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Project on mutual fund Project on mutual fund Document Transcript

  • An Organisational Study at Reliance Mutual FundSubmitted in the partial fulfillment of the requirement for the Degree of Master of Business Administration Of Bangalore University Submitted by Adalat Das Mahant Reg no.:11RSCMA003 Under the guidance of Prof. Reji M. Garden City College Bangalore-560049 Page 1
  • DECLARATIONI, Adalat Das Mahant hereby declare that Industrial Training Report titled “AnOrganisational Study at Reliance industry ltd. Mutual Fund, Banglore” submittedin the partial fulfillment of the requirement for the Degree of Master of BusinessAdministration is my original work and is not submitted for the award of any Degree,Diploma, Fellowship or other similar title or awards.Place: Bangalore Adalat Das MahantDate: Reg no: 11RSCMA003 Page 2
  • ACKNOWLEDGEMENTAnytime we deny the acknowledgement of God we are undermining the entire basis for which our worldexists. Indeed, the acknowledgement of God is not synonymous with religion. I thank the AlmightyGod for blessing me with this life full of opportunities to make this world a better place for each one ofus.I express my heartfelt thanks to Dr. Joseph V.G., Chairman, Garden City Group of Institutions,Bangalore for providing me an opportunity for carrying out this study.My special thanks to Prof. N. Bharathi, Principal, Garden City College, Bangalore, who had been aconstant support throughout the completion of the study.My special words of gratitude to Dr. K.V. Subramanian, Director, Department of MBA, who had beena mentor and had supported me by his vast knowledge, experience and wisdom.I take the opportunity to thank Mr. Shayan Pal, Head of the Department, MBA, who has motivated usto achieve new heights and work creatively.I would also like to thank my guide Mr. Reji M., who have immensely guided, supported and helped mein the process of completion of my Organizational Study through his constant encouragement andsuggestions.My sincere and humble thanks to all my faculty members, my beloved parents, my dear friends andeach and everyone who have been never ending source of knowledge, inspiration and support to me. Signature of the Student Adalat Das Mahant (11RSCMA003) Page 3 View slide
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  • Executive summaryThe project deals with understanding of mutual fund and analysis, during my project, I got theopportunity to understand the concept, various AMC (Asset mgmt company) issuing various mutualfund according to the need of investor. During my project, I came to know important regulations of SEBIfor mutual fund operation. Project deals with an analysis of RELIANCE MUTUAL FUND various schemes in which I triedto came out with a result which is best, for that purpose I conducted market research. During the projectI suggested the investors how to invest and in which fund they should invest. During the project, I made an endeavour to understand the awareness of mutual fund amongthe various classes of investors. The data collected mainly through fact sheets of funds, broachers, andquestionnaire and also from various site of Reliance mutual fund etc. the data analyzed andrecommendation is given on the basis of conclusions. Page 5
  • INDUSTRY PROFILE A mutual represents a vehicle for collective investment. Till 1986, the Unit Trust of India wasthe only mutual fund in India. Since then public sector banks and insurance companies have beenallowed to set up subsidiaries to undertake mutual fund business. So, State Bank of India, CanaraBank, LIC, GIC, and few other public sector banks entered the mutual fund industry. In 1992, the mutual fund industry was opened to the private sector, and a number of privatesector mutual fund such as Birla Mutual Fund, DSP Merrill Lynch Mutual Fund, Kotak MahindraMutual Fund, Morgan Stanley Mutual Fund, Tata Mutual Fund, Prudential ICICI Mutual Fund,Reliance Mutual Fund, Standard Chartered Mutual Fund, Templeton Mutual Fund, IDBI- PrincipalMutual Fund have been set up. The process of consolidation began in recent years. At present, there are about 30 mutual funds managing nearly 1000 schemes. While themutual fund industry in India has registered a healthy growth over the last 15 years, it is still very smallin relation to other intermediaries like banks and insurance companies. Mutual funds are one of thebest investments ever created because they are very cost efficient and very easy to invest in. bypooling money together in a mutual fund, investors can purchase stocks or bonds with much lowertrading costs than if they tried to do it on their own. But the biggest advantage to mutual funds isdiversification.ORIGIN OF MUTUAL FUNDS A review of the history of investment trusts, unit trusts and mutual funds indicates that the earliestinvestment trust called „Societe General de Belgique‟ was formed in Belgium in 1822. The institutionwas formed by the Royal family of Holland before the separation of Belgium and Holland. Theinstitution acquired securities in a wide range of companies and practiced the precept ofdiversification. Later, the investment trust concept attracted many countries in Europe andconsiderable progress was achieved. Page 6
  • The concept of investment trust gained momentum in Great Britain and the first investment trustcalled „The Foreign and Colonial Government Trust‟ was founded in London in 1868. Later in 1873,Robert Fleming at Dundee established the Scottish American Trust. During the period 1925-29, justbefore the depression, substantial expansion of investment trust moment happened in US. Thebanking houses promoted investment trusts to unload the un-saleable securities and to control thecompanies without investing substantial amounts of their own money. Since there were very littlerules and regulations, mismanagement in these institutions was wide spread. During the greatdepression on 1930s the investors had staggering losses from these trusts. In 1933, the US Congress directed the Securities and Exchange Commission (SEC) to investigatethe operations of the American Investment Trusts. The SEC recommended the passage PFlegislation, which materialized in 1940. The Investment Companies Act of 1940 provides rules andregulation for the establishment and management of Mutual Funds. The concept of mutual fund ispopular in the US, and they are regulated by the Investment Companies Act 1940. The actcategorizes investment companies broadly into Unit Investment Trusts and Managed InvestmentCompanies. Internationally, Mutual funds in the US are synonymous with unit trusts in the UK. Page 7
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  • ORGANIZATIONAL HIERARCHY Page 9
  • BRANCH ORGANIZATIONAL HIERARCHY SDM Marketing Manager Finance Sales ClaimHR Dept. IT Dept. Dept. Dept. Dept. AO AO AO AO AO AAO AAO AAO AAO AAO HGS HGS HGS HGS HGSAssistance Assistance Assistance Assistance Assistance Record Record Record Record Record clerk clerk clerk clerk clerkSub Staffs Sub Staffs Sub Staffs Sub Staffs Sub Staffs Page 10
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  • FUNCTIONAL AREAS OF THE RELIANCE INDUSTRY LTD. MUTUAL FUND BANGLORE HUMAN RESOURCE MANAGEMENT FINANCING DEPARTMENT SALES DEPARTMENT INFORMATION TECHNOLOGY CLAIM DEPARTMENT Page 12
  • HUMAN RESOURCE DEVELOPMENTHuman Resource Development (HRD) is the frameworks for helping employees develop theirpersonal and organizational skills, knowledge, and abilities. Human Resource Development includessuch opportunities as employee training, employee career development, performance managementand development, coaching, mentoring, succession planning, key employee identification, tuitionassistance, and organization development. The focus of all aspects of Human Resource Development is on developing the most superiorworkforce so that the organization and individual employees can accomplish their work goals inservice to customers.Organizations have many opportunities for human resources or employee development, both withinand outside of the workplace.Human Resource Development can be formal such as in classroom training, a college course, or anorganizational planned change effort. Or, Human Resource Development can be informal as inemployee coaching by a manager. Healthy organizations believe in Human Resource Developmentand cover all of these bases.The field of HRD or Human Resource Development encompasses several aspects of enabling andempowering human resources in organization. Whereas earlier HRD was denoted as managingpeople in organizations with emphasis on payroll, training and other functions that were designed tokeep employees happy, the current line of management thought focuses on empowering andenabling them to become employees capable of fulfilling their aspirations and actualizing theirpotential. This shift in the way human resources are treated has come about due to the prevailingnotion that human resources are sources of competitive advantage and not merely employeesfulfilling their job responsibilities. The point here is that the current paradigm in HRD treats employeesas value creators and assets based on the RBV or the Resource Based View of the firm that hasemerged in the SHRM (Strategic Human Resource Management) field.The field of HRD spans several functions across the organization starting with employee recruitmentand training, appraisals and payroll and extending to the recreational and motivational aspects ofemployee development.Indeed, one reason for the emergence of the RBV or the SHRM paradigm is that with the advent ofthe service sector and the greater proportion of companies in the service sector, employees are notmerely a factor of production like land, labour and capital but in fact, they are sources of competitiveadvantage. This is characterized by many CEO‟s calling employees their chief assets and valuingtheir contribution accordingly. As a matter of fact, many IT and Financial Services companies routinelyrefer to employees as the value creators and value enhancers rather than just resources doing theirjob. Page 13
  • What this has meant is that the field of HRD has become prominent and important for organizationsand has morphed into a function that takes its place among other support functions in organizationsand indeed, it is the main driver of competitive advantage.Further, the field of HRD now has taken on a role that goes beyond employee satisfaction andinstead, the focus now is on ensuring that employees are delighted with the working conditions andperform their jobs according to their latent potential which is brought to the fore. This has resulted inthe HRD manager and the employees of the HRD department becoming partners in the organization‟sprogress instead of just yet another line function. Further, the HR managers now routinely interactwith the functional managers and the people managers to ensure high levels of job satisfaction andfulfilment. The category of people managers is a role that has been created in many multinationalcompanies like Fidelity and IBM to specifically look into the personality related aspects of employeesand to ensure that they bring the best to the table.Finally, HRD is no longer just about payroll or timekeeping and leave tracking. On the other hand,directors of HRD in companies like Infosys are much sought after for their inputs into the whole rangeof activities spanning the function and they are expected to add value rather than just consumeresources. With this introduction, we will be moving into the module covering HRD with each aspect ofthe HRD function and the associated topics being covered here. It is hoped that the readers wouldgain an overall perspective about HRD after going through the HRD module.This module covers the HRD function in organizations from a wide variety of perspectives. At theoutset, after the introduction to the module in the previous article, it is time to look at some theoreticalperspectives about the HRD function. When the field of management science and organizationalbehaviour was in its infancy, the HRD function was envisaged as a department whose sole role wasto look after payroll and wage negotiation. This was in the era of the assembly line and manufacturingwhere the HRD function‟s purpose was to check the attendance of the employees, process their payand benefits and act as a mediator in disputes between the management and the workers.Concomitant with the rise of the services sector and the proliferation of technology and financialservices companies, the role of the HRD function changed correspondingly.For instance, the RBV or the Resource Based View of organizations was conceptualized to place theHRD function as a department that would leverage the human resources from the perspective of thembeing sources of strategic advantage.The shift in the way the human resources were viewed as yet another factor of production to beingviewed as sources of competitive advantage and the chief determinant of profits was mainly due tothe changing perceptions of the workforce being central to the organization‟s strategy. For instance,many software and tech companies as well as other companies in the service sector routinely identifytheir employees as the chief assets and something that can give them competitive advantage over Page 14
