1. INTRODUCTION OF THE COMPANYRELIANCE INDUSTRIES LIMITED Reliance Group Holdings has grown from a small office data-processing equipmentfirm in 1961 into a major insurance and financial-services group in one generation under onechief. Reliances insurance operations constitute the nations 27th-largest property andcasualty operation. The parent company also includes a development subsidiary incommercial real estate. Reliances international consulting group contains several subsidiariesin energy, environment, and natural resources consulting. A financial arm invests in otherbusinesses, primarily television stations. Reliance Insurance started as the Fire Association of Philadelphia in 1817, organizedby 5 hose and 11 engine fire companies. It became the nations first association of volunteerfire departments. Business got a boost as a result of the Great Chicago Fire of 1871.Theassociation soon developed a field of agents to write policies across the country. For the firsttwo years, shareholders received dividends twice a year of $5 a share, which increasedgradually to $10 in 1876. In 1972, the Reliance insurance group divided its pool so that Reliance InsuranceCompany and its subsidiaries handled most standard lines, while United Pacific InsuranceCompany handled the nonstandard and other operations. In 1977, the company moved into real estate, forming Continental Cities Corporation,which became Reliance Development Group, Inc. This division handled all real estateoperations of the parent company and other subsidiaries. Reliance Capital Group, L.P. constituted the investment branch of the Relianceconglomerate. In December 1989, Reliance Capital sold its investment, Days Corporation,parent company of Days Inn of America, the worlds third-largest hotel chain; it had beenpurchased in 1984. Reliance Industries Limited. The Groups principal activity is to produceand distribute plastic and intermediates, polyester filament yarn, fibre intermediates, polymerintermediates, crackers, chemicals, textiles, oil and gas. The refining segment includesproduction and marketing operations of the Petroleum refinery. The petrochemicals segmentincludes production and marketing operations of petrochemical products namely, High andLow density Polyethylene.
2. "Growth has no limit at Reliance. I keep revising my vision. Only when you can dream it, you can do it." Dhirubhai Ambani founded Reliance as a textile company and led its evolution as aglobal leader in the materials and energy value chain businesses. He is credited to havebrought about the equity cult in India in the late seventies and is regarded as an icon forenterprise in India. He epitomized the spirit dare to dream and learn to excel. The RelianceGroup is a living testimony to his indomitable will, single-minded dedication and anunrelenting commitment to his goals.RELIANCE MUTUAL FUND This group dominates this key area in the financial sector. This mega business housesshow that it has assets under management of Rs.90,938 crore (US$ 22.73 billion) and aninvestor base of over6.6 million (Source:www.amfiindia.com). Reliance’s mutual fundschemes are managed by Reliance Capital Asset Management Limited (RCAM), a subsidiaryof Reliance Capital Limited, which holds 93.37% of the paid up capital of RCAM. The company notchedup a healthy growth of Rs.16,354 crore (US$ 4.09 billion) inassets under management in February2008 and helped propel the total industry-wide AUM toRs. 565,459 crore (US$ 141.36 billion) (Source: indiainvestments.com). A sharp rise infixedmaturity plans (FMPs) and collection ofRs. 7000 crore (US$ 1.75 billion) through new fundoffers (NFOs) created this surge. Reliance continues to be in the number one spot. IndiasBest Offering: Reliance Mutual Fund Investing has become global. Today, a lot of countriesare waking up to the reality that in order to gain financial growth, they must encourage theircitizens to not only save but also invest. Mutual funds are fast becoming the mode ofinvestment in the world. In India, a mutual fund company called the Reliance Mutual Fund ismaking waves. Reliance is considered Indias best when it comes to mutual funds. Itsinvestors number to 4.6 billion people. Reliance Capital Asset Management Limited ranks in
3. the top 3 of Indias banking companies and financial sector in terms of net value. The AnilDhirubhai Ambani Group owns Reliance; they are the fastest growing investment companyin India so far. To meet the erratic demand of the financial market, Reliance Mutual Funddesigned a distinct portfolio that is sure to please potential investors. Reliance Capital Asset Management Limited manages RMF. Vision And Mission Reliance Mutual Fund isso popular because it is investor focused. They show their dedication by continually dishingout innovative offerings and unparalleled service initiatives. It is their goal to becomerespected globally for helping people achieve their financial dreams through excellentorganization governance and customer care. Reliance Mutual fund wants a high performance environment that is geared at makinginvestors happy. RMF aims to do business lawfully and without stepping on other people.They want to be able to create portfolios that will ensure the liquidity of the investment ofpeople in India as well as abroad. Reliance Mutual Fund also wants to make sure that theirshareholders realize reasonable profit, by deploying funds wisely. Taking appropriate risks toreach the companys potential is also one of Reliance Mutual Funds objectives.SCHEMES To make their packages more attractive, Reliance Mutual Fund created proposalscalled The Equity/ Growth scheme, Debt/Income Scheme, and Sector Specific Scheme. i.Debt/Income Scheme, and Sector Specific Scheme. The Equity/ Growth scheme givemedium to long term capital increase. The major part of the investment is on equities andthey have fairly high risks. The scheme gives the investors varying options like, capitalaugmentation or dividend preference. The choices are not deadlocked because if you wantyou may change the options later on. Providing steady and regular income is one of theDebt/Income Schemes primary goals. The Debt/Income scheme has in its portfoliogovernment securities, corporate debentures fixed income securities, and bonds. returns onSector Specific Scheme are dependent on the performance of the industry at which yourmoney is invested upon. Compared to diversified funds this is a lot more risky and you willneed to really give your time on observing the market.
4. Although RMF is gaining good ground in the financial market, remember that theyare a risk taking bunch. They give higher profit because they take a lot of risks. So, if you arefaint hearted, then Reliance Mutual Fund is not for you.GROWTH OF RELIANCE MONEY THROUGH RECOGNITION Growth through Recognition Reliance has merited a series of awards and recognitionsfor excellence for businesses and operations. Corporate Ranking and Ratings:• Reliance featured in the Fortune Global 500 list of ‘World’s Largest Corporations’ for the fourth consecutive year.• Ranked 269th in 2007 having moved up 73 places from the previous year.• Featured as one of the world’s Top 200 companies in terms of Profits.• Among the top 25 climbers for two years in a row.• Featured among top 50 companies with the biggest increase in Revenues.• Ranked 26th within the refining industry.• Reliance is ranked 182nd in the FT Global 500 (up from previous year’s 284th rank).• PetroFed, an apex hydrocarbon industry association, conferred the PetroFed 2007 awards in the categories of “Refinery of the Year” and “Exploration & Production - Company of the Year”.• Brand Reliance was conferred the “Bronze Award” at The Buzziest Brands Awards 2008, organized by agencyfaqs!• Institute of Economic Studies conferred the “Udyog Ratna” award in October 2007 for contributions to the industry.• Chemtech Foundation conferred the “Hall of Fame” in February 2008 for sterling contributions to the industry.• Chemtech Foundation conferred the “Outstanding Achievement - Oil Refining” for work at the Jamnagar Manufacturing Division.• Petroleum Federation of India conferred the “Refinery of the Year Award - 2007” to Jamnagar Manufacturing Division
5. • “The Plastics Export Promotion Council - PLEXCOUNCIL Export Award” in the category of Plastic Polymers for the year 2006-2007 was awarded to Reliance being the largest exporter in this category.HEALTH:-• Jamnagar Manufacturing Division was conferred the “Golden Peacock Award for Occupational Health & Safety - 2007” by Institute of Directors.• Jamnagar Manufacturing Division was conferred the “ICC Award for Water Resource Management in Chemical Industry”.• Jamnagar Manufacturing Division was conferred the “Good House Keeping Award” from Baroda Productivity Council.• Jamnagar Manufacturing Division was conferred the “BEL-IND” Award for the best scientific paper at the 58th National Conference of Occupational Health.• Naroda Manufacturing Division was conferred the “Safety Award and Certificate of Appreciation” presented by Gujarat Safety Council & Directorate of Industrial Safety & Health, Gujarat State for the recognition of safety performance at the 29th State Level Annual Safety Conference.• Dahej Manufacturing Division received “BSC 5-Star” rating from British Safety Council, UK.• Dhenkanal Manufacturing Division received the “2nd Prize for Longest Accident Free Period” from the Hon’ble Minister of Labour, State of Orissa. Hoshiarpur Manufacturing Division bagged the First Prize in “Safety in Punjab”, organized by Punjab Safety Council.• Patalganga Manufacturing Division won the “Gold Medal at CASHe (Change Agents for Safety, Health and Environment) Conference”. It also won the III Prize in Process Management category for Presentation on Safety through Design in chemical process industry in Petrosafe 2007 Conference.• Kurkumbh Manufacturing Division won the “Greentech Safety Award silver trophy” for• outstanding achievement in safety management in chemical sector.
6. • Hazira Manufacturing Division received the “TERI Corporate Environmental Award (Certificate of Appreciation)” for PET recycling project. Nagothane Manufacturing Division received the “Shrishti G-Cube Award for Good Green Governance” from Minister for Commerce and Industry, on World Earth Day.
7. QUALITY:-• For the first time ever, globally, a petrochemical company bagged the “Deming Prize for Management Quality”. “The Quality Control Award for Operations Business Unit 2007” was awarded to the Hazira Manufacturing Division for Outstanding Performance by Practicing Total Quality Management.• “QUALTECH PRIZE 2007”, which recognizes extraordinary results in improvement and innovation, was won by Hazira Manufacturing Division for its Small Group Activity Project.• Vadodara Manufacturing Division’s Polypropylene-IV (PP-IV) plant was conferred the “Spheripol Process Operability Award-2006” for the highest operability rate with an on stream factor 98.97% by M/s. BASELL, Italy.• Allahabad Manufacturing Division won the “Excellent Category Award” at National Convention of Quality Circle (NCQC) - 07.Six-Sigma:-• Lean Six sigma project on “Reducing retention time of caustic soda lye tankers at Jamnagar” won the 1st prize in the national level competition held by Indian Statistical Institute (ISI).• Patalganga Manufacturing Division’s Six Sigma Project on Improve Transfer Efficiency for Automatic winders in PFY won the 2nd Prize for “Best design for Six Sigma Project in International Six Sigma Competition” organized by IQPC (International Quality and Productivity center).• Barabanki Manufacturing Division won the 3rd prize in “All India Six Sigma case study contest 2008” for the Case study on “Reduction of waste of Plant 2 from 16% to 8%”.• Hoshiarpur Manufacturing Division won the 2nd prize in “Six Sigma competition at National Level” organized by ISI and Quality Council of India (in manufacturing category), while Dhenkanal and Barabanki Manufacturing Divisions won the 3rd prize.• Vadodara Manufacturing Division’s Six Sigma project won the 1st prize as the “Best Six Sigma project” at National level by CII.
