A study of customer satisfaction towards mutual funds at karevy stock

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A study of customer satisfaction towards mutual funds at karevy stock

A study of customer satisfaction towards mutual funds at karevy stock

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  • 1. A study of Customer Satisfaction towards Mutual Funds EXECUTIVE SUMMARY Karvy, the FINAPOLIS Ltd. is a stock Broking Company that deals in shares. Apartfrom security broking Karvy is in to Demat services, Mutual fund and Insurance services. It offersa wide range of financial services in order to meet different individuals financial planning. The project emphasizes on “Customer satisfaction towards depository participants”Objectives of the Study: • Main Objective is to find the level of satisfaction of customers. • To find the factors which are responsible for slow growth. • To find out the preference people give to various options available. • To know the kind of benefit people expected from their service. • Origination Study. • Mutual Fund study.Research Methodology: Data source: Primary Data :Through Questionnaire Secondary Data : Karvy’s Record & Report, Magazine & Websites. Sample size: 100 customers of Karvy Stock Broking Ltd. Area Covered for research: Only in Belgaum city. Sampling Procedure: Random sampling method from available database.In the present scenario the service industry has given an utmost importance of doing a particulartask at a fastest time in order to satisfy the customer and to attract new customer. In this project wecan find out the customer of Karvy Consultant have satisfied with Mutual Fund service.BABASAB PATIL MARKETING PROJECT REPORT Page No 1
  • 2. A study of Customer Satisfaction towards Mutual FundsFindings:1.I have carried out this exercise on Mutual Funds. With So in my studies I have tried to seewhether the customer have satisfied with the services given by the Karvy consultants Ltd. 2. .It is also came to know that new customer are not aware of the schemes available in mutualfunds 3. I have also seen that 37% awareness of new service given by Karvy Stock Broking Ltd isfrom mainly through Agents. 4. It is also find that more than46% customers are satisfied and 355 of customers are mostlysatisfied with the service of mutual funds given by Karvy consultant’s ltd. 5. Nearly 16% of the respondents are neither satisfied or un satisfied because of the lack ofattention given to them for their enquires. 6. 3% of customers are mostly unsatisfied with the service because the reason is thatlack of updated information. 7. 36% of respondents prefer Karvy consultants Ltd because of their Quality services given bythem . 8.62% of the respondents opinion is that mutual fund scheme is Extremely Good. 9. Majority of the respondents are very happy with the servicesIntroductionIndia has two hundred years old tradition in Securities. Infact that first India stock exchangeestablished in Bombay is the oldest in Asia. The earliest security dealings were Transactions inloan securities of East India Company, the dominant institution of those days. Corporate Sharescame into the picture by 1830’s and assumed significance with the Companies Act of 1956. In1887 the broker community gave birth to the “Native share and stock brokers Association” whichis now known as the Bombay Stock Exchange.BABASAB PATIL MARKETING PROJECT REPORT Page No 2
  • 3. A study of Customer Satisfaction towards Mutual FundsThe Indian Capital grew at a very moderate rate from 1951 to 1980. However it registered animpressive growth in 1980s. the process of liberalization and the transparency in operation hasraised the interest of foreign investors in India. Till 1978 there were only 8 recognized exchangesin India. Initially the exchange operated on an outcry system i.e. manual system of trading Due toincrease in the trading volumes, the number of issuer increased substantially ,and the birth ofNSES highly transparent automated system come into existence Even then there was an increasein paper work causing a gridlock at every stage in the stock market This delays the clearance andsettlement of traders , registration of securities in the shareholder name and due this it increasedthe back office paper work intermediaries These outdated systems have increased settlement risksand have rendered the implementation of a delivery of a versus payment system impossible Design of the StudyTitle of the project: “To Know the Customer Satisfaction towards Mutual Funds”.Statement of the Problem: KARVY STOCK BROKING Ltd is providing the Demat service.Hence in this report an attempt is made to know the present customer satisfaction towards MutualFunds.RESEARCH OBJECTIVES: • Main Objective is to find the level of satisfaction of customers. • To find the factors which are responsible for slow growth. • To find out the preference people give to various options available. • To know the kind of benefit people expected from their service. • Origination Study. • Mutual Fund studyMethods &Methodology:Sampling Design:  Sampling since segment wise investors in KARVY STOCK BROKING Ltd are not available the overall customers were considered for the study. Hundred Percent coverageBABASAB PATIL MARKETING PROJECT REPORT Page No 3
  • 4. A study of Customer Satisfaction towards Mutual Funds was difficult within the limited period of time. Hence random sampling survey method was adopted for the purpose of the study.  Sampling Size: A sample of 100 was chosen for the purpose of the study. Sample consisted of small investor, large investors and traders of KARVY STOCK BROKING Ltd.  Sampling Procedure: From large number of customer of KARVY STOCK BROKING Ltd. Were randomly selected from the available customer database.Field Study: Directly approached respondentsDATA COLLECTION METHOD: 1. PRIMARY DATA: For a study of this nature of the data is primary data it is collected through by making survey, which is systematic collection of information directly from the respondents. (Questionnaire & telephonic interview). 2.SECOUNDARY DATA: This is been is collected through KARVY’S RECORD & REPORT, MAGAZINE & WEBSITES.MEASUREMENT TECHNIQUE / STATISTICAL TOOLS: For this purpose measurement technique used for survey is questionnaire &telephonic interview to collect information from the respondentANALYTICAL TECHNIQUE: Statistical technique used for measuring the response is in terms ofpercentage.BABASAB PATIL MARKETING PROJECT REPORT Page No 4
  • 5. A study of Customer Satisfaction towards Mutual Funds BACKGROUND Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freelytowards attaining diverse goals of the customer through varied services. Creating a plethora ofopportunities for the customer by opening up investment vistas backed by research-based advisoryservices. Here, growth knows no limits and success recognizes no boundaries. Helping thecustomer create waves in his portfolio and empowering the investor completely is the ultimategoal. KARVY, is a premier integrated financial services provider, and ranked among the top fivein the country in all its business segments, services over 16 million individual investors in variouscapacities, and provides investor services to over 300 corporate, comprising the who is who ofCorporate India. KARVY covers the entire spectrum of financial services such as Stock broking,Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit,equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, MerchantBanking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professionalmanagement team and ranks among the best in technology, operations and research of variousindustrial segments. The birth of Karvy was on a modest scale in 1981. It began with the vision and enterpriseof a small group of practicing Chartered Accountants who founded the flagship company …KarvyConsultants Limited. We started with consulting and financial accounting automation, and carvedinroads into the field of registry and share accounting by 1985. Since then, we have utilized ourexperience and superlative expertise to go from strength to strength…to better our services, toBABASAB PATIL MARKETING PROJECT REPORT Page No 5
  • 6. A study of Customer Satisfaction towards Mutual Fundsprovide new ones, to innovate, diversify and in the process, evolved Karvy as one of India’spremier integrated financial service enterprise.Thus over the last 20 years Karvy has traveled the success route, towards building a reputation asan integrated financial services provider, offering a wide spectrum of services. And we have madethis journey by taking the route of quality service, path breaking innovations in service, versatilityinserviceandfinally…totalityinservice.Our highly qualified manpower, cutting-edge technology, comprehensive infrastructure and totalcustomer-focus has secured for us the position of an emerging financial services giant enjoying theconfidence and support of an enviable clientele across diverse fields in the financial world. Over the years we have ensured that the trust of our customers is our biggest returns.Factors such as our success in the Electronic custody business has helped build on our tradition oftrust even more. Consequentially our retail client base expanded very fast. Our values and vision ofattaining total competence in our servicing has served as the building block for creating a greatfinancial enterprise, which stands solid on our fortresses of financial strength - our variouscompanies.With the experience of years of holistic financial servicing behind us and years ofcomplete expertise in the industry to look forward to, we have now emerged as a premierintegrated financial services provider. And today, we can look with pride at the fruits of our mastery and experience –comprehensive financial services that are competently segregated to service and manage a diverserange of customer requirements. In 1982, a group of Hyderabad-based practising Chartered Accountants started KarvyBABASAB PATIL MARKETING PROJECT REPORT Page No 6
  • 7. A study of Customer Satisfaction towards Mutual FundsComputers hare Private Ltd., with a capital of Rs.1,50,000 offering auditing and taxationservices initially. Later, it forayed into the Registrar and Share Transfer activities andsubsequently into financial services. All along, Karvys strong work ethic and professionalbackground leveraged with Information Technology enabled it to deliver quality to theindividual. A decade of commitment, professional integrity and vision helped Karvy achieve aleadership position in its field when it handled the largest number of issues ever handled in thehistory of the Indian stock market in a year. Thereafter, Karvy made inroads into a host ofcapital-market services, - corporate and retail - which proved to be a sound business synergy.Today, Karvy has access to millions of Indian shareholders, besides companies, banks,financial institutions and regulatory agencies. Over the past one and half decades, Karvy hasevolved as a veritable link between industry, finance and people. In January 1998, Karvybecame the first Depository Participant in Andhra Pradesh. An ISO 9002 company, Karvyscommitment to quality and retail reach has made it an Integrated financial services company.GROUP OF COMPANIES  KARVY SECURITY LTD • Deals in distribution of various investment products, viz, equities, Mutual fund, bounds debenture fixed deposits, insurance policies & other financial roducts. • Member –Hyderabad stock Exchange (HSF)  KARVY STOCK BROKING LTD. • Deals in buying & selling equity shares & debenture &on the national stock exchange (NSE), the Hyderabad stock exchange & over the counter exchange of India (OTCEI) • Member-national stock exchange (NSE)BABASAB PATIL MARKETING PROJECT REPORT Page No 7
  • 8. A study of Customer Satisfaction towards Mutual Funds  KARVY CONSULTANTS LTD • Transfer agency services for corporate & mutual funds • Registrar for IPObook building • Depositary participant services • Registered with both NSDL/CDSL • It enable services –MT/call center /data classification • Karvy .com comprehensive financial advisory site  KARVY INVESTER SERVICES LTD. • Deals in issue management, investor banking & merchant banking of fixed income & other financial products. • Trading through BSE  DEPOSITARY SEVICES • Registered as DP both with NSDL & CDSL • Serving over 2 lac investors • Online connectivity at Hyderabad, Lucknow &Bangalore • Ranked among the top 5 DPS in the country • High synergy with registry & broking activities for higher services levels to the customer information • Web based customer information • Provision of service in over 75 locations  IT SERVICES GROUP 1.Medical transcriptionBABASAB PATIL MARKETING PROJECT REPORT Page No 8
  • 9. A study of Customer Satisfaction towards Mutual Funds • First strategic initiative into global processing • Among the top MT companies in India 2.E-BUSINESS GROUP • Strategic intent: to develop a comprehensive financial services portal which includes • Investor servicing: mutual funds, corporate shareholders & depository clients. • Distribution of financial products • Net trading • Insurance distribution 1. Call centerStarted with a 30 agent e-call centerMISSION: Our mission is to be a leading, preferred service provider to our customers, and we aim toachieve this leadership position by building an innovative, enterprising and technology drivenorganization which will set the highest standards of service and business ethics.QUALITY POLICY: To achieve and retain leadership, Karvy shall aim for completecustomers satisfaction, by combining its human and Technological resources, to provide superiorquality financial Services. In the process, Karvy will strive to exceed Customer’s expectations.QUALITY OBJECTIVES: As per the Quality Policy, Karvy will:BABASAB PATIL MARKETING PROJECT REPORT Page No 9
