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INVESTMENT PATTERN AMONG ITES EMPLOYEES
A STUDY BY TEAM ‘BLUE CHIP’
(STUDY UNDER JMLP (JUNIOR MANAGEMENT LEADERSHIP
JMLP – A COURSE CONDUCTED JOINTLY BY INFOSYS BPO LIMITED
AND WE SCHOOL)
STUDY CONDUCTED UNDER THE GUIDANCE OF MENTOR
PROF. HEMA DORESWAMY
Name Employee ID E-mail Address
Bhavani Karinja firstname.lastname@example.org
Krishna Narayana 904630 Krish.email@example.com
Merlin Shobha firstname.lastname@example.org
Sunia Mukherjee email@example.com
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Introduction & Purpose
(Reason for choosing this topic for study)
Scope of the Study
Data Analysis and Interpretation
Findings, Suggestions, & Conclusion
Thanks Note (Acknowledgements)
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Introduction to ITES Industry
The word ITES stands for Information Technology Enabled Services. What a
layman can understand by the term is that any service which is given to the
customer by virtue of IT can be classified under ITES. Another name for this
industry is BPO (Business Process Outsourcing). Since most of the work which is
worked on globally is from the clients of other countries, hence the word
‘’Outsourcing’’ is used. Any company which is based in a particular location A can
outsource its in-house work to another company based in location B, and that
concept is known as outsourcing. For e.g. AT&T has outsourced its call center
division to Accenture, India. All the technical support is provided by Indian
Nationals sitting in the Bangalore and Mumbai offices in India.
Since over the years, many companies started outsourcing their in-house work
within their own home counties to another companies, hence the word ITES
became more popular. For e.g. Airtel has outsourced its call center and backend
work to IBM. Airtel is an Indian company and has outsourced its business to IBM
which is a USA based company; however the call centers are located in India.
Business process outsourcing (BPO) is a subset of outsourcing that involves the
contracting of the operations and responsibilities of specific business functions (or
processes) to a third-party service provider. Originally, this was associated with
manufacturing firms, such as Coca Cola that outsourced large segments of its
supply chain. In the contemporary context, it is primarily used to refer to the
outsourcing of business processing services to an outside firm, replacing in-house
services with labor from an outside firm.
BPO is typically categorized into back office outsourcing - which includes internal
business functions such as human resources or finance and accounting, and front
office outsourcing - which includes customer-related services such as contact
Often the business processes are information technology-based, and are referred
to as ITES-BPO, where ITES stands for Information Technology Enabled Service.
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Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are
some of the sub-segments of business process outsourcing industry.
Benefits and limitations:
An advantage of BPO is the way in which it helps to increase a company’s
flexibility. However, several sources have different ways in which they perceive
organizational flexibility. Therefore business process outsourcing enhances the
flexibility of an organization in different ways. Outsourcing may provide a firm
with increased flexibility in its resource management and may reduce response
times to major environmental changes.
Another way in which BPO contributes to a company’s flexibility is that a company
is able to focus on its core competencies, without being burdened by the
demands of bureaucratic restraints.
Key employees are herewith released from performing non-core or administrative
processes and can invest more time and energy in building the firm’s core
businesses. The key lies in knowing which of the main value drivers to focus on –
customer intimacy, product leadership, or operational excellence. Focusing more
on one of these drivers may help a company create a competitive edge.
A third way in which BPO increases organizational flexibility is by increasing the
speed of business processes. Supply chain management with the effective use of
supply chain partners and business process outsourcing increases the speed of
several business processes, such as the throughput in the case of a manufacturing
Finally, flexibility is seen as a stage in the organizational life cycle: A company can
maintain growth goals while avoiding standard business bottlenecks. BPO
therefore allows firms to retain their entrepreneurial speed and agility, which
they would otherwise sacrifice in order to become efficient as they expanded. It
avoids a premature internal transition from its informal entrepreneurial phase to
a more bureaucratic mode of operation.
A company may be able to grow at a faster pace as it will be less constrained by
large capital expenditures for people or equipment that may take years to
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amortize, may become outdated or turn out to be a poor match for the company
Although the above-mentioned arguments favor the view that BPO increases the
flexibility of organizations, management needs to be careful with the
implementation of it as there are issues, which work against these advantages.
Among problems, which arise in practice are: A failure to meet service levels,
unclear contractual issues, changing requirements and unforeseen charges, and a
dependence on the BPO which reduces flexibility. Consequently, these challenges
need to be considered before a company decides to engage in business process
A further issue is that in many cases there is little that differentiates the BPO
providers other than size. They often provide similar services, have similar
geographic footprints, leverage similar technology stacks, and have similar Quality
Risk is the major drawback with Business Process Outsourcing. Outsourcing of an
Information System, for example, can cause security risks both from a
communication and from a privacy perspective. For example, security of North
American or European company data is more difficult to maintain when accessed
or controlled in the Sub-Continent. From a knowledge perspective, a changing
attitude in employees, underestimation of running costs and the major risk of
losing independence, outsourcing leads to a different relationship between an
organization and its contractor.
Risks and threats of outsourcing must therefore be managed, to achieve any
benefits. In order to manage outsourcing in a structured way, maximizing positive
outcome, minimizing risks and avoiding any threats, a Business continuity
management (BCM) model is set up. BCM consists of a set of steps, to successfully
identify, manage and control the business processes that are, or can be
Another framework, more focused on the identification process of potential
outsource-able Information Systems, identified as AHP, is explained.
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Importance of the Study/ Introduction:
Savings and Investment:
Savings are the excess of Income over expenditure for any economic unit.
Thus: S=Y- E, where S is the savings, Y is the income and E is the expenditure.
Secondly excess funds or surplus in profits or capital gains are also available for
investment. Savings is abstaining from present consumption for a future use.
Savings are something autonomous coming from households as a matter of habit.
But bulk of the savings come for specific objectives like interest income, future
needs, contingencies, precautionary purposes or growth in future wealth leading
to rise in the standard of living etc.
When people start saving they search for various investment options t invest their
savings. During this process they consider various factors like risk, return,
duration, liquidity, tax planning, hedge against inflation, safety etc.
In earlier days the investment options available to investors were very limited like
insurance, jewellery, fixed deposits, debentures, shares etc.
But in the liberalized economy there are many investment options, which promise
very high returns. After private players started operating in Insurance, there are
many policies available which not only cover the risk, but they also promise high
return with gook capital appreciation.
You are already aware of the various economic activities. Individuals engage
themselves in such activities to earn money. The money they earn is normally
spent on meeting daily needs like buying vegetables, groceries, clothes, giving
school fees, telephone bills etc. People also generally try to keep aside a part of
their earnings to meet future needs like marriage of their sons and daughters,
buying a house, health care, etc. You also find some people who use a part of
their earning to deposit in banks or in buying shares, property or gold. By doing
so, these people are also able to generate some extra earnings for themselves.
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Let us learn more about how people earn; how they spend; how they keep money
for future needs and how they use their earnings to get some return.
After studying this project you will be able to:
Explain the terms ‘income’ and ‘expenditure’;
Identify various ‘sources of income’ and ‘avenues of expenditures’;
Explain the concepts of ‘savings’ and ‘investment’;
Recognize the need for ‘savings’ and ‘investment’; and
Identify the avenues of ‘investment’.
As we know, individuals engage in one or the other occupations to earn their
livelihood. For example, a person may be employed in Bank and draw salary, a
person may engage in selling books and earn a profit, a doctor or a lawyer may do
the private practice and get fees for their services. The earning from all these
sources is called income. Sometimes we find people earn from more than one
source. For example, a teacher can write books for schools and he gets some
money from the publishers. If he is a singer, he can sing for All India Radio (AIR)
for which AIR gives him some money. Thus, one individual can engage in different
occupations to earn money. The earnings from different sources are collectively
called as his total income. This total income in a month is called as his monthly
income and in a year is annual income.
Sources of Income:
You learnt that people earn money from different sources. Some may earn from a
single source and others may have multiple sources. Let us learn about the
various sources from which people earn their income.
Business: Individuals engaged in business earn income by way of profit.
Employment: People who are in employment earn their income by way of
salary or wages.
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Profession: You have seen doctors, lawyers and chartered accountants.
They provide personal services of special nature and charge fees for their
services. This fee is the source of income for professionals.
Vocation: As we know vocation is the application of one’s special skill or
knowledge to earn money. For example, a good cook can cook food at
marriage parties and earn some income. A carpenter can make or repair
furniture and earn income.
Agriculture: When we cultivate land we produce crops, paddy, vegetables
etc. All or a part of it can be sold which gives us a return. This earning is
called agricultural income.
Property: Normally owning land or a home is considered as owning
property. This property can be given on rent or lease to someone for use
and we get a return on it. Thus, it becomes a source of income for us.
Other Income: People keep a part of their earning either in banks, post
office or they can buy shares and debentures, government bonds etc. All
these give them some return in the form of interest/dividend. These are
also called their income.
When we buy goods or products we pay money for them. Similarly when we avail
of some services like consulting a doctor during illness or getting water and
electricity for use, we also pay for them. Normally we pay for all these goods and
services since we use them. Sometimes we present some gift items to our friends
and relatives for their use. Besides this, we also spend money on charity and
donation to the poor persons and also to the cyclone or earthquake victims. In
these cases, we do not earn any money out of such spending. These are our
expenditure. Sometimes we spend money and use it for other purposes to get
some additional income. That spending is a type of expenditure through which we
generate further income. This is called investment. To clarify the concepts further
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let us observe the activities of a housewife and a restaurant owner. Both of them
buy vegetables. A housewife buys them for consumption of her family and the
restaurant owner buys them to prepare different dishes and sells them at a profit.