8. PRODUCT S : RELIANCE MONEY The products on offer from Reliance Mutual Fund fall into four main categories:equity, debt, sector specific and ETF (Exchange Traded Fund).Each taps into a specificaudience profile fulfilling their varying needs. Under the equity category, Reliance has118SUPERBRANDS sixteen schemes with Reliance Growth Fund and Reliance Vision Fund asits flagship schemes. Reliance Equity Opportunities Fund is a scheme which operates in themulti-cap/multi sector segment; Reliance Equity Fund is a long-short fund, Reliance QuantPlus Fund is a quant fund. Reliance offers investments in banking, power, media,entertainment and pharmaceuticals; Reliance Tax Saver Fund and Reliance Equity-LinkedSavings Fund – Series 1 are tax saving schemes; an NRI-dedicated equity scheme is tailoredfor non-resident Indians. Reliance Regular Savings Fund is an asset-allocation fund withthree options. Under the debt and liquid categories, Reliance has liquid funds, liquid plusfunds, income funds, an NRI-dedicated debt fund, gilt funds, fixed maturity plans and aninterval fund. In the hybrid category, Reliance Monthly income Plan is a popular optionReliance understands that investments in mutual fund share a function of knowledgedissemination and awareness of products amongst potential investors. In building its ownbase of assets under management it will necessarily have to carry the entire mutual fundindustry. Towards this end Reliance has launched at wopronged initiative. In the first pincerit has created aformidable network of 26,000 distributors including some of the biggestnames in the banking sector. This who’s who of the financial industry comprises such giantsas Citibank, Standard Chartered, HSBC,ICICI, AXIS, Bank of Baroda, Central Bank ofIndia, Allahabad Bank and fund houses such as JM, DSP Merrill Lynch and Karvy inaddition to a massive infrastructure of direct financial investment officers. This prodigiouseffort is supplemented by the brands’ captive network of 120 branch offices and 30 financialcentres. In the second prong, Reliance has created a series of information packedpresentations which help dispel misinformation Group. This mega business house dominatesthis key area in the financial sector. Figures for March 2008 show that it has emerged as thetop Indian mutual fund with average assets under management of Rs.90,938 crore (US$22.73 billion) and an investor base of over 6.6 million (Source:www.amfiindia.com). Reliance’s mutual fund schemes are managed by Reliance Capital Asset ManagementLimited (RCAM), a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-
9. up capital of RCAM. The company notchedup a healthy growth ofRs.16,354 crore (US$ 4.09billion) in assets under management in February 2008 and helped propel the total industrywide AUM to Rs. 565,459 crore(US$ 141.36 billion) (Source: indiainvestments.com). Asharp rise infixed maturity plans (FMPs) and collection of Rs.7000 crore (US$ 1.75 billion)through new fund offers (NFOs) created this surge. In AUM rankings, Reliance continues tobe in the number one spot. Reliance was the first fund house to launch sector funds withflexibility to invest in a range of 0% to 100% in either equity or debt instruments Mutualfund investments linked to an ATM/debit card are a Reliance innovation India’s first long-short fund comes from Reliance Mutual Fund As at 31st May 2008, more than 6.6 millionpeople had invested in Reliance Mutual Fund; the investments comprised 16% of thecountry’s entire mutual fund asset base.ACHIEVEMENTS In two successive joint surveys by The Economic Times’ Brand Equity andACNielsen, Reliance was recognised as India’s Most Trusted Mutual Fund. The companyalso walked away with seven other scheme prizes – five of them being outright winners – inthe Gulf 2007 Lipper Awards. These included the Fund House of the Year by Lipper GCC aswell as ICRA Online and the Most Improved Fund House by Asia Asset Management. It alsoreceived the NDTV Business Leadership Award 2007 in the mutual fund category andrunners’ up recognition as the Best Fund House in the Outlook Money-NDTV Profit Awards.In addition, the company received the coveted CNBC Web18 Genius of the Web distinctionfor the Best Mutual Fund Website in the country. RCAM was awarded the India OnshoreFund House 2008 instituted by the Asian Investor magazine. The company also won theIndia Equities award in the 5-yearPerformance category.
10. INTRODUCTION OF THE PROJECTHISTORY OF MUTUAL FUNDS It may seem hard to believe given its fairly recent appearance in the publicconsciousness, but mutual funds have actually been around for more than 70 years, whenthey were first made available in the United States. It was in March 21, 1924 that the firstopen-end mutual fund was founded in the country. Called the Massachusetts Investors Trust,it grew to about 200 shareholders and almost $400,000 in total assets only one year afterbeginning operations. The entire industry–including a few closed-ended funds–nevertheless had a fairlymodest beginning, with less than $10 million total assets in 1924. Its growth proceededsteadily however, and by the end of December 1999 there were more than 8,000 mutualfunds recorded with well over $6.8 trillion in combined assets.THE SLOW GROWTH YEARS As we mentioned earlier, the history of mutual funds has been that growth in themutual funds industry was a bit sluggish after its introduction, particularly during its first 27years. In 1951, the number of mutual funds barely reached the 100 mark, and the number ofshareholders were recorded at just a little over one million. In 1954 however, it was clear thatthe stock market was on the upswing, and mutual funds exceeded its 1929 peak. By the endof the fifties there were just over 150 mutual funds in existence, with combined assets ofnearly $16 billion. It was in 1967 when mutual funds hit their highest mark so far–or so it seemed.Figures of the earnings for one quarter showed at least 50%, representing an average returnof 67%, but this was an artificial situation bolstered by the practice of borrowing money, andentailed risky options, as well as artificially boosting returns with letter stock. Nevertheless,the end of the 60s saw almost 300 mutual funds in existence, with total assets of nearly $50billion.
11. MUTUAL FUNDS AFTER THE INTRODUCTION OF THE IRA The passing of the Individual Retirement Account by Congress in 1981 heralded anew period of intense growth in mutual funds and by the end of the decade, there werealmost 3,000 mutual funds in existence, with well over $900 billion in combined assets. ByDecember 1998, the total value of stock mutual funds was recorded at $2.981 trillion oralmost 54% of the total assets of the mutual fund industry.CONCEPT OF MUTUAL FUND A Mutual Fund is a trust that pools the savings of a number of investors who share acommon financial goal. The money thus collected is then invested in capital marketinstruments such as shares, debentures and other securities. The income earned through theseinvestments and the capital appreciation realized is shared by its unit holders in proportion tothe number of units owned by them. Thus a Mutual Fund is the most suitable investment forthe common man as it offers an opportunity to invest in a diversified, professionally managedbasket of securities at a relatively low cost. The flow chart below describes broadly theworking of a mutual fund:ADVANTAGES OF MUTUAL FUNDS • Professional Management: Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell.
12. • Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud. • Liquidity: Its easy to get your money out of a mutual fund. Write a check, make a call, and youve got the cash. • Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet. • Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment.DRAWBACKS OF MUTUAL FUNDSMutual funds have their drawbacks and may not be for everyone: • No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money. • Fees and commissions: All funds charge administrative fees to cover their day-to- day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you dont use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund. • Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made. • Management risk: When you invest in a mutual fund, you depend on the funds manager to make the right decisions regarding the funds portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected.
13. MUTUAL FUNDS IN INDIA The concept of mutual funds in India dates back to the year 1963. The era between1963 and 1987 marked the existence of only one mutual fund company in India with Rs.67bn assets under management (AUM), by the end of its monopoly era, the Unit Trust ofIndia (UTI). By the end of the 80s decade, few other mutual fund companies in India tooktheir position in Mutual fund market. The succeeding decade showed a new horizon in Indian mutual fund industry. By theend of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector fundsstarted penetrating the fund families. In the same year the first Mutual Fund Regulationscame into existence with re-registering all mutual funds except UTI. The regulations werefurther given a revised shape in 1996. Kothari Pioneer was the first private sector mutual fund company in India which hasnow merged with Franklin Templeton. Just after ten years with private sector player’spenetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fundcompanies in India. Some of them are as follows:- ABN AMRO MUTUAL FUND: ABN AMRO mutual fund was set up on April 15, 2004 with ABN AMRO Trustee (India) Pvt. Ltd. As the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank AG is the custodian of ABN AMRO Mutual Fund. ABN AMRO Asset Management is headquartered in London and Amsterdam with important units in Atlanta, Hong Kong, Chicago and Singapore. BIRLA SUN LIFE MUTUAL FUND: Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life Financial is a global organization evolved in 1871 and is being represented in Canada and US. The AMC of Birla Sun Life Mutual Fund is Birla Sun Life Asset Management Company Limited which was incorporated on September 5, 1994. Recently Birla Mutual Fund crossed AUM of Rs. 10,000 crores. BANK OF BARODA MUTUAL FUND: Bank of Baroda Mutual Fund was set up on October 30, 1992 under the sponsorship of Bank of Baroda. BOB Asset
14. Management Company Ltd. Is the AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank is the custodian. HDFC MUTUAL FUND: HDFC Mutual Fund was set up on June 30, 2000 with two sponsors namely Housing Development Finance Corporation Limited and Standard Life Investment Limited. HSBC MUTUAL FUND: HSBC Mutual Fund was set up on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund. PRUDENTIAL ICICI MUTUAL FUND: The mutual fund of ICICI is a joint venture with Prudential Plc. Of America, one of the largest life insurance companies in the US. Prudential ICICI mutual fund was set up on October 13, 1993 with two sponsors Prudential Plc. And ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust Ltd. And the AMC id Prudential Asset Management Company Limited incorporated on June 22, 1993. The debt funds, the Pru ICICI equity funds like Power and Growth Plan have well performed in recent past. Prudential ICICI has a separate analyst who monitors the credit ratings of quality of assets which are given by the credit rating agencies. SAHARA MUTUAL FUND: Sahara Mutual Fund was set up on July 18, 1996 with Sahara India financial corporation ltd. As the sponsor. Sahara Asset Management Company Private Limited incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. STATE BANK OF INDIA MUTUAL FUND: SBI mutual fund is the first bank sponsored mutual fund to launch offshore fund, the India magnum fund with a corpus of Rs. 225 crore approximately. Today it is the largest bank sponsored mutual fund in India. They have already launched 35 schemes out of which 15 have
15. already yielded handsome returns to investors. SBI mutual fund has mire than Rs. 5500 Crores as AUM. TATA MUTUAL FUND: Tata mutual fund is a trust under the Indian Trust Act, 1882. Tata Mutual Fund was setup on June 30, 1995. The Asset Management Company of Tata Mutual Fund is Tata Asset Management Limited, incorporated on March 15, 1994. The Trustee is Tata Trustee Company Private Limited Tata Asset Management Limited is one of the fastest growing fund management companies in India. UNIT TRUST OF INDIA MUTUAL FUND: UTI Asset Management Company Private Limited, established on January 14, 2003, manages the UTI mutual fund with the support of UTI Trustee Company Private Ltd. UTI Asset Management Company presently manages a corpus of over Rs. 20000 crore. The sponsors of UTI mutual fund are Bank of Baroda, Punjab National Bank, State Bank of India and Life Corporation of India. RELIANCE MUTUAL FUND: Reliance mutual fund was established as trust under Indian trusts act, 1882. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustees Co. limited is the Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which was changed on March 11, 2004. Reliance Mutual Fund was formed for launching of various schemes under which, units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. Standard Chartered Mutual Fund: Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard Chartered Asset Management Company Pvt. Ltd. is the AMC which was incorporated with SEBI on December 20,1999.