  • 10. A study of Customer Satisfaction towards Mutual Funds 1. Build in- house process that will ensure transparent and harmonious relationship with its clients and investors to provide high quality of services. 2. Establish a partner relationship with its investor service agents and vendors that will help in keeping up its commitments to the customers. 3. Provide high quality of work life for all its employees and equip them with adequate knowledge &skills so as to respond to customer’s need. 4. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics. 5. Use state –of – the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients. 6. Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of it. 7. Strive to keep all stake- holders (shareholders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.Achievements: Among the top 5 stock brokers in India (4% of NSE volumes)Indias No. 1 Registrar & Securities Transfer AgentsAmong the to top 3 Depository ParticipantsLargest Network of Branches & Business AssociatesBABASAB PATIL MARKETING PROJECT REPORT Page No 10
  • 11. A study of Customer Satisfaction towards Mutual FundsISO 9002 certified operations by DNVAmong top 10 Investment bankersLargest Distributor of Financial ProductsAdjudged as one of the top 50 IT uses in India by MIS AsiaLargest mobiliser of funds as per PRIME DATABASEFirst ISO - 9002 Certified Registrar in IndiaA Category- I -Merchant banker.A Category- I -Registrar to Public Issues.Ranked as " The Most Admired Registrar" by MARG.Handled the largest- ever Public Issue - IDBIStrategic tie-up with Jardine Fleming India Securities Ltd.Handled over 500 Public issues as Registrars.Handling the Reliance Account which accounts for nearly 10 million account holdersFirst Depository Participant from Andhra Pradesh.Major issues managed as arrangersKerala State Electricity Board.Power Finance CorporationA.P. Water Resources Development Corporation.A.P. Roads Development Corporation.A.P. State Electricity Board.Haldia Petrochemicals Ltd. Major issues managed as Co-ManagersBABASAB PATIL MARKETING PROJECT REPORT Page No 11
  • 12. A study of Customer Satisfaction towards Mutual FundsIndusInd Bank LtdICICI Bonds – March 97ICICI Bonds – Dec 97ICICI Safety Bonds March 98ICICI Safety Bonds – April 98. July 98, Oct 98, Dec 98, Jan 99.The Jammu and Kashmir Bank LtdMajor issue handled as Registrars to IssuesIDBI EquityMorgan Stanley Mutual FundBank of BarodaBank of Punjab LtdCorporation BankIndusInd Bank LtdHousing and Urban Development Corporation (HUDCO) LtdMadras Refineries LtdTamil Nadu Newsprint & Paper LtdBPL LtdBirla 3M LtdEssar Shipping LtdEssar Steels Ltd.Hindustan Petroleum Corporation Ltd.Infosys Technologies Ltd.Jindal Vijayanagar Steels Ltd.BABASAB PATIL MARKETING PROJECT REPORT Page No 12
  • 13. A study of Customer Satisfaction towards Mutual FundsNagarjuna Fertilizers & Chemicals Ltd.Rajshree Polyfil Ltd. Karvy Securities Ltd.Karvy has secured over Rs. 500 crore in the following debt issues.Andhra Pradesh Road Development Corporation LtdICICI Bonds ( Private Placement)ICICI Bonds – 96ICICI Bonds – 97- IICICI Bonds – 97 – IIICICI Safety Bonds March 98.IDBI Bonds 96.IDBI Flexi Bonds IIDBI Flexi Bonds IIIDBI Flexi Bonds IIIKerala State Electricity BoardKrishna Bhagya Jala Nigam LtdPower Finance Corporation LtdAndhra Pradesh Water Resources Development CorporationAndhra Pradesh State Electricity BoardBABASAB PATIL MARKETING PROJECT REPORT Page No 13
  • 14. A study of Customer Satisfaction towards Mutual FundsKarvy’s Mutual Fund services:Building a heritage of confidence:Since its inception in 1982, Karvy has demonstrated a dedication coupled with dynamism thathas inspired trust from various segments – corporate, government bodies and individuals.Karvy has since been performing a pivotal role as the intermediary – the interface – betweenthese players. With Mutual Funds emerging as a distinct asset class, Karvy has made a strategicchoice to leverage the power of latest technology to provide a cutting edge to its services. We,today, service nearly 40% of the asset management companies (AMCs) across an extensivenetwork of service centers with assets under service in excess of Rs.10,000 crores. Mutual fundservices have been undergoing a sea change in the Indian market place and asset managementcompanies are finding their niche in delivering unique products and service offerings.Our ability to mass customize and offer a diverse range of products for a diverse range ofcustomers has helped mutual fund companies to uniquely position themselves in the marketplace. These diverse range of services cut across multiple delivery channels – service centers,web, mobile phones, call center – has brought home the benefits of technology to investors,distributors, and the mutual funds.Going forward, we shall strive to create new products and services, which would address theneeds of the end customer. Our single minded focus in delivering products for customers hasgiven us the distinguished position of being the preferred provider of financial services inAlliances:Karvy has a strategic alliance with Jardine Fleming India Securities Limited (JFISL) - one ofAsias most prestigious investment bankers - to leverage on the latters investment bankingBABASAB PATIL MARKETING PROJECT REPORT Page No 14
  • 15. A study of Customer Satisfaction towards Mutual Fundsexpertise. This would augment the retail distribution reach and provide the Indian investoraccess to the best global and local insights on financial markets.Jardine is a respected investment banker with a demonstrated track-record of delivering valueto its clients spread over 43 countries. It is ranked amongst the worlds TOP 3 ForeignInstitutional Investors (FIIs).Milestone:BABASAB PATIL MARKETING PROJECT REPORT Page No 15
  • 16. A study of Customer Satisfaction towards Mutual Funds ORGANISATION CHART Managing Director Chief Managing DirectorVice-President Vice-President Vice-President Vice-President Karvy Karvy Karvy Karvy Securities Ltd. Stock Broking Ltd. Consultants Ltd. Investors Services Ltd. Deputy Deputy Deputy Deputy General General General General Manager Manager Manager Manager Senior Senior Senior Senior Manager Manager Manager Manager Branch Manager Number of Team Leaders N number of Executives BABASAB PATIL MARKETING PROJECT REPORT Page No 16
  • 17. A study of Customer Satisfaction towards Mutual Funds INTRODUCTIONDifferent investment avenues are available to investors. Mutual funds also offer good investmentopportunities to the investors. Like all investments, they also carry a certainRisks. The investor should compare the risks and expected yields after adjustment of tax onvarious instruments while taking investment decisions .The investors may seek advice fromexperts and consultants including agents and distributors of mutual funds schemes while makinginvestment decisions.With an objective to make the investors aware of functioning of mutual funds, an attempt has beenmade to provide information in question –answer format that may help the investors in takinginvestment decisions.Mutual funds now represent perhaps the most appropriate investment opportunity for mostinvestors. As financial markets become more sophisticated and complex., investor need afinancial intermediary who provides the required knowledge on professional expertise onsuccessful investing.CONCEPT OF MUTUAL FUNDS:A Mutual Fund is a trust that pools the savings of a number of investors who share aCommon financial goal. The money thus collected is invested by the fund manager indifferent types of securities depending upon the objective of the scheme. These couldrange from shares to debentures to money market instruments. The income earnedthrough these investments and the capital appreciation realized by the scheme are sharedby its unit holders in proportion to the number of units owned by them (pro rata). Thus aMutual Fund is the most suitable investment for the common man as it offers anBABASAB PATIL MARKETING PROJECT REPORT Page No 17
  • 18. A study of Customer Satisfaction towards Mutual Fundsopportunity to invest in a diversified, professionally managed portfolio at a relatively lowcost. Anybody with an investible surplus of as little as a few thousand rupees can investin Mutual Funds. Each Mutual Fund scheme has a defined investment objective andstrategy. It is is a mechanism for pooling the resources by issuing units to the investorsAnd investing funds in securities in accordance with the objectives as disclosed in offerDocument. Investments in securities are spread across a wide cross-section of industriesAnd sectors and thus the risk ins reduced. Diversification reduces the risk because allStocks may not move in the same direction in the same proportion at the same time.Investors of the mutual funds are known as the unit holders. The mutual funds normally come out with a number of schemes withdifferent investment objectives, which are launched from time to time. Mutual fundsrequired to be registered with securities and exchange board of India (SEBI), whichregulates securities markets before it can collect funds from the public.The flow chart below describes broadly the working of a mutual fund :BABASAB PATIL MARKETING PROJECT REPORT Page No 18
  • 19. A study of Customer Satisfaction towards Mutual FundsORGANISATION OF A MUTUAL FUNDThere are many entities involved and the diagram below illustrates theOrganizational set up of a mutual fund:HISTORY OF THE INDIAN MUTUAL FUND INDUSTRYThe mutual fund industry in India started in 1963 with the formation of Unit Trust of India, atthe initiative of the Government of India and Reserve Bank the. The history of mutual funds inIndia can be broadly divided into four distinct phasesFirst Phase – 1964-87Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by theReserve Bank of India and functioned under the Regulatory and administrative control of theReserve Bank of India. In 1978 UTI was de-linked from the RBI and the IndustrialDevelopment Bank of India (IDBI) took over the regulatory and administrative control in placeof RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI hadRs.6,700 crores of assets under management.BABASAB PATIL MARKETING PROJECT REPORT Page No 19
  • 20. A study of Customer Satisfaction towards Mutual FundsSecond Phase – 1987-1993 (Entry of Public Sector Funds)1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banksand Life Insurance Corporation of India (LIC) and General Insurance Corporation of India(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund inDecember 1990.At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.Third Phase – 1993-200 With the entry of private sector funds in 1993, a new era started inthe Indian mutual fund industry, giving the Indian investors a wider choice of fund families.Also, 1993 was the year in which the first Mutual Fund Regulations came into being, underwhich all mutual funds, except UTI were to be registered and governed. The erstwhile KothariPioneer (now merged with Franklin Templeton) was the first private sector mutual fundregistered in July 1993. 3 (Entry of Private Sector Funds)The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive andrevised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (MutualFund) Regulations 1996The number of mutual fund houses went on increasing, with many foreign mutual funds settingup funds in India and also the industry has witnessed several mergers and acquisitions. As atthe end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead ofother mutual funds.BABASAB PATIL MARKETING PROJECT REPORT Page No 20
  • 21. A study of Customer Satisfaction towards Mutual FundsFourth Phase – since February 2003In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcatedinto two separate entities. One is the Specified Undertaking of the Unit Trust of India withassets under management of Rs.29,835 crores as at the end of January 2003, representingbroadly, the assets of US 64 scheme, assured return and certain other schemes. The SpecifiedUndertaking of Unit Trust of India, functioning under an administrator and under the rulesframed by Government of India and does not come under the purview of the Mutual FundRegulations.The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It isregistered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation ofthe erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets undermanagement and with the setting up of a UTI Mutual Fund, conforming to the SEBI MutualFund Regulations, and with recent mergers taking place among different private sector funds,the mutual fund industry has entered its current phase of consolidation and growth. As at theend of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under421 schemes.The graph indicates the growth of assets over the yearsUnit Trust of India was the first mutual fund set up in India in the year 1963. In early1990s, Government allowed public sector banks and institutions to set up mutual fundsIn the year 1992, Securities and exchange Board of India (SEBI) Act was passed. TheObjectives of SEBI are – to protect the interest of investors in securities and to promoteThe development of and to regulate the securities market.As far as mutual funds are concerned, SEBI formulates policies and regulates the mutualBABASAB PATIL MARKETING PROJECT REPORT Page No 21
  • 22. A study of Customer Satisfaction towards Mutual Fundsfunds to protect the interest of the investors. SEBI notified regulations for the mutualfunds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowedto enter the capital market. The regulations were fully revised in 1996 and have beenamended thereafter from time to time. SEBI has also issued guidelines to the mutualfunds from time to time to protect the interests of investors.All mutual funds whether promoted by public sector or private sector entities includingthose promoted by foreign entities are governed by the same set of Regulations. There isno distinction in regulatory requirements for these mutual funds and all are subject tomonitoring and inspections by SEBI. The risks associated with the schemes launched bythe mutual funds sponsored by these entities are of similar type. It may be mentioned herethat Unit Trust of India (UTI) is not registered with SEBI as a mutual fund (as on January 15,2002).MUTUAL FUND SET-UP:The mutual fund industry in India began with the setting up of the Unit Trust In India(UTI) in 1964 by the Government of India. During the last 36 years, UTI has grown to bea dominant player in the industry with assets of over Rs. 76,547 Crores as of March 31,2000. The UTI is governed by a special legislation, the Unit Trust of India Act, 1963. In1987 public sector banks and insurance companies were permitted to set up mutual fundsand accordingly since 1987, 6 public sector banks have set up mutual funds. Also the twoInsurance companies LIC and GIC established mutual funds. Securities Exchange Boardof India (SEBI) formulated the Mutual Fund (Regulation) 1993, which for the first timeestablished a comprehensive regulatory framework for the mutual fund industry. Sincethen several mutual funds have been set up by the private and joint sectors.A mutual fund is set up in the form of a trust, which has sponsor, trustees, assetBABASAB PATIL MARKETING PROJECT REPORT Page No 22