In the first case the housewife does not get any monetary return. Thus, it is
expenditure for her. In the second case i.e., in case of restaurant owner, spending
on vegetable can be termed as investment, because the spending on vegetables
finally generates additional income for him. Thus, the term ‘Expenditure’ refers
to spending of money on any item, which does not give any additional monetary
income in return to the person who spends that amount.
Avenues of Expenditure:
Generally, most of us spend a major portion of our income on buying goods and
services for daily consumption. Besides spending on goods and services there are
also many other areas in which we spend money like expenditure on celebrations,
on entertainment, charity and donation, etc. The different areas in which we
spent our earnings are called avenues of expenditure. Let us learn in detail about
all these avenues.
Expenditure on Goods and Commodities: We may spend money on various
types of goods and commodities needed for use in our daily living. These
may be perishable goods like vegetables, milk, fish, etc. or may be
consumer durables like television, radio, furniture etc.
Expenditure on Services: We also spend money for availing of different
types of services. It may be for availing banking services, postal services,
transport services, communication services etc.
Expenditure on Celebrations: In our daily life we find several occasions for
celebration. It may be a birthday, an anniversary, a festival, a marriage
ceremony etc. On such occasions we spend a lot of money.
Expenditure on Entertainment: In our busy life we often feel like taking a
break for some sort of enjoyment through entertainment progammes. This
may include going to watch a movie or drama or dance or cricket match or
even going for a picnic or tour.
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Expenditure on Charity and Donation: Sometimes people spend money by
donating to individuals or institutions engaged in social services or
charitable work. These are called expenditure on charity and donation.
Expenditure on Health and Education: In a family people usually spend
some money on health and education of their children. When individuals go
for higher education it requires more money. Thus, money spent on health
and education may be termed as expenditure.
Other Expenditure: The modern age has paved newer avenues of
expenditure for people. For example, now-a-days people go to a
gymnasium to keep themselves physically fit, go to beauticians to take care
of their body and beauty, surf the Internet to gather information and also
send e-mails, etc.
Ramesh and Suresh are working in a school. They had joined this school together
and have been earning some amount of money for the last five years. Last month
there was a training program on computers in their school and both of them
participated in it. They liked computers so much that they decided to buy one
each for their own use. Ramesh asked the school authority for a loan to buy the
computer, as he did not have sufficient money with him. The school authority
asked him to wait for at least two months to get the loan processed and
sanctioned. Suresh had sufficient money with him and he went to the market and
purchased a computer.
Knowing this Ramesh asked Suresh, “Look, from where did you get this money?”
Suresh said, “I got it from my savings”. Ramesh enquired, “What is savings?”
Suresh answered, “See, every month I used to keep aside a portion of my income
for future use. And over a period of five year this has become a substantial
amount to enable me to buy a computer.”
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Thus, we find that savings refer to the amount of money, which is kept aside from
the current income for future use. We may be able to keep aside this money
either by reducing our expenditure or by increasing our income or by doing both.
Investors are savers but all savers cannot be good investors, an investment is a
science and an art. Savings are sometimes autonomous and sometimes induced
by the incentives like fiscal concessions or income or capital appreciation. Savers
come from all classes except in the case of the population who are below the
poverty line. The growth of urbanization and literacy has activated the cult of
investment. More recently, since the eighties the investment activity has become
more popular with the change in the govt. policies towards liberalization and
financial deregulation. The process of liberalization and privatization was
accelerated by the govt. policy changes towards a market oriented economy,
through economic and financial reforms started in July 1991.
Need for Savings:
Savings are essential not only for individuals, family or businessmen but it is also
very much required for a nation. Growth is practically impossible without savings.
Individuals save because of several reasons. Let us discuss why we all require
Savings help us to meet future requirements: We need money in future for
various purposes like spending money on higher education, on marriages
and other celebrations, owning some immovable assets like house, land,
farms etc. With savings at hand we, can meet all these expenses.
Savings help us to meet expenses during emergencies: There are events
which are uncertain and may occur in future. All these events may require
some amount of money to be spend, which we can have from our savings.
For example, we may require money during emergencies like sudden
illness, accidents, etc.
Savings help us to raise our standard of living: Savings accumulated over a
period of time become a substantial amount, which enables us to buy
something, which is better, comfortable or even luxurious. For example,
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you can buy a vehicle of your own, home, good furniture; you can use
generators/inverters at home to avoid power cut, etc. All these improve
your standard of living.
Savings help us to generate further income: We can use our savings or part
of it in buying shares, debentures or bonds, in buying property and renting
it out or even in keeping money in a bank for a fixed period. All of these can
give us an assured return in terms of dividend, rent or interest. This is an
additional income for us.
Savings help the nation in its economic development: When we keep our
savings in a bank or in a post office, we get interest in return. But have you
ever thought what they do with our money? How do they generate more
money from our savings? Actually they utilize our money for various
productive purposes. For instance, banks may give our money to the
business houses as loan and charge more interest from them. Similarly,
government may use our savings in various industrial activities, by taking it
from the post offices or banks. Thus, our savings help in development of
business activities, which ultimately contributes to the overall economic
development of the country.
Impact on Inflation:
All the investments lose in value due to inflation or rise in prices leading to
depreciation of the rupee. When the rate of inflation or rise in prices leading to
depreciation of the rupee. When the rate of inflation is about 10%, the real value
of money is lost by 10% every year. The investors have therefore to protect
themselves from this loss of real values of their assets by proper investment
planning and by securing returns, higher than the inflation rate.
Some investments give only income like bank deposits, Post Office certificates,
company deposits etc. Some assets show capital appreciation if they are shares in
companies or bullion, land and buildings. Some are safe and liquid, like the
investments in government securities, bonds of P.S.U, etc. A few investments like
Indira Vikas Patra are easily transferable and marketable. So also the shares and
securities listed and traded on the stock exchanges. But all the above investments
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do not satisfy all the needs and objectives of investors, referred to later, including
securing a hedge against inflation. All objectives of income, capital appreciation,
safety, marketability and liquidity as also hedge against inflation can be secured
only by proper investment in corporate securities.
Tips on Saving:
We have learnt that savings are required for every individual. Let us learn some
tips so that we will be able to save.
Keep a record of your total income and its sources: This is essential as you
get to know when and how much you earn and to plan your expenditure
accordingly. Keep a record of your current expenditure: As you know there
are certain expenses which you have to incur regularly and the amount you
spend is almost certain. For example, expenditure on food, tuition fee for
children, electricity and water bill, expenses on newspaper, house rent, etc.
These are your current expenditure. Once you know about these
expenditures which you cannot avoid, you can plan for other expenses
keeping current expenditure in mind.
Plan your expenditure: There are certain expenses which do not occur
regularly. For example buying a TV, refrigerator, washing machine,
computer etc. To spend on these you have to make a priority list and then
you can defer the expenditure, which is least important. For example,
suppose you plan your expenditure on 25th December and fix your
requirements as a refrigerator, a computer and a washing machine. You
prioritized your requirements in the following order – washing machine,
refrigerator, and computer. This is so because you find that a computer
shall be most useful during the next academic session, a refrigerator shall
be most useful during summer (next March) and washing machine is urgent
as it is becoming difficult to wash cloth manually in winters. So naturally
your will spend on the washing machine and defer your expenditure on the
refrigerator for three months and the computer for six months.
Cut down your expenditure: There are certain expenses which one may
incur in an unplanned way. For example, suppose you have gone to Shimla
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on a tour in the month of March and got some winter clothes. You may use
them at Shimla but coming back from Shimla you may not be requiring all
those winter clothes. This sort of expenditure may be cut short.
Try to generate additional income and don’t spend it. This is a very good
way of savings. Whatever we earn from a regular source we can spend it on
our livelihood. But the extra earnings that we make from other sources can
be kept aside for future use. For example, suppose one of your articles is
published in the newspaper or magazine and you are paid some money for
that. You can keep aside this money for future use.
We have already learnt that sometimes people spend some money on buying
shares, bonds, properties etc. which give them some monetary return. Sometimes
people also keep their savings or a part of it as a recurring or fixed deposit in the
banks or post offices and earn interest on it. Similarly some people deposit their
money in Mutual Funds, Public Provident Fund Account etc. some buy National
Savings Certificates from the post office and some take Life Insurance Policies etc.
All these give them some additional income. These types of expenditures are
called investment. Thus, the term ‘investment’ refers to depositing or spending
money on some items that generate additional income either immediately or in
the future. For example, if you deposit money in Public Provident Fund Account it
will give you some amount of return in the form of interest. So, this is your
investment. Besides Public Provident Fund Account there are a number of other
avenues in which you can invest your money. Let us learn the details about these
Objectives of Investor:
Appreciation of capital
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Hedge against inflation
A method of tax planning
The mix of these objectives may also depend on the time frame of his investment.
Short-term/day to day trading gains
Short term capital gain up to one year
Long term appreciation more than 1 to 3 years.
Investment preferences of public may be set out in terms of their savings for:
Transaction purpose (for daily needs or regular payment?