16. Franklin Templeton India Mutual Fund: The group, Franklin Templeton Investments is a California (USA) based company with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial services groups in the world. Investors can buy or sell the Mutual Fund through their financial advisor or through mail or through their website. They have Open end Diversified Equity schemes, Open end Sector Equity schemes, Open end Hybrid schemes, Open end Tax Saving schemes, Open end Income and Liquid schemes, Closed end Income schemes and Open end Fund of Funds schemes to offer. Morgan Stanley Mutual Fund India: Morgan Stanley is a worldwide financial services company and its leading in the market in securities, investment management and credit services. Morgan Stanley Investment Management (MISM) was established in the year 1975. It provides customized asset management services and products to governments, corporations, pension funds and non-profit organizations. Its services are also extended to high net worth individuals and retail investors. In India it is known as Morgan Stanley Investment Management Private Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the first close end diversified equity scheme serving the needs of Indian retail investors focusing on a long-term capital appreciation. Escorts Mutual Fund: Escorts Mutual Fund was setup on April 15, 1996 with Excorts Finance Limited as its sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was incorporated on December 1, 1995 with the name Escorts Asset Management Limited. Alliance Capital Mutual Fund: Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital Management Corp. of Delaware (USA) as sponsorer. The Trustee is ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the corporate office in Mumbai.
17. Benchmark Mutual Fund: Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as the sponsorer and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company. Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Asset Management Company Pvt. Ltd. is the AMC. Canbank Mutual Fund: Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai. Chola Mutual Fund: Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is the Trustee Company and AMC is Cholamandalam AMC Limited. LIC Mutual Fund: Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. . The Company started its business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund. GIC Mutual Fund: GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a Government of India undertaking and the four Public Sector General Insurance Companies, viz. National Insurance Co. Ltd (NIC), The New India Assurance Co. Ltd. (NIA), The Oriental Insurance Co. Ltd (OIC) and United India Insurance Co. Ltd. (UII) and is constituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882.
18. MUTUAL FUND CLASSIFIACTIONS Wide variety of Mutual Fund Schemes exists to cater to the needs such as financialposition, risk tolerance and return expectations etc. The table below gives an overview intothe existing types of schemes in the Industry.TYPES OF MUTUAL FUND SCHEMES • By Structure o Open - Ended Schemes o Close - Ended Schemes o Interval Schemes • By Investment Objective o Growth Schemes o Income Schemes o Balanced Schemes o Money Market Schemes • Other Schemes o Tax Saving Schemes o Special Schemes Index Schemes Sector Specific SchemesOPEN ENDED An open-end mutual fund is a fund that does not have a set number of shares. Itcontinues to sell shares to investors and will buy back shares when investors wish to sell.Units are bought and sold at their current net asset value. Open-end funds keep some portion of their assets in short-term and money marketsecurities to provide available funds for redemptions. A large portion of most open mutualfunds is invested in highly liquid securities, which enables the fund to raise money by sellingsecurities at prices very close to those used for valuations.
19. CLOSED ENDED MUTUAL FUND A closed-end mutual fund has a set number of shares issued to the public through aninitial public offering. These funds have a stipulated maturity period generally ranging from3 to 15 years. The fund is open for subscription only during a specified period. Investors can investin the scheme at the time of the initial public issue and thereafter they can buy or sell theunits of the scheme on the stock exchanges where they are listed. once underwritten, closed-end funds trade on stock exchanges like stocks or bonds. The market price of closed-endfunds is determined by supply and demand and not by net-asset value (NAV), as is the casein open-end funds. Usually closed mutual funds trade at discounts to their underlying assetvalue.INTERVAL SCHEMES These schemes combine the features of open ended and close ended schemes and areavailable for purchase or sale during a select periodLARGE CAP FUNDS Large cap funds are those mutual funds, which seek capital appreciation by investingprimarily in stocks of large blue chip companies with above-average prospects for earningsgrowth. Different mutual funds have different criteria for classifying companies as large cap.Generally, companies with a market capitalization in excess of Rs. 1000 crore are knownlarge cap companies. Investing in large caps is a lower risk-lower return proposition (vis-à-vis mid cap stocks), because such companies are usually widely researched and informationis widely available.MID CAP FUNDS Mid cap funds are those mutual funds, which invest in small / medium sizedcompanies. As there is no standard definition classifying companies as small or medium,each mutual fund has its own classification for small and medium sized companies.Generally, companies with a market capitalization of up to Rs.500 crores are classified as
20. small. Those companies that have a market capitalization between Rs. 500 crores and Rs.1,000 crores are classified as medium sized. Big investors like mutual funds and Foreign Institutional Investors are increasinglyinvesting in mid caps nowadays because the price of large caps has increased substantially.Small / mid sized companies tend to be under researched thus they present an opportunity toinvest in a company that is yet to be identified by the market. Such companies offer highergrowth potential going forward and therefore an opportunity But mid cap funds are veryvolatile and tend to fall like a pack of cards in bad times. So, caution should be exercisedwhile investing in mid cap mutual funds.EQUITY MUTUAL FUNDS Equity mutual funds are also known as stock mutual funds. Equity mutual fundsinvest pooled amounts of money in the stocks of public companies. Stocks represent part ownership, or equity, in companies, and the aim of stockownership is to see the value of the companies increase over time. Stocks are oftencategorized by their market capitalization (or caps), and can be classified in three basic sizes:small, medium, and large. Many mutual funds invest primarily in companies of one of thesesizes and are thus classified as large-cap, mid-cap or small-cap funds. Equity fund managersemploy different styles of stock picking when they make investment decisions for theirportfolios. Some fund managers use a value approach to stocks, searching for stocks that areundervalued when compared to other, similar companies. Another approach to picking is tolook primarily at growth, trying to find stocks that are growing faster than their competitors,or the market as a whole. Some managers buy both kinds of stocks, building a portfolio ofboth growth and value stocks.BALANCED FUND Balanced fund is also known as hybrid fund. It is a type of mutual fund that buys acombination of common stock, preferred stock, bonds, and short-term bonds, to provide bothincome and capital appreciation while avoiding excessive risk. Balanced funds provide investor with an option of single mutual fund that combinesboth growth and income objectives, by investing in both stocks (for growth) and bonds (for
21. income). Such diversified holdings ensure that these funds will manage downturns in thestock market without too much of a loss. But on the flip side, balanced funds will usuallyincrease less than an all-stock fund during a bull marketGROWTH FUNDS Growth funds are those mutual funds that aim to achieve capital appreciation byinvesting in growth stocks. They focus on those companies, which are experiencingsignificant earnings or revenue growth, rather than companies that pay out dividends. Growth funds tend to look for the fastest-growing companies in the market. Growthmanagers are willing to take more risk and pay a premium for their stocks in an effort tobuild a portfolio of companies with above-average earnings momentum or price appreciation.In general, growth funds are more volatile than other types of funds, rising more than otherfunds in bull markets and falling more in bear markets. Only aggressive investors, or thosewith enough time to make up for short-term market losses, should buy these funds.NO-LOAD MUTUAL FUNDS Mutual funds can be classified into two types - Load mutual funds and No-Loadmutual funds. Load funds are those funds that charge commission at the time of purchaseor redemption. They can be further subdivided into (1) Front-end load funds and (2) Back-end load funds. Front-end load funds charge commission at the time of purchase and back-end load funds charge commission at the time of redemption. On the other hand, no-load funds are those funds that can be purchased withoutcommission. No load funds have several advantages over load funds. Firstly, funds withloads, on average, consistently under perform no-load funds when the load is taken intoconsideration in performance calculations. Secondly, loads understate the real commissioncharged because they reduce the total amount being invested. Finally, when a load fund isheld over a long time period, the effect of the load, if paid up front, is not diminished becauseif the money paid for the load had invested, as in a no-load fund, it would have beencompounding over the whole time period.
22. EXCHANGE TRADED FUNDS Exchange Traded Funds ( ETFs ) represent a basket of securities that are traded on anexchange. An exchange traded fund is similar to an index fund in that it will primarily investin the securities of companies that are included in a selected market index. An ETF willinvest in either all of the securities or a representative sample of the securities included in theindex. The investment objective of an ETF is to achieve the same return as a particularmarket index. Exchange traded funds rely on an arbitrage mechanism to keep the prices at whichthey trade roughly in line with the net asset values of their underlying portfolios.VALUE FUNDS Value funds are those mutual funds that tend to focus on safety rather than growth,and often choose investments providing dividends as well as capital appreciation. Theyinvest in companies that the market has overlooked, and stocks that have fallen out of favourwith mainstream investors, either due to changing investor preferences, a poor quarterlyearnings report, or hard times in a particular industry. Value stocks are often mature companies that have stopped growing and that use theirearnings to pay dividends. Thus value funds produce current income (from the dividends) aswell as long-term growth (from capital appreciation once the stocks become popular again).They tend to have more conservative and less volatile returns than growth funds.MONEY MARKET MUTUAL FUNDS A money market fund is a mutual fund that invests solely in money marketinstruments. Money market instruments are forms of debt that mature in less than one yearand are very liquid. Treasury bills make up the bulk of the money market instruments.Securities in the money market are relatively risk-free. Money market funds are generally the safest and most secure of mutual fundinvestments. The goal of a money-market fund is to preserve principal while yielding amodest return. Money-market mutual fund is akin to a high-yield bank account but is notentirely risk free. When investing in a money-market fund, attention should be paid to theinterest rate that is being offered.