  • their rivals. Hence, the HRD function in these sectors has evolved from basic duties and is nowlooked upon as a critical support function.With the advent of globalization and the opening up of the economies of several nations, there wasagain a shift in the way the HRD function was conceptualized. In line with the RBV and the view of theresources as being international and ethnically diverse, the HRD function was thought of to be thebridge between the different employees in multiple locations and the management. Further, thepresent conceptualization also means that employees have to be not only motivated but alsoempowered and enabled to help them actualize their potential. The point here is that no longer wereemployees being treated like any other asset. On the contrary, they were the centre of attraction andattention in the changed paradigm. This called for the HRD function to be envisaged as fulfilling a rolethat was aimed at enabling and empowering employees instead of being just mediators andnegotiators.Finally, the theory of HRD also morphed with the times and in recent years, there has been aperceptible shift in the way the HRD function has come to encompass the gamut of activities rangingfrom routine tasks like hiring and training and payroll to actually being the function that plays a criticaland crucial role in the employee development. The theory has also transformed the function frombeing bystanders to the organizational processes to one where the HRD function is the layer betweenthe management and employees to ensure that the decisions made at the top are communicated tothe employees and the feedback from the employees is likewise communicated to the topPERSONNEL MANAGEMENTPersonnel management can be defined as obtaining, using and maintaining a satisfied workforce. Itis a significant part of management concerned with employees at work and with their relationshipwithin the organization.According to Flippo, “Personnel management is the planning, organizing, compensation, integrationand maintenance of people for the purpose of contributing to organizational, individual and societalgoals.”According to Brech, “Personnel Management is that part which is primarily concerned with humanresource of organization.”NATURE OF PERSONNEL MANAGEMENT1. Personnel management includes the function of employment, development and compensation-These functions are performed primarily by the personnel management in consultation with otherdepartments. Page 15
  • 2. Personnel management is an extension to general management. It is concerned withpromoting and stimulating competent work force to make their fullest contribution to the concern.3. Personnel management exist to advice and assist the line managers in personnel matters.Therefore, personnel department is a staff department of an organization.4. Personnel management lays emphasize on action rather than making lengthy schedules,plans, and work methods. The problems and grievances of people at work can be solved moreeffectively through rationale personnel policies.5. It is based on human orientation. It tries to help the workers to develop their potential fully tothe concern.6. It also motivates the employees through its effective incentive plans so that the employeesprovide fullest co-operation.7. Personnel management deals with human resources of a concern. In context to humanresources, it manages both individual as well as blue- collar workers.ROLE OF PERSONNEL MANAGERPersonnel manager is the head of personnel department. He performs both managerial and operativefunctions of management. His role can be summarized as :1. Personnel manager provides assistance to top management- The top management are thepeople who decide and frame the primary policies of the concern. All kinds of policies related topersonnel or workforce can be framed out effectively by the personnel manager.2. He advices the line manager as a staff specialist- Personnel manager acts like a staff advisorand assists the line managers in dealing with various personnel matters.3. As a counsellor,- As a counsellor, personnel manager attends problems and grievances ofemployees and guides them. He tries to solve them in best of his capacity.4. Personnel manager acts as a mediator- He is a linking pin between management and workers.5. He acts as a spokesman- Since he is in direct contact with the employees, he is required to actas representative of organization in committees appointed by government. He represents company intraining programmes.FUNCTIONS OF PERSONNEL MANAGEMENTFollowing are the four functions of Personnel Management:1. Manpower Planning2. Recruitment3. Selection Page 16
  • 4. Training and DevelopmentManpower Planning which is also called as Human Resource Planning consists of putting rightnumber of people, right kind of people at the right place, right time, doing the right things for whichthey are suited for the achievement of goals of the organization. Human Resource Planning has gotan important place in the arena of industrialization. Human Resource Planning has to be a systemsapproach and is carried out in a set procedure. The procedure is as follows:1. Analyzing the current manpower inventory2. Making future manpower forecasts3. Developing employment program4. Design training programSTEPS IN MANPOWER PLANNING1. Analyzing the current manpower inventory- Before a manager makes forecast of future manpower,the current manpower status has to be analyzed. For this the following things have to be noted-• Type of organization• Number of departments• Number and quantity of such departments• Employees in these work unitsOnce these factors are registered by a manager, he goes for the future forecasting.2. Making future manpower forecasts- Once the factors affecting the future manpower forecastsare known, planning can be done for the future manpower requirements in several work units.The Manpower forecasting techniques commonly employed by the organizations are as follows:a. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique.b. Trend Analysis: Manpower needs can be projected through extrapolation (projecting past trends),indexation (using base year as basis), and statistical analysis (central tendency measure).c. Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or ina division.d. Work Force Analysis: Whenever production and time period has to be analysed, due allowanceshave to be made for getting net manpower requirements.e. Other methods: Several Mathematical models, with the aid of computers are used to forecastmanpower needs, like budget and planning analysis, regression, new venture analysis. Page 17
  • 3. Developing employment program- Once the current inventory is compared with future forecasts, theemployment program can be framed and developed accordingly, which will include recruitment,selection procedures and placement plans.4. Design training program - These will be based upon extent of diversification, expansion plans,development program ,etc. Training program depend upon the extent of improvement in technologyand advancement to take place. It is also done to improve upon the skills, capabilities, knowledge ofthe workers.IMPORTANCE OF MANPOWER PLANNING1. Key to managerial functions- The four managerial functions, i.e., planning, organizing, directingand controlling are based upon the manpower. Human resources help in the implementation of allthese managerial activities. Therefore, staffing becomes a key to all managerial functions.2. Efficient utilization- Efficient management of personnels becomes an important function in theindustrialization world of today. Setting of large scale enterprises require management of large scalemanpower. It can be effectively done through staffing function.3. Motivation- Staffing function not only includes putting right men on right job, but it alsocomprises of motivational programmes, i.e., incentive plans to be framed for further participation andemployment of employees in a concern. Therefore, all types of incentive plans becomes an integralpart of staffing function.4. Better human relations- A concern can stabilize itself if human relations develop and arestrong. Human relations become strong trough effective control, clear communication, effectivesupervision and leadership in a concern. Staffing function also looks after training and development ofthe work force which leads to co-operation and better human relations.5. Higher productivity- Productivity level increases when resources are utilized in best possiblemanner. Higher productivity is a result of minimum wastage of time, money, efforts and energies. Thisis possible through the staffing and its related activities (Performance appraisal, training anddevelopment, remuneration) Page 18
  • NEED OF MANPOWER PLANNINGManpower Planning is a two-phased process because manpower planning not only analyses thecurrent human resources but also makes manpower forecasts and thereby draw employmentprogrammes.Manpower Planning is advantageous to firm in following manner:1. Shortages and surpluses can be identified so that quick action can be taken wherever required.2. All the recruitment and selection programmes are based on manpower planning.3. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffingcan be avoided.4. It also helps to identify the available talents in a concern and accordingly training program canbe chalked out to develop those talents.5. It helps in growth and diversification of business. Through manpower planning, humanresources can be readily available and they can be utilized in best manner.6. It helps the organization to realize the importance of manpower management which ultimatelyhelps in the stability of a concern.TYPES OF RECRUITMENT:1. INTERNAL RECRUITMENT - is a recruitment which takes place within the concern ororganization. Internal sources of recruitment are readily available to an organization. Internal sourcesare primarily three - Transfers, promotions and Re-employment of ex-employees. Re-employment ofex-employees is one of the internal sources of recruitment in which employees can be invited andappointed to fill vacancies in the concern. There are situations when ex-employees provideunsolicited applications also.Internal recruitment may lead to increase in employee‟s productivity as their motivation levelincreases. It also saves time, money and efforts. But a drawback of internal recruitment is that itrefrains the organization from new blood. Also, not all the manpower requirements can be metthrough internal recruitment. Hiring from outside has to be done.Internal sources are primarily 3 typesa. Transfersb. Promotions (through Internal Job Postings) and Page 19