Precautionary purpose ( for contingencies or special needs)
Speculation or asset purposes ( for capital gain or building of assets)
Where to Invest:
Deposits in Banks and Post Offices: These are the most common, popular,
risk free and trustworthy investments. In banks and post offices individuals
deposit their money in savings account, where they can withdraw the
money whenever required. They can also deposit money for a fixed period
on one-time basis or a recurring basis. All these investments are safe and
give an assured return. There is something known as recurring deposits.
That means in Banks we can open recurring deposit accounts, and every
month/quarter we can deposit the fixed amount and the bank will give a
fixed interest on that money which is usually higher than the regular
interest rates in the banks.
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Other Schemes/Certificates of Bank, Post Office: Apart from deposits, the
banks and post offices also offer various other schemes like Monthly
Income Scheme, National Savings Scheme, Public Provident Fund, National
Savings Certificates, Kissan Vikas Patra etc., which provide assured return
and are risk free.
Government Bonds: Sometimes government and semi-government
organizations accept deposits from individuals for a fixed period and
promise to pay a fixed amount after the stipulated period. These are in the
form of bonds, which are also risk free and provide assured return.
Life Insurance policies: Post offices, Life Insurance Corporation of India and
other private sector life insurance companies insure the life of individuals
for a specific amount for a specified period upon payment of a premium
amount. The individual who is insured gets a good return on maturity of the
policies. This is a very important form of investment. People should look if
they are adequately covered. A person’s net worth plays a huge role in
determining the amount of policy s/he should have. If a person’s earnings
are high, then accordingly the life style changes. Hence individuals should
ensure that they buy enough coverage so that if case of their unfortunate
death, their family can survive well on that insurance money.
UTI and other mutual funds schemes: There are some financial institutions
(may be government, semi-government or private) which raise money from
individuals and invest the collected amount in securities and deposits and
thereby earn a good return. This return is then distributed among the
investors as dividend. These types of investments are risky. It may give you
very good return or it may also lead to losses.
Corporate securities and deposits: There are companies which accept
deposits from public for a fixed period. People can invest their savings in
these companies. This is bit risky as your money goes into private hands.
But if the company is good and a reputed one, you can get assured return.
Similarly people sometime invest in buying shares of the company. If the
company is performing well the shareholders get good return otherwise
the shareholders may not get anything. These investments are again risky.
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Real estate: Sometimes people spend money on buying a plot of land, an
apartment or a house etc., the value of which appreciates over a period of
time. By giving it on rent they can earn money. These types of investments
are less risky though they do not provide an assured return.
Business activities: You must have observed that some people invest
money to carry on various business activities. They may start the business
individually i.e., in the form of sole proprietorship, or by inviting others to
invest money with them i.e., they can start partnership form of business. By
investing their money and putting their best effort then can get return in
the form of profit.
Investment in the share market: A person can invest his money in the
share market by purchasing shares. A share market is a public institution
and it serves the growth of the capital market. In a stock market, purchase
and sale of shares are made in conditions of free competition. It is
organized as voluntarily, non-profit making association of brokers to
regulate and protect their interests. Whenever a company raises capital
through public issue of securities, its securities are required to be listed on
the stock exchange within ten weeks of the closing of the subscription list
mainly to provide liquidity to the investors.
Gold, Silver, Precious Metals and Precious Stones: All these items vary as
per the market rates. And in the past few years, the rates of them have only
Please go to this site which will give you a day wise rate of gold.
Now if we see the gold price per 10 gram on Jan 2009, it was Rs. 13664.
And it was Rs. 27322 on Jan 1, 2012. So in 3 years it went up by Rs. 13658,
which is almost 100%. So if someone had invested in gold at the right time,
then it brings in good results.
The same goes for silver too. Silver price on Jan 1, 2009 was Rs. 13753/Kg
and it went up to Rs. 51043/Kg on Jan 1, 2011. So the increase was Rs.
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37290/Kg that means the increase was 271%. Hence people who had
invested in silver had reaped a better return than investing in gold. In fact
on May 1, 2011 it went up to Rs. 71576/Kg.
Provident fund- statutory, recognized, unrecognized, public provident
fund: Employee Provident fund scheme came into effect in 1952, and this
was done on a mandatory basis so that employees save on a monthly basis
through a government scheme. The govt. gives interest on the money
which is deducted in PF. All the employees (including casual, part time,
Daily wage contract etc.) other than an excluded employee are required to
be enrolled as members of the fund the day, the Act comes into force in
such establishment. Ideally when someone attains the age of 55, or over
and retires from his duties, then s/he is eligible to withdraw the PF. The
better course would be to invest in savings in Public Provident Fund (PPF)
so that the money is blocked and saved for a minimum period of 15 years.
It is totally exempt from tax.
Unit scheme of Unit trust of India (Some are marketable among these):
The announcement by the Chairman of Unit Trust of India (UTI) Mr. PS
Subramanyam, that all repurchases of units would be stopped for six
months, betrayed the trust that 20 million domestic investors had reposed
in the institution. In one sweep, UTI removed liquidity, one of the prime
components of an open-end fund to nothing at all. The government gave
the Unit Trust of India two weeks to devise a way of allowing small
investors to redeem units in its biggest fund. The government wanted the
suspension lifted for small investors, as it would have jolted the investor’s
confidence on the industry in a big way, something that the government
did not want to happen. UTI obliged by setting up a committee for the
purpose of proposing a way out to end the problem and to help restructure
the scheme from the state of shambles that it currently is in. Investors
stand to gain from the latest mechanism, which has been worked out after
a lot of brainstorming and though it is yet to get a nod from RBI, in all
probability, in the best interest of all the concerned parties, the modalities
shall be worked out properly. However, given the degree of uncertainties
involved, investors can do nothing but watch the drama unfold and just
hope that the outcome is in their interests.
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Venture Capital: Venture capital (VC) is financial capital provided to early-
stage, high-potential, high risk, growth startup companies. The venture
capital fund makes money by owning equity in the companies it invests in,
which and usually have a novel technology or business model in high
technology industries, such as biotechnology, IT, software, etc. The typical
venture capital investment occurs after the seed funding round as growth
funding round (also referred to as Series A round) in the interest of
generating a return through an eventual realization event, such as an IPO or
trade sale of the company. Venture capital is a subset of private equity.
Therefore, all venture capital is private equity, but not all private equity is
In addition to angel investing and other seed funding options, venture
capital is attractive for new companies with limited operating history that
are too small to raise capital in the public markets and have not reached
the point where they are able to secure a bank loan or complete a debt
offering. In exchange for the high risk that venture capitalists assume by
investing in smaller and less mature companies, venture capitalists usually
get significant control over company decisions, in addition to a significant
portion of the company's ownership (and consequently value).
All investments are risky, as the investor parts with his money. An efficient
investor with proper training can reduce the risk and maximize returns. He can
avoid pitfalls and protect his interests.
Classification of Investments:
There are different methods of classifying the investment avenues. A major
Physical investment: Example of physical investments is land, property,
flats, house, gold, precious metals and stones, paintings etc. They are
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physical, if savings are used to acquire physical assets, useful for
consumption and/or production. Many items of physical assets are not
useful for further production of goods or create income as in the case of
consumer durables, gold, silver etc.
Financial investment: Examples are Fixed Deposits, Bonds, Shares, and
Mutual Funds etc. Most of the financial assets, barring cash are used for
production or consumption, or further creation of assets, useful for
production of goods and services. Among different types of investments,
some are marketable and transferable and others are not. Examples of
marketable assets are shares and debentures of public limited companies,
particularly the listed companies on stock exchanges, bonds of P.S.Us,
Government securities, etc. Non-marketable securities or investments are
bank deposits, provident fund and pension funds, insurance certificates,
post office deposits, NSC bonds, company deposits, private limited
companies shares etc.
Difference between savings and investments:
Savings are money or other assets kept over a long period of time, usually in a
bank without any risk of loss or making profit. Investments are money or other
assets purchased with the hope that it will generate income, reduce costs, or
appreciate in the future. In an economic sense, an investment is the purchase of
goods that are not consumed today but are used in the future to create wealth. In
finance, an investment is a monetary asset purchased with the idea that the asset
will provide income in the future or appreciate and be sold at a higher price. And
usually it has also a risk of some loss.
As far as we are talking about investment then it is certain amount of money
which is saved or used in some projects where we can take profit more than the
money we have saved or invested. In general terms investment means the use of
money to make more money.
Think Before Making an Investment:
When you are investing money you must look into some factors to reduce the risk
involved in investment. Analysing these factors you must decide where to invest.
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Ability to save: Some of the investments require regular contributions of
certain amount of money like payment of LIC premium or installments in a
recurring deposit. You must assess your ability to save before taking any
Safety: You must look into the various risks or drawbacks of the
instruments where you are going to invest to ensure safety of your
Easy Liquidity: Any investment you make must be capable of being
converted into cash whenever necessary.
Rate of Interest: Rate of interest is more important than the amount of
return you get. Savings and Investment normally, for larger deposits, higher
rates of interest are fixed.
Tax relief: One must take into consideration the various tax benefits we can
avail of through our investments.
New developments in Investment avenues:
Exchange traded funds: (ETFs) are a new variety of mutual fund that first
became available in 1993. ETFs have grown rapidly and now hold nearly
$80 billion in assets. ETFs are sometimes described as more 'tax efficient'
than traditional equity mutual funds, since in recent years, some large ETFs
have made smaller distributions of realized and taxable capital gains than
most mutual funds. This paper provides an introduction to the operation of
exchange traded funds. It also compares the pre-tax and post-tax returns
on the largest ETF, the SPDR trust that invests in the S&P500, with the
returns on the largest equity index fund, the Vanguard Index 500. The
results suggest that between 1994 and 2000, the before- and after-tax
returns on the SPDR trust and this mutual fund were very similar. Both the
after-tax and the pre-tax returns on the fund were slightly greater than
those on the ETF. These findings suggest that ETFs offer taxable investors a
method of holding broad baskets of stocks that deliver returns comparable
to those of low-cost index funds.