23. INTERNATIONAL MUTUAL FUNDS International mutual funds are those funds that invest in non-domestic securitiesmarkets throughout the world. Investing in international markets provides greater portfoliodiversification and let you capitalize on some of the worlds best opportunities. If investmentsare chosen carefully, international mutual fund may be profitable when some markets arerising and others are declining. However, fund managers need to keep close watch on foreign currencies and worldmarkets as profitable investments in a rising market can lose money if the foreign currencyrises against the dollarSECTOR MUTUAL FUNDS Sector mutual funds are those mutual funds that restrict their investments to aparticular segment or sector of the economy. These funds concentrate on one industry such asinfrastructure, heath care, utilities, pharmaceuticals etc. The idea is to allow investors toplace bets on specific industries or sectors, which have strong growth potential. These funds tend to be more volatile than funds holding a diversified portfolio ofsecurities in many industries. Such concentrated portfolios can produce tremendous gains orlosses, depending on whether the chosen sector is in or out of favour.INDEX FUNDS An index fund is a type of mutual fund that builds its portfolio by buying stock in allthe companies of a particular index and thereby reproducing the performance of an entiresection of the market. The most popular index of stock index funds is the Standard & Poors500. An S&P 500 stock index fund owns 500 stocks-all the companies that are included inthe index. Investing in an index fund is a form of passive investing. Passive investing has twobig advantages over active investing. First, a passive stock market mutual fund is muchcheaper to run than an active fund. Second, a majority of mutual funds fail to beat broadindexes such as the S&P
24. FUND OF FUNDS A fund of funds is a type of mutual fund that invests in other mutual funds. Just as amutual fund invests in a number of different securities, a fund of funds holds shares of manydifferent mutual funds. Fund of funds are designed to achieve greater diversification thantraditional mutual funds. But on the flipside, expense fees on fund of funds are typicallyhigher than those on regular funds because they include part of the expense fees charged bythe underlying funds.
25. REVIEW OF LITERATUREREVIEWSBy Porter, Gary E, Trifts, Jack W (1998), This study examines the performance of 93 fundmanagers over the 10 year period 1986 through 1995 using relative percentile ranks based onquarterly compounded, annual total returns measured against funds with the same investmentobjective. On average, managers with 10-year track records at the same fund do not performbetter than managers with shorter track records. Also, for these experienced managers,superior performance in one-five-year period is not predictive of superior performance overthe next five years. However, inferior performance persists, particularly for funds with aboveaverage expense ratios.Grinblatt and Titman (1992) analyze performance of 279 funds over the period of 1975 to1984 using a benchmark technique and find evidence that performance differences betweenfunds persists over time.Hendricks, Patel, and Zeckhauser (1993) study 165 no-load growth-oriented funds overthe period 1974 to 1988 and obtain similar results. In a study of 728 mutual fund returns overthe period 1976 to 1988.Goetzman and Ibbotson (1994) find that two-year performance is predictive of performanceover the successive two years. Volkman and Wohar (1995) extend this analysis to examinefactors that impact performance persistence. Their data consists of 322 funds over the period1980 to 1989, and shows performance persistence is negatively related to size and negativelyrelated to levels of management fees.Carhart (1997) shows that expenses and common factors in stock returns such as beta,market capitalization, one-year return momentum, and whether the portfolio is value orgrowth oriented "almost completely" explain short term persistence in risk-adjusted returns.He concludes that his evidence does not "support the existence of skilled or informed mutualfund portfolio managers".
26. Kahn and Rudd 1995 study of 300 equity funds and 195 bond funds between 1983 and1993, only the bond funds show evidence of persistence.Detzel and Weigand (1998) use a regression residual technique to control for the effects ofinvestment style, size and expense ratios. They find, after controlling for these variables, noevidence of performance persistence.Dunn and Theisen (1983) rank the annual performance of 201 institutional portfolios for theperiod 1973 through 1982 without controlling for fund risk. They found no evidence thatfunds performed within the same quartile over the ten-year period. They also found thatranks of individual managers based on 5-year compound returns revealed no consistency.Bauman and Miller (1995) studied the persistence of pension and investment fundperformance by type of investment organization and investment style. They employed aquartile ranking technique because they noted that "investors pay particular attention toconsultants and financial periodicals investment performance rankings of mutual funds andpension funds". They found that portfolios managed by investment advisors showed moreconsistent performance (measured by quartile rankings) over market cycles and that fundsmanaged by banks and insurance companies showed the least consistency. They suggest thatthis result may be caused by a higher turnover in the decision-making structure in these lessconsistent funds. This study controls for the effects of turnover of key decision makers byrestricting the sample to those funds with the same manager for the entire period of study.Laurie Prather, William J. Bertin and Thomas Henker (2004), This study provides acomprehensive examination of recent mutual fund performance by analyzing a large set ofboth mutual funds and fund attributes in an effort to link performance to fund-specificcharacteristics. The results indicate that the hypothesized relationships between performanceand the explanatory variables are generally upheld. After taking into consideration generalmarket conditions and fund investment objective, the characteristic variables that relate tofund popularity, growth, cost, and management also explain performance. Finally, after
27. controlling for survivorship and benchmark error as well as fund-specific factors, the resultsrefute the performance persistence phenomenon.Crystal, Mary (1997) On bank marketing suggests more direct interaction with customersby direct mail or personal contact. Doing it pro-actively and by alternative methods: callcenters, PC-banking, internet banking and supermarket banking. Using branding and otherretail marketing skills. Bankers have tried to cut down on personal contact and may havealienated their customers.Milligan, John (1996) First Long Island Bank prospers because it serves a small niche ofsmall privately owned companies and upscale consumers that it coddles by being availableboth in person/ phone and online.Carrow Kenneth A., the study investigates whether the announcement of a merger betweenCiticorp and Travelers abnormally impacted stock prices of financial and insurancecompanies. Analysis of abnormal returns surrounding the merger show that life insurancecompanies and large banks experienced significant stock price increases, while the returns ofstocks of smaller banks, health insurers, and property remain relatively unchanged.The Bobroff-Mack (2003), The authors study a sample of funds from 55 fund families withat least $10 billion in assets. They identify the chair’s independence for each fund from (atleast) the most current Statement of Additional Information (SAI) filed with the Commission,but do not provide information about how many documents were examined and over howmany years. First, they report that the relative and absolute Morningstar rankings of fundswith independent chairs are significantly lower than the rankings of management-affiliatedchaired funds over the past three, five and ten years. Second, they report that the averagealpha for management-chaired funds is higher than for independent-chaired funds. Third,they report no reliable relation between chair independence and expenses, noting that theinference depends on how expenses are measured and the relative weight of each fundconsidered.
28. The Ferris-Yan Study (2002), This study uses a larger sample of mutual fund families in2002 to address whether board and chair independence are related to fund fees and whetherindependence is related to the probability of a fund family being identified as underinvestigation for market timing or late trading activity. The analysis covers almost 450 fundfamilies with over 97% of industry total net assets. The study does not address the questionof whether board or chair independence is associated with differences in performance.The Meschke Study (2006), Meschke assesses the impact of board and chair independencefor a sample of 400 randomly chosen mutual funds for the period from 1995 through 2004.He documents increases in the percentage of boards with independent chairs as well asincreases in the average percentage of director independence over the decade. Meschkeexamines whether this increase in independence can be ascribed to an evolution of boardsgenerally or whether it is associated with a clientele effect – that is, boards add governancefeatures in response to an increased set of investors who are attracted to funds with thosecharacteristics.NEED OF THE STUDY
29. OBJECTIVES OF THE STUDY The present study has also been taken up to fulfill some objectives. Thus theobjectives of the present study have been identified as follows:-1. To give a brief idea about the benefits available from mutual Fund investment.2. To know about the performance of Mutual Funds in Reliance Mutual Fund.3. To know about the fund management of different schemes.4. To study the feedback of different investors of Reliance mutual fund.5. To give an idea about the regulations of mutual funds.6. To make the study of Mutual Fund in the present scenario.