  • c. Re-employment of ex-employees - Re-employment of ex-employees is one of the internalsources of recruitment in which employees can be invited and appointed to fill vacancies in theconcern. There are situations when ex-employees provide unsolicited applications also.2. EXTERNAL RECRUITMENT - External sources of recruitment have to be solicited from outside theorganization. External sources are external to a concern. But it involves lot of time and money. Theexternal sources of recruitment include - Employment at factory gate, advertisements, employmentexchanges, employment agencies, educational institutes, labor contractors, recommendations etc.a. Employment at Factory Level - This a source of external recruitment in which the applicationsfor vacancies are presented on bulletin boards outside the Factory or at the Gate. This kind ofrecruitment is applicable generally where factory workers are to be appointed. There are people whokeep on soliciting jobs from one place to another. These applicants are called as unsolicitedapplicants. These types of workers apply on their own for their job. For this kind of recruitmentworkers have a tendency to shift from one factory to another and therefore they are called as “badli”workers.b. Advertisement - It is an external source which has got an important place in recruitmentprocedure. The biggest advantage of advertisement is that it covers a wide area of market andscattered applicants can get information from advertisements. Medium used is Newspapers andTelevision.c. Employment Exchanges - There are certain Employment exchanges which are run bygovernment. Most of the government undertakings and concerns employ people through suchexchanges. Now-a-days recruitment in government agencies has become compulsory throughemployment exchange.d. Employment Agencies - There are certain professional organizations which look towardsrecruitment and employment of people, i.e. these private agencies run by private individuals supplyrequired manpower to needy concerns.e. Educational Institutions - There are certain professional Institutions which serves as an externalsource for recruiting fresh graduates from these institutes. This kind of recruitment done through sucheducational institutions is called as Campus Recruitment. They have special recruitment cells whichhelp in providing jobs to fresh candidates.f. Recommendations - There are certain people who have experience in a particular area. Theyenjoy goodwill and a stand in the company. There are certain vacancies which are filled byrecommendations of such people. The biggest drawback of this source is that the company has torely totally on such people which can later on prove to be inefficient.g. Labour Contractors - These are the specialist people who supply manpower to the Factory orManufacturing plants. Through these contractors, workers are appointed on contract basis, i.e. for a Page 20
  • particular time period. Under conditions when these contractors leave the organization, such peoplewho are appointed have to also leave the concern.Employee Selection is the process of putting right men on right job. It is a procedure of matchingorganizational requirements with the skills and qualifications of people. Effective selection can bedone only when there is effective matching. By selecting best candidate for the required job, theorganization will get quality performance of employees. Moreover, organization will face less ofabsenteeism and employee turnover problems. By selecting right candidate for the required job,organization will also save time and money. Proper screening of candidates takes place duringselection procedure. All the potential candidates who apply for the given job are tested.But selection must be differentiated from recruitment, though these are two phases of employmentprocess. Recruitment is considered to be a positive process as it motivates more of candidates toapply for the job. It creates a pool of applicants. It is just sourcing of data. While selection is anegative process as the inappropriate candidates are rejected here. Recruitment precedes selectionin staffing process. Selection involves choosing the best candidate with best abilities, skills andknowledge for the required job.The Employee selection Process takes place in following order-1. Preliminary Interviews- It is used to eliminate those candidates who do not meet the minimumeligibility criteria laid down by the organization. The skills, academic and family background,competencies and interests of the candidate are examined during preliminary interview. Preliminaryinterviews are less formalized and planned than the final interviews. The candidates are given a briefup about the company and the job profile; and it is also examined how much the candidate knowsabout the company. Preliminary interviews are also called screening interviews.2. Application blanks- The candidates who clear the preliminary interview are required to fillapplication blank. It contains data record of the candidates such as details about age, qualifications,reason for leaving previous job, experience, etc.3. Written Tests- Various written tests conducted during selection procedure are aptitude test,intelligence test, reasoning test, personality test, etc. These tests are used to objectively assess thepotential candidate. They should not be biased.4. Employment Interviews- It is a one to one interaction between the interviewer and the potentialcandidate. It is used to find whether the candidate is best suited for the required job or not. But suchinterviews consume time and money both. Moreover the competencies of the candidate cannot bejudged. Such interviews may be biased at times. Such interviews should be conducted properly. Nodistractions should be there in room. There should be an honest communication between candidateand interviewer.5. Medical examination- Medical tests are conducted to ensure physical fitness of the potentialemployee. It will decrease chances of employee absenteeism. Page 21
  • 6. Appointment Letter- A reference check is made about the candidate selected and then finallyhe is appointed by giving a formal appointment letter.Training of employees takes place after orientation takes place. Training is the process of enhancingthe skills, capabilities and knowledge of employees for doing a particular job. Training process mouldsthe thinking of employees and leads to quality performance of employees. It is continuous and neverending in nature.IMPORTANCE OF TRAININGTraining is crucial for organizational development and success. It is fruitful to both employers andemployees of an organization. An employee will become more efficient and productive if he is trainedwell.Training is given on four basic grounds:1. New candidates who join an organization are given training. This training familiarizes them withthe organizational mission, vision, rules and regulations and the working conditions.2. The existing employees are trained to refresh and enhance their knowledge.3. If any updations and amendments take place in technology, training is given to cope up withthose changes. For instance, purchasing a new equipment, changes in technique of production,computer implantment. The employees are trained about use of new equipments and work methods.4. When promotion and career growth becomes important. Training is given so that employeesare prepared to share the responsibilities of the higher level job.The benefits of training can be summed up as:1. Improves morale of employees- Training helps the employee to get job security and jobsatisfaction. The more satisfied the employee is and the greater is his morale, the more he willcontribute to organizational success and the lesser will be employee absenteeism and turnover.2. Less supervision- A well trained employee will be well acquainted with the job and will needless of supervision. Thus, there will be less wastage of time and efforts.3. Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills requiredfor doing a particular job. The more trained an employee is, the less are the chances of committingaccidents in job and the more proficient the employee becomes.4. Chances of promotion- Employees acquire skills and efficiency during training. They becomemore eligible for promotion. They become an asset for the organization.5. Increased productivity- Training improves efficiency and productivity of employees. Well trainedemployees show both quantity and quality performance. There is less wastage of time, money andresources if employees are properly trained. Page 22
  • WAYS/METHODS OF TRAINING Training is generally imparted in two ways: On the job training- On the job training methods are those which are given to the employees withinthe everyday working of a concern. It is a simple and cost-effective training method. The in-proficientas well as semi- proficient employees can be well trained by using such training method. Theemployees are trained in actual working scenario. The motto of such training is “learning by doing.”Instances of such on-job training methods are job-rotation, coaching, temporary promotions, etc.Off the job training- Off the job training methods are those in which training is provided away from theactual working condition. It is generally used in case of new employees. Instances of off the jobtraining methods are workshops, seminars, conferences, etc. Such method is costly and is effective ifand only if large number of employees have to be trained within a short time period. Off the jobtraining is also called as vestibule training, i.e., the employees are trained in a separate area( may bea hall, entrance, reception area, etc. known as a vestibule) where the actual working conditions areduplicatedTraining methods pertain to the types of training that can be provided to employees to sharpen theirexisting skills and learn new skills. The skills that they learn can be technical or soft skills and for allcategories of skills, some training methods are suggested here. The training methods can range fromonsite classroom based ones, training at the office during which employees might or not might checktheir work, experiential training methods which are conducted in resorts and other places where thereis room for experiential learning. Training methods include many types of training tools andtechniques and we shall discuss some of the commonly employed tools and techniques. For instance,it is common for trainers to use a variety of tools like visual and audio aids, study material, props andother enactment of scene based material and finally, the experiential tools that include sports andexercise equipment.If we take the first aspect of the different training methods that are location based, we would infer fromthe explanation that these training methods include the specific location based ones and would rangefrom classroom training done at the trainers‟ location to the ones done on the office premises.Further, the experiential training methods can include use of resorts and other nature based locationsso that employees can get the experience of learning through practice or the act itself rather thanthrough study material. It needs to be remembered that the trainings conducted in the office premisesoften involve employees taking breaks to check their work and hence might not be ideal from the pointof view of the organizations. However, provision can be done to locate the training rooms away fromthe main buildings so that employees can be trained in a relaxed manner. For instance, Infosys has Page 23