  • 23. A study of Customer Satisfaction towards Mutual FundsManagement company (AMC) and custodian. The trust is established by a sponsor orMore than one sponsor who is like promoter of a company. The trustees of the mutualFunds hold its property for the benefit of the unit holders. Asset Management Company(AMC) approved by SEBI manages the funds by making investments in various types ofSecurities. Custodian, who is registered with SEBI, holds the securities of variousSchemes of the fund in its custody. The trustees are vested with the general power ofSuperintendence and direction over AMC. They monitor the performance and complianceof SEBI Regulations by the mutual fund.SEBI Regulations require that at least two thirds of the directors of trustee company orboard of trustees must be independent i.e. they should not be associated with thesponsors. Also, 50% of the directors of AMC must be independent. All mutual funds arerequired to be registered with SEBI before they launch any scheme. However, Unit Trustof India (UTI) is not registered with SEBI (as on January 15, 2002).BABASAB PATIL MARKETING PROJECT REPORT Page No 23
  • 24. A study of Customer Satisfaction towards Mutual FundsADVANTAGES OF MUTUAL FUNDS: The following are the major advantages offered by mutual funds to all the investors. 1. Portfolio diversification: Mutual funds normally invest in a well –diversified portfolio or securities. Each investor in a fund is a part of owner of all of the fund’s assets. This enables him to hold a diversified investment portfolio even with a small amount of investment that would otherwise require big capital. 2. Professional management: Even if an investor has an big amount of capital available to him, he Benefits from professional management skills brought by the fund in the Management of the investor’s portfolio. The investments management skills Along with a need ed research into available investment options ,ensure a much better return than what an investor can manage on his own . 3.Reduction /diversification: An investor in mutual fund acquires a diversified portfolio, no matter how small his investment. Diversification reduces the risk of loss, as compared to investing directly in one or two shares or debentures or other instruments. this risk reduction is one of the most important benefits of a collective investment Vehicle like the mutual fund. 4.Reduction of transaction costs: What is true of risk is also true of the transaction costs .a direct Investors bears all the costs of investing such as brokerage or custody of Securities. When going through a fund, he has the benefit of economies of scale;BABASAB PATIL MARKETING PROJECT REPORT Page No 24
  • 25. A study of Customer Satisfaction towards Mutual Funds The funds pay lesser costs because of larger volumes, a benefit passed on to its Investors. 5. Liquidity: Investment in a mutual fund is more liquid .an investor can liquidate The investment, by selling the units to the fund if open-end, or selling them in the market if the fund is closed –end and collect funds at the end of a specified by the mutual fund or the stock market 6. Convenience and flexibility: Mutual fund management companies offer many investor services that a direct market investor cannot get. Investors can easily transfer their holdings from one scheme to the other ,get updated market information and so on. * Drawbacks of Mutual Funds: 1) No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money. 2) 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, 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. 3) 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,BABASAB PATIL MARKETING PROJECT REPORT Page No 25
  • 26. A study of Customer Satisfaction towards Mutual Funds you will pay taxes on the income you receive, even if you reinvest the money you made. 4)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.BABASAB PATIL MARKETING PROJECT REPORT Page No 26
  • 27. A study of Customer Satisfaction towards Mutual FundsFREQUENTLY USED TERMS:Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities. Theper unit NAV is the net asset value of the scheme divided by the number of unitsOutstanding on the Valuation DateSale PriceIs the price you pay when you invest in a scheme. Also called Offer Price. It may include a salesloadRepurchase PriceIs the price at which a close-ended scheme repurchases its units and it may include aback-end load. This is also called Bid Price.Redemption PriceIs the price at which open-ended schemes repurchase their units and close-ended schemesredeem their units on maturity. Such prices are NAV relatedSales LoadIs a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load.Schemes that do not charge a load are called ‘No Load’ schemes.Repurchase or ‘Back-end’ LoadIs a charge collected by a scheme when it buys back the units from the unit holders.Sector specific funds/schemes :These are the funds/schemes, which invest in the securities of only those sectors or industriesas specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving ConsumerGoods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on theperformance of the respective sectors/industries. While these funds may give higher returns,BABASAB PATIL MARKETING PROJECT REPORT Page No 27
  • 28. A study of Customer Satisfaction towards Mutual Fundsthey are more risky compared to diversified funds. Investors need to keep a watch on theperformance of those sectors/industries and must exit at an appropriate time. They may alsoseek advice of an expert.Tax Saving Schemes:These schemes offer tax rebates to the investors under specific provisions of the Income TaxAct, 1961 as the Government offers tax incentives for investment in specified avenues. e.g.Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds alsooffer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities.Their growth opportunities and risks associated are like any equity-oriented scheme.Risks involved in investing in mutual funds.A very important risk involved in mutual fund investments is the market risk. When the market isin doldrums, most of the equity funds will also experience a downturn. However, the companyspecific risks are largely eliminated due to professional fund management.Different types of plans that any mutual fund scheme offersIt depends on your investment object, which again depends on your income, age, financialresponsibilities, risk taking capacity and tax status. For example a retired government employee ismost likely to opt for monthly income plan while a high-income youngster is most likely to opt forgrowth plan.BABASAB PATIL MARKETING PROJECT REPORT Page No 28
  • 29. A study of Customer Satisfaction towards Mutual FundsDIFFERENT TYPES OF MUTUAL FUNDS SCHEMES:Open-ended Fund /Scheme: An open-ended fund or scheme is one that is available for subscription and repurchaseon 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 aredeclared on a daily basis. The key feature of open –ended schemes is liquidity. The” unitcapital” of an open-ended mutual fund is not fixed but variable. The fund size and itstotal investment amount go up if more new subscription come in from new investors thanredemption by existing investors ; the fund shrinks when redemption of units exceedfresh subscriptions.Closed-ended Fund/scheme:A closed –ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fundis open for subscription only during a specified period at the time of launch of theschemes. Investor can invest in the scheme at the time of the initial public issues andthereafter they can buy and sell the units of the scheme on the stock exchanges where theunits are listed. In order to provide an exit route to the investors, some close-ended fundsgive an option of selling back the units to the mutual fund through periodic repurchase atNAV related prices. SEBI regulations stipulate that at least one of the two exit routes isprovided to the investor i.e. either repurchases facility or trough listing on stockexchanges. These mutual funds schemes disclose NAV generally on weekly basis.BABASAB PATIL MARKETING PROJECT REPORT Page No 29
  • 30. A study of Customer Satisfaction towards Mutual FundsLoad and No-load funds. Marketing of a new mutual fund schemes involves initial expenses . these expensesmay be recovered from the investors in different times. Three usual way’s in which aFund’s sales expenses may be recovered from the investor from the investors are: 1. At the time of investor’s entry into the fund/ scheme, by deducting a specific amount from his initial contribution. 2. By charging the fund /scheme with a fixed amount each year ,during the stated number of years ,or 3. At the time of the investor’s exit from the fund/scheme, by deducting a specified amount from the redemption proceeds payable to the investors. A load is one that charges a percentage of NAV for entry or exit. That is , each time one buys or sells units in the fund, a charge will be payable . This charge is used by the mutual fund for marketing and distribution expenses. suppose the NAV per units Rs.10 if the entry as well as exit load charged is%1, then the investors who buy would be required to pay Rs.10.10 and those who offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit. The investors should take the loads into consideration while making investment as these affect their yields /returns . However, the investors should also consider the performance track record and service standards of the mutual fund which are more important .Effective funds may give higher returns in spite of loads. A no-load fund is one that does not charge or exit .It means the investors can enter the funds/scheme at NAV and no additional charges are payable on purchase or sales of units. These charges made by the fund managers to the investors to cover distribution/ sales/ marketing expenses are often called “loads” . The load charged toBABASAB PATIL MARKETING PROJECT REPORT Page No 30
  • 31. A study of Customer Satisfaction towards Mutual Funds the investor at the time of his entry into a scheme is called a “front –end or entry load”. The load charged to the scheme over a period of time is called a “deferred load” . the load that the investor pays at the time of his exit is called a “back-end or exit load”. Tax –exempt Vs. Non –Tax –exempt Funds Generally , when a fund invests in tax-exempt securities , it is called a tax –exempt fund .In the U S A,for ex ,municipal bonds pay interest that is tax- free, while interest on corporate and other bonds is taxable. In India ,after the 1999 Union Government Budget ,all of the dividend income received from any of the mutual funds is tax – free in the hands of the investor. However ,funds other than Equity funds have to pay a distribution tax, before distributing income to investors . While Indian mutual funds currently offer tax-free income, any capital gains arising out of sale of fund units are taxable .All these tax consideration are important in the decision on where to invest as the tax- exemptions or concessions alter the returns obtained from these investments. MUTUAL FUND TYPES: a) Broad Fund Types by Nature of investments: Mutual funds may invest in equities, bonds or other fixed income securities, or short- term money market securities .So we have Euity,Bond and Money Market Funds. All of them investment in financial assets .But there invest in physical assets. For ex. We may have Gold or other precious Metals funds or Real Estate Funds.BABASAB PATIL MARKETING PROJECT REPORT Page No 31
  • 32. A study of Customer Satisfaction towards Mutual Funds b) Broad Fund Types by investment Objective: Investors and hence the mutual funds pursue different objective while investing. Thus Growth Funds invest for medium to long term capital apperception. Value funds invest in equities that are considered under –valued today , whose value will be unlocked in the future. c) Broad fund Types by Risk Profile: The nature of a fund’s portfolio and investment objective imply different levels of risk undertaken . Funds are therefore often grouped in order of risk . Thus, Equity Funds have a greater a risk of capital loss than a debt fund that seeks to protect the capital while looking for income. Money Market Funds are exposed to less than even the Bonds funds ,since they invest in short- term fixed income securities, as compared to longer –term portfolios of Bond Funds. Money Market Funds: Often considered to be at the lowest rung in the order of risk level, Money Market Funds invest in securities of short-term nature, which generally means securities of less than one- year maturity .The typical, short-term ,interest –bearing instruments these funds invest in include Treasury Bills issued by governments,certifactes of Deposit issued by banks and Commercial Paper issued by companies.In India,Money Market Mutual Funds also invest in the inter-bank call money market. Gift Funds: Gifts are government securities with medium to long- term maturities, typically of over one year .in India, we have now seen the emergence of Government securitiesBABASAB PATIL MARKETING PROJECT REPORT Page No 32