30. RESEARCH METHODOLOGY “All progress for born of inquiry. Doubt is often better than over confidence for itleads to inquiry and inquiry leads invention”. Research has its significance in solving various operational and planning problems ofbusiness and industry. Operational Research and Market research along with MotivationalResearch are considered crucial and their results exist in more that one way in takingbusiness decisions. Market Research is the investigation of the structure and development of market forthe purpose of formulating efficient policies for the purchasing, production and sales.Operational research refers to the application of mathematical, logical and analyticaltechniques to the solution of business problems for cost minimization or maximization forthe profit, which can be termed as optimization problems. Motivational Research of defining why people behave as they do is mainly concernedwith the determination of motivations underlying their consumer behavior. As these are ofgreat help to people in business and industry who are responsible for taking businessdecisions. The present study, which attempts to know about the awareness and performance ofmutual fund of the different companies, plays a very crucial role. For a good research and forproper and authentic results research methodology plays a crucial role. Research Methodology is a way to systematically solve the research problem, whichis a science of studying how research is done scientifically. Thus research methodologyencompasses the research methods or techniques research results are capable at beingevaluated either by the researcher himself or by others. The project also covers Descriptive Research which includes surveys and factfindings from various inquiries. The relationship between the customers and the market players must be establishedand explored to make the marketing effort fruitful and profitable. Thus, it is reflected in theabove wording that the present study shall be useful in meeting and exploring the proposedobjectives. Therefore to make the present study meaningful the data shall be collected from
31. various sources such as questionnaire, journals, newspapers and Internet etc. that will serveas the base for the primary and secondary data and for interacting with the respective users ofthe insurance/mutual fund.Research design In the present study the exploratory-cum-descriptive research design will be followedwhich help in exploring the answers to the specified objectives of the present study. A research design is an arrangement of condition for collection and analysis of data ina manner that aims to combine relevance to research purpose with economy in procedure. In fact the research design is the conceptual structure with in which the research isconducted. Research design is needed because it facilitates the smooth sailing of the variousresearch operations. Thereby making research as efficient as possible yielding maximalinformation with minimal expenditure of efforts, time and money. Research Design, in fact, has a great bearing on the reliability of the results arrived atand as such constitutes the firm foundation of the entire evidence of the research work. In theother words we can say that research design is advance planning of research. A good research design should be flexible, appropriate, and efficient and so on. Itshould try to minimize biases and maximize reliability of the data collected and analyzed isconsidered a good design. The design must give the smallest experimental error and it should yield maximuminformation. The present study is an attempt of descriptive in nature, which defines methodto measure and find a method of measuring it along with a clear-cut definition of population.Hence it is an endeavour to obtain complete and accurate information and it is a rigidspecially paying attention on these points:• Objectives of the study• Designing the methods of data collection• Selecting the sample• Collecting the data• Processing the data• Reporting the findings
32. STEPS OF METHODOLOGYCollection of Data Organisation of Data Presentation of Data Analysis of Data Interpretation of DataRESEARCH INSTRUMENTS The proposed study is based on both primary and secondary data. For the primarydata the customers has been contacted with the questionnaire designed to gather the datarelevant with objective of the study. Data is collected through newspapers, magazines,journals, published reports of the industry players and the internet.SAMPLING Sampling may be defined as the selection of some part of an aggregate or totality onthe basic of which a judgment or inference about the aggregate and totality is made.Sampling is used in practice for various reasons. All items in any field of inquiry constitute auniverse or population complete enumeration of all items in the population is known ascensus inquiry. It can be presumed that in such an inquiry, when all items are covered,element of chance is left and highest accuracy is obtain. But in practice this may be not true.Even the slightest element of bias in such an inquiry will get larger and as the numbers ofobservations increased more over there is no way checking the element of bias or it extendexcept through a survey or used sample checks besides this type of inquiry involves a greatdeal of time, money and energy. Therefore when the field of inquiry is large this methodbecomes difficult to adopt because of the resources involve. On the other hand the samplesurvey has the followings advantages:-Sampling can save time and money: A sample study is usually a less expensive than acensus study and produces results at a relatively a faster speed.
33. . Sampling may enable more accurate measurement for trained and experienced investigator generally conducts a sample study.. Sampling remains the only way when population contains infinitely may member.. Sampling remains the only choice when a test involves the destruction of the item under study.. Sampling usually enables to estimate the sampling errors and thus assists in obtaining information concerning same characteristics of the population.SAMPLING UNIT: - Every researcher has to take a decision regarding a sample unit beforeselecting sample. Sampling unit may be a geographical one such as district, state and villageetc or a social unit such as family, club, school, etc or it may be an individual. In my study the sampling units are individuals who are the users of the MutualFund.SAMPLE SIZE: - Size of samples refers to the numbers of items to be selected from theuniverse to constitute a sample. This is a major problem before every researcher. The size ofsample should neither be excessively large, nor too small. It should be optimum. Anoptimum sample is one, which fulfills the requirements of efficiency representatives,reliability and flexibility. While deciding the size of sample researcher must determine thedesired precision as also an expectable confidence liable for the estimate, the size ofpopulation variance needs to be consider as in case of large variance usually a bigger sampleis needed. The size of population must be kept in view for this also limits the sample size. Assuch budgetary constraints must invariable to taken into consideration when researcherdecide the sample size 100 respondents looking at the above consideration. In this case,stratified random sampling was done.SAMPLING PLAN For the purpose of gathering the primary data the respondents numbering not morethan 100 shall be contacted with the help of a questionnaire. The sampling has been randomand discrete.
34. AREA FOR SAMPLING The areas, which has been considered for the purpose of present study is Chandigarh,Derabasi & Zirakpur. Equal number of respondents is contacted for the purpose of uniformityin results without a place for biasness in area or location.DATA COLLECTIONThe task of data collection begins after the research program has been defined and researchdesign plan checked out. The data collection is and important part of the research.DATA COLLECTION METHODIn the data collection method different methods are adopted for primary data collection andsecondary data collection.Primary Data Collection: - Primary data collection, which is collected through observationor direct communication with the respondent in one form or another. These are severalmethods for primary data collection.• Observation Method• Interview Method• Through Questionnaire But as the time was limited I used the Questionnaire method for data collectionSecondary Data: - Secondary data is also collected by me various documents of thecompany from the Internet.DATA COLLECTION INSTRUMENTS The data collection instruments used in the study are following: -QUESTIONNAIRE: - This method of data collection is quiet popular, particularly in care ofinquiries. As we know Questionnaire should be comparatively short and simple in the size ofthe questionnaire should be kept to minimum questions should proceed in logical sequencemoving from easy to more difficult. Hence questionnaire made by me is structured.Structured questionnaire is that in which these are define concrete and predetermine
35. questions. The questions were presented with exactly with same wording and in the sameorder to all respondents. Structured questionnaire are simple to administer and relativelyinexpensive to analyze. The provision of alternatives replies at times helps to understand themeaning of question clearly but such questionnaire have limitations too for instance, widerange of data and that too in respondents own words can’t be obtained with structuredquestionnaire. The sequence is the next important aspect in order to make the effective questionnaireto ensure quality. A researcher should pay attention to the questions sequence in preparingthe questionnaire. A proper sequence of questions reduces considerably the chances ofindividual questions being misunderstood. The following type of question should be avoided. Questions that put too much strain on the memory or intellectual of the respondent.• Questions of a personal characters• Questions related to personal wealth Question sequence must be clear and smoothly moving, meaning thereby that the relationof one question to another question should be reading apparent to the respondent.Concerning the form of questions we can talk about two principles forms:• Multiple Choice Questions• Open Ended Questions Multiple choice or close questions have been the advantages of easy handling, simple toanswer quick and relatively inexpensive to analyze. They are most amendable to a statisticalanalysis some time the open questions are difficult to analyze but as they provide largeinformation so close ended and multiple choice questions are chosen by me in my study.
36. FUND MANAGEMENT OF DIFFERENT SCHEMES OF RELIANCE MUTUAL FUND1. DYNAMIC PLAN It is diversified equity fund that could be your ideal choice to make the most ofdynamic changes in the market. It has the ability to capture upside opportunities across valueand growth, large and midcap, index and non-index stocks. On the flip-side it also has abilityto move into cash as markets get overvalued. Its objective is to generate capital appreciation by actively investing in equity relatedsecurities for defensive considerations; the scheme may invest in debt, money marketinstruments and derivatives. Table 3.1 Years %age 2009 -3.11 2008 -44.79 2007 40.78 2006 58.31 2005 58.51 2004 15.70
37. 58.31 58.51 60.00 40.78 40.00 Dynamic Plan %age 15.70 20.00 -3.11 0.00 -20.00 -40.00 -44.79 -60.00 2009 2008 2007 2006 2005 2004 Years As the diagram depicts that the annual return from Reliance Mutual Fund dynamicplan was 15.70% in 2004 and increased in 2005 and 2006 but it declines in 2007 due to theentry of new firms in the market and it became negative in 2008 due to recession in thewhole economy of the country and is still facing the same situation.2. FMCG PLAN Reliance Mutual FMCG fund is a diversified sector fund that invests in companieswhich are benefiting from the consumption boom in the Indian economy. It is an open endedequity fund. The portfolio is made up of a few number of scrip chosen to reflect the prospectsof FMCG sector. With in the broad definition of the sector scrips are held across sub-sectorslike food, retail distribution and consumables. A smaller allocation to other sectors ispermitted purely for defensive considerations. Table 3.2 Years %age 2009 -1.79 2008 -44.92 2007 42.75 2006 24.60
38. 2005 94.26 2004 30.12 94.26 100.00 FMCG Fund Return %age 80.00 60.00 42.75 30.12 40.00 24.60 20.00 -1.79 0.00 -20.00 -40.00 -44.92 -60.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual FMCG fund was 30.12 in 2004 andincreased to 94.26 in 2005 due to recruitment of trained personnel in the organization andheavy expenditure on promotion. But it decreased in 2006 due to entry of competitors in themarket. But it again increases and becomes negative in 2008 due the problem of recessionand is still facing the same problem.3. MONTHLY INCOME PLAN It is that kind of product seeking to generate regular income with stability and lowerrisk. It is a conservatively managed fund that invest predominately in debt securities, it investwith the view of generating regular income from debt securities.
39. Table 3.3 Years %age 2009 -6.15 2008 25.40 2007 9.15 2006 6.23 2005 4.24 2004 -0.10 Monthly Income Return %age 30.00 25.40 25.00 20.00 15.00 9.15 10.00 6.23 4.24 5.00 -0.10 0.00 -5.00 -6.15 -10.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual monthly income plan was negative in 2004due to improper knowledge to the consumers but with heavy promotional expenditure itincreases upto the year of 2008 and becomes negative in the year of 2009 due to the effect ofrecession.4. INCOME MULTIPLIER FUND It is that type of fund which adds a flavor of equity to the debt portfolio so thatinvestors are able to benefit from the equity market without taking on substantial risks. Itpredominantly invests in a debt portfolio that is conservatively managed with a focus ongenerating regular income. The objective is to keep interest rate risks and credit risks low.
