58% investors in capital market put in money in Mutual Funds

New Delhi, June 23 (UNI) Having an advantage over other financial instruments like risk-sharing and wealth creation, mutual funds are fast emerging the most preferred investment routes, a study said here today.

''It was observed from the study that 58 per cent of investors in the capital market preferred to invest in the mutual funds market in the fiscal 2005-06, because of the lower risk, as compared to investment instruments,'' ASSOCHAM President Anil K Agarwal said.

The survey also revealed that mutual funds constitute a big chunk of investors' portfolio because of their essential quality of risk sharing and wealth creation. Mutual funds are available in a wide range of schemes, providing investment opportunities to all.

It was observed that 53 per cent of the respondents prefer tax saving schemes as it is one of the most important aspects for investors.

The open-ended schemes are preferred by 41 per cent of the investors as these investments can be sold out at any point of time.

A smaller amount of investors (only 6 per cent) supported a close-ended scheme as these block investments for a period of time and hence cannot be sold out as and when required.

It was also observed that almost 19 per cent of the people surveyed, received a rate of return of around 10 per cent on their investments. An equal percentage of respondents received rate of returns on their investments ranging between 20-30 per cent.

A majority of the investors (47.72 per cent) received rates of return between 10-20 per cent on investments in mutual funds, while only 14.28 per cent of the surveyed felt, that they received a return above 30 per cent on their invested amount during the last financial year 2005-2006.

On the motive for investments, the perception of 54 per cent of the respondents has been for future principal, while 38 per cent felt that their investment objectives were current principal.

The remaining 8 per cent, however, felt that their investment objectives were for other purposes.

The study was based on the survey of 210 investors comprising financial executives businessmen, chartered accountants, advocates and university lecturers, who invested in various savings instruments in the capital market in 2005-06.

UNI CS RA KN1817