REIT (Real estate investment trust): REITs are companies, which own
properties such as office buildings, shopping complexes, and hotels etc,
which are giving continuous income. As these companies pass most part of
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their income to the shareholders, they get tax benefits from their income.
Like other stocks that are traded in the stock exchanges, REIT can also be
traded in the stock exchange. REITs give a new opportunity to the retail and
institutional investors to diversify their portfolio.
The Emerging Investment Avenues:
According to a study undertaken jointly by Merrill Lynch and Cap Gemini Ernst
and Young, High Net worth Individuals [HNIs] or wealthy investors are proactive in
portfolio management, risk management, consolidation financial assets and use
of diversification strategies as actively as large institutions. HNIs are proactive in
identifying new investment options and take inputs from professional advisors in
volatile market conditions.
HNIs are dynamic in modifying their asset allocation and were among the first
investors to move from equities to fixed income during 2001-2002 period of
downturn in equity markets. They shifted back to equities when they identified
favorable market trends.
Needs of wealthy investors
Wealthy investors being aware of the emerging investment opportunities use
sophisticated investment strategies such as:-
Leveraging on the professional advisors' capability to analyse market trends
and make appropriate investments.
Searching for innovative products to enhance value.
Diversifying across various types of assets.
Investing across emerging geographies.
Consolidating financial information and assets.
Investment products and avenues
Managed products: Managed product service is the most popular
investment strategy adopted by wealthy investors globally.
Real Estate: Wealthy investors have found this asset class very attractive
and have invested directly in real estate and indirectly through real estate
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Art and passion: Wealthy investors also have their investment in art, wine,
antiques, and collectibles.
Precious Metals: Gold and other precious metals are attractive investment
options to balance the asset allocation.
Commodities: Wealthy investors have turned to commodities to offset the
lower returns from fixed income securities.
Alternative investments: Hedge funds and Private equity investments such
as venture funds are becoming increasingly popular with wealthy investors
to reduce the investment risks related to stock market fluctuations. This is
because these instruments have low correlation with equity asset class
performance. Investment in non correlated assets, such as commodities
helps to improve diversification of the portfolio amidst volatile market
Characteristics of wealthy investor
The wealthy investor of today is:-
Young, educated and knowledgeable.
Well informed about global trends.
Willing to take risks.
Demanding and quality conscious.
Performance oriented in taking decisions and less loyal.
Techno savvy and seeks information from various sources.
Smart in looking for the best deal.
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Not attracted by traditional status symbols that do not add value.
Hands on in checking investments, making deals and getting personally
Special needs of wealthy investors
The strategies and characteristics of wealthy investors has led to financial
institutions innovating and expanding their product range to meet the growing
demands of such investors.
A financial advisor should keep in mind the following special needs and
expectations of the wealthy clients:-
Demand broader range of services and skills: Wealthy clients not only
are on the lookout for multiple investment avenues, unlike other clients,
but are also ready to face the risks associated with newer products.
Net worth and goals need to be matched and assets need to be planned
tax effectively: Since wealthy investors have surplus funds that can be
passed on to the next generations and also come into the high tax
paying category, investors need to advise them on the best methods to
transfer their assets after death as well as on the best tax saving
Estate planning and tax planning: In-depth knowledge about tools of
estate planning such as wills, trusts, and power of attorney is necessary.
It is also important to know the succession rules and tax rules to do
effective tax planning resulting in minimal/no tax on transfer of assets.
Educate the client: Educating the client on various and different types of
investment avenues that will suit him the best will prove very beneficial
for the financial advisor. Wealthy clients, especially those who are self
made, may assume that if they can make wealth in one industry they
can manage their own portfolio as well. In such cases it is best to
educate the client about the best investment options rather than trying
to push a product; because if one is trying to push a product, the client is
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unlikely to get interested since he/she will be having enough people
chasing him/her for investments.
In the BPO industry, the salaries are quite high. And an average manager earns
anything between 10-20 Lakhs/ annum. Hence there are many HNIs in this sector
and we have tried to include some of them in this study and have tried to analyse
their approach towards investments.
Features of investment avenues:
The investor has various alternative avenues of investment for his savings to flow
in accordance with his preferences. All investors involve some risk or uncertainty.
The objective of the investor is to minimize the risk involved in investment and
maximize the return.
1. Risk: The risk depends on the following factors:
a) The longer the maturity period, the larger is the risk.
b) The more the creditworthiness of the borrower or agency issuing
securities, the less is the risk.
c) The nature of instrument, namely, the debt instrument or fixed deposit
or ownership instrument like equity or preference share, also
d) The risk of variability of returns is more in the case of ownership capital
as the return varies with the net profits after all commitments are met.
e) The nature of tax liability on the instrument
2. Return: A major factor influencing the pattern of investment is its return, which
is its return and capital appreciation, if any. The difference between the purchase
price and the sale price is capital appreciation and the yield is the interest or
dividend divided by its purchase price.
3. Safety: The safety of the capital is the certainty of return on capital without loss
of money or time involved. In all cases of money lent, some transaction costs and
time are involved in getting the funds back.
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4. Liquidity: If a capital asset is easily realizable, salable or marketable, then it is
said to be liquid. An investor generally prefers liquidity for his investments, safety
of his funds, a good return with a minimum risk or minimization of risk and
maximization of return (dividend and capital appreciation).
5. Marketability: This refers to transferability or salability of an asset. Those listed
in stock market are more easily marketable than those that are not listed.
6. Tax benefits: Some instruments enjoy good tax benefits; hence their net return
Risk and return are directly correlated with each other, when risk high return is
also high and vice versa.
The relationship between risk and return is a fundamental financial relationship
that affects expected rates of return on every existing asset investment. The Risk-
Return relationship is characterized as being a "positive" or "direct" relationship
meaning that if there are expectations of higher levels of risk associated with a
particular investment then greater returns are required as compensation for that
higher expected risk. Alternatively, if an investment has relatively lower levels of
expected risk then investors are satisfied with relatively lower returns.
This risk-return relationship holds for individual investors and business managers.
Greater degrees of risk must be compensated for with greater returns on
investment. Since investment returns reflects the degree of risk involved with the
investment, investors need to be able to determine how much of a return is
appropriate for a given level of risk. This process is referred to as "pricing the
risk". In order to price the risk, we must first be able to measure the risk (or
quantify the risk) and then we must be able to decide an appropriate price for the
risk we are being asked to bear.
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Problem Statement: We have been working in the BPO industry for a long time.
Sunia has been working for 10+ years in this industry; Krishna is working for 6
years, Merlin for 4 years, Bhavani for 4 years and Sheela for 3 years. We have
realized that we have earned a lot of money from this industry; however our
investments are not up to the mark.
During the global recession in 2008, we have seen many of our colleagues losing
jobs, and then we realized all the more the importance of investments.
We have also gone through traumas of a family member being hospitalized, and
the huge expenses which we have to incur during such times.
It is not only us, we have seen most of our colleagues working in this industry are
earning well, however their savings are investments are poor. In fact most of
them own credit cards and often are neck deep in debts. Also they often take
personal loans to buy consumer durables like TV, Fridge, and Washing Machines
etc. and pay anything between 12-20% as interest/ year of such loans.
Hence we thought of taking up this study so that we can not only gather data and
reach to a conclusion, so that we can create awareness amongst young BPO
employees regarding savings and investments.
Reasons for taking up this study:
As per a study done by Price Water Coopers, here we can find some facts:
Please go through the entire study at:
The Indian information technology (IT) / IT enabled Services (ITeS) industry has
played a key role in putting India on the global map. Over the past decade, the
Indian IT-BPO sector has become the country’s premier growth engine, crossing
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significant milestones in terms of revenue growth, employment generation and
value creation, in addition to becoming the global brand ambassador for India.
The Indian IT-BPO sector including the domestic and exports segments continue
to gain strength, experiencing high levels of activity both onshore as well as
offshore. The companies continue to move up the value-chain to offer higher end
research and analytics services to their clients.
The Indian IT-BPO industry has grown by 6.1 percent in 2010, and is expected to
grow by 19 percent in 2011 as companies coming out of recession harness the
need for information technology to create competitive advantage.
India’s fundamental advantages—abundant talent and cost—are sustainable over
the long term. With a young demographic profile and over 3.5 million graduates
and postgraduates that are added annually to the talent base, no other country
offers a similar mix and scale of human resources.
Realizing the wealth of potential in the IT-ITeS sector, the central and state
governments are also working towards creating a sound infrastructure for the IT-
ITeS sector. CII aims to make the Indian IT and ITeS industry world class by
continuously providing a platform for understanding and adoption of the new
developments & best practices worldwide in this sector, taking up issues and
concerns of the Indian industry with the relevant ministries at National and State
level, coming up with studies, reports and surveys to help understand the
potential of Indian IT and ITeS market and the issues faced.
As one of the key growth engines of the economy, the Indian IT/ITeS industry has
been contributing notably to the economic growth accounting for around 5.6% of
the country’s GDP and providing direct employment to about 2.3 million people
and indirect employment to many more. (Data collated till 2011).