40. Table 3.4 Years %age 2009 -0.47 2008 -12.08 2007 16.09 2006 14.74 2005 15.74 2004 -8.76 20.00 16.09 14.74 15.74 Income Multiplier Fund Return 15.00 10.00 5.00 %age -0.47 0.00 -5.00 -10.00 -8.76 -12.08 -15.00 2009 2008 2007 2006 2005 2004 The annual return from Reliance Mutual income multiplier plan was negative in 2004due to improper knowledge to the customers but with the introduction of it throughadvertisements it increases and becomes negative in 2008 due to economic recession and isstill facing the same.5. BALANCED FUND Asset allocation is the key to investing success. It helps the investors to reduce thevolatility of returns. A balanced fund takes care of this assets allocation by investing inequity for capital appreciation and debt for stable returns. It focuses on reducing volatility ofreturns by increasing/decreasing equity exposure based on market outlook and using a core
41. debt portfolio to do the rebalancing. It is an open-ended fund that allocates to both equity anddebt markets, reflects this wisdom. Table 3.5 Years %age 2009 -0.72 2008 -43.83 2007 36.59 2006 29.36 2005 38.70 2004 16.69 38.70 40.00 36.59 29.36 30.00 Balance Fund Return %age 16.69 20.00 10.00 -0.72 0.00 -10.00 -20.00 -30.00 -40.00 -43.83 -50.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual balanced fund was 16.69% in 2004 and itincreased in 2005 due to training and development of employees and again decreased in 2006due to increase in competition and it increases in 2007 and negative in 2008 due to recessionand is still facing the same.6. CHILD CARE (GIFT PLAN) It is an investment instrument specially designed to help you give your child a headstart in life. It is suitable if your child is in age-group of 1-13 years. Table 3.6
42. Years %age 2009 -3.44 2008 -6.60 2007 17.04 2006 13.48 2005 14.61 2004 6.36 20.00 17.04 14.61 13.48 Child Care Plan Return %age 15.00 10.00 6.36 5.00 0.00 -3.44 -5.00 -6.60 -10.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual child care plan (gift) was 17.1% in 2004 andincreased in 2005 due to emotional appeals used by the advertiser and decreased in 2006 dueto increase in the competition and in 2007 it again increases due to training and developmentof employees and becomes negative in 2008 due to recession in the economy and is stillfacing the same.7. CHILD CARE (STUDY) PLAN It is an investment specially designed to help you give your child a head start in life.It is suitable if your child is in age group of 13-17 years. Table 3.7
43. Years %age 2009 -3.44 2008 -6.60 2007 17.04 2006 13.48 2005 14.61 2004 6.36 20.00 17.04 14.61 Child Care Plan Return %age 13.48 15.00 10.00 6.36 5.00 0.00 -3.44 -5.00 -6.60 -10.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual child care plan (study) was 6.36% in 2004and due to increase in promotion expenses it increased and becomes negative in 2008 due torecession situation in the economy and is still facing the same.8. INDEX FUND There are two approaches to mange an investor’s portfolio. One is active managementwhich involves choosing sectors and stocks that represent the views of the fund managers, asbest suited to meet the portfolio objective. The other is passive management which simplymeans buying into a market index. Reliance Mutual Index fund offers a passive choice toinvestors. Table 3.8
44. Years %age 2009 2.30 2008 -50.36 2007 56.46 2006 41.94 2005 39.98 2004 9.32 56.46 60.00 41.94 39.98 40.00 Index Fund Return %age 20.00 9.32 2.30 0.00 -20.00 -40.00 -50.36 -60.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual index fund was 9.32% in 2004 and isincreased up to 2007 due to heavy promotional expenses spent on advertisements andbecomes negative in 2008 due to recession situation in the economy and its position now hasbeen improved.9. GROWTH PLAN It seeks to invest in large, profitable and well known companies, and aims to benefitfrom the best long terms investments that the market has to offer in large cap space. Theinvestments are spread across sectors to ensure risk diversification and stocks are selectedthrough rigorous fundamental bottom up analysis. Table 3.9
45. Years %age 2009 3.53 2008 -47.74 2007 44.40 2006 42.77 2005 49.53 2004 13.35 49.53 50.00 44.40 42.77 40.00 30.00 Growth Plan %age 20.00 13.35 10.00 3.53 0.00 -10.00 -20.00 -30.00 -40.00 -47.74 -50.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual growth plan was 13.35% in 2004 and itincreased to 49.53% in 2005 due to heavy promotional expenditure and due to recruitment ofable and trained employees in the organization but it declined in 2006 and became negativein 2008 due to recession period and its position is now improving day by day.10. TAX PLAN It allows the investors to harness the benefits of long term equity investing in additionto helping you save tax. It is an open-ended equity linked saving scheme. It is suited forpatient investors who have a long term investing horizon of 3-5 years and at the same timeare looking at tax saving. Table 3.10
46. Years %age 2009 69.5 2008 -56.4 2007 39.1 2006 23.5 2005 67.7 2004 35.9 80 69.5 67.7 60 Tax Plan Retrun (In %age) 39.1 35.9 40 23.5 20 0 -20 -40 -56.4 -60 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual tax plan was 35.9% in 2004 but it increasedsuddenly to 67.7% in 2005 due to heavy expenditure on the promotional tools. This planhelps to save tax. But it decreased in 2006 due to the increase in the competition in themarket but it became negative in 2008 due to economic recession and is still facing the sameproblem.11. EMERGING S.T.A.R. (Stocks Targeted At Returns) PLAN It identifies and focuses on those stocks that not only hold promise but can alsoweather adversity in their path to becoming big and seeks to bring you the benefit ofinvesting in the leaders of tomorrow, today. It is an open-ended equity fund that is focused onmid-cap sector. It provides the opportunity to take part in and gain from the growth stories oflesser known, smaller stocks. Table 3.11
47. Years %age 2009 -10.30 2008 -68.40 2007 59.40 2006 38.50 2005 68.90 2004 19.30 80.00 68.90 59.40 Emerging S.T.A.R. %age 60.00 38.50 40.00 19.30 20.00 0.00 -10.30 -20.00 -40.00 -60.00 -68.40 -80.00 The annual return from Reliance Mutual emerging S.T.A.R. fund2004 19.3% in 2004 2009 2008 2007 2006 2005 was Yearsand increased in 2005 due to increase in the advertisements and decreased in 2006 due toincrease in the competition and lack of able manpower in the organization but it increased in2007 due to heavy expenditure on training and development of employees and becamenegative in 2008 due to recession situation in the economy and is still facing the samesituation.12. DISCOVERY FUND It offers an alternative value investing style that helps in truly balancing the equityportfolio. The value Philosophy focuses on discovering stocks that have high potential butare currently lying low at a discount to their inherent value. It seeks to invest in companies that are well managed and fundamentally strong,picked based on in depth research. As these companies are brought at discount to their fairvalue, there is a margin of safety in the value portfolio. Table 3.12
48. Years %age 2009 -3.43 2008 -54.56 2007 39.65 2006 28.69 2005 63.74 2004 24.93 Discovery Fund Return %age 80.00 63.74 60.00 39.65 40.00 28.69 24.93 20.00 0.00 -3.43 -20.00 -40.00 -54.56 -60.00 2009 2008 2007 2006 2005 2004 Years The annual return from Reliance Mutual discovery fund was 24.93% in 2004 and itincreased in 2005 due to promotional expenses and decreased in 2006 due to lack of ablemanpower and it again increased in 2007 due to training and development and becamenegative in 2008 due to recession period in the whole economy and is trying to move outfrom the worst situation.13. TECHNOLOGY FUND It is a concentrated sector fund that focuses predominantly on informationTechnology. The fund can enhance exposure of an investor’s Portfolio to this sector, ifinvestor is convinced about the prospects. Table 3.13 Years %age 2009 -4.91 2008 -62.76 2007 10.92 2006 51.64
49. 2005 53.34 2004 17.08 51.64 53.34 60.00 Technology Fund Return %age 40.00 10.92 17.08 20.00 -4.91 0.00 -20.00 -40.00 -60.00 -62.76 -80.00 2009 2008 2007 2006 2005 2004 The annual return from Reliance Mutual Years technology fund was 17.08% in 2004 andincreased in 2005 due to heavy promotional expenses and it decreased in 2006 and 2007 dueto entry of new firms in the market and becomes negative in 2008 due to recession in theeconomy and is still facing the same.14. POWER It is an open-ended equity fund. The port folio is made up of large cap and mid-capStocks and is aimed at capturing the growth opportunities across multiple sectors in themarket. It seeks to optimize risk adjusted return. Table 3.14 Years %age 60.00 51.47 50.55 2009 1.54 2008 -54.78 Power Fund Return %age 40.00 2007 51.47 2006 20.00 1.54 50.55 0.00 -20.00 -40.00 -54.78 -60.00 2009 2008 2007 2006 Years
50. The annual return of Reliance Mutual power plan was 50.55% in 2006 and itincreased in 2007 due to increase in the promotional expenses and becomes negative in 2008due to recession situation in the economy and its situation is now improving day by day.
51. ANALYSIS AND INTERPRETATION Table 4.1 Classification of the Respondents on the basis of their Occupation Occupation No. of Respondents %age Businessman 26 26% Govt. Employee 36 36% Students 10 10% Professional 15 15% Any Other 13 13% 40 36 35 No.of Respondents 30 26 25 20 15 13 15 10 10 5 0 Professional Businessm an Any Other Em ployee Students Govt. Occupation The above diagram shows that 36 respondents are govt. employees, 26 respondentsare businessman, 15 respondents are professionals, 13 respondents belongs to any othercategory i.e. farmers and small shopkeepers and 10 respondents are students, has been takenas sample size for the research study by the researcher.
52. Table 4.2 Classification of the Respondents on the basis of their Household Income Monthly Income No. of Respondents %age Below Rs.10000 10 10% 10001-20000 23 23% 20001-30000 38 38% 30001-40000 13 13% Above Rs.40000 16 16% 38 40 35 30 No. of Respondents 25 23 20 16 15 13 10 10 5 0 Below 10001- 20001- 30001- Above Rs.10000 20000 30000 40000 Rs.40000 Monthly Income This diagram depicts that 38 of the respondents were having their household incomein the Rs.20001-30000 income group, 23 respondents were having their income betweenRs.10001-20000 income group, 16 respondents were having their income above Rs.40000,13 respondents were having income between Rs.30001-40000 and 10 respondents werehaving their income below Rs.10000.
53. Table 4.3 Classification of the Respondents on the basis of Necessity of Mutual Funds Necessity of Mutual Funds No. of Respondents %age Yes 91 91% No 9 9% 91 100 90 No. of Respondents 80 70 60 50 40 30 9 20 10 0 Yes No Necessity of Mutual Fund The classification of the respondents shows the necessity of mutual fund with thisdiagram. This shows that 91 respondents said that mutual fund investment is necessary in thepresent time for everyone and only 9 respondents said that it is not a necessity and it dependsupon the savings of an individual whether he has capacity to pay the amount or not.
54. Table 4.4 Classification of the Respondents on the basis of Mutual Fund Investment Options No. of Respondents %age Yes 89 89% No 11 11% Respondents having Mutual Fund Investments No 11% Yes 89% The above diagram shows the classification of the respondents on the basis of theirinvestment in Mutual Funds. 89% of the respondents have invested their savings in MutualFunds and only 11% of the respondents said that they have not invested their savings tillnow. It shows that large part of our study belongs to mutual fund investors.
