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1         /115    Related                     Reliance mutual fund 2360 views                     Study on reliance mutual...
TBNG Mutual Fund Report 289 views                  Project report on mutual funds 227 views                  Analysis of M...
Project report of axis mutual fund by kamal 1031 views                  Pakistan Mutual Funds Report May 2012 156 views   ...
Mutual Funds 4564 viewsMutual Fund 1449 viewsMutual funds 428 viewsMutual Funds 553 viewsMutual funds 541 viewsMutual Fund...
Mutual Funds 153 viewsMutual Funds 164 viewsMutual Funds 200 viewsMutual Funds 410 viewsMutual Funds 106 viewsMutual Funds...
mutual funds 318 views       0       inShare       Pin It       Wordpress       + FollowReport on reliance mutual fundsby ...
trends in theMutual Market have shown that an average retail investor always lost withperiodic bearishtends. People began ...
real estateoperations of the parent company and other subsidiaries. Reliance CapitalGroup, L.P.constituted the investment ...
increaseeven further. In the coming year‟s mutual funds as saving intermediaries willplay a greater role inbringing the ga...
Thereafter, mutual funds sponsored by private sector entities were allowed to enterthecapital market. The regulations were...
Mutual, a mutual fund allows you to request that yourshares be converted into cash.5-Simplicity- Buying a mutual fund is e...
diversifiedportfolio of equities. Changes in government policyChanges in Governmentpolicy especially in regard to the tax ...
maximum orminimum for each asset class.A similar type of fund is known as an assetallocation fund. Objectives are similar ...
The expense ratio iscomposed of the following:• The cost of hiring the fund manager(s) -Also known as the management fee,T...
investments done. It is thus important to know the risks associated with the fund andalign it with the quantum of risk one...
45. 9. Keep track of your investmentsFinding the right fund is important but even moreimportant is to keep track of the wa...
fund in December1990. At the end of 1993, the mutual fund industry had assets undermanagement of Rs.47,004 crores. Third P...
LOAD A charge collected by a scheme when it sells the units. Also called, „Front-end‟load.Schemes that do not charge a loa...
Birla Sun life New Millennium-Growth 35.60 21.335 Banking Bees 32.69 590.316Prudential ICICI Technology –Growth 32.59 15.9...
design, the research would have only foggy notions as about what is to bedone. I haveused of „Exploratory Type‟. The resea...
with an experienced investment manager to oversee their investment. This is because themutual fund is composed of differen...
want to do job in Reliance • Some persons don‟t want just because of lack of knowledgeabout investment. • Some persons don...
this is that the debt funds provide the fixed rate of interest to the investors,there is no riskin that type of funds for ...
States, Japan and the rest of Asia, Reliance should concentrate on these markets,especially in view of low global interest...
advisory services from reliance which could provide them whole information about themarket situation of mutual fund. 10710...
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  3. 3. 1 /115 Related Reliance mutual fund 2360 views Study on reliance mutual fund 3713 views Comparative study on performance of equity schemes of reliance mutual fund mba p… 233 views Reliance mutual fund common application form 439 views
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  5. 5. Project report of axis mutual fund by kamal 1031 views Pakistan Mutual Funds Report May 2012 156 views Indian Mutual Fund Monthly Report July 2012 45 views A project report on mutual fund a safer investment 140 views A project report on different schemes of mutual funds and theircomparative ana… 514 views Research report on mutual fund in india at mahindra finance8966 views A project report on comparative study of mutual funds in india29127 views mutual_fund 159 views
  6. 6. Mutual Funds 4564 viewsMutual Fund 1449 viewsMutual funds 428 viewsMutual Funds 553 viewsMutual funds 541 viewsMutual Funds 2842 viewsMutual fund 3338 viewsMutual Funds 161 viewsMutual Funds 125 views
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  8. 8. mutual funds 318 views 0 inShare Pin It Wordpress + FollowReport on reliance mutual fundsby Anshi Bajpai on Nov 26, 2012 97 viewsReport on reliance mutual funds by Anshika Bajpai No comments yet Subscribe to comments Post Comment Report on reliance mutual funds Document Transcript 1. SUMMER INTERNSHIP REPORT ONCOMPARITIVE ANALYSIS OF RELIANCE MUTUALFUNDS WITH OTHER EXISTING MUTUAL FUNDS... 1 2. Submitted in fulfillment for the award of Master of business administration (G.B.T.U. Lucknow) SESSION: 2010-2012 FOR THE PARTIAL FULFILLMENT OF TWO YEAR DEGREE IN MASTER OF BUSINESS ADMINISTRATIONUNDER THE GUIDANCE OF: SUBMITTEDBY:SANJAY KUMAR ANSHIKABAJPAIBranch Manager MBA-Final yrReliance Mutual Fund Roll No.-1034970004 MAHARANA
  9. 9. INSTITUTE OF PROFESSIONAL STUDIES (AFFILIATED BY GAUTAM BUDDHTECHNICAL UNIVERSITY) APPROVED BY AICTE, MINISTERY OF HRD, GOVT.OF INDIA, 23. PREFACEWith the growth of rapid industrialization the need of management is feltevery where.management, A research report provides the most natural condition underwhich a studentcan learn and got success in implementing the theoretically learned in tothe practical andcurrent environment of daily practices done by the people (investor) ithelps a student tolearn, to improve, to improvise, to experiment, to find knowledge in allpossible ways andto translate that knowledge into action.MBA is a foundation stone tothe management career. The classroom learning needs topractical exposure. To developconcrete managerial and administrative skills of potentialmanager, it is important that theinteraction to the real environment be there.The project is a real life venture for me. It is agreat privilege that you have spread your forreading this. In forthcoming pages, anattempt has been made to present the different aspectof my project. 34. Date (AnshikaBajpai)Place: Kanpur ACKNOWLEDGMENTIf words are consideredas a symbol of approval and taken of appreciation then let thewords play the heraldingrole expressing my gratitude.First of all I thank to my Gracie god who blessed me withall kind of facilities that had beenprovided to me for completion of my report.I‟m alsograteful to my teacher for guiding me to learn and helped me on projectonCOMPARITIVE ANALYSIS OF RELIANCE MUTUAL FUND WITHOTHEREXISTING MUTUAL FUNDS.My endless appreciation goes to my all respectedfaculty who has stood by my side andgive me moral support whenever I was low andboosted my will power. Finally, I wouldlike to express my solidarity towards theRELIANCE GROUP for providing me with suchan opportunity. 45. Thank You INTRODUCTION TABLE OF CONTENTS HISTORY OF THERELIANCE COMPANY 7-8 COMPANY PROFILE 9-10 RELIANCE 11-13MUTUAL FUND PROFILE 14- Reliance Mutual Fund - 19 HISTORY OF MUTUALFUND About the project Accelerating Growth 20- Disadvantages of Advantages ofmutual funds 62 mutual funds 5 Risks 6. Types of mutual Various mutual fund scheme involved in mutual fundsThe Costs involved in mutual fund Different types of funds fund Some of theexisting asset management company values of your fund Mutual Graphicalrepresentation Development of mutual fund in India Frequently used terms in mutualfunds Flow chart funds organizations OBJECTIVE OF Working of mutualfund Structure of Indian mutual fund THE STUDY SCOPE OF THE STUDY 63-64RESEARCH METHODOLOGY 65-66 USE OF THE PROJECT 67-70IMPORTANCE 71 OF THE STUDY RESEARCH ANALYSIS AND 72-73INTERPRETATION FINDINGS 74-90 91-92 6 7. SWOT ANALYSIS 93- weakness Strengths 96 RECOMMENDATIONSCONCLUSION 97-98 99- 100 ANNEXURE 101- BIBLIOGRAPHY 105 106Introduction 78. There are a lot of investment avenues available today in the financial market for aninvestorwith an investable surplus. He can invest in Bank Deposits, CorporateDebentures, andBonds where there is low risk but low return. He may invest in Mutual ofcompanies wherethe risk is high and the returns are also proportionately high. The recent