  • training centres that are exclusively built for training and these centres give the employees enough scope and time for learning new skills. The next aspect of the training methods includes the use of visual and audio aids, study material, props and equipment. Depending on the kind of training that is being imparted, there can be a mechanism to use the appropriate tools and techniques based on the needs of the trainers and the trainees. The use of the training material often indicates the thoroughness of the training program and the amount of work that the trainers have put in to make the training successful. Of course, if the training material is good, it also means that the employees would benefit from the scope and depth of the material though they need to invest time and energy as well. Finally, the bottom line for any training to be successful is the synergy between the trainers and the trainees and this is where the HRD function can act as a facilitator for effective trainings and ensure that the trainers and trainees bond together and benefit in a mutual process of understanding and learning. In conclusion, there are various ways to approach trainings and some of the methods discussed above would be good starting points for follow up action and partnership between the training agencies and the organizations. AREAS OF PROGRAMMES AT HRD CENTRE :o NON EXECUTIVE ENHANCNG AGENT SKILLS MUTISKILL ELECTRONCS COMPUTER UNIT TRAININGo EXECUTIVE COMPUTER MANAGERIAL GENERAL MANAGEMENT MANAGERIAL FUNCTION Page 24
  • FINANCE DEPARTMENT Finance is the life blood of business. Finance is the base of all corporate activitiesin the day to day world. Management of finance is broadly concerned with the acquisitionand use of funds by a business firm. Reliance mutual fund has a very efficient Finance Department headed by ManagerFinance. All the Finance Department staffs are professionals. Finance Department consist ofa team of professionals headed by Manager Finance, having sufficient industry experience inthe field of accounting, costing, taxation, company law and financial managementOBJECTIVES OF FINANCE DEPARTMENT 1. To manage & account for the financial resource of the organization, to forecast its requirement in the future and plan accordingly and to check for deviation. 2. Report the financial performance of the organization, to comply with the government rules and regulation.FUNCTIONS OF FINANCE DEPARTMENTThe main functions of finance department are defined as follows. 1. Recording of day-to-day business transaction. 2. Receiving payments from customers and accounting these funds. 3. Preparations of sales budgets and revenue budgets and expenditure budgets on a quarterly basis. 4. Preparations and, maintenance of costing records. 5. Preparations of fund flow and cash flow statement for every month. 6. Preparing and filling of quarterly and final income tax returns. 7. Preparations and implementation of cost reduction and cost control methods 8. Conduct and co-ordinate internal and stationary audits. 9. Perpetual stock verification and asset evaluation. Page 25
  • JOB DESCRIPTION OF PEOPLE IN FINANCE DEPARTMETResponsibility of people in finance department Establishing and controlling the financial systems and administrative services ofthe organization, and providing financial information to Board of Directors.MANAGER (FINANCE)Main duties Directing the establishment of financial/accounting principles, procedures and practices in line with legal and corporate requirements. Ensuring accurate and timely financial reports and forecasts for the whole organisation so as to provide a clear insight into its financial condition. Ensuring that the profits of the organisation are protected through the establishment of effective financial controls; implementing and maintaining appropriate management accounting and reporting systems, budgetary controls and expenditure procedures.ADMINISTRATIVE OFFICER (FINANCE)Main duties Providing accurate and timely financial reports and forecasts and general accounting and administrative services. Ensuring effective costing and contribution analysis. Implementing policies to ensure the security of funds and assets.CASHIERMain duties Maintain an awareness of all promotions and advertisements. Accurately and efficiently ring on registers and accurately maintain all cash and media at the registers. Communicate customer requests to top management. Page 26
  • INTERNAL AUDIT The audit of all branch office departments of the corporation is completing every yearfinancial year. In keeping with practice of improving our systems and procedures through theuse of IT as a tool, audit packages are being used so that our auditors are able to carry out theaudit in a Front End Applications package environment. INSPECTION The inspection of all the branches of the corporation in India is completing within time schedule. Implementation of inspection package in all our offices led to transparency by on- line report writing, acceptance of compliance and closure process. VIGILANCE Special efforts were made to focus on disposal of vigilance cases pending for more than one year. Besides expediting disposal of vigilance cases, emphasis is also laid on preventive vigilance through the dissemination of information on areas susceptible to vigilance. NOMINEE DIRECTORS The corporation appoints nominee directors on the board of the companies where it has substantial stake by way of debt or equity. Nominees are officials of the corporation who are in service or retired. Adequate systems are in place to review and guide the nominee directors from time to time. Nominee directors provide feedback with regard to operations problems, prospects and corporate governance standards etc. RISK MANAGEMENT Corporation is the largest institutional investor in the financial market and its staggering fund size which is placed in varying asset classes is exposed to various financial risks. To mitigate the investment risks arising out of market risk, credit risk, interest rate risk and other risks inherent in the financial market, a distinct full-fledged Risk management structure has been created in the corporation. Page 27
  • BOARD MEETINGS Board meetings as per regulations are generally held once in three months. In additionto policy matters, the board provides strategic direction for execution ensures financialdiscipline and accountability to the policy holders and also ensures the interest of the policyholders and stakeholders. Page 28
  • SALES DEPARTMENT Manager (Sales)Administrative Officers (AO) Asst. Administrative Officers (AAO) Higher Grade Staffs Assistance Record clerk Sub Staff Page 29
  • SALES DEPARTMENT Sales management is a business discipline which is focused on the practicalapplication of sales techniques and the management of a organizational sales operations. It isan important business function as net sales through the sale of products and services andresulting profit drive most commercial business. These are also typically the goals andperformance indicators of sales management. The art of meeting the sales targets effectively through meticulous planning andbudgeting refers to sales management. Sales Management helps to extract the best out ofemployees and achieve the sales goals of the organization in the most effective ways.Process of Sales Management1. Sales Planning Marketers must plan things well in advance for the best results. It is essential to have concrete plans. Mere guess works do not help in business. Know product well. Sales professionals must know the benefits of the product for the consumers to believe them. Identify the target market. Sales Planning makes the products available to the end users at the right time and at the right place. Sales Planning helps the marketers to analyse the customer demands and respond efficiently to fluctuations in the market. Devise appropriate strategies to increase the sales of the products.2. Sales Reporting Sales strategies are implemented in this stage. Check the effectiveness of the various strategies. Find out whether they are bringing the desired results or not. Page 30
  • Ask the sales team to submit reports of what all they have done throughout the week. The management must sit with the sales team frequently to assess their performance and chalk out future course of actions.3. Sales Process Sales process refers to various activities which help in the timely achievement of sales targets for the successful functioning of an organization. Sales Process includes various strategies and techniques employed by an individual to achieve sales goals within the stipulated time frame.MANAGER (SALES) Sales manager is the typical title of someone whose role is sales management. Therole typically involves sales planning, human resources, talent development, leadership andcontrol of resources such as organizational assets.Main duties Manage and coordinate all marketing, advertising and promotional staff and activities Conduct market research to determine market requirements for existing and future products Analysis of customer research, current market conditions and competitor information Develop and implement marketing plans and projects for new and existing products Page 31
  • MARKETING ACTIVITIES IN RELIANCE MUTUAL FUNDPRODUCT DEVELOPMENT In a competitive market, there is a greater need to provide insurance products that meetthe needs of customers RMF therefore a wide variety of products which fulfils the needs ofdifferent segments of the society. As at the end of the financial year 2009-10, the corporationhad 54 plans available for sale.FIELD PERSONNEL TRAINING (FPT) The theme of FPT is professionalism. For the purpose, training in a big way isconducting across all zones using reputed International / National Training Institutions.BANCASSURANCE & ALTERNATE CHANNELS Banc assurance is the term used to describe the partnership or relationship between abank and an insurance company whereby the insurance company uses the bank sales channelin order to sell insurance products.DIRECT MARKETING This vertical is started with an objective of “creating new systems for businessgeneration, sales process monitoring and business processing with a view to reach out tountapped markets and provide improved buying experience to customers.” In a short period, the channel has expanded and professionally trained Direct SalesExecutives (DSEs) to provide financial advice to prospective customers. The main focus of the channel was setting up systems and processes. A state of art leadmanagement system has been established to provide easy access to prospective customers toreach out to LIC to buy a policy. Such leads captured through our website.www.reliancemutualfund.com is passed on to well trained DSEs on real time basis who cancontact the customer instantly.AGENTS Most people have their first contact with an insurance company through an insurancesales agent. These workers help individuals, families, and businesses select insurance policies Page 32
  • that provide the best protection for their lives, health, and property. Insurance sales agentscommonly referred to as “producers” in the insurance industry. a) Agency Strength The total number of agents on our role is 140280 as at 31.03.2011 as against 134485as on 31.03.2012. b) Agents’ Club Membership In order to motivate and recognize high performers amongst agents a premium clubcalled the Corporate Club. The other 5 clubs which were formed to recognize agents, whoperform consistently year after year.MEMBERS OF VARIOUS AGENTS CLUBS Name of the Club Corporate Chairman Zonal Manager Divisional Manager Branch Manager Distinguished Agents Page 33
  • c) Career Agents Scheme The corporation has a scheme of Urban Career Agents and Rural Career Agentsto promote the cause of professionalizing the agency force. They are given Stipends at thestart of their career to enable them to settle down in the profession. d) Chief mutual fund Advisor Scheme The corporation introduced the above scheme with an objective of increasing itsmarket presence through more agents by utilizing capabilities of existing high performingagents for organizational growth. e) Authorised Agents In tune with the increasing customer expectation for more conveniences in premiumpayments and servicing, the corporation has empowered select agents to collect the renewalpremium through “Premium Points”. Page 34