55. Table 4.5 Classification of the Respondents on the basis of Type of Mutual Funds Type of Mutual Funds No. of Respondents %age Short-Term 28 28% Medium 43 43% Long-Term 29 29% 43 45 40 35 29 No.of Respondents 28 30 25 20 15 10 5 0 Short-Term Medium Long-Term Types of Mutual Funds Respondents are classified on the basis of type of mutual funds. Diagram shows that43 of the respondents said that they have medium term mutual funds, 29 respondents saidthat they are having long term mutual fund plans and 28 respondents said that they are havingshort term mutual fund plans. Investors of short term mutual fund plans said that they needliquidity in short time that’s why they invest in this type of plans and businessmen areinvested in long term plans.
56. Table 4.6 Classification of the Respondents on the basis of Duration of Mutual Funds Duration of Mutual Funds No. of Respondents %age Less than 5 yrs 19 19% 5-10 yrs 22 22% 10-15 yrs 34 34% Above 15 yrs 25 25% Duration of Mutual Funds Less than 5 Above 15 yrs yrs 25% 19% 10-15 yrs 5-10 yrs 34% 22% Above diagram shows the classification of the respondents on the basis of duration oftheir investment in mutual funds i.e. 34 respondents said that they are having mutual fundinvestments for 10-15 years, 25 respondents are having above 15 years mutual fundinvestments, 22 respondents are having 5-10 years mutual fund investments and 19respondents are having less than 5 years mutual fund investments. Long term investors arethose which invest their money for their children education or their marriage.
57. Table 4.7 Classification of the Respondents on the basis of Source of Information Gathered for Mutual Funds Information Source No. of Respondents %age TV 29 29% Advisor 43 43% Newspaper 4 4% Magazine 9 9% Any Other 25 25% 43 45 40 35 No. of Respondents 29 30 25 25 20 15 9 10 4 5 0 TV Advisor Newspaper Magazine Any Other Information Source The diagram shows the classification of respondents on the basis of source ofinformation gathered. 43 of the respondents gathered the information about their mutual fundinvestment from the advisors, 29 from the fastest media like television, 15 gathered theinformation from any other source which includes radio and friend circle and 9 of therespondents gathered the information from magazines and 4 from the newspaper.
58. Table 4.8 Classification of the Respondents on the basis of Ever Invests their Savings in Reliance Mutual Funds Ever Invest in Reliance Mutual Funds No. of Respondents %age Yes 58 58% No 14 14% Never think 4 4% Want to Invest 24 24% 58 60 50 No. of Respondents 40 30 24 20 14 10 4 0 Yes No Never think Want to Invest Ever Invest in ICICI Prudential The above diagram is based on the classification of respondents who ever investstheir money in Reliance Mutual Fund. 58 of the respondents said that they have invested theirmoney in Reliance Mutual Fund, 24 respondents said that they wants to invest their savingsin Reliance Mutual Fund, 14 have not invested their money and 4 never think to invest theirmoney in Reliance Mutual Fund.
59. Table 4.9 Classification of the Respondents on the basis of Knowledge about different schemes of Reliance Mutual Fund Knowledge about Schemes No. of Respondents TV 26 Advisors 47 Newspaper 4 Magazine 7 Any other 16 47 50 45 40 No. of Respondents 35 30 26 25 20 16 15 7 10 4 5 0 TV Advisors Newspaper Magazine Any other Knowledeg about Schemes The diagram shows the classification of respondents on the basis of knowledgegathered about mutual fund schemes i.e. 47 of the respondents come to know about thedifferent schemes of Reliance Mutual Fund from advisors, 26 from TV, 16 from any othersource which includes radio and friends circle, 7 from the magazines and 4 from thenewspapers.
60. Table 4.10 Classification of the Respondents on the basis of Reasons to Invest in Mutual Fund Reasons to Invest in Mutual Funds No. of Respondents %age Better Return 4 4% Risk Coverage 58 58% Tax Saving 24 24% Any Other 14 14% 58 60 50 No. of Respondents 40 30 24 20 14 10 4 0 Better Return Risk Coverage Tax Saving Any Other Reasons to Invest in Mutual Funds Classification of the respondents in the above diagram is based on the reasons toinvest their savings in mutual funds. Diagram shows that 58 of the respondents invest theirsavings in mutual funds to cover their risk and 24 invest to save tax and 14 invest theirmoney due to any other reasons which includes their child’s future and marriage purpose and4 invest their money for better return from the mutual funds.
61. Table 4.11 Classification of the Respondents on the basis of Their Investment in Different Mutual Funds Mutual Funds No. of Respondents %age LIC 14 14% ICICI Pru 23 23% HDFC Standard 18 18% Bajaj Allianz 11 11% Reliance 17 17% Any Other 17 17% 25 23 20 18 17 17 No. of Respondents 15 14 11 10 5 0 LIC ICICI Pru HDFC Bajaj Reliance Any Standard Allianz Other Different Mutual Funds Respondents of the study are classified on the basis of their investment in differentmutual funds. The above diagram shows that 23 respondents have invested their money inICICI Prudential mutual funds, 18 in HDFC Standard, 14 in LIC, 17 in Reliance and 17 inany other which includes Kotak Mahindra and SBI and 11 in Bajaj Allianz.
62. Table 4.12 Classification of the Respondents on the basis of Rate of Return from Mutual Funds Investment Rate of Return No. of Respondents %age Good 26 26 Better 43 43 Satisfactory 31 31 43 45 40 35 31 No. of Respondents 30 26 25 20 15 10 5 0 Good Better Satisfactory Rate of Return The diagram is based on the classification of the respondents on the basis of Rate ofreturn from different mutual fund investments. 43 respondents said that they get better rate ofreturn from their mutual fund investment, 31 respondents said that they get satisfactory returnfrom investment and 26 respondents get good return from their investment.
63. Table 4.13 Classification of the Respondents on the basis of Type of Experience with Present Mutual Funds Experience with Present %age Mutual Funds No. of Respondents Very Good 12 12% Good 23 23% Satisfactory 36 36% Poor 29 29% 40 36 35 29 30 No. of Respondents 23 25 20 12 15 10 5 0 Very Good Good Satisfactory Poor Experience with Present Mutual Funds Classification of the respondents of above diagram is based on past experience ofrespondents with their present mutual funds. It shows that 36 respondents have satisfactoryexperience with their present mutual funds, 29 having poor experience and 23 have goodexperience and only 12 have very good experience with their present mutual funds.
64. Table 4.14 Classification of the Respondents on the basis of Satisfaction from the present Mutual Fund Investment Satisfied No. of Respondents %age Yes 66 66% No 34 34% 66 70 60 No. of Respondents 50 34 40 30 20 10 0 Yes No Satisfied with Present Investment The above diagram depicts the classification of the respondents on the basis ofsatisfaction level of the respondents. 66 of the respondents are satisfied with their presentmutual fund investment and 34 of the respondents are not satisfied because most of themthink that they do not get proper return and proper timely payment.
65. LIMITATIONS OF THE STUDY Though every effort was put in to make this report authentic in every sense, yet therewere few factors, which might have their influence on the final report.1. The study was confined only to the Chandigarh, Zirakpur & Derabassi, and the sample size is about 100 mutual fund users. As such the findings are not generalizable.2. Some respondents might not reply well to some of the questions and hence their response may not reflect the real picture.3. Because of the time limitation to complete the project, I could collect the data from 100 mutual fund users only.4. Sample size, which was taken, may not be the true representatives of the population.
66. FINDINGS AND SUGGESTIONS After analyzing & interpreting data obtained from surveyed sample considered to therepresentative of the entire population & generalizing the total population following are thevarious findings that are in accordance with the objectives set forth the study.• At present there are 18 players operating in the mutual fund industry.• Irrespective of occupation and income of mutual fund owners, most of them buy mutual fund plans of investment for their security of investments.• People prefer to invest more in mutual funds rather than any other investment. In mutual funds they got maximum increment in their money.• India has a vast potential that is waiting to be tapped and this could be achieved when sufficient competition is generated and it is exposed to the developments in the rest of the world.• Indian mutual fund business, which remained under developed with low levels of investment penetration and investment density has shown signs of improvement.• It is found that there are 36 government employees and 26 businessmen, 15 professionals, 13 from any other category and 10 are students. This shows that our research study is mainly based on government employees.• 38% respondents who have their monthly income between Rs.20001-30000; they are the largest part of our research study.• 89% respondents who have the mutual fund investments. This shows that 89% of our research study belongs to the mutual fund investors and only 11% are non investors.
67. • It is find next that 43 respondents have medium term mutual fund schemes for 5-10 years and 29 have long term plans for 10-15 years and only 28 have short term plans for below 5 years. This shows that most of our study part belongs to the persons who have medium term mutual fund plans.• That 34 of the respondents have mutual fund investments for last 10-15 years and only 19 have from less than 5 years. This shows that our research study mainly includes the persons who have mutual fund plans for last 10-15 years.• That 43 of the respondents gather the information about their mutual fund plans from their advisors because they thought that they get the correct and perfect information only from them and 29 of the respondents gather the information about their mutual fund investments from the fastest media television because they get up to date information at any time where as 4 respondents get the information from the newspaper because mainly persons give less importance to reading than viewing and listening.• It is studied next that 58 of the respondents have invested their savings in Reliance mutual funds and most of the part of our study includes the investors of Reliance and 24 of the respondents want to invest their money in Reliance Mutual Fund because of their better return and reputation.• It is studied that 47 of the respondents come to know about the schemes of Reliance Mutual Fund from their advisors and this shows that a large part of our research study mainly depends upon the advisors for getting up to date information and 26 of the respondents get the information regarding schemes from the television.• It is studied that 58 of the respondents invest their savings in mutual fund plans to cover their risk. This shows that our study part contains the persons who are more conscious regarding their investments and 24 of the respondents invest their savings only to save their tax and only 4 invest for getting better return.
68. • It is studied that 23 of the respondents have invested their savings in Reliance mutual funds and hence most of our study part contains the investors of the Reliance Mutual Fund because they get better return from their investment and 18 of the respondents have invested their savings in HDFC Standard and 17 in Reliance because these are new in the market for last few years and people have invested their savings in the ICICI Prudential because it is an old company and people think that old is gold.• It is studied that 43 of the respondents get the better rate of return from the investment and 31 are only satisfied with what they get from the investment and only 26 get good rate of return. This shows that most part of our research study contains the investors who get better rate of return from their investment.• It is studied that 36 of the respondents are satisfied with the present mutual funds because they have invested their money and they do not have another alternative now and 29 of the respondents have poor experience because they do not get the expected rate of return and proper timely information and only 12 of the respondents have very good experience with the present mutual funds because they get good return and better services. This shows that our research study contains the investors who are satisfied with their present mutual funds.• It is studied that 91 of the respondents think that mutual fund investment is necessary because of the uncertainties present in daily life and only 9 think that it is not necessary. So, 91% of the study part includes the persons who are in favour of mutual fund investment.• It is studied that 66 of the respondents are satisfied with the present mutual fund investment and 34 are not satisfied because they do not get proper return and information and hence 66% of our study part contains satisfied persons from mutual fund returns.