  10. 10. trends in theMutual Market have shown that an average retail investor always lost withperiodic bearishtends. People began opting for portfolio managers with expertise inMutual markets whowould invest on their behalf. Thus we had wealth managementservices provided by manyinstitutions. However they proved too costly for a smallinvestor. These investors havefound a good shelter with the mutual funds.Like mostdeveloped and developing countries the mutual fund cult has been catching on inIndia.The reasons for this interesting occurrence are: 89. # Mutual funds make it easy and less costly for investors to satisfy their need forcapitalgrowth, income and/or income preservation.# Mutual fund brings the benefits ofdiversification and money management to theindividual investor, providing aOpportunity for financial success that was once availableonly to a select few. History ofReliance Company 910. The reliance group founded by Dhirubhai. H. Ambani (1932-2002) is India‟s largestprivatesector enterprise. He is credited to have brought about the equity cult in India inthe lateseventies and is regarded as an icon for enterprise in India. He epitomized thespirit dare todream and learn to excel‟. The Reliance Group is a living testimony to hisindomitable will,single-minded dedication and an unrelenting commitment to hisgoals.Unit Trust of India is the first Mutual Fund set up under a separate act, UTI Act in1963,and started its operations in 1964 with the issue of units under the scheme US-641.In 1978UTI was delinked from the RBI and Industrial Development Bank of India (IDBI)took overthe Regulatory and administrative control in place of RBI.In the year 1987Public Sector banks like State Bank of India, Punjab National Bank, IndianBank, Bank ofIndia, and Bank of Baroda have set up mutual funds.Apart from these above mentionedbanks Life Insurance Corporation [LIC] and GeneralInsurance Corporation [GIC] toohave set up mutual fund. LIC established its mutual fundin June 1989.while GIC had setup its mutual fund in December 1990.The mutual fundindustry had assets undermanagement of Rs. 47,004 crores.With the entry of Private Sector Funds a new era hasstarted in Mutual Fund Industry .e.g:-Principal Mutual Fund. 1011. Company Profile 1112. Reliance Group Holdings has grown from a small office data-processing equipmentfirm in1961 into a major insurance and financial-services group in one generation underone chief.Reliances insurance operations constitute the nations 27th-largest property andcasualtyoperation. The parent company also includes a development subsidiary incommercial realestate. Reliances international consulting group contains several energy,environment, andnatural resources consulting. A financial arm invests in otherbusinesses, primarilytelevision stations.Reliance Insurance started as the Fire Associationof Philadelphia in 1817, organized by 5hose and 11 engine fire companies. It became thenations first association of volunteer firedepartments. Business got a boost as a result ofthe Great Chicago Fire of 1871. 1213. The association soon developed a field of agents to write policies across the country.Forthe first two years, shareholders received dividends twice a year of $5 a share,whichincreased gradually to $10 in 1876.In 1972, the Reliance insurance group dividedits pool so that Reliance Insurance Companyand its subsidiaries handled most standardlines, while United Pacific Insurance Companyhandled the nonstandard and otheroperations.In 1977, the company moved into real estate, forming Continental CitiesCorporation,which became Reliance Development Group, Inc. This division handled all
  11. 11. real estateoperations of the parent company and other subsidiaries. Reliance CapitalGroup, L.P.constituted the investment branch of the Reliance conglomerate.In December1989, Reliance Capital sold its investment, Days Corporation, parent companyof DaysInn of America, the worlds third-largest hotel chain; it had been purchased in1984.Reliance Industries Limited. The Groups principal activity is to produce anddistributeplastic and intermediates, polyester filament yarn, fiber intermediates,polymerintermediates, crackers, chemicals, textiles, oil and gas. The refining segmentincludesproduction and marketing operations of the Petroleum refinery. Thepetrochemicalssegment includes production and marketing operations of petrochemicalproducts namely,High and Low density Polyethylene."Growth has no limit at Reliance. Ikeep revising my vision.Only when you can dream it, you can do it." 1314. Reliance mutual fund profileReliance Mutual Fund - Accelerating GrowthRelianceMutual Fund, a part of the Reliance Anil Dhirubhai Ambani Group is the No. 1MutualFund in India. Reliance Mutual Fund offers investors a well rounded portfolio ofproductsto meet varying investor requirements. Reliance Mutual Fund has a presence inover 100cities across the country, an investor base of over 3.9 million and manages assetsover Rs.67,598 Crores as on August 31, 2007. Reliance Mutual Fund constantly endeavorstolaunch innovative products and customer service initiatives to increase value toinvestors.Reliance Mutual Fund schemes are managed by Reliance Capital AssetManagement Ltd.,awholly owned subsidiary of Reliance Capital Ltd. Reliance CapitalLtd. is one of India‟sleading and fastest growing private sector financial servicescompanies, and ranks amongthe top 3 private sector financial services and bankingcompanies, in terms of net worth.Reliance Capital Ltd. has interests in asset managementand mutual funds, life and generalinsurance, private equity and proprietary investments,stock broking and other financialservices. 1415. No.1 basis Assets under Management (AUM) as on August 31, 2007. 1516. ABOUT PROJECT MUTUAL FUNDA mutual fund is nothing more than acollection of Mutuals and/or bonds. You can think ofa mutual fund as a company thatbrings together a group of people and invests their moneyin Mutuals, bonds, and othersecurities. Each investor owns shares, which represent aportion of the holdings of thefund. 1617. You can make money from a mutual fund in three ways:1) Income is earned fromdividends on Mutuals and interest on bonds. A fund pays out.Nearly all income itreceives over the year to fund owners in the form of a distribution.2) If the fund sellssecurities that have increased in price, the fund have a capital gain. Mostfunds also passon these gains to investors in a distribution.3) If fund holdings increase in price but arenot sold by the fund manager, the funds .Sharesincrease in price. You can then sell yourmutual fund shares for a profit.Funds will also usually give you a choice either to receivea check for distributions ortoReinvest the earnings and get more shares.The competitionamong funds has led to the launch of newer products, tailor-made to suitthe requirementsof investors. Mutual funds now offer products for the entire range of needsof investors.The encouraging response to index funds and sector funds shows the growingmaturityamong investors. Open-end funds, which provide liquidity to investors at dailyNAVrelated prices, are growing in popularity. The funds have be en adopting technology 1718. to provide good service to investors and with the proposed introduction of electronicfundstransfer and the growing trend towards E-Commerce; the efficiency of service will
  12. 12. increaseeven further. In the coming year‟s mutual funds as saving intermediaries willplay a greater role inbringing the gap between investors and issuers, especially in the areaof equity funds ?Atpresent these funds represents 13% of BSE market capitalization. Thisis expected to go upwith increasing flows into financial savings, especially the mutualfund with thegrowth and stability in the capital market flows into equity funds areexpected to go up. A Mutual Fund is a trust that pools the savings of a number ofinvestors who share acommon financial goal. The money thus collected is then investedin capital marketinstruments such as shares, debentures and other securities. The incomeearned throughthese investments and the capital appreciation realized is shared by its unitholders inproportion to the number of units owned by them. Thus a Mutual Fund is themost suitableinvestment for the common man as it offers an opportunity to invest in adiversified,professionally managed basket of securities at a relatively low cost. Mutualfunds, also referred to as investment companies, offer an alternative investmentchoice forindividuals with a long-term horizon. The way they operate is that individualinvestormoney are pooled and invested in many different companies. Assets areprofessionallymanaged to meet various investment objectives. They issue and sell shares toshareholders and also redeem them (buy them back) upon request. Prices of shares are setdailyat the close of business, based on the value of all investments in the mutualfund‟sportfolio. Their major advantages are diversification and professional management,which 1819. are not readily available to small investors outside the mutual fund arena. Moneymarketmutual funds are short-term funds. They invest in short-term cash and cashequivalentinstruments, such as Treasury bills, certificates of deposit, and short-termnotes. Mutualfunds may own Mutual and bonds of many different companies.A mutualfund is the ideal investment vehicle for today‟s complex and modern financialscenario.Markets for equity shares, bonds and other fixed income instruments, realestate,derivatives and other assets have become mature and information driven. Pricechanges inthese assets are driven by global events occurring in faraway places. A typicalindividual isunlikely to have the knowledge, skills, inclination and time to keep track ofevents,understand their implications and act speedily. An individual also finds it difficultto keeptrack of ownership of his assets, investments, brokerage dues and banktransactions etc. 1920. 2021. History of mutualfundIn 1924 three Boston securities executives pooled their moneytogether to create the firstmutual fund. The idea of pooling money together for investingpurposes started in Europein the mid-1800s. The first pooled fund in the U.S was createdin 1893 for the faculty and 2122. staff of Harvard University on March 21st, 1924 the first official mutual fund wasborn. Itwas called the Massachusetts Investors Trust.However in India UTI was the firstto introduce mutual funds in the Indian markets and itcommenced its operations fromJuly 1964, Government allowed public sector banks andinstitutions to set up mutualfunds.In the year 1992, Securities and exchange Board of India (SEBI) Act was passed.Theobjectives of SEBI are – to protect the interest of investors in securities and topromote thedevelopment of and to regulate the securities market.As far as mutual fundsare concerned, SEBI formulates policies and regulates the mutualfunds to protect theinterest of the investors. SEBI notified regulations for the mutual fundsin1993.
