This is a research work based on the investment behavior of youth in India.

1. A Study on Investment
Behavior of Youth
By:
Shubhra Nalini (MBA/1011/2012)
Kumar Mayank (MBA/1013/2012)
Amit Dubey (MBA/1014/2012)
Deepshikha Tirkey (MBA/1015/2012)

2. Why Invest ?
Investment Period Investment Period
15 years 20 years
Monthly Investment 5000 5000
Total Investment 9,00,000 12,00,000
Assumed Annualized 18% 18%
Returns
Final Corpus 45.96 Lacs 1.17 Crore

3. Need for the Research
Youth is wasted on the young, said Irish playwright George
Bernard Shaw.
Most people in their later stage of life realize that the financial
strain suffered by them could have been avoided if they had
started saving or had invested wisely in their early stage of
earning. It takes very little to ensure financial security if one
begins to plan her/his investment timely.
Our project on the investment behavior of youth focuses on – How
the young generation is managing their money? Are they aware of
the investment options available to them or not? Which is most
likely to be their investment plan and why? The aim of our
research is to overcome the decision making inertia that currently
characterizes youths’ attitude towards investment.

4. Background of the Research
• The pre-liberalized India had a very poor rate of savings and most of the
money earned was spent on consumption rather than accumulation. But in the
post-liberalization period, India saw an upsurge in volume of savings.
• The investment habit of the small investors particularly has undergone a sea
change . So that investment companies continually introduced new types of
funds in an effort to attract investor's capital and maximize assets under
management.
• However investment is increasingly considered as a subject falling under
behavioral science rather than finance or economics
• It is governed more by trends and group behavior rather than rationality and
cold calculations. Investors like consumers are also immensely influenced by
fashions and what is “in-thing”.
• Moreover, investors are unique and are a highly heterogeneous group at the
retail level.

5. Contd…
• It is widely believed that Mutual funds (MFs) and Life Insurances (LIs) are
designed to target small investors, salaried people and others who are
intimidated by the stock market;
• Mutual fund as an investment vehicle is capturing the attention of various
segments of the society, like academicians, entrepreneurs, financial
intermediaries, investors and regulators for varied reasons.
• All this in aggregate, heightens the consumer’s confusion in selection of the
investment instrument.
• Various studies observed that with the structural liberalization policies no
doubt Indian economy is likely to return to a high grow path in few years, at
the same time mutual fund organizations are needed to upgrade their
transparency
With this background, a humble attempt is made in this research to study the
investment behavior of youth.

6. Introduction
• In India, number of investment avenues are available
for the investors. Some of them are marketable and
liquid while others are non marketable and some of
them also highly risky while others are almost risk
less. The people has to choose Proper Avenue among
them, depending upon his specific need, risk
preference, and return expected.
• The investors with higher risk appetite want to
experiment and try new and exotic products in the
name of diversification. This has resulted in
emergence of new options within the same or fresh
asset classes.

7. Contd…
• There are more products available within each
asset class be it Equity, Mutual Fund, Gold, Real
Estate.
• The Mutual Fund industry has emerged as an
important segment of financial market of India,
especially in channelizing the savings of millions of
individuals into the investment in equity and debt
instruments.

8. Problem Statement
• There is not much awareness about the need for
financial protection.
• The study intends to find out the inclination of
youth investors towards different Investment
Instruments like FDs, PPF, Mutual Fund, etc.

9. Objectives
• To study the investment behavior and level of
awareness of youth investors.
• To study the relative preference of investment
instruments.
• To study the influence of importance assigned to
the economic performance attributes of
investment instruments while choosing.
• To compare different investment instruments on
the basis of factors like risk and return
profile, tax saving, etc.

10. Continued…
• To assess the transparency of Mutual Funds with
respect to information available through fact
sheets, offer documents, annual reports &
promotional materials.
• To ascertain the flexibility of Mutual funds in
terms of choosing a scheme that matches the
investor’s investment objective.
• To study the influence of reference groups and
middlemen in investment decisions.
• To find out reason for non-investment.