69. SUGGESTIONS• Regulatory Mechanism:- Need for regulatory mechanism is recognized as mutual fund is effected with public interest in view of the large numbers involved. As a contract necessarily embodying a host of legal details, and specially imbalance of bargaining power of the investments (Asymmetrical information) invites regulatory oversight to adequately protect the mutual fund consuming public. (Beneficiaries)• Promotional Activities:- There should be more promotional activities to improve the performance of Reliance Mutual Fund. There should be more promotional activities like, wall painting, feedback forms through newspaper etc. So that customers should get proper knowledge about the different schemes.• Innovations:- Innovations are also an important tool to improve the performance. To innovate means to invent new things. Today’s environment need time to time change because customer’s needs and preferences changes from time to time. To cope up with the changed environment, company should innovate new schemes so that customers should be attracted towards them very frequently.• Flexibility:- The existing schemes of the company should have flexibility feature so that time to time change should be made in the existing schemes with the customer’s preferences.• Additional Offers:- The company should try to give additional offers with the existing schemes in the market so that a large number of investors should be attracted towards the schemes. The company should also try to give occasional offers and schemes to their regular customers also so that they should be satisfied with the company.• Proper Information:- The company should try to give timely proper information to their investors so that why can get correct and timely upto date information from the company about their investment.
70. • Training and Development:- The company should try to give timely training to their employees so that their performance should be improved from time to time.• Recruitment of Skilled Advisors:- The company should recruit only those advisors who have skills and capabilities of doing a particular job. It is necessary because with the help of skilled and capable advisors, customers can be satisfied.• Emotional Appeals:- The company should try to develop emotional appeals in the advertisements. They have more frequent impact on the mind of the customers and customers can be easily attracted towards the schemes of the company.• Direct Contacts:- The company should try to establish direct contact with their regular investors, so that they should be properly aware about the different schemes and their return on the investment. Proper and timely information to the investors is must to satisfy the investors and to improve the performance of the company.
71. CONCLUSION The unilateral move to further liberalize the mutual fund sector in India isunjustifiable. Events over the decade of the 1990s have borne out the fact that financialliberalization does not contribute positively to investment and economic growth. Countrieswhich enthusiastically opened up their financial sectors in order to attract capital inflowsoften experienced enhanced volatility in their financial markets and speculative attacks ontheir currency. It is concluded from the study that Reliance Mutual Fund is the India’s largest privatefinance service provider till 2005 but with the entry of many private players it is now the 3rdlargest private company from among all the private mutual fund companies exceptnationalized banks due to its largest share in the whole economy. Its goodwill has beenincreased. It has many good schemes due to which customers are attracted more and moreand are satisfied with their investment. But due to the depression situation in the wholeIndian economy in 2008, its performance has been affected and consumers did not get theexpected results. But now, its performance has improved and due to trainings anddevelopment and its expenditure on promotional tools, the consumers are attracted more andwanted to invest their money in the schemes of Reliance Mutual Funds.
72. BIBLIOGRAPHYBOOKSa) Beri G.C., “Marketing Research”, Tata McGraw Hill, Third Edition.b) Bhole L.M., “Management of Financial Institutions”, Tata McGraw Hill,2001.c) Khan M.Y., “Indian Financial System”, Tata McGraw Hill, 2000.d) Kothari C.R., “Research Methodology”, New Age Publishing House,Second Edition.e) Tripathi, Nalini Prava, “Mutual Fund in India –Emerging Issues”.JOURNALS/MAGAZINES• The Prudent Fact Sheet, February, 2012, p 3-5, 11-14, 19-27WEBSITEI. http://reliancemutualfund.comII. http://indiafocus.indiainfo.com/business/invest
73. QUESTIONNAIREName:_______________________________ Age_______________________________Tel.No._________________________ No. of Family Members_____________________Q.1 What is your occupation? Businessman Govt. Employee Students Professional Any OtherQ.2 What is monthly household income? Below Rs.10000 Rs.10001-20000 Rs.20001-30000 Rs.30001-40000 Above Rs.40000Q.3 Do you think investment is necessary? Yes NoQ.4 Have you invested in any Mutual Fund? Yes NoQ.5 Which type of Mutual Fund do you have? By Structure By Investment Objective Other SchemesQ.6 For how many years you have invested in Mutual Funds? Below 5 yrs 5-10 yrs 10-15 yrs Above 15 yrsQ.7 How do you gather the information about your Mutual Fund? TV Advisors Newspaper Magazine Any otherQ.8 Have you ever invested your money in Reliance Mutual Fund? Yes No Never think Want to investQ.9 How do you know about the different schemes of Reliance Mutual Fund? TV Advisors Newspaper Magazine Any otherQ.10 Why do you invest your savings in Mutual Funds? For Better Return Risk Coverage Tax Saving Any otherQ.11 In which mutual fund you have invested your money? Reliance ICICI HDFC Bajaj Allianz Any other
74. Q.12 How much return you get from your investment? Good Better SatisfactoryQ.13 What type of experience you have with your present investment? Very Good Good Satisfactory PoorQ.14 Are you satisfied with your present Mutual Fund investment? Yes No If No, why_______________________________________
75. PROJECT REPORT ON SYSTEMATIC APPROACH FOR BUILDING WEALTH SUBMITTED TO CHITKARA UNIVERSITY, __________ IN PARTIAL FULFILLMENT OFDEGREE OF MASTER OF BUSINESS ADMINISTRATIONUNDER THE SUPERVISION OF SUBMITTED BYMRS. NAMARTA SANDHU BHUPINDER PAL SINGHASST. PROFESSOR, ROLL NO. CUN110551007 CHITKARA UNIVERSITY, RAJPURA SESSION 2012-2013
76. LIST OF TABLESTABLE DESCRIPTION PAGE NO.3.1 Dynamic Plan (42)3.2 FMGC Plan (44)3.3 Monthly Income Plan (45)3.4 Income Multiplier Plan (46)3.5 Balanced Fund (47)3.6 Child Care (Gift) Plan (48)3.7 Child Care (Study) Plan (50)3.8 Index Fund (51)3.9 Growth Plan (52)3.10 Tax Plan (54)3.11 Emerging Stock Targeted at Returns Plan (55)3.12 Discovery Fund (56)3.13 Technology Fund (58)3.14 Power Plan (59)4.1 Classification of the Respondents on the basis of their Occupation (60)4.2 Classification of the Respondents on the basis of their Household Income (61)4.3 Classifi. of the Respondents on the basis of Necessity of Mutual Funds (62)4.4 Classifi. of the Respondents on the basis of holding Mutual Fund Plans (63)4.5 Classifi. of the Respondents on the basis of Type of Mutual Funds (64)4.6 Classification of the Respondents on the basis of Years of Mutual Funds (65)4.7 Classification of the Respondents on the basis of Source of Information (66) Gathered for Mutual Funds4.8 Classifi. of the Respondents on the basis of Ever Invests their Savings (67) in Reliance Mutual Fund4.9 Classifi. of the Respondents on the basis of Knowledge about different (68) schemes of Reliance Mutual Fund4.10 Classification of the Respondents on the basis of Reasons to Invest in (69) Mutual Fund4.11 Classification of the Respondents on the basis of their investment in (70) different Mutual Funds
77. 4.12 Classification of the Respondents on the basis of Rate of Return from (71) Mutual Fund Investment4.13 Classification of the Respondents on the basis of Type of Experience (72) with Present Mutual Funds4.14 Classification of the Respondents on the basis of Satisfaction from (73) the present Mutual Fund Investment
78. CONTENTSACKNOWLEDGEMENTCERTIFICATEDECLARATIONLIST OF TABLES DESCRIPTION PAGE NO.CHAPTER 1 INTRODUCTION (01-26)CHAPTER 2 REVIEW OF LITERATURE AND RESEARCH METHODOLOGY (27-41)CHAPTER 3 FUND MANAGEMENT OF DIFFERENT SCHEMES OF RELIANCE MUTUAL FUND (42-59)CHAPTER 4 ANALYSIS AND INTERPRETATION (60-73)CHAPTER 5 FINDINGS, SUGGESTIONS AND CONCLUSION (74-80) BIBLIOGRAPHY ANNEXURE
79. ACKNOWLEDGEMENT With great reverence I wish to express my profound sense of gratitude to Mrs.Namarta Sandhu, Assistant Professor, _______________, ________, my projectsupervisor, for her valuable guidance, encouragement and constructive suggestions withoutwhich it would have been impossible for me to complete this dissertation work. I am deeply indebted to Dr. ___________, Director, _________,____________ University, _______ who permitted me to undertake this dissertation. I shall be failing in my duty if I do not express my gratitude to my respondentswho spared their valuable time and extended their full co-operation in providing necessaryinformation required for this study. I never forget to thank the almighty God, the supreme power, who isobviously the one who has always guided me to work on the right path of life. (BHUPINDER PAL SINGH)
80. CERTIFICATE It is certified that the summer training project report entitled “Systematic Approachfor Building Wealth” has been completed by Mr. Bhupinder Pal Singh and submitted inthe partial fulfillment for the requirement of the degree M.B.A. (Financial Market),______________ University, ___________. It is his original work and has been completedunder my supervision. It is recommended that this project is fit for submission and may be sent forevaluation. (NAMARTA SANDHU)
81. DECLARATION I hereby solemnly declare that dissertation entitled “Systematic Approach forBuilding Wealth” has been completed by me and submitted in the partial fulfillment forthe requirement of the degree M.B.A. (Financial Market) ______________,__________. It is further stated that it is my original work. BHUPINDER PAL SINGH
82. CHAPTER - 1INTRODUCTION
83. CHAPTER – 2REVIEW OF LITERATURE ANDRESEARCH METHODOLOGY
84. CHAPTER – 3 FUND MANAGEMENT OFDIFFERENT SCHEMES OFRELIANCE MUTUAL FUND