  • 33. A study of Customer Satisfaction towards Mutual Funds or gift funds that invest in government in government paper called dated securities. since the issuer is the governments/s of India/states these funds have little risk of default and hence offer better protection of principles . Debt Funds (Income Funds): Debt funds invest in debt instruments issued not only by governments, but also by private companies, banks and financial institutions and other entities such as infrastructure companies/utilities. By investing in debt ,these funds target low risk and stable income for the investor as their key objectives. Debt funds are largely considered as Income funds as they do not target capital appreciation, look for high current income, and therefore distribute a substantial part of their surplus to investors. Income funds that target returns substantially above market levels can face more risks. a) Diversified Debt Funds: A debt fund that invest in all available types of debt securities, issued by entities across all industries and sectors is a properly diversified debt fund. While debt offer high income and less risk than equity funds, investors need to recognize that debt securities are subject to risk of default by the issuer on payment of interest or principal .A diversified debt fund has the benefit of risk reduction through diversification and sharing of any default losses by a larger number of investors. Hence a diversified debt fund isles risky than a narrow –focus fund that invest in debt securities of a particular sector or industry.BABASAB PATIL MARKETING PROJECT REPORT Page No 33
  • 34. A study of Customer Satisfaction towards Mutual Funds b) Focused Debt Funds: Some debt funds have a narrow focus ,with less diversification in its Investments.Ex include sector ,specialized and offshore debt funds. These are similar to the funds described later in the equity category except that debt funds have a substantial part their portfolio invested in debt instruments and are Therefore more income oriented and inherently less risky than equity funds. That debt funds should be automatically considered to be less risky than equity funds. c) High Yield Debt Funds: Usually ,debt funds control the borrower default risk by investing in Securities issued by borrowers who are rated by credit rating agencies and are considered to be of “investment grade “.There are High Yield debt funds that seek to obtain higher interest returns by investing in debt instruments that are considered “bellow investment grade”.Cleraly ,these funds are exposed to higher risk. d) Assured Return Funds-an Indian Variant: Fundamentally ,mutual funds hold assets in trust for investors. All returns and risks are for account of the investor .The role of the fund manager is to provide the professional management service and to ensure the highest possible return consistent with the investment objective of the fund .The fund manager or the trustees or the sponsors do not give any guarantee on the minimum return to the investors.BABASAB PATIL MARKETING PROJECT REPORT Page No 34
  • 35. A study of Customer Satisfaction towards Mutual Funds e) Fixed Term Plan Series-Another Indian Variant: A mutual fund scheme would normally be either open-end or close-end .However ,In India, mutual funds have evolved an innovative middle option the two, in response to investor needs. If a scheme is open-end ,the fund issues new units and redeems them at any time. The fund does not have a stated maturity or fixed term of investment as such. Fixed Term Plan series offer a combination of both these features to investors ,as a series of plans are offered and units are issued at frequent intervals for short plan durations. Equity Funds: Equity funds invest a major portion of their corpus in equity shares issued by companies, acquired directly in initial public offerings or through the secondary market .Equity funds would be exposed to the equity price fluctuation risk at the market level, at the industry or sector level and at the company- specific level. Equity Funds Net asset Values fluctuate with all these price movements. they are generally considered at the higher end of the risk spectrum among all funds available in the market. a) Aggressive Growth Funds: As the name suggests , aggressive growth funds target maximum capital appreciation, invest in less researched or speculative shares and may adopt speculative investment strategies to attain their objective of high returns for the investor .consequently ,they tend to be more volatile and riskier than other funds. b) Growth Funds: Growth fund invest in companies whose earnings are expected toBABASAB PATIL MARKETING PROJECT REPORT Page No 35
  • 36. A study of Customer Satisfaction towards Mutual Funds rise at an above average rate. These companies may be operating in sectors like technology considered to have a growth potential ,but not entirely unproven and speculative .the primary objective of growth fund is capital appreciation over a three to five year span . growth funds are therefore less volatile than funds that target aggressive growth. C) Specialty Funds: These funds have a narrow portfolio orientation and invest in only companies that meet pre- defined criteria. for EX. At the height of the South African regime, many funds in the U.S.offered plans that promised not to invest in south African companies. Funds that invest in particular regions such as the Middle East or ASEAN countries are also an example of specialty funds. C) I . Sector Funds: Sector fund’s Portfolios consist of investment in only one industry or sector of the the market such as Information Technology , Pharmaceuticals or Fast Moving Consumer goods that have recently been launched in India. Since sector funds do not diversify into multiple sectors ,they carry a higher level of sector and company specific risk than diversified equity funds. C) II. Offshore Funds These funds invest in equities in one or more foreign countries therebyachieving diversification across the country’s borders. However they also have additionalrisks-such as the foreign exchange rate risk-and their performance depends on theeconomic conditions of the countries they invest in. Offshore Equity funds may investin a single country or many countries.BABASAB PATIL MARKETING PROJECT REPORT Page No 36
  • 37. A study of Customer Satisfaction towards Mutual Funds C) III. Small-Cap Equity Funds These funds invest in shares of companies with relatively lower marketcapitalization than that of big ,blue chip companies. They may thus be more volatile thanother funds ,as smaller companies ‘shares are not very liquid in the markets.We can think of these funds as a segment of specialty funds. Int terms of riskcharacteristics, small company funds may be aggressive –growth type .D) Diversified Equity Funds A fund that seeks to invest only in equities , except for a very smallportion in liquid money market securities ,but is not focused to all equity price risks,diversified equity funds seek to reduce the sector or stock specific risks throughdiversification .They have mainly market risk exposure. Such general purpose butdiversified funds are clearly at the lower risk level than growth funds.D) i. Equity Linked Savings Schemes: In India the investor’s have given tax concessions to encourage them toinvest in equity markets through these special schemes. Investment in these schemesentitles the investor to claim an income tax rebate ,but usually has a lock- in periodbefore the end of which funds cannot be withdrawn. These funds are subject to thegeneral SEBI investment guidelines for all “equity” funds, and would be in thediversified Equity Fund category.E) Equity Index funds: An index fund track the performance of a specific stock market index.The objective is to match the performance of the stock market by tracking an index thatBABASAB PATIL MARKETING PROJECT REPORT Page No 37
  • 38. A study of Customer Satisfaction towards Mutual Fundsrepresents the overall market. The fund invests in shares that constitute the index andin the same proportion as the index . since they generally invest in a diversified marketindex portfolio, these funds take only the overall market risk ,while reducing the sectorand stock specific risks through diversification.F) Value Funds : Value Funds have the equity market price fluctuations risks ,but stand often at a lower end of the risk spectrum in comparison with the Growth Funds. Value stocks may be from a large number of sectors and therefore diversified. However ,value stocks may be from a cyclical industries. In the long-term ,value funds ought to be less risky than growth funds or even Equity Diversified Funds. G) Equity Income Funds: There are equity funds that can designed to give the investor a high level of current income along with some steady capital appreciation, investing mainly in shares of companies with high dividend yields. These equity funds should therefore be less volatile and less risky than nearly all other equity funds. Hybrid Funds –Quasi Equity/Quasi debt There are funds that, however, seek to hold a relatively balanced holdings of debt and equity securities in their portfolios. Such funds are termed “hybrid funds” as they have a dual equity /bond focus. Some of the funds in this category are described below. a) Balanced Funds: A balanced fund is one that is one that has a portfolio comprising debt instruments , convertible securities , preference and equity shares. Their assetsBABASAB PATIL MARKETING PROJECT REPORT Page No 38
  • 39. A study of Customer Satisfaction towards Mutual Funds are generally held in more or less equal proportion s between debt/money market securities and equities . By investing in a mix of this nature ,balanced funds seek to attain the objectives of income ,moderate capital appreciation and preservation of capital and are ideal for investors with a conservative and long- term orientation. b) Growth-and-Income Funds: Unlike income –focused or growth –focused funds, these funds seek to strike a balance between capital appreciation and income for the investor . their portfolios are a mix between companies with good dividend paying records and those with potential for capital appreciation these funds would be less risky than pure growth funds, though more risky than income funds. C) Asset Allocation Funds: Normally ,an Equity fund would have its primary portfolio in equities most of the time .similarly a debt fund would not have major equity holdings .In other words ,their “asset allocation “is predetermined within certain parameters. However there do exist funds that follow variable asset allocation policies and move in and out of an asset class. depending upon their outlook for specific markets. Commodity Funds: Commodity funds specialize in investing in different commodities directly or through shares of commodity companies or commodity futures contracts. Specialized funds may invest in a single commodity or a commodity group such as edible oils or grains ,while diversified commodity funds will spread their assets over many commodities. Real Estate Funds: Specialized Real estate Funds would invest in Real Estate directly, or mayBABASAB PATIL MARKETING PROJECT REPORT Page No 39
  • 40. A study of Customer Satisfaction towards Mutual Funds fund real estate developers, or lend to them ,or buy shares of housing finance companies or many even buy their securitised assets. The funds may have a growth orientation or seek to give investors regular income. There has recently been an initiative to offer such an income fund by the HDFC.Regulatory Aspects of Mutual FundsSchemes of a Mutual Fund • The asset management company shall launch no scheme unless the trustees approve such scheme and a copy of the offer document has been filed with the Board. • Every mutual fund shall along with the offer document of each scheme pay filing fees. • The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor • The mutual fund and asset management company shall be liable to refund the application money to the applicants,- (i) If the mutual fund fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1); (ii) If the moneys received from the applicants for units are in excess of subscription as referred to in clause (b) of sub- regulation (1). • The asset management company shall issue to the applicant whose application has been accepted, unit certificates or a statement of accounts specifying the number of units allotted to the applicant as soon as possible but not later than six weeks from the date ofBABASAB PATIL MARKETING PROJECT REPORT Page No 40
  • 41. A study of Customer Satisfaction towards Mutual Funds closure of the initial subscription list and or from the date of receipt of the request from the unit holders in any open ended scheme.Rules Regarding Advertisement: • The offer document and advertisement materials shall not be misleading or contain any statement or opinion, which are incorrect or false.Investment Objectives And Valuation Policies: • The price at which the units may be subscribed or sold and the price at which such units may at any time be repurchased by the mutual fund shall be made available to the investors.General Obligations: • Every asset management company for each scheme shall keep and maintain proper books of accounts, records and documents, for each scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the fund and intimate to the Board the place where such books of accounts, records and documents are maintained. • The financial year for all the schemes shall end as of March 31 of each year. Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management company. Procedure For Action In Case Of Default: • On and from the date of the suspension of the certificate or the approval, as the case may be, the mutual fund, trustees or asset management company, shall cease to carry on any activity as a mutual fund, trustee or asset management company, during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents, or securities that may be in its custody or control, relating to its activities as mutual fund, trustees or asset management company.BABASAB PATIL MARKETING PROJECT REPORT Page No 41