11. Hypothesis
Investors are not well aware of the investing options they
have.
Youth Investors are less inclined towards mutual fund
investment avenue.
Mutual Fund involves less risk.
Female section of investors are more ignorant towards MF.

12. Research Design & Methodology
Though we have kept the research design
flexible enough to provide opportunity for
considering different aspects of a problem
under study, we are using Exploratory
Research Design.
Later on we moved on to Descriptive
Research Design for Secondary data.

13. Methodology contd…
• Primary data
Primary Data was collected from structured
Questionnaire with 50 respondents.
• Secondary data
Secondary Data was collected from Business
Journals, websites and business news
channels.

14. Sampling Techniques
 Our sample consisted of young investors. With age
groups 25-40.
 Sample size:- 50
 We selected them right from working
professional, businessmen and students.
 We used the Quota sampling technique for our research.

15. Primary Data Analysis

16. Investment Behavior

17. Measure of Central Tendency
Investment Instruments Mean Mode
Saving Accounts 3.89 Rank 8
Fixed Deposits 3.76 Rank 2
Insurance 3.52 Rank 5
Mutual Funds 4.33 Rank 3
Post Office- NSC 4.88 Rank 7
Share and Debentures 5.09 Rank 6
Gold and Silver 4.40 Rank 4
Real Estate 3.40 Rank 1
PPF 5.11 Rank 9

18. Relative Preference of Investment
Instruments
180
160 17
140 PPF
35 12
7 Real Estate
120
16 20 Gold & Silver
100 4 5 10
17 17 14 5 Shares & Deb
80 4 10 10
9 10 9 16 2 Post Office-NSC
19 11 7 14 17
16 14 13 5 Mutual Fund
60 24 7 7 13 11 5 9
17 22 13 5 7 9 7
40 16 4 13 Insurance
22 10 17 14 11
24 11 15 9 9 10 14 Fixed Deposits
20 11 9 13 2
4 9
24 9 4 2 7
2 Savings Acc
15 13 9 7 11 15 9 4
4
0 2
Rank Rank Rank Rank Rank Rank Rank Rank Rank
1 2 3 4 5 6 7 8 9

19. Preferred medium of receiving returns
35% 31%
Dividend Payout
Dividend Reinvestment
Growth in NAV
33%

20. Preferred Investment Period
6% 6%
35% 1-2 yrs
2-5 yrs
53% 5-10 yrs
More than 10 yrs

21. Preference of investment
parameters
120
100 2 4 4 7
12 7 18
17 20 Credit Ratings
80 18
56 Lock in Period
44 24
60 30 42 Company Reputation
32
13 High Return
6
40 5 16 Low Risk
18 24 16
2 Liquidity
32 4 9
20 34 9
24 18 11
7 11 7
0
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

22. The influence of reference groups in
investment decision in mutual funds
8%
19% 33 %
Advertising
Peer Group
14% Banks
26 % Financial Advisor
Others

23. Reason for non investment in
Mutual funds
Other 21
Inefficient Investment Advisor 13
Difficulty In Selection Of Scheme 16
Lack Of Confidence 13
Lack Of Knowledge 31
Bitter Past Experience 6
0 5 10 15 20 25 30 35

24. Level of Awareness about Mutual fund
Totally Ignorant
11% 13%
Partial Knowledge of
21%
Mutual Fund
Aware only of any
55% specific scheme in which
you have invested
Fully aware

25. Type of Mutual funds preferred
5%
12%
37%
Equity Focused MF
Debt Focused MF
32% Balanced Fund
Commodity Funds
15%
Other

26. Mode of investment preferred
30%
One time Investment
70% Systematic Investment
Plan (SIP)

27. Transparency of Mutual Fund
Highly Satisfied 5
Satisfied 24
Average 56
Dissatisfied 10
Highly Dissatisfied 5
0 10 20 30 40 50 60

