Sociological factors affecting investment in SIPs
To analyze the situation Anich Uddin took Samples of 100 respondents selecting of those who
were involved with mutual fund SIP in Gandhinagar (Gujarat) where main objectives of the
study included various factors that affect the investment in systematic investment plan. The
other objectives include the study of (a) purpose of the investment in SIP (b) amount of
investment in SIP (c) awareness of investors about the Mutual fund SIP and (d) sector p.
references for SIP in his paper titled “Investor Perception about Systematic Investment Plan
(SIP) Plan: An Alternative Investment Strategy”. He concluded that if the income level of the
investor is increasing than preference to invest in equity plan is also increasing. so that to get
their expected return maximum investor’s expectation on return is 10% to 25% for the
fulfillment of their investment objective. The results of the test indicates that there is no
significant relationship between gender but there is a significant relationship between
occupation and the SIP amount of the respondent.
As mentioned by Dr. Arvind Kumar Singh and Karan Veer Singh in their paper “Study of
investor perception towards unconventional tool of investment with special reference to
mutual funds in Phagwara Region” took sample size will be of 200 respondents and concluded
that the most vital problem spotted is of ignorance. Investors should be made aware of the
benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to
realize that ignorance is no longer bliss and what they are losing by not investing.
1. Mutual funds offer a lot of benefit which no other single option could offer. But most of the
people are not even aware of what actually a mutual fund is. Young investors as well as persons
at the height of their career would like to go for advisors due to lack of expertise and time.
2.Younger people aged fewer than 35 will be a key new customer group into the future, so
making greater efforts with younger customers who show some interest in investing should pay
off.
3. Customers with graduate level education are easier to sell to and there is a large untapped
market there. To succeed however, advisors must provide sound advice and high quality.

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4. Systematic Investment Plan (SIP) is one the innovative products launched by Assets
Management companies very recently in the industry. SIP is easy for monthly salaried person as
it provides the facility of do the investment in EMI. Though most of the prospects and potential
investors are not aware about the SIP. There is a large scope for the companies to tap the
salaried persons.
5.4 Investor Sentiments of tier 2 cities
As mentioned by Dr.T.Unnamalai in his paper “A study on awareness of investors about the
mutual fund investments in musiri taluk” took the primary data from 250 respondents. He
noted that nowadays investors prefer to diversify their risks and the returns should be high, tax
exemptions etc. Today many institutions are busy in providing wealth management services to
its investors. But these services are very costly. Due to this reasons the mutual fund industries
gaining importance and attracts more investors. The present study analyses the mutual fund
investments in relation to investor’s awareness. In this study above the awareness about the
schemes, the study is trying to find out the various investments other than mutual funds.
Nearly 75% of the investors are having investment s other than mutual funds. The study also
find out the opinion of the Investors and perception has been studied relating to various issues
like type of mutual fund scheme, main objective behind investing in mutual fund scheme, level
of satisfaction, role of financial advisors and brokers, investors’ opinion relating to factors that
attract them to invest in mutual funds, sources of information, deficiencies in the services
provided by the mutual fund managers, challenges before the Indian mutual fund industry etc.
The study reveals that there is a positive growth in their investments and majority of them
expects safety, diversification of their risks, high returns etc. Majority of them expects better
advice from the agents. Instated of the agents regular awareness campaign should be
conducted by the companies. It will win the confidence of the investors. In order to maintain
their confidence in mutual funds they should be provided with timely information relating to
different trends in the mutual fund industry.
Confidence level of investors was analysed by Priti Mane in his paper titled “A Study of
Investors Perception towards Mutual Funds in the City of Aurangabad in which she took thirty
investors of Aurangabad city. Her objective was to study the investors view towards mutual
fund as per the sample size and test which is applied to the study. She found that the investors
are not choosing or feeling confident in investing in mutual fund because they think that mutual
fund is risky than other investment option. The awareness level of mutual fund among the
investors are very low because of only having the partial knowledge about the mutual fund
which prevent them to invest in mutual fund to avoid risk bearing factor and fear of losing
money .The most preference of the investors are the fixed deposit because they feel it is the
safest and returns are fixed and not having fear of losing the money. Apart from these found
that there are investors facing various problems in selecting mutual fund as an investment
option because of share market uncertainties and risk associated with it so investors avoid the
investing in mutual fund. Mutual fund are link with share market and investors are not taking