Since this industry has a huge potential, and it is providing a positive impact on
India’s GDP, and every year a lot of new graduates and post graduate young
people are joining the work force, we thought that this will be a good platform to
base our studies on.
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Since this is an emerging and young sector, not too many studies have happened
in this sector. Hence it gave us a fresh platform to work on. Plus since many of our
friends and colleagues work in this sector, it was easy for us to collect primary
data. Also this was a very relevant study which would have benefitted most of us
and this research would have helped us to create awareness amongst our
colleagues and friends associated with this industry.
Bangalore is known as the Silicon Valley of India and most of the IT and ITES
companies have their large operations in Bangalore. Hence Bangalore has a
sizeable population and we will take a small sample from that population for this
Since out of total investment from Bangalore, substantial share is from ITES
professionals, the researcher is making a study here to understand the
investment pattern of ITES professionals. The knowledge about investments and
portfolio designing is limited for ITES professionals as there area of study and
interest is different. The decisions they take regarding their investments may not
be accurate and hedging will not be taken care properly if portfolio is not proper.
Therefore this study is basically conducted to find out the investment pattern of
ITES professionals in Bangalore city and offer suggestions for better performance
of the funds invested.
Scope of the study: The area covered for the study of “A study on investment
pattern of ITES Employees in Bangalore” is about X ITES companies for the
collection of primary data. They are:
1. Infosys BPO
2. Accenture BPO
3. IBM- Daksh BPO & IT Services.
4. HP (BPO and IT Services)
5. Fidelity BPO Wing
6. GENPACT BPO
7. ANZ Services/BPO
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9. Dell (BPO and IT Services)
Profile of the ITES Companies
1. Infosys BPO
Progeon was established in April 2002 as the BPO subsidiary of Infosys
Technologies and today is among the top third party BPOs in India according to
NASSCOM. It was started as a 74% and 26% joint venture between Infosys and
Citibank Investments. In 2006 Infosys bought out Citibank's share at a price of Rs
592 per share. Today it has operations in Bangalore, Chennai, Gurgaon,
Bhbaneshwar, Jaipur and many other Indian Cities along with international
centers like, Monterrey, Mexico, Lodz, Poland, Brno, Czech Republic, Atlanta, USA,
Hnagzhou, China, Manila, Philippines, and Brazil. Infosys BPO, the Business
Process Outsourcing subsidiary of Infosys Limited (NASDAQ: INFY), is an end-to-
end outsourcing services provider. Infosys BPO addresses your business
challenges and unlocks business value by applying proven process methodologies,
integrated IT and business process outsourcing solutions. The company applies
business excellence frameworks to significantly reduce costs, enhance
effectiveness and optimize business processes. The company focuses on
integrated end-to-end outsourcing and delivery of result-oriented benefits to our
clients through reduced costs, ongoing productivity improvements and process
Our business solutions and leadership are recognized by several global forums.
We are consistently ranked among the leading BPO companies in India by
industry bodies such as Global Outsourcing 100 (The International Association of
Outsourcing Professionals), FAO Today, and NelsonHall.
Infosys BPO has not only pioneered "Business Value Realization" (BVR), but has
also emerged as a trusted and valued collaboration partner through consistent
focus on improving process and end-business metrics. We continue to enable
realization of business value, customer satisfaction and co-creation to sustain long
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We take pride in being a consistent performer and are endorsed by industry
analysts, customers (internal and external), and alliance partners. Infosys BPO is a
global company operating in the Americas, APAC, Australia and Europe with over
21,421 employees and revenues of $494.9 million as of March 31, 2012.
Business Transition Methodology
Infosys BPO enables flexible business process management services through
global delivery centers. We believe that a well managed transition provides a
robust foundation for smooth operations. A key aspect of our service is the
transition of business processes from client’s locations to our delivery center(s).
We have a comprehensive and mature transition methodology documented from
over 1,000 transitions.
Infosys BPO leverages global delivery centers to deliver predictable and flexible
business process management services. A key aspect of our service delivery is the
successful migration or transition of business processes from the client’s locations
to our delivery center(s).
We have a comprehensive and mature transition methodology that has been
refined and documented during the course of more than 1,000 transitions.
Compliance is monitored through check points at different stages.
Project preparation begins with the handover of the solution design to the
transition team. It involves defining the roles and responsibilities of key
stakeholders to ensure a smooth transition. A dedicated transition team
consisting of a transition manager, operation and documentation specialists, and
trainers, is deployed.
The team has access to a shared resource pool from technology, legal, finance,
human resources and quality during transition. It involves Knowledge Transfer
(KT), team identification and preparing the team for onsite assignment.
After a detailed planning workshop with the client, this phase involves finalization
of the integrated project plan. It includes plans for operations, delivery,
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technology, recruitment, quality, and risk to cater to project requirements. In
addition, the integrated project plan mobilizes resources and arranges logistics.
The objectives of planning include -
Creation of a detailed execution plan for all work streams
Validation of FTE ramp-up, technology requirements and establishment of a
Identification of deliverables across different functionalities
Pre-empting and monitoring implementation of the plan across all phases – a
continuous and consistent exercise
Assessing and mitigating risk
Workflow tool/ point application requirement collection and analysis
Execution involves the implementation of the transition solution. We deploy
domain, process and technology teams to address transition -
Knowledge transfer: Includes the construction of operating procedures,
preparation of training documents, and training executives to execute the process
Technology transfer: Identifies the optimal network architecture, procurement of
bandwidth and systems, and installation, testing, and deployment of technical
Operating preparedness: Includes recruitment, induction and site preparation
In this phase, offshore operations are initiated with active client support.
Gradually, the responsibility is transferred to the offshore operations team while
ensuring that inter-dependent processes are not affected. It involves several
Preparation of the ramp-up schedule
Execution of offshore ramp-up and onsite ramp-down while maintaining
continuity of operations
Establishing service levels
Parallel run helps achieve robust operations with all the resources and
infrastructure to execute steady state operations.
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'Steady state operations’ is the ongoing delivery of services. The key objective is
"business as usual," where the outsourced processes are executed in accordance
with the norms in the Service Level Agreement (SLA). Steady state involves:
Security and business continuity
SLA metrics tracking and reporting to monitor continuous performance
Human Resource Management
Quality Management System
Our transition framework has several features:
Check points after each phase of transition to enable robust implementation
Health checks after go-live as a warranty
Structured Customer Satisfaction (CSAT) survey after each transition to elicit
client feedback and ensure world-class transition
2. Accenture BPO:
Accenture is a global management consulting, technology services and
outsourcing company, with more than 249,000 people serving clients in more
than 120 countries. Combining unparalleled experience, comprehensive
capabilities across all industries and business functions, and extensive research on
the world’s most successful companies, Accenture collaborates with clients to
help them become high-performance businesses and governments. The company
generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011.
Accenture is a great success story by any measure. The company’s history has
been more than 60 years in the making—from the earliest days as a pioneer in
the new world of information technology in the 1950s to its position today as a
Fortune Global 500 industry leader.
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Initially called Andersen Consulting, Accenture was formally established in 1989
when a group of partners from the Consulting division of the various Arthur
Andersen firms around the world formed a new organization focused on
consulting and technology services related to managing large-scale systems
integration and enhancing business processes.
In April 2001, Accenture’s partners voted overwhelmingly to pursue an initial
public offering, and Accenture became a public company on July 19, 2001, when it
listed on the New York Stock Exchange under the symbol ACN.
The majority of Accenture employees are organized in one of four "workforces"
(Consulting, Services, Solutions and enterprise) and they chose to open their BPO
wing in Bangalore in April 2003.
Accenture offers a vast range of BPO services to enable high performance,
including function-specific services such as procurement, HR and finance and
accounting, as well as services geared to the needs of specific industries such as
utilities, insurance and health care.
Cross-Industry BPO Services
Finance and Accounting BPO
Human Resources BPO
Supply Chain BPO
Credit Services BPO
Health Administration BPO
Life Sciences BPO
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5. Fidelity BPO Wing:
FMR India consists of three business verticals - Technology services, Business
Delivery and Enterprise Services, providing services to Fidelity Investments' US
clients. The range of operations include IT Development & Support, Business
Process Outsourcing (BPO), Implementation, Business Analytics & Research and
FMR India was set up in the year 2002 at Gurgaon and its Bangalore operations
commenced in 2003, with the mission to enable Fidelity’s clients to achieve
lifelong financial independence and peace of mind. Headquartered in Bangalore,
FMR India has full-fledged operations Chennai also.
Fidelity Management and Research (FMR co.) founded in Boston by Edward C.
to act as investment advisor to fidelity fund.
The global brand
Fidelity is an international provider of financial services and investment resources
that help individuals and institutions meet their financial objectives.
Once known primarily as a mutual fund company, Fidelity has adapted and
evolved over the years to meet the changing needs of its customers. Today, that
evolution is reflected in Fidelity's menu of products and services. In addition to
more than 300 Fidelity mutual funds, Fidelity also offers discount brokerage
services, retirement services, estate planning, wealth management, securities
execution and clearance, life insurance and much, much more.
What hasn't changed over the years is Fidelity's commitment to continuous
improvement, state-of-the-art technology and peerless customer service. Fidelity
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is responsible for many innovations that are standards in the industry today.
Fidelity reinvests a substantial portion of its revenues each year back into
technology to deliver new products and services to investors. And Fidelity is being
consistently recognized by industry surveys and publications for providing some
of the highest levels of customer support.