  • 42. A study of Customer Satisfaction towards Mutual FundsRestrictions On Investments: • A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer, which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the Act. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of asset management company. • A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. All such investments shall be made with the prior approval of the Board of Trustees and the Board of asset management company. • No mutual fund under all its schemes should own more than ten per cent of any companys paid up capital carrying voting rights. • Such transfers are done at the prevailing market price for quoted instruments on spot basis. • The securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made. • A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees, provided that aggregate interscheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund. • The initial issue expenses in respect of any scheme may not exceed six per cent of the funds raised under that scheme. • Every mutual fund shall buy and sell securities on the basis of deliveries and shall in allBABASAB PATIL MARKETING PROJECT REPORT Page No 42
  • 43. A study of Customer Satisfaction towards Mutual Funds cases of purchases, take delivery of relative securities and in all cases of sale, deliver the securities and shall in no case put itself in a position whereby it has to make short sale or carry forward transaction or engage in badla finance. • Every mutual fund shall, get the securities purchased or transferred in the name of the mutual fund on account of the concerned scheme, wherever investments are intended to be of long-term nature. • Pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. • No mutual fund scheme shall make any investment in; i. Any unlisted security of an associate or group company of the sponsor; or ii Any security issued by way of private placement by an associate or group company of the sponsor; or The listed securities of group companies of the sponsor which is in excess of 30% of the net assets [of all the schemes of a mutual fund] • No mutual fund scheme shall invest more than 10 per cent of its NAV in the equity shares or equity related instruments of any company. Provided that, the limit of 10 per cent shall not be applicable for investments in index fund or sector or industry specific scheme. • A mutual fund scheme shall not invest more than 5% of its NAV in the equity shares or equity related investments in case of open-ended scheme and 10% of its NAV in case of close-ended scheme.BABASAB PATIL MARKETING PROJECT REPORT Page No 43
  • 44. A study of Customer Satisfaction towards Mutual FundsON-LINE PROCEDURE: IIL / 5p Users Registered Users New User 5p investor can use their trading ID & Registration form Fund Transfer (Ledger) password for availing online Equity IPO & Mutual Funds. Login ID Investor has to accept POA terms & conditions & also need to send physical copy Password of POA by courier or post ASAP POA Confirmation Investor has to select his/her Product correct DP Name from list & input DP s ID & Beneficiary account. Allotment proceeds will be MF IPO credited to this DP Account Company DP Details Scheme Select No of Shares Transaction Report Confirmation Report PAN Card is compulsory, for investments greater than or equal to Rs. Reminder for Documents 50000. Redirect to Payment GatewayBABASAB PATIL MARKETING PROJECT REPORT Page No 44 Thank you
  • 45. A study of Customer Satisfaction towards Mutual FundsGrowth of the Mutual Fund Industry in India :The mutual fund industry has seen various phases in India and has evolved overthe last 10 years in a big way. It started in India in 1963 with the setting up ofUnit Trust of India. Its total Assets under Management (AUM) reached a level ofRs 67 billion by the end of 1988. In 1987 some Public Sector Banks and InsuranceCompanies started their own mutual funds and kicked off the second phase in themutual fund industry. SBI Mutual Fund, LIC Mutual Fund etc. were few amongthem.The mutual fund industry registered a major milestone in 1993 with the beginningof first private sector mutual fund. The erstwhile Kothari Pioneer Mutual Fund(now merged with Franklin Templeton Mutual Fund) was the first private sectormutual fund registered in July 1993. After that several mutual funds have startedin India, including many international players. The industry has also seen a spateof mergers and acquisitions, most recently being the acquisition of the schemes ofAlliance Mutual by Birla Sun Life and Sun F&C by Principal Mutual.The latest phase in the evolution of the industry started when Unit Trust of India(UTI) was bifurcated into two separate entities. The first one is the specifiedundertaking of UTI and covers mainly the AUM of US-64 (the first mutual fundscheme in India) and other assured return schemes. The second is the UTI MutualFund, which manages about 40 schemes and AUM worth Rs 209.76 billion as ofDecember 2004.While the Indian mutual fund industry has grown in size by about320% from March, 1993 (Rs 470 billion) to December, 2004 (Rs 1505 billion) interms of AUM, the AUM of the sector excluding UTI has grown over 8 times fromRs.152 billion in March 1999 to Rs.1295 billion as at December 2004 (See Chart 1).BABASAB PATIL MARKETING PROJECT REPORT Page No 45
  • 46. A study of Customer Satisfaction towards Mutual Funds 1SECURITIES AND EXCHANGE BOARD OF INDIA INVESTMENT MANAGEMENT DEPARTMENTBABASAB PATIL MARKETING PROJECT REPORT Page No 46
  • 47. A study of Customer Satisfaction towards Mutual FundsTrends in Transactions on Stock Exchanges by Mutual Funds(since January 2000)Trends in Transactions on Stock Exchanges by Mutual Funds(Provisional and subject to revision) February 2005 Equity (Rs in crores) Debt (Rs in crores)Transactio Gross Gross Net Gross Gross Netn Date Purchases Sales Purchase Purchas Sales Purcha s / Sales es ses/ Equity (Rs in Crores) Sales Debt (Rs in Crores) 01.02.05 159.50 272.45 -112.95 Net 366.45 254.61 111.84 Net 02.02.05 290.22 Gross 246.23 Gross 43.99 793.07 Gross Purchase/ 525.92 Gross 267.15 Purchase 03.02.05 195.62 Purchase 211.86 Sales -16.24 Sales 767.85 Purchase 280.55 Sales 487.30 / Sales 04.02.05Jan 2000- 131.16 113.52 17.64 409.49 343.13 66.36 05.02.05March 0.00 0.00 0.00 261.26 71.35 189.91 07.02.052000. 109.64 11070.54 195.16 11492.19 -85.52 -421.65 378.63 2764.72 191.39 1864.29 187.24 900.43 08.02.05April 2000 199.20 169.55 29.65 486.78 406.32 80.46 09.02.05-March 193.60 141.26 52.34 597.15 213.70 383.45 10.02.052001. 198.31 17375.78 148.58 20142.76 49.73 -2766.98350.41 13512.17 449.75 8488.68 -99.34 5023.49 11.02.05April 2001- 229.54 167.90 61.64 260.32 218.11 42.21 12.02.05March 0.00 0.00 0.00 40.20 59.81 -19.61 14.02.052002. 240.43 12098.11 195.25 15893.99 45.18 -3795.88174.22 33583.64 46.83 127.39 22624.42 10959.22 15.02.05April 2002- 107.62 239.60 -131.98 261.86 189.49 72.37 16.02.05March 2003 179.72 14520.89 157.57 16587.59 22.15 -2066.70237.29 46663.83 154.00 34059.41 83.29 12604.42 17.02.05April 2003- 108.62 205.94 -97.32 318.27 193.74 124.53March 2004 18.02.05 36663.58 202.63 35355.67 -49.35 251.98 1307.91 124.81 63169.93 87.80 40469.18 37.01 22700.75April 2004. 19.02.05 3675.30 0.00 3894.64 0.00-219.34 40.13 6105.57 0.00 40.09 3653.81 0.04 2451.76May 2004. Total 4857.15 2545.81 3852.06 2716.85 -171.041005.09 5868.19 4311.55 3726.59 3684.39 2141.60 627.16June 2004. 2130.11 2389.96 -259.85 4066.64 5338.14 -1271.50July 2004. 2678.86 3149.27 -470.41 4356.85 4006.42 350.43August2004 2822.05 2919.88 -97.83 4582.91 3228.22 1354.69September2004. 3530.42 3759.18 -228.76 4620.8 3411.59 1209.21October2004. 2861.36 3283.24 -421.88 2354.67 2819.14 -464.47November2004. 3589.34 4284.71 -695.37 3709.49 2527.27 1182.22December2004. 4795.59 5151.50 -355.91 6573.29 3872.69 2700.60January2005. 3767.54 3219.83 547.71 5817.59 3137.39 2680.20February2005 (upto19th) 2545.81 2716.85 -171.04 5868.19 3726.59 2141.60BABASAB PATIL MARKETING PROJECT REPORT Page No 47Total (April04 - Feb.05) 37253.53 38621.12 -1367.59 52367.55 39405.65 12961.90
  • 48. A study of Customer Satisfaction towards Mutual FundsANALYSIS OF CUSTOMER SATISFACTION: The Sample size selected for the survey was 100 .The respondents are the customers of KARVYCONSULTANT STOCK BROCKING LTD. were available for the survey,& their opinion wastaken to know the customer satisfaction towards Mutual Funds.Q NO .1 Do you believe in savings? YES NO 100% 0%BABASAB PATIL MARKETING PROJECT REPORT Page No 48
  • 49. A study of Customer Satisfaction towards Mutual Funds savings 100 100 80 respondents Number of 60 yes 40 0 No 20 0 1 opinionInterpretation:According to the survey we came to know that 100%respondents are believe in savings.from the selected sample all respondents save their earnings in investing in mutualfunds.So they believe in savings. Q NO .2 What is the minimum amount you save per month/quarterly/ half- yearly/yearly? 0-500 500-1000 1000-2000 2000-5000 5000 above 8 17 26 25 24 8% 17% 26% 25% 24%BABASAB PATIL MARKETING PROJECT REPORT Page No 49
  • 50. A study of Customer Satisfaction towards Mutual Funds Minimum amount of savings 30 26 25 24 25 Amount of savings 17 20 0-500 15 500-1000 8 10 1000-2000 5 2000-5000 5000 above 0 1 Savings per monthInterpretation:By conducting survey we came to know about the minimum amount of savings made bythe Respondents 8% of respondents save between 0-500, 17%respondents savebetween 500-1000, & 26%of respondents save between 1000-2000, & 25% of therespondents save between 2000-5000& 24% of respondents save above 5000.Sohere maximum Respondents are fall in the category 1000-2000.3 Q No : As customers while investing in Mutual Funds what factors do you see? [A] 1 2 3 4 5 6 60 20 10 6 3 1 60% 20% 10% 6% 3% 1%BABASAB PATIL MARKETING PROJECT REPORT Page No 50
  • 51. A study of Customer Satisfaction towards Mutual Funds Saftey 60 60 50 No of 40 Responden 30 20 ts 10 20 6 Saftey 1 3 1 10 0 1 2 3 4 5 6 RanksInterpretation: According to the survey we know that 60% of respondents have given firstpreference to safety,20% of respondents are given second preference,10%respondents are given third preference ,6% of respondents are given fourthpreference, as like 5% respondents given fifth ,1% respondents given sixthpreference. 3 [B] 1 2 3 4 5 6 28 34 20 14 4 0 28% 34% 20% 14% 4% 0%BABASAB PATIL MARKETING PROJECT REPORT Page No 51
  • 52. A study of Customer Satisfaction towards Mutual Funds Rate of return 2 34 40 28 30 20 No of Responden 14 20 ts 4 0 10 Rate of return 2 0 1 2 3 4 5 6 RanksInterpretation: According to the survey we came to know that 28% of the respondents have given firstpreference to rate of return, 34 % respondents have given second preference,20% respondents have given third ,14% respondents have given fourth ,4% havegiven fifth. 3 [C ] 1 2 3 4 5 6 2 20 18 44 15 1 2% 20% 18% 44% 15% 1%BABASAB PATIL MARKETING PROJECT REPORT Page No 52
  • 53. A study of Customer Satisfaction towards Mutual Funds Liquidity 3 50 44 No of Respondents 40 30 20 18 Liquidity 3 20 15 10 2 1 0 1 2 3 4 5 6 RanksInterpretation:According to the survey we came to know that 2% respondents have given firstpreference,20%have Given second, 18% have given third,44%have fourth,15%have givenfifth,1%have given as six. 3 [D] 1 2 3 4 5 6 6 16 37 14 25 2 6% 16% 37% 14% 25% 2%BABASAB PATIL MARKETING PROJECT REPORT Page No 53
  • 54. A study of Customer Satisfaction towards Mutual Funds Tax liability 4 40 37 35 25 30 No of 25 Responde 20 16 14 6 nts 15 Tax liability 4 10 2 5 0 1 2 3 4 5 6 RanksInterpretation:According to the survey we came to know that 6% of respondents have given first,16%have givenSecond,37%have given third,14%have given fourth ,25% have given fifth,2%havegiven six preference. 3 [E] 1 2 3 4 5 6 3 8 13 18 48 10 3% 8% 13% 18% 48% 10%BABASAB PATIL MARKETING PROJECT REPORT Page No 54
  • 55. A study of Customer Satisfaction towards Mutual Funds Flexibility 5 10 3 8 1 13 2 3 4 5 48 18 6Interpretation:According to the survey we came to know that 3% of respondents have given first preference, 85have given Second,13% have given third,18%have given fourth 48% have given fifth,10% have given six preference.3 [F] 1 2 3 4 5 6 1 2 2 4 5 86 1% 2% 2% 4% 5% 86%BABASAB PATIL MARKETING PROJECT REPORT Page No 55
  • 56. A study of Customer Satisfaction towards Mutual Funds Others if any 6 100 90 86 80 No of Respondents 70 60 50 Others if any 6 40 30 20 10 2 2 4 5 1 0 1 2 3 4 5 6 RanksInterpretation:According to the survey we came to know that 1% of respondents have given first preference, 2%have given second, 2%have given third,4% have given fourth ,55have given fifth ,86%have given six preference. Q No 4 : In which scheme are your holding your Mutual Fund? [ I] Equity 63 63% Debt 5 5% Balanced 30 30%BABASAB PATIL MARKETING PROJECT REPORT Page No 56
  • 57. A study of Customer Satisfaction towards Mutual Funds Schemes of holding 63 70 60 50 30 No of 40 Response 30 5 20 10 0 Equity Debt Balanced Types of schemesInterpretation:Here the majority of respondents i,e,63% , have chosen Equityscheme for investing their savings in mutual funds &remaining 5%for debt& 30%for balanced scheme. Q No 5 : How do you justify your performance of your service provider for over Mutual Fund distribution? Qty services 36 36% Steady 16 16% Reach 13 13% Safety 28 28%BABASAB PATIL MARKETING PROJECT REPORT Page No 57
  • 58. A study of Customer Satisfaction towards Mutual Funds Nothing in particular 7 7% Performance of service provider Nothing in particular 7 28 Saftey Services Reach 13 steady 16 Qty services 0 10 36 20 30 40 Series1Interpretation:For measuring the performance of Service provider 36% of respondents havechosen quality service ,as it indicates that the service provider will give morequality service to the public.& 16% have chosen steady,13%have chosen reach,28%have chosen safety ,7% have chosen nothing in particular. Q No 6: If you are aware of new services, then how do you come to know Abou t these services? 12% Friends 12 22% News papers &Magazines 22 26% Brokers 26 37% Agents 37BABASAB PATIL MARKETING PROJECT REPORT Page No 58
  • 59. A study of Customer Satisfaction towards Mutual Funds 3% Others 3 Awareness of new services 3 2 1 12 22 26 37 3 0 20 40 60 80 100 120 Level of awareness Friends News papres&Magazines Brokers Agents OthersInterpretation:According to the survey we came to know that the awareness of new service throughAgents is very high because 37% of respondents are aware through agents,26%arethrough Brokers,22%are through News papers & Magazines ,12%throughFriends,3% through others. so the majority of the respondents are aware fromagents. Q No 7: Overall, How would you rate Mutual Fund scheme? 62% Extremely good 62 29% Very good 29 8% Neither good/bad 8 1% Very bad 1 0% Extremely bad 0BABASAB PATIL MARKETING PROJECT REPORT Page No 59