  13. 13. Thereafter, mutual funds sponsored by private sector entities were allowed to enterthecapital market. The regulations were fully revised in 1996 and have beenamendedthereafter from time to time. SEBI has also issued guidelines to the mutual fundsfrom timeto time to protect the interests of investors.All mutual funds whether promotedby public sector or private sector entities includingthose promoted by foreign entities aregoverned by the same set of Regulations. There is nodistinction in regulatoryrequirements for these mutual funds and all are subject tomonitoring and inspections bySEBI. The risks associated with the schemes launched by themutual funds sponsored bythese entities are of similar type. It may be mentioned here thatUnit Trust of India (UTI)is not registered with SEBI as a mutual fund (as on January15,2002. The end ofmillennium marks 36 years of existence of mutual funds in our country. 2223. The ride through these 36 years is not been smooth. Investor opinion is still divided.Whilesome are for mutual funds others are against it. MUTUAL FUNDSCHEMESMutual funds offer a variety of schemes to investor so as to provide steadyincome orgrowth or both. They differ according to the investment policies. The funds likeindividualinvestor have different goals. Of the investor who will first ascertain hisinvestmentobjectives, thinking that the units of a fund have an investment goalparalleling hisobjectives FUND MUTUAL BASICS:As you probably know, mutualfunds have become extremely popular over the last 20years.What was once just anotherobscure financial instrument is now a part of our daily lives.In fact, too many people,investing means buying mutual funds. After all, its commonknowledge that investing inmutual funds is (or at least should be) better than simply lettingyour cash waste away in asavings account, but, for most people, thats where theunderstanding of funds ends. Itdoesnt help those mutual fund sales people speak a strangelanguage that, sounding sort oflike English, is interspersed with jargon like MER, NAVPS,load/no-load, etc.Originallymutual funds were heralded as a way for the little guy to get a piece of themarket. Insteadof spending all your free time buried in the financial pages of the 2324. investment Journal, all you have to do is buy a mutual fund and youd be set on yourway tofinancial freedom. As you might have guessed, its not that easy. Mutual funds areanexcellent idea in theory, but, in reality, they havent always delivered. Not all mutualfundsare created equal, and investing in mutual‟s isnt as easy as throwing your money atthe firstsalesperson who solicits your business. ADVANTAGES OF MUTUAL FUND1-Professional Management - The primary advantage of funds (at least theoretically)is theprofessional management of your money. Investors purchase funds because they donothave the time or the expertise to manage their own portfolio. A mutual fund is arelativelyinexpensive way for a small investor to get a full-time manager to make andmonitorinvestments. 2425. 2-Diversification - By owning shares in a mutual fund instead of owningindividualMutualOr bonds, your risk is spread out. The idea behind diversification is toinvest in a largenumber of assets so that a loss in any particular investment is minimizedby gains in others.In other words, the more Mutuals and bonds you own, the less any oneof them can hurt you(think about Enron). Large mutual funds typically own hundreds ofdifferent Mutuals inmany different industries. It wouldnt be possible for an investor tobuild this kind of aportfolio with a small amount of money.3-Economies of Scale -Because a mutual fund buys and sells large amounts ofsecurities at a time, its transactioncosts are lower than you as an individual would pay.4-Liquidity - Just like an individual
  14. 14. Mutual, a mutual fund allows you to request that yourshares be converted into cash.5-Simplicity- Buying a mutual fund is easy. DISADVANTAGES OF MUTUAL FUND1-Professional Management- Did you notice how we qualified the advantage ofprofessionalmanagement with the word "theoretically"? Many investors debate over 2526. whether or not the so-called professionals are any better than you or I at pickingMutuals.Management is by no means infallible, and, even if the fund loses money, themanager stilltakes his/her cut. .2-Costs- Mutual funds dont exist solely to make your lifeeasier--all funds are in it for aProfit. The mutual fund industry is masterful at buryingcosts under layers of jargon.Because funds have small holdings in so many differentcompanies, high returns from afew Investments often dont make much difference on theoverall return. Dilution is also theresult of a successful fund getting too big. When moneypours into funds that have hadstrong Success, the manager often has trouble finding agood investment for all the newmoney3-Taxes- When making decisions about yourmoney, fund managers dont consider yourpersonal tax situation. For example, when afund manager sells a security, a capital-gain taxis triggered, which affects how profitablethe individual is from the sale. It might have beenmore advantageous for the individual todefer the capital gains liability RISKS INVOLVED IN MUTUAL FUND 2627. In short, how stable is the company or entity to which you lend your money whenyouinvest? How certain are you that it will be able to pay the interest you are promised,orrepay your principal when the investment matures? Inflation riskChanging interestrates affect both equities and bonds in many ways. Investors arereminded that“predicting” which way rates will go is rarely successful. A diversifiedportfolio can helpin offsetting these changes. Effect of loss of key professional and inability to adoptAnindustries‟ key asset is often the personnel who run the business i.e. intellectualpropertiesof the key employees of the respective companies. Given the ever-changingcomplexionof few industries and the high obsolescence levels, availability of qualified,trained andmotivated personnel is very critical for the success of industries in few sectors.It is,therefore, necessary to attract key personnel and also to retain them to meet thechangingenvironment and challenges all investments involve some form of risk, whichshould beevaluated them potential Rewards when an investment is selected. Managing risk 2728. At times the prices or yields of all the securities in a particular market rise or fall duetobroad outside influences. When this happens, the Mutual prices of an out standing,highlyprofitable company and a fledgling corporation may be affected.This change inprice is due to “market risk”. Interest rate riskSometimes referred to as “loss ofpurchasing power”. Whenever inflation sprints forwardfaster than the earnings on yourinvestment, you run the risk that you will actually be able tobuy less, not more. Inflationrisk also occurs when prices rise faster than your returns. Credit riskThe sector offers.Failure or inability to attract/retain such qualified key personnel mayimpact the prospectsof the companies in the particular sector in which the fund invests. Exchange risksAnumber of companies generate revenues in foreign currencies and may haveinvestmentsor expenses also denominated in foreign currencies. Changes in exchangerates may,therefore, have a positive or negative impact on companies which in turnwould have aneffect on the investment of the fund. Investment risks 2829. The sectoral fund schemes, investments will be predominantly in equities ofselectcompanies in the particular sectors. Accordingly, the NAV of the schemes arelinked to theequity performance of such companies and may be more volatile than a more
  15. 15. diversifiedportfolio of equities. Changes in government policyChanges in Governmentpolicy especially in regard to the tax benefits may impact thebusiness prospects of thecompanies leading to an impact on the investments made bythe fund. 2930. VARIOUS MUTUAL FUND SCHEME Mutual Fund Schemes:-Wide variety ofMutual Fund Schemes exists to cater to the needs such as financial position,risk toleranceand return expectations etc. The table below gives an overview into theexisting types ofschemes in the Industry. By Structure# Open - Ended Schemes# Close - EndedSchemes# Interval Schemes By Investment Objective Growth Schemes IncomeSchemes Balanced Schemes Money Market Schemes 3031. Types of Mutual Fund 3132. Mutual Funds: Different Types of FundsNo matter what type of investor you are thereis bound to be a mutual fund that fits yourstyle. According to the last count there are over10,000 mutual funds in North America!That means there are more mutual funds thanMutuals. Its important to understand thateach mutual fund has different risks andrewards. In general, the higher the potential return,the higher the risk of loss. Althoughsome funds are less risky than others, all funds havesome level of risk--its never possibleto diversify away all risk. This is a fact for allinvestments.Each fund has a predeterminedinvestment objective that tailors the funds assets, regionsof investments, and investmentstrategies. At the fundamental level, there are threevarieties: of mutual funds1) Equityfunds (Mutual)2)Fixed-income funds (bonds)3) Money market fundsAll mutual funds arevariations of these three asset classes. For example, while equityFunds that invest in fast-growing companies are known as growth funds, equity funds that 3233. Invest only in companies of the same sector or region is known as specialty funds.Let‟s goover the many different flavors of funds. Well start with the safest and then Workthroughto the more risky. Money Market FundsThe money market consists of short-term debt instruments, mostly T-bills. This is a safeLace to park your money. You wontget great returns, but you wont have to worry aboutlosing your principal. A typical returnis twice the amount you would earn in a regularchecking/savings account and a little lessthan the average certificate of deposit (CD).Wevegot a whole tutorial on the moneymarket if youd like to learn more about it. Bond/Income FundsIncome funds are namedappropriately: their purpose is to provide current income on asteady basis. Whenreferring to mutual funds, the terms "fixed-income," "bond," and"income" aresynonymous. These terms denote funds that invest primarily in governmentand corporatedebt. While fund holdings may appreciate in value, the primary objective ofthese funds isto provide a steady cash flow to investors. As such, the audience for thesefunds consistsof conservative investors and retirees. 