6. GENPACT BPO:
Genpact Limited (NYSE: G) is a global provider of business process and technology
management services, offering a portfolio of enterprise and industry-specific
services. It was formerly a GE owned company called GE Capital International
Services or GECIS. It operates from India, China, Guatemala, Hungary, México,
Morocco, the Philippines, Poland, the Netherlands, Romania, Spain, South Africa,
Australia, UAE, Brazil and the United States. Tiger Tyagarajan is the President and
CEO of Genpact and has the highest paid salary package of Rs.49 Crores per
Currently it employs over 55,000 people in various locations providing services in
25+ languages on a 24/7 basis.
Genpact's services cover areas like Finance and Accounting, Analytics & Research,
Risk Management, Supply chain, Procurement, Enterprise Application Services
and IT Information Services. Genpact serves clients in various industries including
Banking and Financial Services, Insurance, Capital Markets, Healthcare, Life-
sciences, Consumer Goods, Retail, Aerospace, Automotive, Energy, Hi-Tech,
Transportation & Logistics, and Hospitality.
Genpact went public on NYSE on August 2, 2007 under the symbol "G".
The NYSE symbol "G" was initially allocated to the Gillette company. After the
Gillette Company was acquired by Procter and Gamble, the symbol became free
and Genpact and Google booked it. It was Genpact in the end that got to keep G
as its stock symbol.
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Apart from GECIS, Genpact has also been known as GECSI and GECIBS in its initial
days of operation.
Genpact operates from Asia, Eastern Europe, Northern America, Latin America,
Australia and Africa.
Genpact, Uppal Hyderabad
In India it operates from Gurgaon, Noida, Delhi, Hyderabad, Jaipur, Kolkata,
Bangalore and Dehradun. The operations in India are Finance and Accounting,
Sales and Marketing Analytics, Customer Services, Financial Services Collections,
Supply chain, Information Technology and Actuarial & Other Insurance Services
with Learning Content Development. Genpact has got an approval to open its SEZ
center in Bhubaneshwar.II
Genpact has a 50:50 joint venture with NDTV in NGEN Media Services. Also has
tied up with NIIT for training related services.
Genpact Mexico provides bilingual English and Spanish-language based business
services, near-shore services to North America and a significant document
management capability. The Mexico operations have 2200 people in three sites –
two sites in Ciudad, Juarez (sister city to El Paso, TX) and one site in Caborca. The
core business competencies of Genpact Mexico lie in the areas of Customer
Service, Finance and Accounting, Collections, Document Management. Mexico is a
Strategic Site to handle Bilingual Call Centre and Non Voice Capabilities – mainly
English and Spanish.
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Genpact has assumed several accounting processes of Walgreens, the largest
drugstore chain in the United States. It has acquired a former Walgreens facility in
Danville, Illinois to accommodate these functions.
Through its wholly owned subsidiary formerly known as Creditek LLC, with
facilities in Wilkes Barre, PA, Nashville, TN, and Parsippany, NJ, Genpact provides
Finance & Accounting solutions Revenue Cycle Management services in such
processes as order-to-cash, procure-to-pay and forecast-to-fulfill.
Genpact Mortgage Services, formerly MoneyLine Lending Services, provides
private-label, outsourced mortgage origination and fulfillment services and
complex business process outsourcing for financial institutions and other
mortgage lenders from its centers in Irvine, CA, and Salt Lake City, UT.
Genpact's facility in Guatemala was opened in 2008 and provides business
process services in English as well as in Spanish. The delivery center will initially
accommodate more than 700 workers and has the capacity to grow to
approximately to 1,000. The facility's close proximity to the region's largest public
university is a major advantage in terms of attracting key talent.
Genpact Hungary, founded in 2002, operates in Budapest and has established
itself as one of Europe’s premier business services and technology solutions
providers. It currently employs staff from more than two dozen
countries serving customers across Europe in over 15 languages.
Genpact Romania, founded in 2006, operates in Bucharest and in Cluj.
In Netherlands & Spain
With the strategic acquisition in 2007 of Dutch and Spanish entities of ICE
Enterprise Solutions, Genpact provides SAP solutions via centers in the
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Netherlands and Spain. ICE is an SAP Services Partner, Utilities Partner, and
BW/SEM Partner in the Netherlands, and an SAP Partner and StreamServe Partner
In June 2008, Genpact opened a new center in the Polish city of Lublin.
Genpact Operations Centre located in city of Lublin is a finance and accounting
operations centre which offers services to customers from Slovakia, Czech and
Decision about starting the centre in Lublin results first of all with good city
location, close to other states in Centre and Eastern Europe. What is more Lublin
– the largest city in eastern Poland - is known as a strong academic centre. Lublin
is home to 14 universities, approximately 100 000 students and about 22 000
university graduates. Therefore Lublin can assure suitable personnel backup
and offers professional and experienced staff in finances and accounting, and also
We are pleased with expansion our company in Poland. Opening of new centre is
a large step in systematic enlarging our European operating possibilities” - said
Patrick Cogny CEO Genpact Europe.
First employees of new Centre became officially take on in June 2008 r. Centre in
Lublin functions already in 100% and it develops continually.
In 2008, Genpact set foot in the North African city of Rabat, Morocco.
In 2009, Genpact entered into a partnership with South African Breweries Ltd
(SAB) assuming responsibility for its Shared Services Centre in Johannesburg,
Genpact in China, known as Jianbaite (in Chinese: 简柏特), has Service delivery
centers in Dalian, Changchun and Shanghai. Among them, the center in Dalian is
the largest, located in Dalian Software Park, employing about 3,000 people, and
focusing on the Japanese business.
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Genpact in the Phillppines has a BPO/Call Center branch located at Northgate
Cyberzone, Filinvest Corporate City, Alabang, Muntinlupa City.
The leadership team:
Pramod Bhasin is the Non-Executive Vice Chairman and former President and
CEO of Genpact.
Foundation of GENPACT:
Pramod started GE Capital International Services (GECIS) in 1997 as the in-house
BPO division of General Electric (GE) when K.P. Singh convinced Jack Welch, the
former CEO of GE, to outsource certain services to India at Gurgaon. It was under
Pramod that GE hired Raman Roy, pioneered business process outsourcing in
India, and expanded its operations from India to countries like China, Hungary,
Guatemala, Poland, Mexico, Morocco, the Philippines, Romania, South Africa and
the United States.
GENPACT began in 1997 as a business unit within GE and this lineage has
contributed to our deep understanding of process. Starting first with the business
of GE Capital and then expanding scope across GE businesses, to providing
business process management capabilities that delivered outstanding business
impact for the company.
Over a sustained 14-year period, Genpact has been the key provider of business
process and technology management services to GE and they continue to be a
significant Genpact client. In January 2005, Genpact became an independent
company to bring our process expertise and unique DNA in Lean Six Sigma to
clients outside the GE family. In August 2007, Genpact was listed on the NYSE
under the symbol ‘G’.
Driven by a passion for process innovation and operational excellence built on its
Lean and Six Sigma DNA and the legacy of serving GE for more than 14 years, the
company’s professionals around the globe deliver services every day to its more
than 600 clients from a network of 18 countries, 67 delivery centers supporting
more than 25 languages.
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Genpact has been an early mover in the industry and a pioneer in many of the
areas that have given strength to the concept of Business Process Management.
From the first to introduce Six Sigma for Process Transitions to the first to build a
Science of Process Management (SEPSM), Genpact has always led the way, and in
the process helped their clients to outperform.
Genpact’s successful and incessant efforts in challenging the status quo and
bringing innovation to our clients are demonstrated by continuous process
solutions advances, such as those in analytics (e.g., inventory optimization or
investor listening services based on social media methods), risk management
(e.g., anti money laundering, or simulation of the impact of commodity costs) or
business collaboration (through better platforms such as Genpact-Unified -
Genpact is uniquely positioned to deliver business process innovation because of:
Its diverse yet cohesive client, partner and internal ecosystem. Like any great
process, real innovation doesn’t happen in a silo and our approach benefits from
a vast network of intelligence: in-depth collaborative development work with
some of our best clients, select consultants and advisors; joint research with
leading academia like the MIT Center for Collective Intelligence; our web-based
SolutionXchange collaboration network of “crowd sourced” experts; our SEP
innovation group, and our deep analytics bench; Genpact’s active Board of
Directors; acquisitions such as Akritiv and EmPower Research.
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Its unique innovation process with dedicated senior management. Our
“innovation factory” consistently harnesses the power of our ecosystem, extracts
needs and insights and combines Genpact capabilities to create repeatable, cost
effective, configurable yet standardized innovative solutions to old and new
The Genpact DNA of Lean Six Sigma
Genpact is proud of its heritage of Lean Six Sigma—it is the way we work, a part of
our DNA! Lean Six Sigma is a tool, a methodology for quality improvement that
has been around for many years. So the difference is not the tool but how a
company embraces it and puts it to work.
As a part of GE, Genpact was in an initial beta site under Jack Welch, who became
known worldwide as
a leading proponent of Lean Six Sigma. Lean Six Sigma was common in
manufacturing but GE was an early innovator in its application to services and
made this a tremendous success.