  • 60. A study of Customer Satisfaction towards Mutual Funds Overall Rating of M/F 70 62 60 No of 50 Extermely good 40 29 Responde Very good 30 nts 20 8 Neither good/bad 1 10 Very bad 0 Extermely bad 1 2 OpinionInterpretation:According to the survey we came to know that overall rating of mutual fund scheme is that62% of the respondents have chosen Extremely good ,29%have chosen very good,8% have chosen Neither good / Bad ,1% have chosen very bad.So finally the Majority of the respondents say that this mutual fund scheme isExtremely good. Q No 8 : Overall how do you Rate the services of Your Financial Service Provider? 0% 0 0% 20% 6 6% 40% 24 24% 60% 45 45% 80% 21 21% 100% 4 4%BABASAB PATIL MARKETING PROJECT REPORT Page No 60
  • 61. A study of Customer Satisfaction towards Mutual Funds Overall Rating of services 1 2 0%7% 3 6 13% 33% 4 20% 5 27%Interpretation: From this survey we can see that overall rating the Services of Financial ServiceProvider in terms of Percentage is that, 40% of respondents are chosen 60%becauseThey are satisfied up to 60%,24% respondents have satisfied 40%,21% respondentsHave satisfied 80%,6%respondents have satisfied 20%,4%respondents haveSatisfied 100% respectively. Q NO 9: Express your level of satisfaction about the following schems/services. [I] S MS NE S/US MUS US 46 35 16 3 0 46% 35% 16% 3% 0%BABASAB PATIL MARKETING PROJECT REPORT Page No 61
  • 62. A study of Customer Satisfaction towards Mutual Funds Mutual fund 46 50 35 40 No of 30 16 Responde nts 20 3 0 Mutual fund 10 0 S MS NE MUS US S/US OpinionInterpretation:From this we will see that about M UTUAL FUND scheme the level of satisfaction of therespondents is that 46% of respondents are satisfied,35% respondents are Mostlysatisfied, 16% respondents are Neither satisfied/unsatisfied,3%respondents areMostly unsatisfied. Hence the majority of the respondents is satisfied with the scheme. [II] S MS NE S/US MUS US 40 12 46 2 0 40% 12% 46% 2% 0%BABASAB PATIL MARKETING PROJECT REPORT Page No 62
  • 63. A study of Customer Satisfaction towards Mutual Funds Tax 20 40 46 12Interpretation: From this we will see that about TAX scheme, Most of the respondents arei,e,46%are Neither satisfied/unsatisfied about the scheme, 40% are satified,12% areMostly satified,2%are Mostly satisfied .so the majority of the respondents haveChosen they are Neither satisfied or un satisfied about the scheme [III] S MS NE S/US MUS US 33 15 50 2 0 33% 15% 50% 2% 0%BABASAB PATIL MARKETING PROJECT REPORT Page No 63
  • 64. A study of Customer Satisfaction towards Mutual Funds Insurance 50 50 33 40 30 15 No of 20 2 0 Responden 10 Insurance ts 0 S MS NE MUS US S/US OpinionFrom this survey it is clear that about INSURANCE Scheme 50%of the respondentsare neither satisfied or unsatisfied about the scheme,33% of respondents aresatisfied,15%are Mostly satisfied,2% are Mostly satisfied. Finally we will see thatmajority is 50%. [IV] S MS NE S/US MUS US 38 10 45 5 2 38% 10% 45% 5% 2%BABASAB PATIL MARKETING PROJECT REPORT Page No 64
  • 65. A study of Customer Satisfaction towards Mutual Funds Bonds 38 No of Respondents 50 45 40 30 Bonds 20 10 10 5 2 0 S S S S S M U U U M S/ E N Opinion Interpretation:From this it is clear that the level of satisfaction about BONDS is that45%respondents are Neither satisfied or un satisfied,38%are satisfied, 10%areMostly satisfied,5%are Mostly unsatisfied,2% unsatisfied about the bond schemes. [V] S MS NE S/US MUS US 62 12 25 1 0 62% 12% 25% 1% 0%BABASAB PATIL MARKETING PROJECT REPORT Page No 65
  • 66. A study of Customer Satisfaction towards Mutual Funds Equity IPO 80 60 No of Respondent 40 s 20 0 S MS NE MUS US Equity IPO 62 12 25 1 0 Opinion Interpretation: From this we know that the level of satisfaction about the Equity IPO is that 62% of the respondents are satisfied about the scheme,12% are Mostly satisfied, 25%are Neither satisfied or unsatisfied,1% are Mostly unsatisfied. So finally the majority of respondents are satisfied about the schemes . Code sheet Customer ResponseS NO Q1 Q2a Q3a Q3b Q3c Q3d Q3e Q3f Q4 Q5 Q6 Q7 Q8 Q9a Q9b Q9c Q9d Q9e1 1 5 1 2 3 3 4 6 1 1 3 2 4 1 2 3 1 22 1 2 1 1 3 5 6 4 1 5 1 3 3 1 1 2 1 13 1 3 6 1 2 3 5 4 3 1 4 2 4 2 1 3 4 34 1 3 1 2 5 3 6 5 1 2 3 1 4 2 1 1 1 15 1 1 1 2 2 3 4 6 1 1 3 1 3 1 1 4 3 2 BABASAB PATIL MARKETING PROJECT REPORT Page No 66
  • 67. A study of Customer Satisfaction towards Mutual Funds6 1 3 1 4 2 5 5 6 3 1 2 2 5 1 3 2 2 27 1 4 1 1 5 4 6 2 1 4 4 1 4 2 1 1 3 18 1 5 1 2 4 5 6 3 1 2 4 1 3 4 1 2 1 39 1 3 5 1 4 2 4 3 1 2 1 3 3 3 1 3 3 110 1 5 1 2 5 3 5 6 1 1 2 1 5 1 2 2 1 111 1 5 1 3 3 5 4 6 1 1 3 2 5 2 1 3 3 112 1 3 1 3 4 5 2 6 1 4 1 1 3 2 3 1 5 213 1 4 1 2 4 3 3 6 1 2 2 1 3 1 1 2 1 114 1 3 2 1 4 3 5 6 3 3 1 2 4 2 3 3 3 115 1 5 1 1 4 3 6 6 1 1 4 1 4 2 1 3 3 116 1 4 1 2 3 4 5 6 2 4 1 1 4 1 3 3 3 117 1 5 1 2 5 3 4 6 1 1 2 1 4 2 2 2 3 318 1 4 1 3 5 2 4 4 2 3 3 2 5 2 3 3 4 119 1 3 1 3 5 2 4 6 1 1 4 2 4 1 1 1 2 220 1 5 2 1 4 3 6 6 1 2 2 1 2 1 1 2 3 121 1 2 1 2 4 3 5 6 1 1 4 2 4 1 3 3 3 122 1 2 1 4 4 5 2 6 1 1 2 1 3 3 3 1 3 323 1 2 2 1 4 3 5 6 3 2 4 2 4 2 3 3 3 124 1 5 2 3 4 3 5 6 1 3 2 2 5 1 3 3 3 325 1 4 1 5 2 3 5 6 1 1 4 1 4 1 3 2 3 326 1 4 5 1 4 3 2 6 3 2 1 4 3 4 3 3 4 427 1 3 2 1 4 3 5 6 1 3 4 1 5 3 3 3 3 328 1 5 1 5 2 4 3 6 1 2 2 2 5 2 2 2 2 229 1 3 1 3 4 2 5 6 3 1 4 1 3 1 3 3 3 130 1 5 1 2 5 4 3 6 1 3 4 2 4 1 3 3 3 331 1 4 2 1 4 5 3 6 1 1 3 1 4 2 3 3 3 132 1 3 1 2 4 3 5 6 3 1 2 1 4 1 3 1 1 133 1 4 1 3 2 5 4 6 1 3 4 2 4 2 1 1 3 134 1 3 2 1 4 5 3 6 1 1 2 1 4 2 1 3 3 135 1 5 1 4 5 3 2 6 2 2 2 1 2 3 2 2 2 236 1 3 2 1 4 3 5 6 1 4 4 1 4 3 2 1 1 137 1 5 1 2 4 6 4 5 1 3 3 6 3 3 3 3 138 1 4 1 5 3 5 2 6 1 2 4 2 5 2 3 3 1 139 1 2 1 2 4 3 5 6 1 1 3 1 4 2 3 3 3 140 1 2 1 4 2 3 5 6 3 1 4 1 3 1 3 3 3 341 1 4 3 1 2 4 5 6 1 4 3 2 4 2 3 3 3 142 1 4 4 1 2 5 3 6 1 2 4 1 5 2 1 1 1 143 1 4 3 2 4 5 2 6 1 1 3 2 5 2 3 3 3 144 1 3 2 1 4 3 5 6 1 1 3 1 3 3 4 3 3 145 1 3 1 4 3 2 5 6 1 4 3 1 2 1 3 3 3 346 1 3 3 1 4 2 5 6 1 2 3 1 3 3 3 3 3 147 1 3 1 4 2 4 5 6 2 1 4 1 4 1 3 3 3 148 1 4 2 1 4 3 5 6 1 1 3 2 4 1 3 3 3 149 1 3 2 1 3 5 4 6 1 4 3 1 4 2 3 3 3 150 1 5 2 5 6 3 1 2 3 1 1 2 5 1 3 1 1 351 1 4 1 3 2 4 5 6 1 3 5 1 2 1 3 3 3 152 1 2 1 3 4 2 5 6 3 4 2 1 4 2 2 3 3 253 1 4 1 3 2 5 4 6 1 4 4 1 2 1 3 3 3 354 1 2 1 2 3 4 5 6 1 2 2 3 2 1 1 1 1 155 1 4 2 1 4 5 3 6 1 1 2 1 3 1 3 3 3 356 1 3 1 2 5 3 4 6 1 3 2 2 5 1 1 1 1 1 BABASAB PATIL MARKETING PROJECT REPORT Page No 67
  • 68. A study of Customer Satisfaction towards Mutual Funds57 1 2 1 2 4 5 3 6 1 2 3 1 4 2 2 2 2 258 1 5 2 4 3 5 6 1 1 5 2 2 4 1 1 1 1 159 1 5 1 2 3 4 5 6 1 5 2 2 4 2 1 1 1 160 1 4 3 4 5 1 2 6 1 2 2 1 4 1 2 2 1 161 1 4 2 1 4 3 5 6 3 4 1 1 3 1 2 3 3 362 1 4 2 1 4 5 3 6 1 3 1 3 3 3 3 3 3 163 1 1 2 3 1 4 5 6 1 4 1 2 4 1 3 3 3 264 1 5 1 2 5 4 3 6 3 4 4 1 5 2 3 3 3 365 1 4 1 2 3 4 5 6 1 4 4 2 4 1 1 1 1 166 1 4 1 2 4 3 5 6 1 3 3 1 4 1 1 1 1 167 1 4 1 2 4 3 5 6 1 4 3 1 6 2 1 1 1 168 1 5 1 2 4 3 5 6 1 4 4 2 5 2 1 1 1 169 1 1 1 3 4 2 5 6 1 3 3 1 2 1 3 1 1 170 1 4 2 1 4 5 3 6 3 4 3 2 4 1 2 2 2 171 1 5 1 2 4 3 5 6 1 4 4 1 5 2 1 1 3 372 1 3 1 2 3 5 4 6 3 1 2 1 5 2 3 3 3 373 1 2 4 2 1 3 5 6 1 2 4 2 4 1 3 3 3 374 1 3 3 4 2 1 5 6 3 1 1 1 5 2 3 3 1 175 1 2 4 1 3 2 5 6 1 3 3 1 6 2 1 1 1 176 1 5 1 2 4 3 5 6 1 1 4 1 2 1 3 3 3 377 1 5 1 2 4 3 5 6 1 1 4 1 5 2 1 1 1 178 1 2 3 1 2 4 5 6 2 5 5 3 3 1 3 3 1 179 1 1 4 3 5 2 3 6 1 4 3 1 3 1 1 1 1 180 3 2 1 4 3 6 5 1 3 3 3 3 3 3 3 3 181 1 3 1 3 2 4 5 6 2 1 2 1 5 2 1 3 3 382 1 2 1 3 4 2 5 6 1 2 3 3 3 3 1 1 1 183 1 2 1 4 5 3 2 6 1 1 1 2 4 1 3 3 3 384 1 1 3 1 5 2 4 6 3 1 3 3 3 1 1 1 1 185 1 5 1 3 2 5 4 6 1 1 3 1 6 2 1 1 1 186 3 1 3 4 2 5 6 1 1 5 2 2 4 1 1 1 387 1 1 1 2 4 3 5 6 3 1 3 1 3 1 1 1 1 188 1 3 3 4 2 1 5 6 1 3 2 1 3 3 3 3 3 389 1 1 1 4 3 2 5 6 3 3 1 3 2 3 3 3 3 390 1 5 4 2 3 1 5 6 1 1 3 2 4 1 3 4 4 191 1 4 1 3 2 5 4 6 2 2 3 3 3 1 4 3 3 392 1 3 5 4 2 3 1 6 1 2 4 2 5 2 1 1 1 193 1 3 3 4 2 1 5 6 1 4 4 1 4 2 1 1 1 194 1 4 1 3 4 2 5 6 1 1 2 3 2 3 3 2 3 195 1 5 3 2 5 1 4 6 2 1 1 1 5 2 3 3 1 196 1 2 4 1 3 2 6 5 1 2 2 2 3 1 3 1 1 197 1 1 2 3 4 5 1 6 1 4 1 2 4 2 1 1 5 298 1 2 1 2 4 6 3 5 2 2 2 3 3 1 1 3 3 399 1 5 1 2 3 5 4 6 1 1 3 1 4 1 2 3 1 2100 1 2 1 2 3 5 6 4 1 1 3 3 1 1 2 1 1  Recommendations Findings & suggestions: BABASAB PATIL MARKETING PROJECT REPORT Page No 68
  • 69. A study of Customer Satisfaction towards Mutual Funds 1.I have carried out this exercise on Mutual Funds. With So in my studies I have tried to seewhether the customer have satisfied with the services given by the Karvy consultants Ltd. 2. .It is also came to know that new customer are not aware of the schemes available in mutualfunds 3. I have also seen that 37% awareness of new service given by Karvy Stock Broking Ltd isfrom mainly through Agents. 4. It is also find that more than46% customers are satisfied and 355 of customers are mostlysatisfied with the service of mutual funds given by Karvy consultant’s ltd. 5. Nearly 16% of the respondents are neither satisfied or un satisfied because of the lack ofattention given to them for their enquires. 6. 3% of customers are mostly unsatisfied with the service because the reason is thatlack of updated information. 7. 36% of respondents prefer Karvy consultants Ltd because of their Quality services given bythem . 8.62% of the respondents opinion is that mutual fund scheme is Extremely Good. 9. Majority of the respondents are very happy with the services given by Karvy agents. Suggestions:BABASAB PATIL MARKETING PROJECT REPORT Page No 69
  • 70. A study of Customer Satisfaction towards Mutual Funds QUESTIONNAIRE NAME : ADDRESS : E-MAIL : MOBILE NO : PH NO: AGE : 18-25 26-50 50 &AboveANUUAL INCOME : 1 lack –5lack 5lack-8 lack 8 lack & above1) Do you believe in savings? Yes No2) What is the minimum amount you save per month/quarterly/half-yearly/yearly? 0-500 500-1000 1000-2000 2000-5000 5000 above3) As customers while investing in Mutual Funds what factors do you see? (Rank them No 1 for Preferred and No 6 for Least Preferred ) • Safety • Rate of Return • Liquidity • Tax LiabilityBABASAB PATIL MARKETING PROJECT REPORT Page No 70
  • 71. A study of Customer Satisfaction towards Mutual Funds • Flexibility • Others if any4) In which scheme are your holding your Mutual Fund? Equity Debt Balanced5) How do you justify your performance of your service provider for over Mutual Funddistribution? Qty services Steady Reach Safety Nothing in Particular6) If you are aware of new services, then how do you came to know about these services? Friends News Papers& Brokers Agents Others Magazines 7) Overall, How would you rate Mutual Fund scheme? Extremely Very good Neither Very bad Extermely bad good good/bad8) Overall how do you Rate the services of Your Financial Service Provider? 0% 20% 40% 60% 80% 100%9) Express your level of satisfaction about the following schems/services.pleaseTick ( ) thefollowing. Satisfied Mostly un Neither Mostly Un Unsatisfied Satisfied satisfied/Un Satisfied satisfied Mutual Fund Tax Insurance BondsBABASAB PATIL MARKETING PROJECT REPORT Page No 71
  • 72. A study of Customer Satisfaction towards Mutual Funds Equity IPO 10) Any Suggestion for Your Financial Advisory Services. -------------------------------------------------------------- -------------------------------------------------------------- Thank you.  RecommendationsFindings & suggestions: 1.I have carried out this exercise on Mutual Funds. With So in my studies I have tried to seewhether the customer have satisfied with the services given by the Karvy consultants Ltd. 2. .It is also came to know that new customer are not aware of the schemes available in mutualfunds 3. I have also seen that 37% awareness of new service given by Karvy Stock Broking Ltd isfrom mainly through Agents. 4. It is also find that more than46% customers are satisfied and 355 of customers are mostlysatisfied with the service of mutual funds given by Karvy consultant’s ltd. 5. Nearly 16% of the respondents are neither satisfied or un satisfied because of the lack ofattention given to them for their enquires. 6. 3% of customers are mostly unsatisfied with the service because the reason is thatlack of updated information. 7. 36% of respondents prefer Karvy consultants Ltd because of their Quality services given bythem . 8.62% of the respondents opinion is that mutual fund scheme is Extremely Good. 9. Majority of the respondents are very happy with the services given by Karvy agents. Suggestions:BABASAB PATIL MARKETING PROJECT REPORT Page No 72
  • 73. A study of Customer Satisfaction towards Mutual FundsGlossary on Mutual Funds:Account StatementA physical document, similar to a bank account statement, representing the mutual fund unitsowned. Issued to the unitholder every time he/she carries out a transaction.Annual ReportUnabridged financial results that comprise historical per unit statistics and complete portfolio ofschemes of a mutual fund for a certain period. It is sent to unit holders once in a year.AppreciationAn increase in an investment’s value.Asset AllocationThe process of diversifying investments among different types of assets like stocks, bonds andcash in order to optimize risk / return tradeoff based on a person’s financial situation and goals.Asset ClassDifferent types of investments such as stocks, bonds, real estate and cash.Asset Management CompanyA firm that invests the pooled funds of retail investors in securities in line with the statedinvestment objectives. For a fee, the investment company provides more diversification, liquidity,and professional management service than is normally available to individual investors.Asset-Backed SecurityA debt instrument backed by loan paper or accounts receivable from banks, companies or otherproviders of credit.AssetsAn item of value owned by an individual or an organization. It could be stocks, cash, house or acar.Automatic Investment PlanPeriodic investment of a fixed amount by a unitholder, either directly from his bank account or byissuing post-dated cheques, in his mutual fund account. It allows the investor to benefit from rupeecost averaging.BABASAB PATIL MARKETING PROJECT REPORT Page No 73