  • CLAIMS DEPARTMENT The Claims department is headed by the claims managerFUNCTIONS OF CLAIMS DEPARTMENT The claims department is responsible for the claim settlements arising from thecustomers. In case of a life insurance claim the department gets information directly from thecustomer, the department authenticates the policy details and issues a claim number, and thenassigns the surveyor for valuation. After proper enquiry, fund is collected and delivered to thecustomer. In case of reimbursement process, the customer will have to submit documents andthey will make the payment within 3 days of completion of documentation.Survival Benefit/Maturity Claims: RMF settles survival benefit/maturity claims on or before the due date. Policyholders are intimated well in advance by the Branch Office which services the policy regarding the payment, and the necessary Discharge Voucher is also sent for execution by the assured. In case the policyholder does not get any intimation from the Branch Office concerned, he/she should contact them, quoting the Policy Number. Survival Benefit payment up to Rs.60,000/- are settled without insisting for Policy Bond and Discharge Voucher.Death Claims: If the life assured dies during the term of the policy, death claim arises. The death of the policyholder should be immediately intimated in writing to the Branch Office where the policy is serviced along with the following particulars: 1. The No./s of the policy/ies 2. The name of the policyholder 3. Death Certificate issued by concerned Authority 4. The date of death 5. The cause of death and 6. Claimant’s relationship with the deceased Page 35
  • On receipt of the intimation of death, necessary claim forms are sent by the Branch Office for completion along with instructions regarding the procedure to be followed by the claimant. The claims which have arisen after a period of three years are treated as non-early claims and settled within 30 days from the date of receipt of all requirements. The claims that have arisen within a period of two years from the date of commencement of the policy, are treated as early claims and investigation is compulsory in such cases. The Corporation grants claims concessions under certain Plans whereby payment of full sum assured is made, subject to the deduction of unpaid premiums with interest till the date of death and unpaid premiums falling due before the next anniversary of the policy, in the event of the death of the life assured within a period of six months or one year from the date of the first unpaid premium, provided premiums have been paid for at least three years and five years respectively.Claim Review Committee: The Corporation settles a large number of Death Claims every year. Only in case offraudulent suppression of material information is the liability repudiated. This is to ensurethat claims are not paid to fraudulent persons at the cost of honest policyholders. The numberof Death Claims repudiated is, however, very small. Even in these cases, an opportunity isgiven to the claimant to make a representation for consideration by the Review Committeesof the Zonal office and the Central Office. As a result of such review, depending on themerits of each case, appropriate decisions are taken. The Claims Review Committees of theCentral and Zonal Offices have among their Members, a retired High Court/District CourtJudge. This has helped providing transparency and confidence in our operations and hasresulted in greater satisfaction among claimants, policyholders and public. Page 36
  • IT DEPARTMENT Manager (IT)Administrative Officers (AO) Asst. Administrative Officers (AAO) Higher Grade Staffs Assistance Record clerk Sub Staff Page 37
  • IT DEPARTMENT RMF has been one of the pioneering organizations in India whointroduced the leverage of Information Technology in servicing and in their business.Data pertaining to almost 10 crore policies is being held on computers in RMF. RMFhave gone in for relevant and appropriate technology over the years. 1964 saw the introduction of computers in RMF. Unit Record Machinesintroduced in late 1950’s were phased out in 1980’s and replaced by Microprocessorsbased computers in Branch and Divisional Offices for Back Office Computerization.Standardization of Hardware and Software commenced in 1990’s. Standard ComputerPackages were developed and implemented for Ordinary and Salary Savings Scheme(SSS) Policies.FUNCTIONS OF IT DEPARTMENTFRONT END OPERATIONS With a view to enhancing customer responsiveness and services, LIC starteda drive of On Line Service to Policyholders and Agents through Computer. This online service enabled policyholders to receive immediate policy status report, promptacceptance of their premium and get Revival Quotation, Loan Quotation on demand.Incorporating change of address can be done on line. Quicker completion of proposalsand dispatch of policy documents have become a reality. All our 2048 branches acrossthe country have been covered under front-end operations. Thus all our 100 divisionaloffices have achieved the distinction of 100% branch computerization. New paymentrelated Modules pertaining to both ordinary & SSS policies have been added to theFront End Package catering to Loan, Claims and Development Officers’ Appraisal.All these modules help to reduce time-lag and ensure accuracy. Page 38
  • METRO AREA NETWORK A Metropolitan Area Network, connecting 74 branches in Mumbai wascommissioned in November, 1997, enabling policyholders in Mumbai to pay theirPremium or get their Status Report, Surrender Value Quotation, Loan Quotation etc.from ANY Branch in the city. The System has been working successfully. More than10,000 transactions are carried out over this Network on any given working day. SuchNetworks have been implemented in other cities also.WIDE AREA NETWORK All 7 Zonal Offices and all the MAN centres are connected through a WideArea Network (WAN). This will enable a customer to view his policy data and paypremium from any branch of any MAN city. As at November 2005, we have 91centers in India with more than 2035 branches networked under WAN.INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS) IVRS has already been made functional in 59 centers all over the country.This would enable customers to ring up RMF and receive information (e.g. nextpremium due, Status, Loan Amount, Maturity payment due, Accumulated Bonus etc.)about their policies on the telephone. This information could also be faxed on demandto the customer.RMF ON THE INTERNET Our Internet site is an information bank. We have displayed informationabout RMF & its offices. Efforts are on to upgrade our web site to make it dynamicand interactive. The addresses/e-mail Ids of RMF Zonal Offices, Zonal TrainingCenters, Management Development Center, Overseas Branches, Divisional Officesand also all Branch Offices with a view to speed up the communication process. Page 39
  • PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNETRMF has given its policyholders a unique facility to pay premiums through Internetabsolutely free and also view their policy details on Internet premium payments.There are 11 service providers with whom RMF has signed the agreement to providethis service.INFO CENTRES RMF have also set up call centers, manned by skilled employees to provideyou with information about our Products, Policy Services, Branch addresses and otherorganizational information. Page 40
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  • COMPANY PROFILE Reliance mutual fund, a part of the Reliance- Anil Dhirubhai group (RADAG) is one of thefastest growing mutual funds in the country. Reliance mutual fund offers investors a well roundedportfolio of products to meet varying investor requirements. Reliance mutual fund has a presence in95 cities across the country, an investor base of over 2.8 million and manages assets ofRs36927crore as on December 31, 2006. Reliance mutual constantly endeavors to launch innovativeproducts and customer service initiatives to increase value to investors. Reliance mutual fund schemes are managed by reliance capital asset management Ltd., awholly owned subsidiary of reliance capital ltd. Reliance capital is one of the India‟s leading andfastest growing private sector financial services companies, and ranks among the top 3 private sectorfinancial services and banking companies in terms of net worth. Reliance capital has interests in asset management and mutual funds, life and generalinsurance, private equity and investments, stock broking and other financial services. Reliance MutualFund (RMF) has been established as a trust under the Indian Trusts Act, 1982 with Reliance CapitalLimited (RCL), as the Settler/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as theTrustee. RMF has been registered with the Securities & Exchange Board of India (SEBI) videregistration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual Fundhas been changed to Reliance Mutual Fund effective 11th. March 2004 vide SEBIs letter no.IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was formed to launch variousschemes under which units are issued to the Public with a view to contribute to the capital market andto provide investors the opportunities to make investments in diversified securities. Page 42
  • The main objectives of the Trust are:To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise variouscollective Schemes of savings and investments for people in India and abroad and also ensureliquidity of investments for the Unit holders;To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savingsandTo take such steps as may be necessary from time to time to realize the effects without any limitation.Statutory Details:Sponsor: Reliance Capital Limited.Trustee: Reliance Capital Trustee Co. Limited.Investment Manager: Reliance Capital Asset Management Limited. The Sponsor, the Trustee and theInvestment Manager are incorporated under the Companies Act 1956.Business overview RCL is registered as a depository participant with national securities depository Ltd (NSDL)and central depository services Ltd (CSDL) under the securities and exchange board of India(Depositories and participants) regulations, 1996. RCL has sponsored the reliance mutual fund withinthe frame work of the securities and exchange board of India(Mutual fund) regulations, 1996 RCL primarily focuses on funding projects in the infrastructure sector and supports thegrowth of its subsidiary companies, reliance capital trustee co. Limited, reliance capital assetmanagement limited, reliance general insurance company limited and reliance life insuranceCompany limited. As of march 31, 2005, the company‟s investment in infrastructure projects stood atRs.1071 crores. The investment portfolio of RCL is structured in a way that realizes the highest post-tax return on its investments. Page 43
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  • EQUITY SCHEMES:Reliance Equity Fund: (An open-ended diversified Equity Scheme.) The primary investment objective of the schemeis to seek to generate capital appreciation & provide long-term growth opportunities by investing in aportfolio constituted of equity & equity related securities of top 100 companies by market capitalization& of companies which are available in the derivatives segment from time to time and the secondaryobjective is to generate consistent returns by investing in debt and money market securities.Reliance Tax Saver (ELSS) Fund: (An Open-ended Equity Linked Savings Scheme.) The primary objective of the scheme is togenerate long-term capital appreciation from a portfolio that is invested predominantly in equity andequity related instruments.Reliance Equity Opportunities Fund: (An Open-Ended Diversified Equity Scheme.) The primary investment objective of thescheme is to seek to generate capital appreciation & provide long-term growth opportunities byinvesting in a portfolio constituted of equity securities & equity related securities and the secondaryobjective is to generate consistent returns by investing in debt and money market securities.Reliance Vision Fund: (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme isto achieve long term growth of capital by investment in equity and equity related securities through aresearch based investment approach. Page 45