3334. Bond funds are likely to pay higher returns than certificates of deposit and moneymarketInvestments, but bond funds arent without risk. Because there are many differenttypes ofBonds, bond funds can vary dramatically depending on where they invest. Forexample, afund specializing in high-yield junk bonds is much more risky than a fund thatinvests ingovernment securities; also, nearly all bond funds are subject to interest raterisk, whichmeans that if rates go up the value of the fund goes down. BalancedFundsThe objective of these funds is to provide a "balanced" mixture of safety, income,andcapital appreciation. The strategy of balanced funds is to invest in a combination offixed-income and equities. A typical balanced fund might have a weighting of 60%equityand40% fixed-income. The weighting might also be restricted to a specified
  16. 16. maximum orminimum for each asset class.A similar type of fund is known as an assetallocation fund. Objectives are similar to thoseof a balanced fund, but these kinds offunds typically do not have to hold a specifiedpercentage of any asset class. The portfoliomanager is therefore given freedom to switchthe ratio of asset classes as the economymoves through the business cycle. Equity FundsFunds that invest in Mutual representthe largest category of mutual funds. Generally, theinvestment objective of this class offunds is long-term capital growth with some income. 3435. There are, however, many different types of equity funds because there are manydifferenttypes of equities. A great way to understand the universe of equity funds is to usea stylebox, an example of which is below.The idea is to classify funds based on both thesize of the companies invested in and theinvestment style of the manager. The term"value" refers to a style of investing that looksfor high quality companies that are out offavor with the market. These companies arecharacterized by low P/E ratios, price-to-bookratios, and high dividend yields, etc.The opposite of value is growth, which refers tocompanies that have had (and are expectedto continue to have) strong growth in earnings,sales, and cash flow, etc. A compromisebetween value and growth is "blend," whichsimply refers to companies that are neithervalue nor growth Mutuals and so are classifiedas being somewhere in the middle. For example, a mutual fund that invests in large-capcompanies who are in strong financial shape but have recently seen their share price fallwould be placed in the upper left quadrant of the style box (large and value). Theopposite of this would be a fund that invests in startup technology companies withexcellent growth prospects. Such a mutual would reside in the bottom right quadrantGlobal/International FundsAn international fund (or foreign fund) invests only outsideyour home country.Global funds invest anywhere around the world, including your homecountry.Its tough to classify these funds as either riskier or safer. On the one hand theytend to bemore volatile and have unique country and/or political risks. But, on the flipside, they can, 3536. as part of a well-balanced portfolio, actually reduce risk by increasingdiversification.Although the worlds economies are becoming more inter-related, it isLikely that anothereconomy somewhere is outperforming the economy of your homeCountry. Index FundsThe last but certainly not the least important are index funds.This type of mutual fundreplicates the performance of a broad market index such as thesensex and nifty. Aninvestor in an index fund figures that most managers cant beat themarket. An index fundmerely replicates the market return and benefits investors in theform of low fees. 3637. COSTS INVOLVED IN MUTUAL FUND• Mutual Funds: CostsCosts are thebiggest problem with mutual funds. These costs eat into your return, and theyare the mainreason why the majority of funds end up with sub-par performance. What‟seven moredisturbing is the way the fund industry hides costs through a layer of financialcomplexityand jargon. Some critics of the industry say that mutual fund Companies getaway withthe fees they charge only because the average investor does not understand whathe/she ispaying for. 3738. Fees can be broken down into two categories:1. Ongoing yearly fees to keep youinvested in the fund.2. Transaction fees paid when you buy or sell shares in a fund(loads)• The Expense RatioThe ongoing expenses of a mutual fund are represented by theexpense ratio. Thisis sometimes also referred to as the management expense ratio (MER).
  17. 17. The expense ratio iscomposed of the following:• The cost of hiring the fund manager(s) -Also known as the management fee,This cost is between 0.5% and 1.0% of assets onaverage. While it sounds small,This fee ensures that mutual fund managers remain in thecountry‟s top echelon ofEarners. Think about it for a Second: 1% of 250 million (a smallmutual fund) is2.5 million--fund managers are definitely not going hungry! It‟s true thatpayingManagers is a necessary fee, but don‟t think that a high fee assuressuperiorPerformance.• Administrative costs –These include necessities such as postage,record keeping, customer service, cappuccinomachines, etc. Some funds are excellent atminimizing these costs while others (the oneswith the cappuccino machines in the office)are not. On the whole, expense ratios range 3839. from as low as 0.2% (usually for index funds) to as high as 2.0%. The averageequitymutual fund charges around 1.3%-1.5%. You‟ll generally pay more for specialtyorinternational funds, which require more expertise from manager..• Buying and Selling3940. (You can buy some mutual funds no-load) by contacting the fund companiesdirectly.Other funds are sold through brokers, banks financial planners, or insuranceagents. If youbuy through a third party there is a good chance they‟ll hit you with a salescharge (load).That being said, more and more funds can be purchased through no-transaction feeprograms that offer funds of many companies. Sometimes referred to as a"fundsupermarket," this service lets you consolidate your holdings and record keeping,and it stillallows you to buy funds without sales charges from many different companies.•Popular examples are Schwab‟s OneSource, Vanguard‟s Fund Access, and Fidelity‟sFunds Network. Many large brokerages have similar offerings. Selling a fund is as easyas purchasing one. All mutual funds will redeem (buy back) your shares on any businessday. In the United States companies must send you the payment within seven days. 4041. THE VALUES OF YOUR FUND Net asset value (NAV), which is a funds assetsminus liabilities, is the value of a mutual fund. NAV per share is the value of one share inthe mutual fund, and it is the number that is quoted in newspapers. You can basically justthink of NAV per share as the price of a mutual fund. It fluctuates everyday as fundholdings and shares outstanding change. When you buy shares, you pay the current NAVper share plus any sales front-end load. When you sell your shares, the fund will pay youNAV less any back-end load .Moses gave to his follow eternities 10 commandments thatwere to be followed till: The world of investments too has several ground rules meant forinvestors who are novices in their own right and wish to enter the myriad world ofinvestments. These come in handy for there is every possibility of losing what one has ifdue care is not taken.1. Assess yourself: Self-assessment of one‟s needs; expectations andrisk profile is of prime importance failing which; one will make more mistakes in puttingmoney in right places than otherwise. One should identify the degree of risk bearingcapacity one has and also clearly state the expectations from the investments. Irrationalexpectations will only bring pain. 4142. 2. Try to understand where the money is going : It is important to identify the natureof investment and to know if one is compatible with the investment. One can losesubstantially if one picks the wrong kind of mutual fund. In order to avoid any confusionit is better to go through the literature such as offer document and fact sheets that mutualfund companies provide on their funds.3. One first has to decide what he wants themoney for and it is this investment goal that should be the guiding light for all