There are two types of companies when it comes to embracing Six Sigma. Those
where it is simply a function and others where Lean Six Sigma is driven through
the organization, which is true of GE and is clearly true for Genpact. It permeates
what we do and is highly visible in our operations, our people processes, and our
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Genpact’s offerings: (Solutions)
Analytics and Research
BPaas (Business Process as a Service)
Enterprise Application Services
Finance and Accounting
Human Resource Services
Indirect Source to Pay
IT- Infrastructure Services
Learning and Marcomm Services
Risk Management Services
Genpact’s offerings: (Industries)
Banking and Financial Services
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Transportation and logistics
We have mentioned about the solutions and industries which GENPACT supports
because GENPACT has not divided the company as technologies, BPO etc. They
have divided as per ‘’Solutions’’ and ‘’Industries’’ and they do high end work in
the services space. Since it all comes under the big umbrella of IT Enabled
Services, we thought of including it in the company profile.
7. ANZ Services/BPO
ANZ in India:
ANZ's operations in India are an integral part of ANZ’s global network comprising:
Australia and New Zealand Banking Group Limited (ANZ) in Mumbai
ANZ commenced banking operations in India with the opening of its first
branch in Mumbai in June 2011. This follows the receipt of the banking
licence from the Reserve Bank of India in October 2010.
ANZ is one of the 25 largest banks globally by market capitalisation1 and
holds a long-term credit rating of Aa2/stable from Moody’s and AA-/stable
The India branch supports Corporate and Institutional clients in India and
provides greater access to the Indian markets for our global network
ANZ offers clients a full range of rupee and foreign currency products and
services, working capital and term financing, cash management and trade
products, foreign exchange and interest rate solutions, as well as deposits
and advisory services.
ANZ Operations and Technology and ANZ Support Services India,
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ANZ Operations and Technology Pvt. Ltd. and ANZ Support Services India
Pvt. Ltd. in Bangalore are an integral part of ANZ’s Global Services &
Operations and Technology divisions.
In Bangalore, ANZ currently employs close to 5000 people in technology
development, operations and shared services roles. The group has been
servicing ANZ’s technology needs for more than 21 years and has in recent
years extended its capabilities to include operations and support functions.
This division is led by Leanne Lazarus.
ANZ’s history dates back over 175 years. We are committed to building
lasting partnerships with our customers, shareholders and communities in
32 countries in Australia, New Zealand, throughout Asia and the Pacific, and
in the Middle East, Europe and America.
We aim to become a super regional bank. This involves growing our
presence in the Asia Pacific region and source 25-30% of earnings from our
Asia Pacific Europe and America Division by 2017, while also being very
focused on growth in our core domestic businesses in Australia and New
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ANZ executive is made up of the Board of Directors and Management team.
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In relation to corporate governance, ANZ's Board seeks to:
Embrace principles and practices it considers to be best practice
Be an 'early adopter', where appropriate, by complying before a published
law or recommendation takes effect; and
Take an active role in discussions of corporate governance best practice
and associated regulation in Australia and overseas.
As a company listed on the Australian Securities Exchange (ASX), ANZ is
required to disclose how it has applied the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations (ASX
Governance Principles) during the financial year, explaining any departures
ANZ has complied with each of the ASX Governance Principles throughout
the 2011 financial year.
Codes of Conduct and Ethics
ANZ has two main Codes of Conduct and Ethics which provide employees
and Directors with a practical set of guiding principles to help them make
decisions in their day to day work. The Codes embody honesty, integrity,
quality and trust, and employees and Directors are required to
demonstrate these behaviours and comply with the Codes whenever they
are identified as representatives of ANZ.
9. Dell (BPO and IT Services)
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Sample Size: We have taken a sample size of about 200 respondents spreaded
almost equally among the companies. Since we work for Infosys BPO, the majority
of the sample comes from there. However it can be taken as a neutral data, as the
people change companies and the people who are today in Infosys BPO, they
might have worked in other BPOs in the past. Hence the figures do not affect the
The study areas covered for the analysis are Behavioral finance, portfolio
management, and financial management.
Tools for data collection: We have used the questionnaire as a tool for data
collection. We have used the same questionnaire to collect data as soft copy
(using googledocs) and also took print outs of the same questionnaire and took
hardcopies and then we manually fed the data for analysis.
Personal Tax planning for an Individual:
Some people have a wrong notion that tax planning is useful only once you are
well settled in life. Rather, the best time to start tax planning is right from the day
you start earning any income in your name.
For any individual tax planning occupies a prominent position in the investment
Tax Planning: Everyone is entitled to so arrange his affairs to reduce his tax
liability, but the arrangement must be real and genuine and not a sham. Thus tax
planning ensures not only the accrual of tax benefits within the four corners of
law but also that the tax obligations are properly discharged to avoid penal
provisions. It should not be mixed with tax evasion and tax avoidance.
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Tax planning at different stages of life through various Investments:
1. When a person starts earning by default the company s/he works for deducts
the PF which is exempted from tax. Also Insurance policy (life Insurance, medical
insurance u/s 80D and retirement plans) can be planned as deduction can be
availed u/s 80 C.
2. Next stage is to own a house. The biggest advantage of putting your money in
residential house property is tax haven in one hand while on the other hand; you
get a secure place of your own to live in. The repayment of principal is deductible
up to one lakh in a year u/s 80 C.
3. Usually, a person has to spend a lot on the education of children. Tax planning
can be used as effective tool in this respect as it may ensure that the capital base
is not eroded or adversely affected. Sec 10(14) and rule 2BB provides for certain
allowances that are exempt according to the limit specified in respect of each
4. Senior citizens can invest special Senior Citizens schemes launched by govt. of
Tax planning brings fiscal discipline in the functioning of a taxpayer and reduces
the transfer of money, from the person who has earned it by hard labor, to the
govt. for waste and ostentation. Thus the amount invested enhances the capacity
of the taxpayers for expansion and growth, which in turn increases the tax
revenue of the govt.
Objectives of the Study:
1. To examine history, growth and development of investment avenues in the city
2. To analyze investment pattern of ITES professionals in Bangalore city.
3. To find out the most accepted investment option in the city.
4. To offer suggestions on the basis of findings with reference to profitability, tax
benefits, liquidity and risk.
Period of the Study:
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The study on Investment pattern analysis of ITES professionals in Bangalore city is
conducted for a period of about 1 year.
1. The findings of this study are based on sample size, so they can’t be
2. The research period is very short. So time constraint was a limiting factor.
3. Limited knowledge of respondents about the topic of the study was also a
4. The age group was very diverse. There were freshers with a CTC of 1
Lakh/Annum, and there were middle management professionals with a CTC
of 20 lakhs/annum or so. All cannot be clubbed in one group as they view
investments from a different perspective.
Different types of Investment patterns/Different segments of the society who do
investments and their ways.
The topic “A study on investment pattern of ITES Employees in Bangalore” is
covered under behavioral finance. The researcher has reviewed the following
literature for the study of the above stated topic.
We have searched the internet and we have found 6 different literature reviews
which I would like to include in my research. They are as follows:
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1. ASIAN JOURNAL OF MANAGEMENT RESEARCH
Online Open Access publishing platform for Management Research.
Done by: Gaurav Kabra, Prashant Kumar Mishra, Manoj Kumar Dash,
PGH Student, ABVIndian Institute of Information Technology and Management,
Assistant Professor, ABVIndian Institute of Information Technology and
Topic: Factors Influencing Investment Decision of Generations in India: An
2. Investment Patterns and its Strategic Implications for Fund Managers: An
Empirical Study of Indian Mutual Funds Industry.
Done by: D. N Rao, Kings University and S.B Rao, All India Management
Association. Date: January 19, 2010
3. Changing Trend of Investment Pattern in India and Emergence of Mutual
[HDFC Asset Management Company]
Done by: Sheeba Lole, MBA II Semester
Shree Amreli Jilla Leuva Patel MBA College Of Women
Amreli–365 601 GJ
4. WORKING PAPERS ON INTERNATIONAL INVESTMENT. Investment Patterns
Done by: Stephen Thomsen, Date: April 2000
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5. WORKING PAPERS ON INTERNATIONAL INVESTMENT. Investment Patterns
Done by: Stephen Thomsen, Date: April 2000
6. On Being a Woman: How Our Differences Shape Our Investment
Done by: Nicole Alper
7. Savings and Investment pattern of IT Employees of Bangalore.
Done by Prof. Hema Doreswamy of Welingkar Business School.
After reading all the five studies done by different groups/individuals of scholars, I
have tried to analyze their findings and present my view point. I have tried to
search for different investment patterns among Indians and by international
people. I have found that many scholars have worked on the emergence of
‘’Mutual Fund Industry’’ in India. Also I have found an interesting research of
investment pattern of women.
In the first research, where the topic is ‘’ Factors Influencing Investment Decision
of Generations in India: An Econometric Study’’, I have realized that the team has
researched on the age old methods of investments. This study aims to gain
knowledge about key factors that influence investment behavior and
ways these factors impact investment risk tolerance and decision making process
and women and among different age groups. Today the field of investment is
even more dynamic than it was only a decade ago. World event rapidly events
that alter the values of specific assets the individual has so many assets to choose
from, and the amount of information available to the investors is staggering and
continually growing. The turnover rate in investments should exceed the inflation
rate and cover taxes as well as allow you to earn an amount that compensates the
risks taken. Savings accounts, money at low interest rates and market accounts do
not contribute significantly to future rate accumulation. While the highest rate
come from stocks, bonds and other types of investments in assets such as real
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estate. Nevertheless, these investments are not totally safe from risks, so one
should try to understand what kind of risks are related to them before taking
In this Paper the team has examined some common reasons for investing.
In this Paper we are trying to find out
Factors which affects individual investment decision.