28. Flexibility of Mutual Fund
Highly Flexible 7
Flexible 30
Average 40
Unflexible 18
Highly Unflexible 5
0 10 20 30 40 50

29. Do past performances of the schemes and market
conditions affect your investment decision
12 %
33 %
Not at all
Somewhat affects
55 %
Strongly affects

30. Alluring feature of MF
120
14
100 31
Tax Benefits
24
80 45
12
Reduction in Risk &
31 31 Transaction Cost
60
45 Better Return & Safety
40 33
14 12
7 Diversification of MF
20 29
24 24 23
0
Rank 1 Rank 2 Rank 3 Rank 4

31. Mutual Fund Ratings On Various
Determinants
250
Overall experience with
200 MF
150 On the basis of tax saving
options
100
On the basis of
50 repurchase price
0 On the basis of fund
portfolio
On the basis of risk
exposure
On the basis of returns

32. Hypothesis: Female section of
investors are more ignorant towards MF
1
1 1
Totally Ignorant
Partial Knowledge
Aware Only Of Any
Specific Scheme
Fully Aware
7

33. Secondary Data Analysis

34. Where do people invest in India
Mutual Fund 3.34 Alternative Assets 0.34
Provident Fund 4.76
Small
Savings Fixed Deposits Fixed Deposits
6.06
30.95 Direct Equity
Savings Deposits 7.13
Insurance
Savings Deposits
Insurance 17.64
Small Savings
Direct Equity 29.78
Provident Fund
Mutual Fund
Alternative Assets
Source: India Wealth Report, 2011
By Karvy Private Wealth

35. AuM Splits between fund types
(as on 31st March 2011)
Source: AMFI data

36. Investment period of retail
investors in India
3.294.6
5.64
Less than 1 month
10.53 1-3 months
3-6 months
6-12 months
57.29
12-24 months
18.65
More than 24 months
Source: AMFI data

37. ASSET-WISE INDIVIDUAL WEALTH IN INDIA
Asset Amount (Rs. In Crore) Proportion (%)
Fixed Deposits and Bonds 26,76,878 30.95
Direct Equity 25,76,317 29.78
Insurance 15,25,735 17.64
Savings Deposits 6,16,917 7.13
Small Savings 5,23,908 6.06
Provident Fund 4,11,901 4.76
Mutual Fund 2,88,543 3.34
Alternative Assets 29,565 0.34
Total 86,49,764 100
Source: India Wealth Report, 2011
By Karvy Private Wealth

38. Findings
• Saving Accounts is the preferred investment
instrument followed by mutual funds , Insurance and
fixed deposits.
• Most investors like to receive the returns from Growth
in NAV(Net Asset Value).
• The period for keeping the money invested for long
term investment is 2-5 years.
• High return is the most preferred investment
parameter.
• Most investors invest in SBI mutual fund followed by
UTI.

39. Contd…
• Lack of knowledge is the main barrier for non
investment in Mutual funds.
• When it comes to awareness level, Most Investors had
partial knowledge of Mutual fund.
• Most Investors had invested in Equity focused Mutual
funds followed by Balanced type of Mutual funds.
• SIP is the most preferred mode of Investment in
Mutual fund.
• Past performance of the Schemes and Market
Conditions Somewhat affects the investment Decision.
• Better Return and Safety is the Most alluring feature of
Mutual fund.

40. Recommendations
• Provide should provide more transparency in
terms of information about schemes and returns
of Mutual Funds.
• To decrease the complexity in procedures of
transferring funds from Mutual Fund to Bank
accounts, i.e. difficulty in encashment.
• To decrease complexity in pulling out of stocks.
• To make the schemes of investments more
understandable.
• To improve the promotional activities more .

41. References
• PWC Report Mutual Fund Summit 2012.
• Mutual Fund saving ka naya tarika Article by AMFI.
• www.amfi.com
• Bloomberg business news channel.
• India Wealth Report 2011 by Karvy Private Wealth.
• Economics Times news paper.
• www.investopedia .com

42. Thank You!