  18. 18. investments done. It is thus important to know the risks associated with the fund andalign it with the quantum of risk one is willing to take. One should take a look at theportfolio of the funds for the purpose. Excessive exposure to any specific sector shouldbe avoided, as it will only add to the risk of the entire portfolio .Mutual funds invest witha certain ideology such as the "Value Principle" or "Growth Philosophy". Both have theirshare of critics but both philosophies work for investors of different kinds. Identifying theproposed investment philosophy of the fund will give an insight into the kind of risks thatit shall be taking in future.4. A common investor is limited in the degree of risk that . It isthus of key importance that there is thought given to the process of investment and to thetime horizon of the intended investment. One should abstain from speculating which inother words would mean getting out of one fund and investing in another with theintention of making 4243. quick money. One would do well to remember that nobody can perfectly time themarket so staying invested is the best option unless there are compelling reasons to exit.5.This old age adage is of utmost importance. No matter what the risk profile of a person is,it is always advisable to diversify the risks associated. So putting one‟s money indifferent asset classes is generally the best option as it averages the risks in each category.Thus, even investors of equity should be judicious and invest some portion of theinvestment in debt. Diversification even in any particular asset class (such as equity,debt) is good. Not all fund managers have the same acumen of fund management andwith identification of the best man being a tough task; it is good to place money in thehands of several fund managers. This might reduce the maximum return possible, but willalso reduce the risks.6. Investing should be a habit and not an exercise undertaken atone‟s wishes, if one has to really benefit from them. As we said earlier, since it isextremely difficult to know when to enter or exit the market, it is important to beat themarket by being systematic. The basic philosophy of Rupee cost averaging would suggestthat if one invests regularly through the ups and downs .of the market, he would stand abetter chance of generating more returns than the market for the entire duration. The SIPs (Systematic Investment Plans) offered by all funds helps in being systematic. All thatone needs to do is to give post-dated cheques to the fund and thereafter one will not beharried later. The 4344. Automatic investment Plans offered by some funds goes a step further, as the amountcan be directly/electronically transferred from the account of the investment7. Do yourhomework: It is important for all investors to research the avenues available to themirrespective of the investor category they belong to. This is important because aninformed investor is in a better decision to make right decisions. Having identified therisks associated with the investment is important and so one should try to know allaspects associated with it. Asking the intermediaries is one of the ways to take care of theproblem. 8. Find the right funds Finding funds that do not charge many fees is ofimportance, as the fee charged ultimately goes from the pocket of the investor. This iseven more important for debt funds as the returns from these funds are not much. Fundsthat charge more will reduce the yield to the investor. Finding the right funds is importantand one should also use these funds for tax efficiency. Investors of equity should keep inmind that all dividends are currently tax-free in India and so their tax liabilities can bereduced if the dividend payout option is used. Investors of debt will be charged a tax ondividend distribution and so can easily avoid the payout options. 44
  19. 19. 45. 9. Keep track of your investmentsFinding the right fund is important but even moreimportant is to keep track of the way theyare performing in the market. If the market isbeginning to enter a bearish phase, theninvestors of equity too will benefit by switchingto debt funds as the losses can beminimized. One can always switch back to equity if theequity market starts to show somebuoyancy.10. Know when to sell your mutualfunds:Knowing when to exit a fund too is of utmost importance. One should bookprofitsimmediately when enough has been earned i.e. the initial expectation from the fundhasbeen met with. Other factors like non-performance, hike in fee charged and change inanybasic attribute of the fund etc. are some of the reasons for to exit. For more on it,read"When to say goodbye to your mutual fund.”Investments in mutual funds too are notrisk-free and so investments warrant some cautionand careful attention of the investor.Investing in mutual funds can be a dicey business forpeople who do not remember tofollow these rules diligently, as people are likely to commitmistakes by being ignorant oradventurous enough to take risks more than what they canabsorb. This is the reason whypeople would do well to remember these rules before theyset out to invest their hard-earned money.SOME OF THE EXISTING AMC (ASSETMANAGEMENTCOMPANY) 45 BOB Mutual Birla Mutual Fund Alliance Mutual Fund 46. HDFC Mutual FundDSP Merrill Lynch Mutual Fund BOI Mutual Fund Fund ING Mutual FundIndian Bank Mutual Fund IDBI Principal Mutual Fund Morgan Stanley MutualFund LIC Mutual Fund Kotak Mahindra Mutual Fund Prudential ICICI MutualPNB Mutual Fund Pioneer ITI Mutual Fund Fund¾Reliance Capital MutualFund¾SBI Standard Mutual Fund Tata TD Waterhouse Mutual Sundaram MutualFund Chartered Mutual Fund Taurus Mutual Fund Fun 4647. DEVELOPMENT OF MUTUAL FUND IN INDIAThe mutual fund industry in Indiastarted in 1963 with the formation of unit trust ofIndia at the initiative of government ofIndia and reserve bank of India. The historyOf mutual fundIn India can be divided intofour phases:FIRST PHASE : 1964 – 87SECOND PHASE: 1987-1993 (ENTRY OFPUBLIC SECTOR FUNDS)THIRD PHASE : 1993 – 2003 (ENTRY OF PRIVATESECTOR FUNDS)FOURTH PHASE: SINCE FEBURARY 2003 4748. The mutual fund industry in India started in 1963 with the formation of Unit Trust ofIndia,at the initiative of the Government of India and Reserve Bank of India. The historyofmutual funds in India can be broadly divided into four distinct phasesFirst Phase –1964-87 Unit Trust of India (UTI) was established on 1963 by an Act ofParliament. Itwas set up by the Reserve Bank of India and functioned under the Regulatoryandadministrative control of the Reserve Bank of India. In 1978 UTI was de-linked fromtheRBI and the Industrial Development Bank of India (IDBI) took over the regulatoryandadministrative control in place of RBI. The first scheme launched by UTI wasUnitScheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets undermanagement.Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked theentry ofnon- UTI, public sector mutual funds set up by public sector banks and LifeInsuranceCorporation of India (LIC) and General Insurance Corporation of India (GIC).SBI MutualFund was the first non- UTI Mutual Fund established in June 1987 followedby Canarabank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),Indian BankMutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund(Oct 92). LICestablished its mutual fund in June 1989 while GIC had set up its mutual
  20. 20. fund in December1990. At the end of 1993, the mutual fund industry had assets undermanagement of Rs.47,004 crores. Third Phase – 1993-2003 (Entry of Private SectorFunds) with the entry of privatesector funds in 1993, a new era started in the Indianmutual fund industry, giving the Indian 4849. investors a wider choice of fund families. Also, 1993 was the year in which the firstMutualFund Regulations came into being, under which all mutual funds, except UTIwere to beregistered and governed. The erstwhile Kothari Pioneer (now merged withFranklinTempleton) was the first private sector mutual fund registered in July 1993. The1993SEBI (Mutual Fund) Regulations were substituted by a more comprehensive andrevisedMutual Fund Regulations in 1996. The industry now functions under the SEBI(MutualFund) Regulations 1996. The number of mutual fund houses went on increasing,withmany foreign mutual funds setting up funds in India and also the industry haswitnessedseveral mergers and acquisitions. As at the end of January 2003, there were 33mutual fundswith total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44,541 crores ofassets under management was way ahead of other mutual funds.FourthPhase – since February 2003 In February 2003, following the repeal of the UnitTrust ofIndia Act 1963 UTI was bifurcated into two separate entities. One is theSpecifiedUndertaking of the Unit Trust of India with assets under management of Rs.29,835 croresas at the end of January 2003, representing broadly, the assets of US 64scheme, assuredreturn and certain other schemes. The Specified Undertaking of UnitTrust of India,functioning under an administrator and under the rules framed byGovernment of India anddoes not come under the purview of the Mutual FundRegulations. The second is the UTIMutual Fund, sponsored by SBI, PNB, BOB and LIC.It is registered with SEBI andfunctions under the Mutual Fund Regulations. With thebifurcation of the erstwhile UTIwhich had in March 2000 more than Rs.76, 000 crores ofassets under management and 4950. with the setting up of a UTI Mutual Fund, conforming to the SEBI MutualFundRegulations, and with recent mergers taking place among different private sectorfunds, themutual fund industry has entered its current phase of consolidation and growth.GRAPHICAL REPRESENTATION 5051. MUTUAL FUND - ORGANIZATIONSThere are many entities involved and thediagram below illustrates the 5152. Organizational set up of a mutual fund: REGULATORY BODIESFinancial System isbasically responsible for the major up and downs in the 5253. Economy. So, there are some regulatory bodies on it which ensures effectivenessInthe management of Fund of the investors and transparency in the transactions. FLOWCHART 5354. FREQUENTLY USED TERMS IN MUTUAL FUND 5455. NET ASSET VALUENet Asset Value is the market value of the assets of thescheme minus its liabilities. The perunit NAV is the net asset value of the scheme dividedby the number of units outstandingon the Valuation Date. SALE PRICEThe price youpay when you invest in a scheme. Also called Offer Price. It may include asales load.REPURCHASE PRICE 5556. The price at which units under open-ended schemes are repurchased by the MutualFund.Such prices are NAV related. REDEMPTION PRICEThe price at which close-ended schemes redeem their units on maturity. Such prices areNAV related. SALES