  • 74. A study of Customer Satisfaction towards Mutual FundsAutomatic Withdrawal PlanAllows an investor to receive periodic payments of fixed amount or units from his investment in amutual fund scheme. Retirees who want a regular income supplement often choose this.Average Portfolio MaturityThe average maturity of all the bonds in a bond fund’s portfolio.Back-End/ Redemption LoadOne of two possible sales charge imposed by funds that charge fees. Redemption load is a chargean investor pays when units are redeemed or sold back to the fund. It sometimes depends on howlong the investment is held -- generally the longer the time period, the smaller the charge.Balanced SchemeA mutual fund scheme with an investment objective of both long-term growth and Income,through investment in stocks and bonds. Typically, the stock-bond ratio ranges around 60%-40%in an effort to obtain the highest returns consistent with a low risk strategy.Basis Point (BP)The smallest measure used in quoting yields on fixed income securities. One basis point is onepercent of one percent, or 0.01%.Bear MarketA prolonged period of falling securities prices in a stock market.BenchmarkA standard used for comparison. Usually to provide a point of reference for evaluating a fundsperformance. The common benchmarks for equity-oriented funds is the BSE 200 index or the BSESensex.BetaA measure of a fund’s volatility in relation to the stock market, as measured by a stated index. Bydefinition, the beta of the stated index is 1; a fund with a higher beta has been more volatile thanthe market, and a fund with a lower beta has been less volatile than the market. Based on pasthistorical records, a beta higher than 1.0 indicates that when the market rises, the stock will rise toa greater extent than that of the market; likewise, when the market falls, the stock will fall to agreater extent. A beta lower than 1.0 indicates that the stock will usually change to a lesser extentthan that of the market. The higher the beta, the greater the investment risk.Blue chipStock of a nationally known company that has a long record of profit, growth, and dividendpayment, and a reputation for quality management, products, and services.BondA debt security, or an IOU, issued by a company or government agency. A bond investor lendsmoney to the issuer and, in exchange, the issuer promises to repay the loan amount on a specifiedBABASAB PATIL MARKETING PROJECT REPORT Page No 74
  • 75. A study of Customer Satisfaction towards Mutual Fundsmaturity date; the issuer usually pays the bondholder periodic interest payments over the period ofthe loan.Bond SchemeA scheme that invests primarily in bonds with the general emphasis on income over growth.Bottom-UpAn investment strategy that first seeks individual companies with attractive investment potential,then considers the economic and industry trends affecting those companies.Bull MarketA prolonged rise in the price of stocks, bonds or commodities characterized by high tradingvolumes.Business DayA Business Day is any day other than a Saturday, a Sunday or a day on which banks are notrequired or obligated by law or executive order to remain closed including the occasions when thefunctioning of the Banks/ RBI is affected due to a strike call made by a Recognized Union/Management at any part of the country.Call moneyMoney which is loaned in the call market, which can be demanded for repayment on call, whichbasically means immediately. The term call money is also known as money at short notice as it isrepayable in 24 hours. It is also traded in the money market.Call RiskThe risk that bonds will be redeemed (or "called") before maturity. This possibility increasesduring periods of falling interest rates.Capital AppreciationAn increase in the value of an investment, measured by the increase in a fund units value from thetime of purchase to the time of redemption.Capital GainThe amount by which an investment’s selling price exceeds its purchase price.Capital MarketA market where debt or equity securities are traded.Certificate of Deposit (CD)Short-term debt instrument issued by scheduled commercial banks excluding regional rural banks.They are unsecured instruments that mature between three months to one year.BABASAB PATIL MARKETING PROJECT REPORT Page No 75
  • 76. A study of Customer Satisfaction towards Mutual FundsCompounded Annualized Growth Return (CAGR)When you deposit money in a bank it earns interest. When that interest also begins to earn interestthe result is compound interest. Compounding occurs if bond income or dividends from stocks ormutual funds are reinvested. Because of compounding the money has potential to grow muchfaster.Contingent Deferred Sales Charge (CDSC)A type of back-end sales load charged when shares are redeemed within a specific periodfollowing their purchase. Usually assessed on a sliding scale, these charges reduce, the longer theunits are held.Closed-End SchemeA mutual fund scheme that offers a limited number of units which have a lock-in period, usually ofthree to five years. ELSS schemes are closed-ended schemes. The units of closed-end funds areoften listed on one of the major stock exchanges and traded like securities at prices which may behigher or lower than its net asset valueCommercial PaperDebt instruments issued by corporations to meet their short-term financing needs. Suchinstruments are unsecured and have maturities ranging from 15 to 365 days.CommissionA fee charged by a broker or distributor for his/her service in facilitating a transaction.Compound InterestInterest earned not only on the initially invested principal but also on accumulated interest duringthe period.Consumer Price IndexThe index compiled by a governmental agency which follows the cost of living by following thechanges in price of basic goods and services over time. This index measures inflation.Convertible securityCorporate security (usually preferred stock or bond) that is exchangeable for another form ofsecurity (usually common stock) at a predetermined price.CouponInterest rate on a debt security that the issuer promises to pay to the holder until maturity. Usuallyexpressed as a percentage of the face value of the security.BABASAB PATIL MARKETING PROJECT REPORT Page No 76
  • 77. A study of Customer Satisfaction towards Mutual FundsCredit RatingA measure of a bond issuers creditworthiness or the ability to repay the loan as rated by anindependent rating agency, such as CRISIL, ICRA and CARE.Credit RiskThe possibility that a bond issuer will default, and fail to repay principal or interest as promised.Also known as "default risk."Cumulative Quantitative Discount (CQD)Cumulative quantitative discount (CQD) is discount on sales load to investors on increasingpurchase of units.Cumulative total returnUsually calculated in the same manner as standardised average annual total return, except thatthese figures represent the total change in value of an investment over the stated periods and do notreflect any sales chargesCurrent assetsAssets that can be converted to cash within a year.Current liabilitiesLiabilities that must be paid within a year.Currency RiskThe possibility that fluctuating currency exchange rates will affect the rupee value of aninvestment.CustodianThe organization (usually a bank) that keeps and safeguards the custody of securities and otherassets of a fund.Cyclical stocksStocks which rise and fall in price with the state of the economy, in such industries as construction,automobile, engineering or those affected by the international economy such as shipping, aviation,and tourism. Cyclical stocks are also stocks which are affected by the natural environment such asfertilizers and tea. Examples of non-cyclical stocks would be drugs, insurance, basic foodstuffs andmany other consumer products.DebenturesInstruments of debt, usually unsecured. They are also usually credit rated.Debt funds/ securitiesBABASAB PATIL MARKETING PROJECT REPORT Page No 77
  • 78. A study of Customer Satisfaction towards Mutual FundsA general term for any security representing money loaned that must be repaid to the lender at afuture date. Bonds,T-notes, T-bills and money market instruments are debt securities, but they varyin maturities.DefaultA term that denotes the failure to pay the principal or interest on a financial obligation (such as abond).DerivativeFinancial instrument whose value is based on the value of another underlying security.DepreciationA decline in an investments value.DiscountRefers to the selling price of a bond when it’s price is below its maturity value.DistributionThe payment of dividends to unit holders by a mutual fund.DiversificationThe strategy of spreading investments among different securities to reduce risk. By nature, mutualfunds are a diversified investment.DividendWhen companies pay part of their profits to the shareholders those profits are called dividends. Amutual fund’s dividend is money paid to shareholders from investment income the fund hasearned. The amount of each share’s dividend depends on how well the company does.Dividend ReinvestmentA unitholder service that allows dividend distributions to be reinvested automatically to purchasemore fund units.Dow Jones Industrial AverageThe oldest and most quoted measure of stock market price movements, an indicator showing howthe market is going. It is a price-weighted average of 30 actively traded blue chip stocks.Earnings (per share)BABASAB PATIL MARKETING PROJECT REPORT Page No 78
  • 79. A study of Customer Satisfaction towards Mutual FundsThe net income for a company during a specific period. It is calculated by subtracting the cost ofsales, operating expenses and taxes from revenues, for a specific time period. It is the reasoncorporations exist and often the single most important determinant of a stock’s price.Equity SchemesA scheme that invests primarily in stocks while seeking to provide relatively high long-termgrowth of capital.Ex-Dividend DateThe date following the record date for a scheme. When a funds net asset value reduces by anamount equal to a dividend distribution.Expense RatioA funds operating expenses, expressed as a percentage of its average net assets.Face valueThe value printed on the face of a stock, bond or other financial instrument or document.Family Of SchemesA set of schemes with different investment objectives from a single asset management companyusually allowing investors to switchtheir investments from one scheme to another at a no charge or a nominal charge.FCNRA Fully Convertible Non-Rupee account that can be opened for funds coming in from abroad orfrom local funds. The funds in the account are held in a foreign currency.Fixed assetsA long-term asset that will not be converted to cash within a year such as a house or a plot of land.Fixed depositAn investment instrument where you invest a fixed amount of money for a fixed period of time ata fixed rate of interest.Fixed Income SecurityA security that pays a fixed rate of interest such as a bond but do not offer an investor muchpotential for growth.Front-End LoadA one-time charge that an investor pays at the time of buying units of a scheme.Fixed rateBABASAB PATIL MARKETING PROJECT REPORT Page No 79
  • 80. A study of Customer Satisfaction towards Mutual FundsA loan in which the interest rates do not change during the entire term of the loan.Floating rateAn interest rate which is periodically adjusted, usually based on a standard market rate outside thecontrol of the institution. These rates often have a specified floor and ceiling, which limit thefloating rate. The opposite of having a floating rate is having a fixed rate.FloorA lower limit for a price, interest rate, or other numerical factor. The price at which a stop order isactivated (an order to buy or sell at the market when a definite price is reached either above (for abuy) or below (for a sell) the price that prevailed when the order was given). Also the area of astock exchange where active trading occurs.Fully InvestedThe investment of nearly all available assets in securities as per the stated objective of the schemeand having no cash or cash equivalents in one’s portfolio.Fund ManagerThe individual responsible for making portfolio decisions for a mutual fund.Government securitiesSecurities that are sold to the public by the government, for example, bonds.GrowthAn investment objective of equity funds which seek to provide capital gains, rather than dividendincome.Growth fundsMutual funds with a primary investment objective of long-term growth of capital. Unlike income,which is somewhat regular and consistent in most cases, growth is much less certain. Growthinvestments, however, usually outpace the returns on income investments over the long-term (fiveto ten years, or longer). It invests mainly in common stocks with significant growth potential.Growth InvestingAn investment style that seeks stocks with the belief they will go up in price, regardless of thestocks current price relative to its underlying value. Often discussed in contrast to value investingHoldingsThe possessions or securities in an investors portfolio.Historical YieldYield provided by a scheme, typically a money market fund, over a specific time period.BABASAB PATIL MARKETING PROJECT REPORT Page No 80