  • Reliance Growth Fund: (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme isto achieve long term growth of capital by investment in equity and equity related securities through aresearch based investment approach.Reliance Index Fund: (An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Plan is toreplicate the composition of the Nifty, with a view to endeavour to generate returns, which couldapproximately be the same as that of Nifty. The Investment Objective under the Sensex plan is toreplicate the composition of the Sensex, with a view to endeavour to generate returns, which couldapproximately be the same as that of Sensex.Reliance NRI Equity Fund: (An open-ended Diversified Equity Scheme.) The Primary investment objective of the schemeis to generate optimal returns by investing in equity or equity related instruments primarily drawn fromthe Companies in the BSE 200 Index.DEBT SCHEMES:Reliance Monthly Income Plan: (An Open Ended Fund. Monthly Income is not assured & is subject to the availability ofdistributable surplus ) The Primary investment objective of the Scheme is to generate regular incomein order to make regular dividend payments to unit holders and the secondary objective is growth ofcapital. Primarily the investment shall be made in debt and money market securities (i.e. 80%) with asmall exposure (i.e. up to 20%) in equity.Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan: Page 46
  • Open-ended Government Securities Scheme) the primary objective of the Scheme is togenerate optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteedby the central Government and State GovernmentReliance Income Fund: (An Open-ended Income Scheme) The primary objective of the scheme is to generate optimalreturns consistent with moderate levels of risk. This income may be complemented by capitalappreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt & MoneyInstruments.Reliance Medium Term Fund: (An Open End Income Scheme with no assured returns.) The primary investment objective ofthe Scheme is to generate regular income in order to make regular dividend payments to unit holdersand the secondary objective is growth of capitalReliance Short Term Fund: (An Open End Income Scheme) The primary investment objective of the scheme is togenerate stable returns for investors with a short investment horizon by investing in Fixed IncomeSecurities of short term maturity.Reliance Liquid Fund: (Open-ended Liquid Scheme). The primary investment objective of the Scheme is to generateoptimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investmentsshall predominantly be made in Debt and Money Market Instruments. Page 47
  • Reliance Fixed Term Scheme: (Close-ended Income Scheme) The primary objective of the Scheme is to seek to achieveregular returns / growth of capital by investing in a portfolio of fixed income securities normallymaturing in line with the time profile of the plan with the objective of limiting interest rate volatility.Reliance Floating Rate Fund: (An Open End Income Scheme) The primary objective of the scheme is to generate regularincome through investment in a portfolio comprising substantially of Floating Rate Debt Securities(including floating rate securitized debt and Money Market Instruments and Fixed Rate DebtInstruments swapped for floating rate returns). The scheme shall also invest in fixed rate debtSecurities (including fixed rate securitized debt, Money Market Instruments and Floating Rate DebtInstruments swapped for fixed returns.Reliance NRI Income Fund: (An Open-ended Income scheme) The primary investment objective of the Scheme is togenerate optimal returns consistent with moderate levels of risks. This income may be complimentedby capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in debtInstruments.Fixed Maturity Fund - Series I: Reliance (A Close Ended Income Scheme)The primary investment objective of the Scheme is to seekto achieve regular returns / growth of capital by investing in a portfolio of fixed income securitiesnormally maturing in line with the time profile of the Plan with the objective of limiting interest ratevolatility. Page 48
  • Reliance Fixed Maturity Fund - Series II: (A closed ended Income Scheme) The primary investment objective of the Scheme is to seekto achieve growth of capital by investing in a portfolio of fixed income securities normally maturing inline with the time profile of the respective plans.RELIANCE REGULAR SAVINGS FUND: (An Open - ended scheme)The Investment Objectives:Debt Option: The primary investment objective of this plan is to generate optimal returns consistentwith moderate level of risk. This income may be complemented by capital appreciation of the portfolio.Accordingly investments shall predominantly be made in Debt & Money Market Instruments.Equity Option: The primary investment objective is to seek capital appreciation and or consistentreturns by actively investing in equity / equity related securities.Hybrid Option: The primary investment objective is to generate consistent return by investing a majorportion in debt & money market securities and a small portion in equity & equity related instruments.Sector Specific Schemes Sector Funds are specialty funds that invest in stocks falling into a certain sector of theeconomy. Here the portfolio is dispersed or spread across the stocks in that particular sector. Thistype of scheme is ideal for investors who have already made up their mind to confine risk and returnto a particular sector. Page 49
  • Reliance Banking Fund Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the primaryinvestment objective to generate continuous returns by actively investing in equity / equity related orfixed income securities of banks.Reliance Diversified Power Sector Fund Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme. Theprimary investment objective of the Scheme is to seek to generate consistent returns by activelyinvesting in equity / equity related or fixed income securities of Power and other associatedcompanies.Reliance Pharma Fund Reliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary investmentobjective of the Scheme is to generate consistent returns by investing in equity / equity related orfixed income securities of Pharma and other associated companies.Reliance Media & Entertainment FundReliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme. Theprimary investment objective of the Scheme is to generate consistent returns by investing in equity /equity related or fixed income securities of media & entertainment and other associated companies. Page 50
  • SELECTION OF A PARTICULAR SCHEME1. Choice of any scheme would depend to a large extent on the investor preferences. For an investor willing to undertake risks, equity funds would be the most suitable as they offer the maximum returns. Debt funds are suited for those investors who prefer regular income and safety. Gilt funds are best suited for the medium to long-term investors who are averse to risk. Balanced funds are ideal for medium- to long-term investors willing to take moderate risks.2. Liquid funds are ideal for Corporate, institutional investors and business houses who invest their funds for very short periods. Tax Saving Funds are ideal for those investors who want to avail tax- benefit.3. An important aspect while selecting a particular scheme is the duration of the investment. Depending on your time horizon you can select a particular scheme. Besides all this, factors like promoter‟s image, objective of the fund and returns given by the funds on different schemes should also be taken into account while selecting a particular scheme. RISKS INVOLVED IN INVESTING IN MUTUAL FUNDS Mutual Funds do not provide assured returns. Their returns are linked to their performance. They invest in shares, debentures and deposits. All these investments involve an element of risk. The unit value may vary depending upon the performance of the company and companies may default in payment of interest/principal on their debentures/bonds/deposits. Besides this, the government may come up with new regulation which may affect a particular industry or class of industries. All these factors influence the performance of Mutual Funds. Page 51
  • Risk factors in mutual fundsThe Risk-Return Trade-off: The most important relationship to understand is the risk-returntrade-off. Higher the risk greater the returns/loss and lower the risk lesser the returns/loss. Hence it isup to you, the investor to decide how much risk you are willing to take. In order to do this you mustfirst be aware of the different types of risks involved with your investment decision .Market Risk: Sometimes prices and yields of all securities rise and fall. Broad outside influencesaffecting the market in general lead to this. This is true, may it be big corporations or smaller mid-sized companies. This is known as Market Risk. A Systematic Investment Plan (“SIP”) that works onthe concept of Rupee Cost Averaging (“RCA”) might help mitigate this risk.Credit Risk: The debt servicing ability (may it be interest payments or repayment of principal) of acompany through its cash flows determines the Credit Risk faced by you. This credit risk is measuredby independent rating agencies like CRISIL who rate companies and their paper. An „AAA‟ rating isconsidered the safest whereas a „D‟ rating is considered poor credit quality. A well-diversified portfoliomight help mitigate this risk. Page 52
  • Inflation Risk: Things you hear people talk about: “Rs. 100 today is worth more than Rs. 100 tomorrow.” “Remember the time when a bus ride costed 50 paise?” “Mehangai Ka Jamana Hai.”The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times peoplemake conservative investment decisions to protect their capital but end up with a sum of money thatcan buy less than what the principal could at the time of the investment. This happens when inflationgrows faster than the return on your investment. A well-diversified portfolio with some investment inequities might help mitigate this risk.Interest Rate Risk: In a free market economy interest rates are difficult if not impossible topredict. Changes in interest rates affect the prices of bonds as well as equities. If interest rates risethe prices of bonds fall and vice versa. Equity might be negatively affected as well in a rising interestrate environment. A well-diversified portfolio might help mitigate this risk.Political/Government Policy Risk: Changes in government policy and political decision canchange the investment environment. They can create a favorable environment for investment or viceversa.Liquidity Risk: Liquidity risk arises when it becomes difficult to sell the securities that one haspurchased. Liquidity Risk can be partly mitigated by diversification, staggering of maturities as well asinternal risk controls that lean towards purchase of liquid securities. Page 53