  21. 21. LOAD A charge collected by a scheme when it sells the units. Also called, „Front-end‟load.Schemes that do not charge a load are called „No Load‟ schemes. REPURCHASEOR BACK END LOADA charge collected by a scheme when it buys back the unitsfrom the Unit holders. STRUCTURE OF INDIAN MUTUAL FUND INDIANMUTUAL FUND INDUSTRY 5657. The rising Indian mutual funds industry probably never had it better, as far as theentry ofindividual or retail investors is concerned. The industry‟s total AUM inDecember 2006stood at a hefty Rs 3, 23,597 crore, with a total of2.79 crore depositorfolios, of which 2.31crore depositor folios had invested inequity schemes. The share ofdirect investors, on theother hand, has been dropping, stating that more retail investorssee mutual funds as apreferred route for investing in the markets.Existing and new marketplayers as well as Exchange Traded Funds are likely to hit themarket in the comingmonths with a flurry of new Mutual Funds schemes. An action packedfirst quarter of2007 was forecasted to witness at Least 20 new schemes which are waitingon thesidelines to be launched. Market share *(%) of mutual funds companies 5758. PERFORMANCE SNAPSHOT!!!The year 2006 scored high in terms of both returnsand volatility. The rising Indian mutualfunds industry saw its best, as far as the entry ofindividual or retail investors is concerned.In 2006, out of the 159 diversified equity funds(includes diversified equity, midcap, andequity tax saving schemes): 20 funds (13 %)out-performed the Sensex 50 funds (37%) out performed theNifty 58 -59.  The best returns generated were up to 58.3% (Tata Infrastructure Fund) EquityDiversified funds churned out an average 33.2% return, which Compriseof 72 funds inthis category comprising of total 135 funds Infrastructure funds stole the limelight thisyear with the top three Performersbeing Infrastructure Fund. TOTAL ASSETMANAGED BY VARIOUS FUND HOUSES: 5960. The amount of assets managed by AMCs varies every year. Following is the tablethatdepicts the total amount of asset managed by the well known AMCs in India. It alsoshowsthe ranking of AMCs for the year 2007, based on the above mentionedparameter.FUND HOUSE JAN 2009 JAN 2008 DEC 2008Reliance MF 39,020 16,70236,928UTI MF 37,535 25,617 38,109Prudential ICICI 34,746 22,635 33,305HDFC MF31,425 18,591 29,635Franklin Templeton 23,908 18,153 23,403Birla Sun Life 21,19013,797 17,054SBI MF 17,552 10,839 15,086DSP Merrill Lynch 13,440 8,97613,517TATA MF 13,222 8,649 12,177Standard Chartered 12,746 9,480 12,629KotakMahindra 12,674 7,397 12,062LIC MF 12,237 6,386 11,599HSBC 12,140 6,28810,450Principal 10,333 6,789 10,522Figures in Rs crores 6061. 1) Birla Sun life was the best performer in January 2007 and Rs4, 136 crore to itsassets2) Reliance MF has become the top mutual fund house in the country by adding avery Impressive Rs2, 092 crore to assets under management3) Previous Top Fund HouseUTI MF declined by Rs574 crore and lost its top position to Reliance4) SBI MF was ableto acquire 7th position by an addition of Rs2, 466 crore5) Tata MF gained Rs1, 045 croreand able to secure its position in top 10. 6162. BEST EQUITY MUTUAL FUNDS: (As on 27th April, 2009) Following is theranking of the best mutual funds and their NAVs as on 27thApril, 2009. The rankings arebased on 1 year returns of the Equity Mutual Funds available in the market.S.NO.SCHEME NAME 1 Yr. return Present (%) NAV1 DSPML Technology.com fund-growth47.50 26.892 UTI Banking sector fund-growth 40.05 21.473 Magnum IT 36.06 28.494
  22. 22. Birla Sun life New Millennium-Growth 35.60 21.335 Banking Bees 32.69 590.316Prudential ICICI Technology –Growth 32.59 15.997 Prudential ICICI Services IndustriesFund – 32.07 16.02 Growth8 UTI Software – Growth 30.09 27.719 Reliance Media &Entertainment – Growth 28.61 26.0710 Birla Sun life Frontline Equity – Growth 27.9052.8111 Reliance Banking – Growth 27.81 39.2012 Reliance NRI Equity Fund – Growth26.54 24.7013 Franklin InfoTech – Growth 25.95 52.6214 DBS Chola Opportunity 25.8528.6315 Reliance Diversified Power Sector – Growth 25.16 37.71 6263. MUTUAL FUND AT A GLANCE• A mutual fund is professionally managed firm ofcollective instrument that pools money from many investors and invest it in Mutual,bonds etc.• A mutual fund is a trust registered with securities and exchange board ofIndia. Value of the fundThe value of each unit of mutual fund, known as net assetvalue (NAV) Formula: Net asset scheme / No. of unit outstanding METHODS OFMUTUAL FUND • One time payment • Systematic investment plan 6364. SYSTEMATIC INVESTMENT PLAN:• Under this a fixed sum is invested eachmonth on a fixed date of a month.• Payment is through post dated cheque or direct debitfacilities• The investor gets the fewer units when the NAV is high and gets the more unitswhen the NAV is low. 6465. WORKING OF MUTUAL FUND 6566. NNNNN 6667. Objective of the study 6768. • To study the mutual fund industry in detail.• To study the investment procedure indetail.• To find out the market risk of sip plan.• To aware the client about mutual fundinvestment.• To suggest better investment option according to market behavior to theclient.• Expansion of mutual fund investment.• To remove the past image of mutual fundfrom the mind of investors.• To show the beneficiary aspect of mutual fund.• To give theupdated information to the investors about the high return and less risk fund. 6869. Scope of the study 6970. Scope of Mutual Funds has grown enormously over the years. In the first age ofmutualfunds, when the investment management companies started to offer mutual funds,choiceswere few. Even though people invested their money in mutual funds as thesefunds offeredthem diversified investment option for the first time. By investing in thesefunds they wereable to diversify their investment in common Mutuals, preferred Mutuals,bonds and otherfinancial securities. At the same time they also enjoyed the advantage ofliquidity. WithMutual Funds, they got the scope of easy access to their invested funds onrequirement.But, in today‟s world, Scope of Mutual Funds has become so wide, thatpeople sometimestake long time to decide the mutual fund type, they are going to investin. SeveralInvestment Management Companies have emerged over the years, who offervarious typesof Mutual Funds, Each type carrying unique characteristics and differentbeneficial features. 7071. ResearchMethodology 7172. 1. Research Design:A research design is a pattern or an outline of a research project‟sworking. It is a statementof only the essential element of a study, those that provide thebasic guidelines for thedetails of the project. It comprises a series of prior decision thattaken together providemaster plans for executing a research projects.A research designserves as a bridge between what has been established i.e., the researchobjectives and whatis to be done, in conduct of the study to relish those objectives. If therewere no research