  • 81. A study of Customer Satisfaction towards Mutual FundsInception DateThe date when a scheme’s initial offering period ends and the scheme’s formation takes place.Income /Debt SchemeA scheme that invests primarily in fixed income securities. Typically, income schemes seek toprovide current income rather than growth of capital.IndexA benchmark against which the performance of a scheme is measured. Usually, equity funds useBSE 30 or BSE 200 as the benchmark. For fixed-income funds it is a bond index. The benchmarkindex must consist of securities similar to which the scheme invests in.Index FundA fund that tries to mirror the performance of an index by investing in securities making up thatindex. (note: it is not possible for investors to actually invest in the actual index, such as the BSE30).Inflation RiskThe possibility that the value of assets or income will be eroded by inflation affecting thepurchasing power of a currency. Often mentioned in relation to fixed income funds as while theymay minimize the possibility of losing principal, they expose an investor to inflation risk.Initial Public Offer (IPO)The first sale of units of a scheme by a mutual fund to the public. Usually, for a fixed time period.Interest rate riskThe risk that a security’s value will change due to an increase or decrease in interest rates. Abond’s price will always drop as interest rates rise and when interest rates fall, a bond’s price willrise.Investment GradeHigh quality bonds that are rated AAA or higher by a rating agency. Investment grade bonds areconsidered safe. However, the higher the bonds rating, the lower the interest it offers.Investment ObjectiveA scheme’s investment goal. Say, a growth scheme typically has an investment objective ofproviding long-term growth of capital.LoadA one-time sales charge paid by an investor while buying or selling units of a scheme. Typically,there are two types of loads front-end charged at the time of purchase and back-end charged at thetime of redemption.LiabilitiesThe claims of investors who have loaned to a company. The debts of a company.BABASAB PATIL MARKETING PROJECT REPORT Page No 81
  • 82. A study of Customer Satisfaction towards Mutual FundsLiquidityThe ease with which an investment can be converted into cash or cash equivalents. Mutual fundunits are generally considered highly liquid investments as they can be sold on any business day attheir current net asset valueListedSecurities which are traded and listed in any of the approved Stock Exchanges of India will betreated as listed security.Lock-in periodA period of time during which the investor is restricted from selling a particular investment.Management FeeThe amount a scheme pays to its asset management company for its services. Typically, a certainpercentage of assets under management. A funds management fee is listed in its offer document.Market riskThe potential loss that is possible as a result of short-term volatility of the stock market, indicatedby beta. Owning mutual fund shields an investor to some market risk that a stockholder may bevulnerable to because of their diversification.Market TimingAttempting to time the purchase and sale of securities or mutual fund units to coincide with marketconditions.Maturity DateThe date on which the principal amount of a bond is to be paid in full.Maturity valueThe amount the issuer agrees to pay out when the bond reaches it’s maturity date.Minimum PurchaseThe smallest investment amount a scheme will accept to open a new unitholder account.Money Market FundA fund that invests in the short-term, high-grade securities sold in the money market includinggovernment securities, treasury bills, certificates of deposit, and commercial paper.Mutual FundAn investment company through which an investor can pool his money with other investors whohave a similar objective. Professional investment managers, then invest the pool in securitieswhich in their judgement will help investors achieve their objective. Mutual funds offer theBABASAB PATIL MARKETING PROJECT REPORT Page No 82
  • 83. A study of Customer Satisfaction towards Mutual Fundsbenefits of portfolio diversification (which provides greater safety and reduced volatility),professional management, liquidity and convenience.Net Asset Value (NAV)The market value of a mutual fund unit. It is calculated daily by taking the funds total assets,securities, cash and any accrued earnings, deducting liabilities, and dividing the remainder by thenumber of units outstanding.Net AssetsThe net worth of a fund.Net profit marginA measure of a company’s profitability and efficiency calculated by dividing a measure of netprofits (operating profit minus depreciation and income taxes) by sales.Net worthThe value found by subtracting total liabilities from total assets.No Load FundA fund that sells its units to investors without a sales load/charge.NREA Non-Resident External Rupee account that NRIs can open with any Indian bank. They can usethis account for making investments in India on a repatriable basis.NRIA Non-Resident Indian who is an Indian citizen or a person of Indian origin but who residesabroad. NRIs have to follow specific rules when investing in India.NROAn Ordinary Non-Resident Rupee account which can be opened for funds coming in from abroador from local funds. The amount in the account is, however, non-repatriable.Offer Document / ProspectusA legal document, that describes a mutual fund scheme. It contains information required by theSecurities and Exchange Board of India explaining the offer, including the terms, issuer,objectives, historical financial statements, and other information that could help an individualdecide whether the investment is appropriate for him.Offering priceBABASAB PATIL MARKETING PROJECT REPORT Page No 83
  • 84. A study of Customer Satisfaction towards Mutual FundsThe price at which mutual fund shares are offered for sale to the public. Also known as offeringprice. The public offering price represents the net asset value plus any applicable initial salescharges.Open-Ended SchemeA scheme where investors can buy and redeem their units on any business day. Its units are notlisted on any stock exchange but are bought from and sold to the mutual fund.Operating ExpensesThe day-today costs a mutual fund incurs in conducting business, such as for maintaining offices,staff, and equipment. These expenses are paid from the funds assets before any earnings aredistributed.PerformanceA measure of how well a fund is doing. Typically, mutual fund performance measures are yield(for dividends) and total return (which measures dividends plus changes in net asset value).Increase in the Net Asset Value (NAV)PortfolioA collection of securities owned by a mutual fund. A funds portfolio may include a combinationof stocks, bonds, and money market securities.Portfolio ManagerThe individual responsible for managing a mutual funds portfolio.Portfolio TurnoverThe rate of trading activity in a funds portfolio of investments. In other words, how oftensecurities are bought and sold.Preferred stockA type of capital stock whose holders are paid dividends at a specified rate. It has preference overcommon stock in the payment of dividends and the liquidation of assets, but does not ordinarilycarry voting rights. The benefits of owning preferred stock are realised if the company ever goesbankrupt. If this occurs, preferred stock shareholders receive their money first. General (alsoknown as common) stockholders may not receive any money, if none is remaining after payingpreferred stock holders.Price-earnings ratio (P/E)One of the benchmarks used by portfolio managers to help them value companies. It is calculatedby dividing a company’s share price by its earning per share.PrincipalThe original amount initially invested, exclusive of earnings.Promissory noteBABASAB PATIL MARKETING PROJECT REPORT Page No 84
  • 85. A study of Customer Satisfaction towards Mutual FundsA document signed by the borrower in which he promises to repay a loan under agreed-uponterms.Public Offer PriceThe price at which an investor can buy units of a mutual fund scheme. It includes the current netasset value plus any sales load.Rate of returnRate of return is calculated by subtracting the purchase value by the present value and thendividing it by the purchase value. For equities, we often include dividends with the present value.Real ReturnThe rate return earned on an investment after adjusting for the rate of inflation.Record DateThe date on which a unitholder must officially own a schemes units in order to receive declareddividend.RedeemTo cash in units by selling them back to the mutual fund.Redemption PriceThe price at which a mutual fund’s units are redeemed, or bought back, by the fund. It is usuallythe current net asset value per unit less exit load if any.Reinstatement PrivilegeA facility which allows unit holders who have redeemed units, and then wish to reinvest, toreinvest without paying the sales load. There is generally a 30-day time limit for this service.RepatriableThe return from abroad of the financial assets of an organization or individual, and the conversionof foreign currency to Rupees.RiskIn general, risk is the possibility of suffering loss. There are many types of risk, such as credit risk ,principal risk, inflation risk, interest rate risk and investment risk. If you are prepared to acceptgreater risk, you have the chance of earning higher returns or profits on your money. Low-riskinvestments, while generally safer, do not usually produce a high return, hence the loss of potentialgain.BABASAB PATIL MARKETING PROJECT REPORT Page No 85
  • 86. A study of Customer Satisfaction towards Mutual FundsRisk/ reward trade-offThe compromise made between high- and low-risk investments. High-risk investments generallygenerate more earnings, while low-risk ones generate a lower rate of return.Risk toleranceThe willingness of an investor to tolerate the risk of losing money for the potential to make money.RolloverA movement of funds from one investment to another, often similar, investment. Typically usedwhen securities are maturing.Rupee Cost AveragingAn investment strategy that involves investing a fixed amount in a scheme at regular intervals -say, monthly or quarterly. As a result, more fund units are bought when prices are low than at highprices, usually bringing down an investors average cost per share over time.Sales chargeA charge added on to the price of a mutual fund when you buy it.Sector FundA fund that invests primarily in securities of companies engaged in a specific industry. Sectorfunds entail more risk, but may offer greater potential returns than funds that diversify theirportfolios.SecuritiesThe holdings of a mutual fund, such as stocks or bonds. Stocks are securities representingownership shares. Bonds are securities representing a contractual debt obligation of the issuer torepay the holder, with interest.Settlement DateThe date by which a transaction must be settled, that is, to make the payment of funds and thedelivery of securities.Standard DeviationA measure of the degree to which a funds return varies from the average of the scheme’s ownreturn.Stock FundA fund that invests primarily in stocks.SwitchingThe movement of investment from one scheme to another usually within the family of schemes.An investor may switch schemes because of market conditions.BABASAB PATIL MARKETING PROJECT REPORT Page No 86
  • 87. A study of Customer Satisfaction towards Mutual FundsSystematic Investment Plan (SIP)Allows an investor to periodically invest in units by issuing post-dated cheques. It allows theinvestor to benefit from rupee cost averaging.Systematic Withdrawal Plan (SWP)Permits the investor to receive regular payments of a fixed amount or capital appreciation from hisinvestment in a mutual fund scheme on a periodic basis. Retirees in need of a regular income oftenopt for this.Top DownAn investment method that first defines major economic and industry trends, and then identifiesspecific companies that are likely to benefit from those trends.Total ReturnA funds performance that takes into account: income from dividends and unit priceappreciation/depreciation over a time period.Treasury bills (T-bills)A short-term security with a maturity of one year or less.Treasury bonds (T-bonds)A long-term debt instruments with a maturity of 10 years or longer.Treasury notes (T-notes)A certificate representing an intermediate-term loan to the government with a maturity betweentwo to ten years.Transaction costsThe costs incurred by the buying and selling of securities, including broker commissions and thedifference between dealer buying and selling price.TransferThe process of changing ownership of a unitholder account within the same scheme.Transfer AgentA firm employed by a mutual fund to maintain unitholder records, including purchases, sales, andaccount balances.Treasury Bill (T-bill)A debt security issued by the Indian government, having a maturity of less than a year.BABASAB PATIL MARKETING PROJECT REPORT Page No 87
  • 88. A study of Customer Satisfaction towards Mutual FundsTurnover RateBased on the corpus, it is the number of times at which the fund buys and sells securities each year.UnitholderAn investor, owning units of a mutual fund.UnlistedSecurities which are not traded or listed in any of the approved Stock Exchanges of India will betreated as unlisted security.Unrealized Gain Or LossIncrease or decrease in the prices of securities held by the fund.Value InvestingThe investment approach which favours buying under priced stocks that have the potential toperform well and increase in price.VolatilityThe rate by which the price of a security fluctuates in changing market conditions.Year To Date (YTD)A period in a calendar year starting January 1 of that year and ending on that date.YieldThe annual rate of return on an investment usually expressed as a percentage.Yield CurveA graph depicting yield vis-a-vis maturity. If short-term rates are lower than long-term rates, it is apositive yield curve, if short-term rates are higher, it is a negative or inverted yield curve. If thereis isn’t much difference, it is a flat yield curve.Yield To Maturity (YTM)The yield earned by a bond if held to maturity Zero Coupon Bond A bond issued at a discount, which accrues interest that is paid in full at maturity. The maturity value an investor receives is equal to the principal invested plus interest earned compounded semi-annually at the original rate to maturity. Interest income from zero-coupon bonds is subject to taxes annually even though no payments will be made.BABASAB PATIL MARKETING PROJECT REPORT Page No 88
  • 89. A study of Customer Satisfaction towards Mutual Funds Bibliography  Web sites: • www.Karvy.com • www .Karvy mutualfunds.com • www. AmfiIndia.com • www.sharekhan.com • www. Indiamart.comBABASAB PATIL MARKETING PROJECT REPORT Page No 89
  • 90. A study of Customer Satisfaction towards Mutual Funds • www.Indiainfoline.com • www.Equity masters.com  Books: • Company Books • Company Brochures • AMFI (work book) • SEBI (A guide to mutual funds) • Financial Institutions and Markets ( L.M. Bhole)BABASAB PATIL MARKETING PROJECT REPORT Page No 90