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advice from expert advisor to guide them for their investment in mutual fund so it creates the
difficulty to select the mutual fund scheme beneficial for them.
Discussed by Dr. Aruna K and M. Senthamil Selvi in their paper “the scenario of mutual fund
investment in systematic investment plan (sip) in vellore district” analyzed 150 respondents
which revealed that majority of respondent are from the age group of 41 – 50years. Private
employees prefer to invest than others. Male respondent are more preferable to invest in
systematic investment plan in mutual fund than female respondents. With regard to education
most of the respondents of graduate persons have intension on saving habits. 54.7% of the
respondents were between the annual incomes of 100000 – 300000. 92.7% of respondents
were aware of Systematic Investment Plan. The analysis revealed that 47.3% of the
respondents were preferred to save on tax savings scheme of mutual fund. 34.7% of
respondents invest a sum of 5000 – 10000 every month. 34.7% of respondents consider safety
as top most important factor. From the regression analysis it is revealed that there is a
relationship between age and opinion regarding investment. The investments should be in such
a way that it should match the Inflation.
Advertisement effects were investigated by Vipin Kumar and Preeti Bansal in their research
paper titled “A Study on Investors’ Behavior towards Mutual Funds in Rohtak, Haryana” where
they took the sample size of 125respondents. The data was collected through structured
questionnaires. The inference drawn is for middle income individuals, investing in mutual funds
yields higher interest and comes with good principal amount at the end of the maturity period
of the mutual fund investment. Another important fact is that mutual funds are safe, with close
to zero risk, offering an optimized return on earnings and protecting the interest of investors. It
is important to gain good understanding of mutual fund investments, companies in the field,
and mutual fund experts, as customers are easily misguided by the advertisements and offers
promoted by various financial institutions. Mutual fund companies should come forward with
full support for the investors in terms of advisory services, participation of investor in portfolio
design, ensure full disclosure of related information to investor, proper consultancy should be
given by mutual fund companies to the investors in understanding terms and conditions of
different mutual fund schemes, such type of fund designing should be promoted that will
ensure to satisfy needs of investors, mutual fund information should be published in investor
friendly language and style, proper system to educate investors should be developed by mutual
fund companies to analyze risk in investments made by them, etc. On the other it is required
from government and regulatory bodies point of view that more laws should be there to secure
the funds of investors to be exploited, more tax rebate should be given on mutual fund
investment, proper and effective grievance system, right of investor education, and more
control on asset management companies should be there.

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6.Conclusion
The aggressive market that can tap any individual is financial services. Investors have their
individual risk appetite and believe in the market they are entering in but majorly rely on
investment advisors or their seniors in family or at work place to guide them regarding the
small investments. In this volatile market environment mutual funds play an active role not only
in promoting a healthy capital market but also increase liquidity in the money market. They
have been identified as one of the important factor pushing up the market prices of securities
.In the country where 35% population is youth, the future penetration of the working class in
the age of 25-35 in mutual fund SIPs seems to be inevitable. The analysis of the above study
helps us to understand the attitude and behavior of the investor based on their preferences.
Investor education remains a major driving factor in investing in mutual funds as graduates are
more likely to invest in these funds. SIP protects the investor from market volatility and derives
maximum benefit as the investment is done at regular basis irrespective of market conditions.
Individuals with consistent income source are more likely to start the systematic investment
plan. SIP is a best option planned for small investors who wish to invest small amounts regularly
to build wealth over a long period of time. Based on the above approach, it can be noted that
investors ought to be cautious in selecting the schemes, sectors and various asset management
companies as they must thoroughly examine their risk appetite and objectives. It has also been
analyzed that more and more investments are coming from tier 2 cities where people are
shifting towards more modern financial products leaving the low yielding traditional bank
deposits and gold investments. Mutual fund industry which has enormous growth, if better
controlled by market regulators with their strict regulations, the resources can be better
allocated in an emerging market economy.
7.Limitations
1. This study/review paper limits to Secondary data analysis.
2. Targeted audience behavior changes rapidly with respect to new innovations and social
channel.
3. The way things are measured may change over time, making historical comparisons difficult.
4. Validity and authenticity could be erroneous.

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8.References
1.ANICH UDDIN, A. (2016). Investor Perception about Systematic Investment Plan (SIP)
Plan: An Alternative Investment Strategy. International Journal of Research in Humanities &
Soc. Sciences, 4(3), 7.
2. Aruna, K., & Senthamil, M. (2017). The scenario of mutual fund investment through sip in
vellore district. International Journal of Business and Administration Research Review, 1(18),
152.
3. Godase, S. (2000). Long Term Performance of Equity Based Mutual Funds (Systematic
Investment Plan). Twelfth AIMS International Conference on Management.
4. KUMAR, V., & BANSAL, P. (2014). A Study on Investors’ Behavior towards Mutual Funds
in Rohtak, Haryana. International Journal of Engineering and Management Research, 4(1),
224-228. Retrieved from www.ijemr.net
5. SINGH, A. K., & SINGH, K. V. (2016). Study of investor perception towards investment in
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OF MANAGEMENT, 7(2), 115-122. Retrieved from www.jifactor.com
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9. Bansal, Lalit K.; Mutual Funds Management and Working –; Deep and Deep
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10. Amitabh Gupta Quoted by Bansal, Lalit K.; Mutual Funds – Management and
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11. Gururani, Akhilesh; Mutual Funds by Akhilesh; HABSG Consulting; Mumbai; 2007;
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12. Kurian, A.P.; Making Mutual Funds Work for You; Association of Mutual Funds in
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