  • ADVANTAGES OF MUTUAL FUNDS There are numerous benefits of investing in mutual funds and one of the key reasons for itsphenomenal success in the developed markets like US and UK is the range of benefits they offer,which are unmatched by most other investment avenues. We have explained the key benefits in thissection. The benefits have been broadly split into universal benefits, applicable to all schemes andbenefits applicable specifically to open-ended schemes.Diversification: The nuclear weapon in your arsenal for your fight against Risk. It simply means thatyou must spread your investment across different securities (stocks, bonds, money marketinstruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information technologyetc.). This kind of a diversification may add to the stability of your returns, for example during oneperiod of time equities might underperform but bonds and money market instruments might do wellenough to offset the effect of a slump in the equity markets.Affordability: A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending uponthe investment objective of the scheme. An investor can buy in to a portfolio of equities, which wouldotherwise be extremely expensive. Each unit holder thus gets an exposure to such portfolios with aninvestment as modest as Rs.500/-. This amount today would get you less than quarter of an Infosysshare! Thus it would be affordable for an investor to build a portfolio of investments through a mutualfund rather than investing directly in the stock market.Variety: Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two ways:first, it offers different types of schemes to investors with different needs and risk appetites; secondly,it offers an opportunity to an investor to invest sums across a variety of schemes, both debt andequity. For example, an investor can invest his money in a Growth Fund (equity scheme) and IncomeFund (debt scheme) depending on his risk appetite and thus create a balanced portfolio easily orsimply just buy a Balanced Scheme.Professional Management: Qualified investment professionals who seek to maximize returns andminimize risk monitor investors money. When you buy in to a mutual fund, you are handing yourmoney to an investment professional who has experience in making investment decisions. It is theFund Managers job to (a) find the best securities for the fund, given the funds stated investmentobjectives; and (b) keep track of investments and changes in market conditions and adjust the mix ofthe portfolio, as and when required.Regulations: Securities Exchange Board of India (“SEBI”), the mutual funds regulator has clearlydefined rules, which govern mutual funds. These rules relate to the formation, administration and Page 54
  • management of mutual funds and also prescribe disclosure and accounting requirements. Such ahigh level of regulation seeks to protect the interest of investors.Liquidity: Its easy to get your money out of a mutual fund. Write a check, make a call, and youve gotthe cash.Convenience: An investor can purchase or sell fund units directly from a fund, through a broker or afinancial planner. The investor may opt for a Systematic Investment Plan (“SIP”) or a SystematicWithdrawal Advantage Plan (“SWAP”). In addition to this an investor receives account statements andportfolios of the schemes.Flexibility: Mutual Funds offering multiple schemes allow investors to switch easily between variousschemes. This flexibility gives the investor a convenient way to change the mix of his portfolio overtime.Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. Expensesfor Index Funds are less than that, because index funds are not actively managed. Instead, theyautomatically buy stock in companies that are listed on a specific indexTransparency: Mutual fund provide information on each scheme about the specific investment madethere-under and so onTax benefits: Any income distributed after March 31, 2002 will be subject to tax in the assessment ofall Unit holders. However, as a measure of concession to Unit holders of open-ended equity-orientedfunds, income distributions for the year ending March 31, 2003, will be taxed at a concessional rate of10.5%. In case of Individuals and Hindu Undivided Families a deduction up to Rs. 9,000 from theTotal Income will be admissible in respect of income from investments specified in Section 80L,including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Taxand Gift-Tax. Well regulated: The funds are registered with the Securities and Exchange Board ofIndia and their operations are continuously monitored.Mutual funds drawbacks and may not be for everyone:No Guarantees: No investment is risk free. If the entire stock market declines in value, the value ofmutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounterfewer 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-to-day expenses.Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, Page 55
  • or financial planners. Even if you dont 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 money you made. Management risk: When you invest in a mutual fund, you depend on the funds manager to make the right decisions regarding the funds 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. TYPE 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. By structure Open- Ended schemes Close- Ended schemes Interval schemes By investment objectives Growth/Equity schemes Income/Debt scheme Money market Guilt funds Balanced schemes Other schemes Tax saving schemes Special schemes: Sector specific schemes Index schemes Page 56
  • BY STRUCTUREOpen - Ended Schemes: An open-ended fund or scheme is one that is available for subscription andrepurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors canconveniently buy and sell units at Net Asset Value (NAV) related prices, which are declared on a dailybasis. The key feature of open-end schemes is liquidityClose - Ended Schemes: A close-ended fund or scheme has a stipulated maturity period e.g. 5-7years. The fund is open for subscription only during a specified period at the time of launch of thescheme. Investors can invest in the scheme at the time of the initial public issue and thereafter theycan buy or sell the units of the scheme on the stock exchanges where the units are listed. In order toprovide an exit route to the investors, some close-ended funds give an option of selling back the unitsto the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate thatat least one of the two exit routes is provided to the investor i.e. either repurchase facility or throughlisting on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.Interval Scheme: these combine the feature of open-ended and close ended schemes. They may betraded on the stock exchange or may be open for sale or redemption during predetermined intervalsat NAV related prices.BY INVESTMENT OBJECTIVEGrowth Schemes: The aim of growth funds is to provide capital appreciation over the medium tolong- term. Such schemes normally invest a major part of their corpus in equities. Such funds havecomparatively high risks. These schemes provide different options to the investors like dividendoption, capital appreciation, etc. and the investors may choose an option depending on theirpreferences. The investors must indicate the option in the application form. The mutual funds alsoallow the investors to change the options at a later date. Growth schemes are good for investorshaving a long-term outlook seeking appreciation over a period of time. Page 57
  • Income Schemes: The aim of income funds is to provide regular and steady income to investors.Such schemes generally invest infixed income securities such as bonds,corporate debentures, Governmentsecurities and money market instruments.Such funds are less risky compared toequity schemes. These funds are not affectedbecause of fluctuations in equity markets.However, opportunities of capital appreciation are also limited in such funds. The NAVs of such fundsare affected because of change in interest rates in the country. If the interest rates fall, NAVs of suchfunds are likely to increase in the short run and vice versa. However, long term investors may notbother about these fluctuations. Different types of debt schemesBalanced Schemes: The aim of balanced funds is to provide both growth and regular income assuch schemes invest both in equities and fixed income securities in the proportion indicated in theiroffer documents. These are appropriate for investors looking for moderate growth. They generallyinvest 40-60% in equity and debt instruments. These funds are also affected because of fluctuationsin share prices in the stock markets. However, NAVs of such funds are likely to be less volatilecompared to pure equity funds. Page 58
  • Money Market Schemes: These funds are also income funds and their aim is to provide easyliquidity, preservation of capital and moderate income. These schemes invest exclusively in safershort-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bankcall money, government securities, etc. Returns on these schemes fluctuate much less compared toother funds. These funds are appropriate for corporate and individual investors as a means to parktheir surplus funds for short periodsGilt Fund: These primarily invest in government debts. Hence, the investor usually does not have toworry about credit risk since government debt is generally credit risk free. Reliance Gilt SecuritiesFund - Short Term Gilt Plan & Long Term Gilt Plan are best example of such scheme.OTHER SCHEMESTax Saving Schemes: These schemes offer tax rebates to the investors under specific provisions ofthe Income Tax Act, 1961 as the Government offers tax incentives for investment in specifiedavenues. E.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutualfunds also offer tax benefits. These schemes are growth oriented and invest pre-dominantly inequities. Their growth opportunities and risks associated are like any equity-oriented scheme.SPECIAL SCHEMESIndex Schemes: Index Funds replicate the portfolio of a particular index such as the BSE Sensitiveindex, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weightagecomprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall inthe index, though not exactly by the same percentage due to some factors known as "tracking error"in technical terms. Necessary disclosures in this regard are made in the offer document of the mutualfund scheme. There are also exchange traded index funds launched by the mutual funds which aretraded on the stock exchanges.Sector Specific Schemes: These are the funds/schemes which invest in the securities of only thosesectors or industries as specified in the offer documents. E.g. Pharmaceuticals, Software, FastMoving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependenton the performance of the respective sectors/industries. While these funds may give higher returns,they are more risky compared to diversified funds. Investors need to keep a watch on the Page 59
  • performance of those sectors/industries and must exit at an appropriate time. They may also seekadvice of an expert.NAV NAV or Net Asset Value of the fund is the cumulative market value of the assets of the fund net ofits liabilities. NAV per unit is simply the net value of assets divided by the number of units outstanding.Buying and selling into funds is done on the basis of NAV-related prices. NAV is calculated as follows: NAV= Market value of the fund‟s investments + Receivables + Accrued Income– Liabilities-Accrued Expenses Number of Outstanding unitsEntry/Exit Load A Load is a charge, which the AMC may collect on entry and/or exit from a fund. A load islevied to cover the up-front cost incurred by the AMC for selling the fund. It also covers one timeprocessing costs. Some funds do not charge any entry or exit load. These funds are referred to as „NoLoad Fund‟. Funds usually charge an entry load ranging between 1.00% and 2.00%. Exit loads varybetween 0.25% and 2.00%.E.g. Let us assume an investor invests Rs. 10,000/- and the current NAV is Rs.13/-. If the entry loadlevied is 1.00%, the price at which the investor invests is Rs.13.13 per unit. The investor receives10000/13.13 = 761.6146 units. (Note that units are allotted to an investor based on the amountinvested and not on the basis of no. of units purchased).Let us now assume that the same investor decides to redeem his 761.6146 units. Let us also assumethat the NAV is Rs 15/- and the exit load is 0.50%. Therefore the redemption price per unit works outto Rs. 14.925. The investor therefore receives 761.6146 x 14.925 = Rs.11367.10 Page 60