  23. 23. design, the research would have only foggy notions as about what is to bedone. I haveused of „Exploratory Type‟. The research is of both qualitative as well as quantitativetype.2. Unit of Analysis: Investors Characteristics of interest: Client‟s knowledgeabout Mutual Fund. 72 73. Client‟s knowledge about Reliance. Client‟s interest in getting knowledge ofMutual Fund. Client‟s willingness to deal in Mutual Fund with Reliance. Client‟spreference in selecting tax saving instrument of investment. Client‟s preference inselecting dealer.3. Sources of Data: Primary Source:The primary data is collectedusing sampling method and by survey using questionnaire. SecondarySource:Secondary data includes information regarding present market scenario,Informationregarding Mutual Funds and competitors are collected by internet, MagazinesandNewspaper and books.4. Sample Planning: Sample Size: 50 units. Sample Extent:Kanpur city.5. Sample design: 7374. A sample design is a definite plan for obtaining a sample from a given population. Itrefersto the technique or method the researcher would adopt in selecting items for thesample. I have used convenience sampling method6. Data collection method: I haveused survey method to collect the data. Questionnaire plan: I have used structured forgathering the required data through contacting respondent personally7. Type ofinformation: I have collected facts, awareness, attitude, future action plan and reasonusing questionnaire.8. Type of questions: Close ended questions for dichotomous.Multiple choice type9. Data Analysis and Interpretation: Data analysis is based on thedata collected by way of questionnaires. The data is tabulated and frequencydistribution chart is prepared. 7475. Use of the Project• Through this C can take the way that in which direction theyshould go for promoting mutual fund.• Through this project (Awareness of Clienttowards Mutual Fund) we can know about the securities market. 7576. • We can know that how many investors are aware about the mutual fund.• We canknow that in which type of securities, people want to invest and why.• We can know thatif investors don‟t want to invest in mutual fund so what the reason behind that is.• Wecan aware the investors about mutual funds beneficiary schemes.• We can know aboutthe market potential.• By this project we can know that, which fund is growing up andwhich fund is going down.• By this we can know about the co.‟s that provide the mutualfund investment facilities.• We can know about the Reliance Mutual fund co. and it‟sworking.• We can know about the mutual fund AMC (Asset Management Company) 7677. Importance of the study• Mutual funds offer inexperienced and experiencedinvestors---who may not have a lot of money to invest---the ability to invest in more thanjust one investment tool without having to monitor or manage that investment personallyand at a reduced risk. 7778. • Every person who have no more knowledge about investment and he want to investanywhere so he can invest easily in mutual fund.• One of the mode to invest mutual fundthat‟s SIP (Systematic Investment Plan) is less risky to invest and every investor want toinvest in less price.• Mutual fund is totally depend upon the NAV value (Net AssetsValue)• By purchasing a combination of Mutuals, bonds and other securities--rather thanjust one single Mutual purchase--their risk is spread out over many fields and companies,instead of just one.• Purchasing into a mutual fund automatically provides the investor
  24. 24. with an experienced investment manager to oversee their investment. This is because themutual fund is composed of different investment securities and requires a competentprofessional to oversee it from the onset.• It is one of the easiest ways of investing yoursaving money 7879. Research analysisand interpretation 7980. MUTUAL FUND ADVISORS SUGGESTION ABOUTINVESTMENTINTERPRETATION:Mutual fund advisor will suggest the investors toinvest in mutual fund investment morebecause it is les risky than any investment. Inmutual fund the investor can invest in sip(systematic investment plan) which is dependupon NAV (net asset value) which is lessrisky and whenever investors want to close thatscheme they can. And it is profitablebecause its profit is based on average basis. 8081. REASONS FOR CHOOSING ABOVEINTERPRETATION:After analysis we havegot that lots of investors want to invest just for security purpose.because most of theinvestors want to secure or their money, so for holding the money theywant to invest insomewhere so that they can safe their money for future .and a persons whohave noknowledge about security market, they can also be invest in mutual funds. 8182. INVESTORS WHO KNOW ABOUT THE MUTUAL FUND SERVICESPROVIDED BY RELIANCEINTERPRETATION:After analysis we have known thatmost of the investors don‟t know about the mutual fundservices which has been providedby Reliance just because of publicity, Reliance doesn‟tshow that it provides mutual fundservices along with other services such as: pan cardservices, d.p. services, share tradingservices, IPOs services etc. that‟s why most of thepeoples are unknown about theReliance mutual fund services. 8283. INVESTORS INTERESTED TO INVEST IN MUTUALFUNDINTERPRETATION:After analysis we have seen that most of the investors arenot interested to invest in mutualfund just because of: Past image of mutual fund.Because of unawareness. They are unaware about the mutual fund benefits. 83 They don‟t want to take risk 84. A INVESTORS WANTS TO INVEST ON WHICHBASISINTERPRETATION: • After analysis we have got the result that most of theinvestors want to invest in any securities on the basis of rate of return, when they investin any believable security so they expected or anticipated that they will got the expectedrate of return , 8485. • Some people invest on the basis of safety purpose , some small investors mostlyinvest their money for saving and for getting into near future • Businessman mostlyinvests their money on securities just for saving the tax because invested money always istax free A PERSON WANTS TO TAKE INFORMATION ABOUT MUTUALFUNDINTERPRETATION:By above analysis we can know that most of theclients,Persons or investors want to know about the mutual fund benefits, schemes, and8586. Each and every information, because now a days every persons or investors wanttoGet information about everything so that on time he can utilize optimum utilizationOfresources in a right way and could get profit. A PERSON WHO WANT TO DO THEJOB IN RELIANCE MUTUAL FUND 8687. INTERPRETATION: • After analysis we got that investors don‟t want to do the jobin Reliance because: • Because lots of persons have no time for joining that and there islack of management in each dept. of Reliance that is also be reason that persons don‟t
  25. 25. want to do job in Reliance • Some persons don‟t want just because of lack of knowledgeabout investment. • Some persons don‟t want to do the job in Reliance because they don‟twant to expand their business. • Some persons gave no answers on such issues. 8788. A INVESTORS WHO WANT TO ATTEND THE SEMINAR PROVIDED BYRELIANCEINTERPRETATION: 8889. • By above evaluation we can see that some investors are interested to join theseminar on mutual fund which has been organized by Reliance because they actuallywant to know the actual situation of mutual fund that : benefits ,why this investmentexist, why they Most of the persons don‟t want to attend should invest over there.They They have no time for such type of activities. seminar because They think thatthese all are don‟t trust on mutual fund investment. rubbish thing. ON WHICHCOMPANIES THE CLIENT BELIEVES MORE 8990. INTERPRETATION: 9091. We all know that most of the investors or persons are interested to invest in public co.orgovernment co. in which there is less chance to drop out the invested money while ontheother hand less of the persons are not interested to invest in private sector becausethere ismore risk than public sectors.Same as we can see in the above chart that most ofthe investors want to invest in relianceco. because investors has made the mind set thatwe will get always the profit in investingover there while only small investors who investvery small amount in security invest inprivate co. such as: hdfc , icici. Other. WHY THECLIENTS BELIEVE ONLY ABOVE CHOOSING FUND 9192. INTERPRETATION: Most of the investors or clients want to invest in public co.because most of the clients think that/; It is risk free means to say there is less risk toinvest in that type of funds, that is a trustworthy co. Some investors invest just becauseof good return, peoples perception towards that co. is that it will never incurred loss and itwill not cheat the investors. Reliance is one of the most powerful and reputed co. evenwe can say MNC co. so just because of good positioned in the market investors want toinvest over there. 9293. CLIENTS WANT TO GET ADVISORY SERVICES FROMRELIANCEINTERPRETATION:Investors who have already invested in mutual fundthey all want advisory services fromReliance, in advisory services; we can know NAV(net assets value) of each fund on dailybasis.So investors want to get those services sothat they can take right decision on right time, ifhe sees that he is getting loss in investingfund so by this services he can switch from lossfund to profitable fund. So all theinvestors want to get that type of services from Reliance. 9394. CLIENTS ATTITUDE TOWARDS DSP BLACK ROCK FUND WHICH PROVIDE100% RETURN NOW A DAYSINTERPRETATION:We have seen that most of theinvestors don‟t want to invest in dsp black rock fund, whichis international co. , theydon‟t want to invest because they know that now a days the NAVof this fund is very lowapprox. (14 -15 rs.) so on this the 100% return is not so hectic forthe org. and market istotally based upon uncertainty and always be fluctuating so he thinksthat may bedspblack rock will not provide same return in future so the investors may getlost, so theydon‟t want to invest in this. Only those investors would like to invest in thisfund whoinvests for short term. 9495. INVESTORS WOULD LIKE TO INVEST ININTERPRETATION:We can see thatmost if the investors want to invest in debt funds because there is a solidreason behind