Difference in perception of Investors in the decision of investing on the
basis of Age.
Difference in perception of Investors in the decision of investing on the
basis of Gender.
This study follows the survey research methodology. Based on previous research
in related areas,
a questionnaire was constructed to measure the investment pattern of individuals
on the basis of
Age and Gender. After pilot testing, the questionnaire was administered to a
group of people
whom age is more than 22 years. Here we are using minimum age as 22 years
since we are
considering that an individual starts earning after this age. The data were
analyzed using standard
techniques of factor analysis, Regression analysis and other basic techniques.
The target groups chosen for this study were the investor, who regularly invests.
They will invest
fewer amounts but invest regularly according to their earning. The target groups
types of Investors such as on the basis of areas whether they belong to rural or
urban areas. On
the basis of Profession whether they are working in Government or Private Sector
and On the
basis of annual income and annual amount they invest.
A four page questionnaire consisting of six subscales was developed. In the first
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demographic information such as age, gender, marital status, region to which
profession, individual income levels were sought. In the remaining five subscales,
were adapted from similar instruments reported in the literature by previous
measure the investment pattern of individuals on the five variables under
investing background, opinion leadership, Duration of investment, Awareness of
Security. They have done an extensive literature review which included reviews
from International scholars like Statman (1988), Barnewall (1988), Langer (1975)
etc as well as Indian scholars like Karthikeyan (2001).
Details of respondents
No. Of respondents
22-28 233 51.10%
28-40 180 39.50%
40-60 43 9.40%
Male 270 59.20%
Female 186 40.80%
Service 134 29.40%
Service 212 46.50%
Professional 110 24.10%
1.5-3 Lakhs 44 9.60%
3.5- 5 Lakhs 212 46.50%
Lakhs 200 43.90%
Hence the team had taken a good mix of the variety of people based on
gender, age group, income group and profession. At the end of the study it
was concluded that the modern investor is a mature and adequately groomed
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person. In spite of the phenomenal growth in the security market and quality
Initial Public Offerings (IPOs) in the market, the individual investors prefer
investments according to their risk preference. For e.g. risk-averse people
choose life insurance policies, fixed deposits with banks and post office, PPF
and NSC. Occasions of blind investments are scarce, as a majority of investors
are found to be using some source and reference groups for taking decisions.
Though they are in the trap of some kind of cognitive illusions such as
overconfidence and narrow framing, they consider multiple factors and seek
diversified information before executing some kind of investment transaction.
The purpose of this study was to determine whether the variables such as
demographic characteristics (age, gender) and investment patterns could be
used individually or in combination to both differentiate among levels of men
and women investment decisions and risk tolerance and develop some
guidelines to the investment managers to design their investment schemes by
considering these views of individuals.
In the second research, where the topic is ‘’ Investment Patterns and its
Strategic Implications for Fund Managers: An Empirical Study of Indian Mutual
Funds Industry’’, the team has analysed about the mutual fund industry in
The mutual fund industry in India presents an interesting scenario of 48 million
investors, a large variety of product offerings and coexistence of private, public
and foreign Asset Managing Companies. The study, adopting the classification
of investors and categorization of funds by Association of Mutual Funds in
India (AMFI) empirically researches the investment patterns of the five
investor groups in the eight fund categories; examines the portfolios of the
investor groups to identify their propensity for specific fund categories and
identifies the dominant investor groups in terms of quantum of investment
and investor folios.
The significant findings of the study have been that (a) Corporates are the
dominant investor group in the Indian Mutual Fund Industry and they account
for almost 48% of the total investment (AUM) in the industry and they are
more oriented towards non-equity funds which offer high security & liquidity
and hence their propensity towards Liquid/Money Market and Debt-oriented
funds; The second dominant group in the industry is the Retail investors’ group
which accounts for almost 24% of the total investment (AUM) in the industry,
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while they account for 98% of the 48 million investors in the industry. The
portfolio of this group is highly skewed towards equity oriented schemes
(almost 80%) which offer high return, capital appreciation coupled with high
risk and 18% of the portfolio accounts for Debt-oriented and Balanced funds.
There were 34 pages in the PDF file, however I was unable to read all the 34
pages as the entire material was not available on the internet. I am trying to
the PDF file from the scholars who had worked on it.
In the third research, where the topic is ‘’ Changing Trend of Investment
Pattern in India and Emergence of Mutual Fund Industry, the researcher has
come up with a few interesting findings. This project is about how the
Investor's Behavior is changing and they are now leaving behind the sacred
investment options like the fixed deposits, company deposits, gold etc.
Investors are now looking towards equity linked investment options.
Like most developed and developing countries the mutual fund cult has been
catching on in India. There are various reasons for this. Mutual Fund makes it
easy and less costly for investors to satisfy their need for capital growth,
income preservation. And in addition to this a mutual fund brings the benefit
of diversification and money management to the individual investor, providing
an opportunity for financial success that was once available only to a select
In this project the researcher has given a brief about economy, inflation, and
equity and debt market. Then it is explained how to cope with the inflation
and how mutual fund is one of the best investment options today. A brief
about mutual fund industry and the some information about HDFC Mutual
Fund and its various products are also given.
A mutual fund is a pool of money, collected from investors, and is invested
according to certain investment objectives. The term mutual means that
investors contribute to the pool, and also benefit from the pool. There are no
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other claimants to the funds. The pool of fund mutually invested in by
investors is the mutual fund. A mutual fund's business is to invest the funds
thus collected, according to the wishes of the investors who created the pool.
In many markets these wishes are articulated as "investment mandates".
Usually, the investors appoint professional investment managers, to manage
their "product", and offer it for investment to the investor. A Mutual fund
belongs to the investors who have pooled their funds. The ownership of the
mutual fund in the hands of the investors. Investment professional and other
service providers, who earn a fee for their services, from the fund, manage the
The researcher had done a comparison of FD, FI Bonds and Mutual funds in
terms of accessibility, tenor, tax benefit, liquidity, convince and transparency
and found that Mutual funds give good returns to the investors.
FDs FI Bonds Mutual Fund
Accessibility Low Low Low
(medium) Fixed (Long) No lock in period
Tax Benefit None
Liquidity Low Very Low None
Convince Medium Tedious Very High
Transparency None None Very High
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The researcher did not collect any first hand data from the individuals/investors,
and her research is based only on the research of how Mutual Funds have evolved
over the years and how the Government policies have impacted its growth in our
country. She has concluded by saying, ‘’ So, if you are looking for an investment
product that offers you low risk of capital loss and the potential to earn
reasonable returns in the uncertain environment of today, HDFC Multiple Yield
Fund might be the right fund for you.’’. It looks like she had contacted the HDFC
Asset Management Company to do her research and she wants to advertise about
HDFC Mutual Funds.
In the fourth research, where the topic is ‘’ WORKING PAPERS ON
INTERNATIONAL INVESTMENT’’. Investment Patterns in a Longer-Term
Perspective, the researcher Stephen Thomsen has focused on long-term patterns
and has demonstrated how FDI (Foreign Direct Investment) has evolved from an
activity largely undertaken by large multinational enterprises (MNEs) located in a
handful of countries into a global phenomenon.
Both trade and investment have grown rapidly in the past five years relative to
economic growth more broadly. There have been periods of rapid FDI growth
before, such as at the beginning and end of the 1980s, which were subsequently
interrupted by economic recessions in major economies.
The upward trend in FDI flows can also be interrupted temporarily by a decline in
global growth. Like any form of investment, FDI is affected by the business cycle.
Slower growth in home countries reduces investor profits at home which could
have been used for acquisitions abroad. Figure 2 compares growth in OECD
inflows with real growth in OECD countries since 1971. Economic growth
influences both the “supply” and “demand” for FDI. Slower growth in the home
country reduces both earnings and equity prices and hence limits the pool of
capital available for expansion abroad. Similarly, recession in host countries
lowers the short-term profitability of a potential investment.
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Cross-border mergers and acquisitions (M&As) are estimated to account for no
less than 60 per cent of the total value of global investments, or 80 per cent of FDI
in the United States and 85 per cent in Australia.
To conclude what we can say is evidence on long-term trends suggests that the
1990s represented not so much a watershed as an acceleration of trends already
underway. Many firms from developing countries are now important foreign
investors in their own right. We cannot use this study much as a literature review,
because it does not focus on individual investors. It focuses on the trends of
investment patterns of large companies and midsized companies in different
geographies and different economic status.
In the fifth research, where the topic is ‘’ On Being a Woman: How Our
Differences Shape Our Investment Techniques, the researcher Nicole Alper has
done a brief study of the investment patterns of women and how they are
different from the investment patterns of men. She has not done any elaborate
research of the trends; neither did she collate data via sample questionnaires.
However I wanted to include this in our research because it deals with a different
segment of the society, ‘’Women’’.
According to Ruth Hayden, author of How to Turn Your Life Around: The Money
Book For Women, many of the more appealing "female" characteristics, such as
patience, tenacity, and pragmatism make us better investors than men, once we
actually get started. "Women have an intuitive sense. They are practical and
understand that things work in stages and are therefore comfortable with
volatility. And once they're in the market, they'll stay put."
If a woman's patience is her virtue, then riding out the peaks and valleys of an
ever-changing market should be her pay off. After all, according to most financial
planners, it is those investors who stay in it for the long-term who reap the full
benefits of the market. Women normally do not believe in rapid return
philosophy. They do not invest in risky instruments which might yield profits
overnight; however sometimes lose out on lucrative opportunities.