  • Sales/Purchase price Sales/Purchase price is the price paid to purchase a unit of the fund. If the fund has no entry load,then the sales price is the same as the NAV. If the fund levies an entry load, then the sales pricewould be higher than the NAV to the extent of the entry load levied.Switch Some Mutual Funds provide the investor with an option to shift his investment from one scheme toanother within that fund. For this option the fund may levy a switching fee. Switching allows theInvestor to alter the allocation of their investment among the schemes in order to meet their changedinvestment needs, risk profiles or changing circumstances during their lifetime.Association of Mutual Fund in India (AMFI): AMFI, the apex body of all the registered Asset Management companies was incorporated onaugust 22, 1995 as a non-profit organization. As of now, all the 31Asset Management Companiesthat has launched Mutual Fund schemes are its members. AMFI functions under the supervision andguidance of a Board of Directors. Over the years, AMFI has worked closely with SEBI in establishing standards that match the bestin the world. It has played a significant role in introducing best practices to reinforce the growth of theindustry on healthy lines and protect the interests of the investors. One of the major initiatives of AMFI has been the introduction of certification program for agentdistributors. SEBE has mandated that all those engaged in sales a marketing of mutual fundschemes will be AMFI certified and registered. AMFI has brought out a detailed workbook on mutualfunds based on which it conducts computerized testing through National Stock Exchange test centers.It also organizes written examinations in different languages. Till date over 31,000 agent distributorshave passed the test. Page 61
  • AMFI complies and publishes data on a monthly and quarterly basis. It has a quarterlypublication “AMFI update” which summarizes major developments in the mutual fund industry andchanges in the regulatory framework.SEBI REGULATIONS ON MUTUAL FUNDSSEBI REGULATIONS 1996: Mutual funds in India are comprehensively regulated under the SEBI(Mutual Funds) Regulation, 1996. Some of the important provisions of this regulation are as follows:A mutual fund shall be constituted in the form of a thrust executed by the sponsor in favor of thetrustees.The sponsor or, if so authorized by the trust deed, the trustees, shall appoint an asset managementcompany.The mutual fund shall appoint a custodian.No scheme shall be launched by the AMC unless it is approved by the trustees an a copy of the offerdocument has been filed with SEBI.The offer document and advertisement materials shall not be misleading.No guaranteed return shall be provided in a scheme unless such returns are fully guaranteed by thesponsor or the AMC.The moneys collected under any scheme of a mutual fund shall be invested only in transferablesecurities.The moneys collected under any money market scheme of a mutual fund shall be invested only inmoney market instruments in accordance with directions issued by the reserve bank of India.The mutual funds shall not borrow except to meet temporary liquidity needs.The net asset value (NAV) and the sale and repurchase price of mutual fund schemes must beregularly published in daily newspapers.Every AMC shall keep and maintain proper books of accounts records, and documents for eachscheme.The investments of a mutual fund are subject to several restrictions relating to exposure to stocks ofindividual companies, debt instruments of individual issuers so on and so forth.Costs associated with mutual fund investing such as initial expenses, loads (entry and exit), andannual recurring expenses are subject to certain ceilings. Page 62
  • The rights which are available to a Mutual Fund holder: As per SEBI Regulations on Mutual Funds, aninvestor is entitled to-Receive unit certificates or statement of accounts confirming your title within 6 weeks from the dateyour request for a unit certificate is received by the Mutual Fund.Receive information about the investment policies, investment objectives, financial position andgeneral affairs of the scheme.Receive dividend within 42 days of their declaration and receive the redemption of repurchaseproceeds within 10 days from the date of redemption or repurchase.The trustees shall be bound to make such disclosures to the unit holders as they essential in order todeep them informed about any information which may have an adverse bearing on their investments.75% of the unit holders with the prior approval of SEBI can terminate the AMC of the fund.75% of the unit holders can pass a resolution to wind-up the scheme. Page 63
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  • SWOT ANALYSIS:- SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,Opportunities, and Threats involved in a business venture. It involves specifying the objective of thebusiness venture or project and identifying the internal and external factors that are favourable andunfavourable to achieve that objective. A SWOT analysis must first start with defining a desired end state or objective. A SWOTanalysis may be incorporated into the strategic planning model. Strengths: attributes of the person orcompany that is helpful to achieving the objectives. 1. Weaknesses: attributes of the person or company that is harmful to achieving the objectives. 2. Opportunities: external conditions that is helpful to achieving the objectives. 3. Threats: external conditions which could do damage to the objectives. Identification of SWOTs is essential because subsequent steps in the process of planning forachievement of the selected objective may be derived from the SWOTs. Identification the threats and opportunities in the environment and strength weakness of thefirm is the basis of business policy formulation; these factors determine the course of action to ensurethe survival or growth of the firm. The environment might present many opportunities but a company might not have thestrengths to exploit all opportunities. Similarly, sometimes a firm will not have the strengths to meetthe environmental threats. If a company thus finds that it will not have the competence to survive in aparticular line of business, it will prudent to give up and concentrate on such business for which thefirm is most competent. Page 65
  • STRENGTH RMF offers high claim settlement. Outstanding claim is very less. RMF offers maximum variety of policies according to the needs of people in India The only guaranteed return regular mode pension plan in the country. No other insurer could launch till IRDA dispensed with guarantee. Introducing satellite branches in every branch. There are well trained and experienced development officers for guiding agents Agents are business minded and experienced in this profession. WEAKNESS It is subject to constant changes of the Indian economy It should follow the updating Indian economic norms. It is not an independent decision making on, it always dependent to national economic conditions Lack of competitive differential with other offshore centres. Rigid legislation that inhibits business development. The middle class population that we are eyeing at are today overburdened, first by inflationary pressures on their pockets and then by the tax net Page 66
  • OPPORTUNITY Mutual fund market is very big, where company can expand its horizon in insurance industry. Though good investment and insurance it is easy to top Indian customers. Globalization of the economy has helped the organization to overcome operational restrictions. There is an opportunity for merger or acquisition or setting up a joint venture or creating a subsidiary by either party. THREATS It‟s still difficult task to win the confidence of public towards mutual company. The company is facing some threats from other private companies. Plans for all income groups are not available which can create adverse effect later on the market share of the company. Outsourcing to cheaper jurisdictions Subsequent impact on rest of finance sector ecosystem. The investors in the capital may turn their face off in case the rate of return on capital falls short of the existing rate of return on capital. Page 67
  • MISSION, VISION & VALUES Vision “To be a globally admired organization that enhances the quality of life of all stakeholders through sustainable industrial and business development” Mission We aspire to achieve business excellence through-• The spirit of entrepreneurship and innovation• Optimum utilization of resources• The highest ethics and standards• Maximizing returns to stakeholders Values• Passion for people• Business excellence• Integrity, ownership and and source of belonging• Sustainable development Page 68
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  • FINDINGS:- The Reliance Banking Fund has given higher return 0f 40.25% in the year 2008 compared to the index return (bank nifty) of 30.32%. In 2007 this fund is the highest return given compared to the other fund in the past 3 years. The second best is Reliance Growth Fund which has given return of 71.97% in the year 2007 compared to the BSE 100 59.35%. The Reliance Growth Fund was performed well with the average return of 59.79% compared to the BSE 100 which is has average return of 45.95%. The Reliance NRI Equity Fund also performed well with the average return of 52.05% compared to BSE 200 44.33%. Reliance Equity Fund was favorable fund with less standard deviation of 4.4749 than the other fund. The rate of risk of Reliance Pharma Fund was less compared to the other funds with 0.4104. As per the Sharpe index performance measure the well performed fund with less Standard Deviation was Reliance Equity Fund. According to the Treynor index performance measure the well performed fund with less rate of risk was Reliance Pharma Fund. According to the Jensen Index, performance measure the well performed fund was Reliance Pharma Fund which has given excess return over the actual return. Page 70
  • SUGESSIONS AND RECOMMENDATION:-The investor should read the offer document before investing.The investor should consult the financial experts or the investment advisors before taking anydecisions.Both- the economy and the corporate sector are doing well but the valuations are fair and priced forperfection.Asset allocation and Systematic Investment Plans are the best way to safeguard against volatility.They insure optimal returns and not the maximum return in volatile markets.Investors who able to wait for long time could look at value stocks, which consistently perform over aperiod of time.Investors should look at a mix of large and mid cap funds for 3-5 years horizon on systematicinvestment basis.With the long-term India growth story intact, remain invested in equity with a longer time horizon.In a fair value plus market, maintain a little less than neutral allocation towards equities.AMFI passed that agents are not so active to promote the product, so conduct programmes ormeetings to educate and giving additional information about company‟s performance of existingschemes. Page 71
  • CONCLUSION The research shows that Equity Funds are performing well, but the investments frominvestors are less in equity funds, because of unawareness about mutual funds. The low level of awareness among investors is the biggest problem to the expansion of theindustry. Despite the best efforts by mutual funds, SEBI and AMFI and their distributor, the investor‟sbase is below one percent of the population. Generally, investors react only when activity in equitymarkets reaches a crescendo. Some are caught up by catchy advertisements and invest in belief thatthe party is going to lost forever. Only when the market tanks and they burn their fingers do investorssuddenly realize their ignorance and even then not all. Many do not know how to track their portfolio. Therefore company has to take some steps to make aware people of Mutual Funds, throughadvertisements in Newspaper, Magazine, Commercial advertisement, distributing leaflets, Television,Radios. As per budget , the dividends from MF units‟ continue to be tax-free for its investors. Debt-oriented Mutual Funds schemes continue to pay distribution tax amounting to 12.5 percent on thedividends declared, while equity-oriented mutual funds schemes will not be required to pay distributiontax. Long-term capital gains tax on equity 5[unds remains nil while for debt funds it would be taxed atthe prevailing rates- 10% ithout indexation or 20% with indexation. Page 72
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  • BIBLIOGRAPHY:-1) Reliance mutual fund Brochures and Manuals.2) Website- www.relianceimutualfund.com.3) Newspapers.4) Search Magazines.5) Electrical media. Page 74