  26. 26. this is that the debt funds provide the fixed rate of interest to the investors,there is no riskin that type of funds for the investors.While only big investors want to invest in equitymarket because equity fund provide thedividend according to performance of the org. ifthere will be profit in org so investors willget the dividend otherwise they will have toface lossThat‟s why investors want to invest in debt funds rather than equity market. 9596. WHICH TYPE OF INSTRUMENT CURRENTLY INVESTED Now a day‟s mostof the investors want to invest in ININTERPRETATION: others funds such as: • FD‟s •INSURANCE • Etc. 96 After that the investors 97. mostly focus on to invest in debt market just for reducingthe risk. After that they want to invest in equity market for getting more Then investorswant to invest in commodity market just for profit. saving money in near future.Findings 9798. 1) After getting in depth research study of Reliance, I came to know that Reliance isnot much popular as other brands operating in Kanpur city. Bajaj Allianz, HDFC, ICICIare having much higher tapped market in respect to mutual funds.2) Reliance as aninvestment option in Mutual Fund does not possess much proficiency and potentialcustomers in Kanpur city. Though the financial advisors advise their clients to go forMutual Fund as an investment option. About 42% of advisors advise their clients toinvest in Mutual Funds, followed by investing in Insurance sector.3) The advisors afterhaving a deep thought says that it is the Returns that make them convince their clients togo for investment in mutual funds. 36% of advisors said that it is the Returns which makea person to invest in Mutual Fund. Followed by Risk which is quite lesser in otherinvestment options.4) A huge lot of advisors showed a positive response in dealing of forMutual Fund. About 60% of them said that they are interested in dealing for MutualFunds, because that results in higher brokerage.5) As far as Reliance is concerned about91% of the advisors said that they are not aware of the services provided by Reliance,including Mutual Fund. 9899. 6) When asked, 53% of advisors said that they are not interested to work withReliance Securities, to the contrary with they don‟t have any such expansion plans andthey have little knowledge about Reliance.7) In Kanpur city advisors don‟t have anappropriate knowledge about Reliance as an Investment hub. Swot Analysis 99100. A type of fundamental analysis of the health of a company by examining itsstrengths(S),weakness (W), business opportunity (O), and any threat (T) or dangers itmight be exposedto. # I. STRENGTHS • Brand strategy: as opposed to some of itscompetitors (e.g. HSBC), Reliance ADAG operates a multi-brand strategy. The companyoperates under numerous well-known brand names, which allows the company to appealto many different segments of the market. • Distribution channel strategy: Reliance iscontinuously improving the distribution of its products. Its online and Internet-basedaccess offers a combination of excellent growth prospects and its retail direct businessalso saw growth of 27% in 2002 and 15% in 2003. 100101. • Various sources of income: Reliance has many sources of income throughout thegroup, and this diversity within the group makes the company more flexible and resistantto economic and environmental changes.• Large pool of installed capacities.•Experienced managers for large number of Generics.• Large pool of skilled andknowledgeable manpower.• An increasing liberalization of government policies.# II.WEAKNESS• Emerging markets: since there is more investment demand in the United
  27. 27. States, Japan and the rest of Asia, Reliance should concentrate on these markets,especially in view of low global interest rates.• Mutual funds are like many otherinvestments without a guaranteed return: there is always the possibility that the value ofyour mutual fund will depreciate. Unlike fixed-income products, such as bonds andTreasury bills, mutual funds experience price fluctuations along with the stocks that makeup the fund. When deciding on a particular fund to buy, you need to research the risksinvolved – just because a 101102. professional manager is looking after the fund, that doesn‟t mean the performancewill be stellar.• Fees: In mutual funds, the fees are classified into two categories:shareholder fees and annual operating fees. The shareholder fees, in the forms of loadsand redemption fees are paid directly by shareholders purchasing or selling the funds.The annual fund operating fees are charged as an annual percentage – usually rangingfrom 1-3%. These fees are assessed to mutual fund investors regardless of theperformance of the fund. As you can imagine, in years when the fund doesn‟t makemoney, these fees only magnify losses.III. OPPORTUNITIES• Potential markets: TheIndian rural market has great potential. All the major market leaders consider thesegments and real markets for their products. A senior official in a one of the leadingcompany says foray into rural India already started and there has been realization that therural market is both price and quantity conscious. 102103. • Entry of MNCs: Due to multinationals are entering into market job opportunitiesare increasing day by day. Also India Mutual Fund majors are tie up with other financialinstitutions.•# IV. THREATS• Hedge funds: sometimes referred to as as hot money, arealso causing a threat for mutual funds have gained worldwide notoriety for bringing themarkets down. Be it a crash in the currency, A stock or A bond market, A usually a hedgefund prominently figures somewhere in the picture. 103104. Recommendations• There is high potential market. For mutual fund investorsKanpur city but this market need to bed explored as investors are still hesitated to investtheir money in mutual fund. 104105. • In Kanpur city, investor has inadequate knowledge of mutual fund, so propermarketing of various scheme is required, co. should arrange more and more seminarabout mutual fund.• Co. should also provide the knowledge of growth rate and expectedgrowth rate of mutual fund in India.• Reliance must be concentrate on the management ofthe co. so that every work can be done in a proper way.• Reliance must be advertising itstie up co. fund along with their features that the investors can invest in that type of fundin Reliance.• Reliance must be provided the advice to investors about mutual fundgrowing fund. 105106. Conclusion 106107. The awareness level of investors is low who are interested in dealing in mutualfund:• Most of investors are totally unaware about this investment.• Very less peopleknows about the service of Reliance.• Past image of mutual fund is not good.• Reliancecan promote the investors by advertising, hording, and by interviews to invest in thisfund.• Most of the investors want to invest in public co.‟s fund just because of safetypurpose.• Most of the investors want to safer side in investment.• Most of the investorswant to invest in debt funds because those are the risk free funds; it gives the interest oninvestment.• Most of the investors don‟t know about the mutual funds so they want
  28. 28. advisory services from reliance which could provide them whole information about themarket situation of mutual fund. 107108. Annexure 108109. We assure you that all the information that will be collected from youwill remainfully confidential and use only for study purpose.NAME:___________________________________DESIGNATION/ADDRESS:____________________________________________EMAIL ID:______________________ PHONENO.:___________________ 1) As a financialadvisor which investment options you will suggest your customers: a) Shares ( ) b)Insurance ( ) c) Mutual fund ( ) d) Fixed deposit ( ) 109110. 2) Please indicate reason for choosing above : a) Return ( ) b) Risk ( ) c) Safety ( ) d)Tax benefit ( ) e) Others ( )3) Do you know about the mutual fund services provided bythe Reliance : a) Yes ( ) b) No ( )4) Are you interested to invest in mutual fund : a) Yes () b) No ( )5) Do you invest your money on which basis : a) Return ( ) b) Safety ( ) 110111. c) Tax saving ( ) d) Others ( )6) Do you want to collect information about mutualfund investment: a) Yes ( ) b) No ( )7) Will you like to work in Reliance Mutual FundLtd. , which deals with mutual fund : a) Yes ( ) b) No ( )8) In future will you attend theseminar arranged by Reliance to guide the investors about mutual fund : a) Yes ( ) b) No ()9) In which co. you believe more : 111112. a) Hdfc b) Icici c) Reliance d) Dsp black rock e) Any other fund_________________________10) Why you believe only such kind of fund : a) Return ( )b) Good market position ( ) c) Risk free ( ) d) Any other reason ( )11) Do you want theadvisory services of Reliance : a) Yes ( ) b) No ( ) 112113. 12) Now a days DSP black rock fund provides the 100 % return so do you want toinvest in this fund : a) Yes ( ) b) No ( ) c) If yes/no why ______________________13) Ifyou have Rs. 100 , in which of these assets classes would you like to invest : a) Equity ( )b) Debt ( ) c) Commodities ( ) d) Derivatives ( )14) Which type of instrument arecurrently invested in : a) Mutual fund (equities) ( ) b) Debt funds ( ) c) Currency &Commodities ( ) d) Others_____________________ 113114. Bibliography WEBSITE:• http://www.moneycontrol.com• http://www.amfi.com•http://www.Reliance .com//v2/ 114115. • www.amfiindia.com MAGAZINES:• S.Gopichand, the finapolis , RelianceMutual Fund Ltd..,volume 4 , 2010• PunithavathyPandian , Security Analysis AndPortfolio Management , Vikas Publishing House , 2001 Thank you 115Connect on LinkedInFollow us on TwitterFind us on FacebookFind us on Google+Learn About UsAboutCareersOur Blog
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