Analysis of Mutual Fund Schemes of Reliance Money By Mohammed Sarfaraz Siddique

A PROJECT REPORT ON“ANALYSIS OF MUTUAL FUND SCHEMES OFRELIANCE MONEY.” FOR RELIANCE MONEY Submitted to University of Pune In the partial fulfillment of MASTERS IN BUSINESS ADMINISTRATION Submitted ByMOHAMMED SARFRAZ MOHAMMED SIDDIQUE ALLANA INSTITUTE OF MANAGEMENT SCIENCES. (2007-2009)ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 1

DECLARATIONI, the undersigned hereby declare that project report entitled “ANALYSIS OF MUTUALFUND SCHEMES OF RELIANCE MONEY” has been submitted under the guidance ofProf. Pradnya P.M. This is the original work done by me.Date:Place: MOHAMMED SARFRAZALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 2

CERTIFICATEThis is to certify that the project report on “Analysis of mutual fund schemes of RelianceMoney“ completed by Mr. Mohammed Sarfraz student of the MBA course of theUniversity Of Pune, conducted by our Institute. The report is submitted in partialfulfillment of the MBA course curriculum as per the rules of the University of Pune.INTERNAL GUIDE DIRECTORMrs.PRADNYA P.M. Dr. K.K. SINGHALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 3

ACKNOWLEDGEMENTA successful project work is a result of the organized and well coordinated teamwork. Soat the completion of the project .I take this opportunity to thank Mr. Abdullah Centre Manager of Reliance Money, forhis valuable advice and direction which he provided to me during the course of myproject. I am grateful to Dr. K.K.Singh and to all the members & the faculty of AIMS,PUNE for their constant support and inspiration throughout the lifespan of the project.I express my deep sense of gratitude and sincere thanks to my project guideProf. Pradnya for her constant guidance, co operation and advice which helped me incompleting the project successfully.Last but not the least, I would like to thank all my family members and friends for theirconstant co operation and inspiration and direct or indirect help without which thisproject could not be completed. MOHAMMED SARFRAZALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 4

CONTENTSChapter INDEX Page No. No. Executive summary 07 1. Introduction to the study 09 2. Objective of the study 13 3. Scope of the study 15 4. Company Profile 17 5. 6. Theoretical Background 23 7. Mutual Fund Schemes Of Reliance Money. 34 8. Limitation of the study 47 9. Findings 49 10. Suggestions 51 11. Research Methodology 53 10. Conclusion 55 11. Bibliography 57ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 5

EXECUTIVE SUMMARYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 6

I had undertaken a project titled “Analysis of Mutual Fund Schemes For RelianceMoney”This project work consists of the analytical and different schemes of mutual funds whichReliance Money which provides to give the concept of what is the difference in theirschemes.The methodology that was adopted for framing the project was primary and secondarydata. This project is restricted to Pune area only.In my project, I have shown the different products and utility of it to the customer. Thisproject highlights on the peculiarities of the product since they are traded in the market.The project was studied with the help of brochure, magazine and net.Even a dialogue was carried with the top executive so that it can help me to shape myproject and get the exact idea where the position of product lies and its status.Customers are the king. They were interviewed and their opinion was taken intoconsideration so that I can correlate my information with the theory part.Since customers were rigid they didn’t reveal the exact information about the product.Even keeping in mind the duration of the project there were certain limitations for it. Aspeople were not ready to spare some time and discuss the product or answer to the queryraised by me.So, I have to drawn some of the conclusion on the basis of the brochures and material ofthe company being provided.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 7

INTRODUCTION TO THE STUDYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 8

INTRODUCTION TO MUTUAL FUNDS:A mutual fund is an investment vehicle where a person or group of persons, called mutualfund managers, choose a group of stocks and sell them in one package. Mutual Funds aregenerally lower risk investment for a beginner or intermediate investor because;  The managers are experts.  Having a large number and variety of stocks is less risky than owning one stock  If the prices per share of some stocks go down, others can go up, possibly keeping the price (NET ASSET VALUE), of the mutualfund stable or going up.Mutual funds are also recommended for those who do not have the time, energy or desireto research their own stocks.Every mutual fund and fund family comes with a prospectus read the prospectus beforeinvesting. The prospectus not only helps you to understand what you are investing in, butit helps you to understand mutual funds and stocks in general.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 9

Development of the Global Mutual Funds IndustryStructural changes in the global economic environment have, over the year, led tothe emerged of a strong market economy and facilitated the growth of the mutualfund industry, particularly since the 1980s’. A market economy depends more ongrowth led by the stock market than by bank finance. Since the mutual fundindustry is a strong pillar of the stock market system, it got a boost with theemergence of a strong market economy. Mutual funds found increasing acceptancealso because they have the capacity to absorb the instability and uncertainties thatcharacterize the stock market system. The rise in inflation, reduction in real interestand growing complexities in the market provide tremendous opportunities to mutualfunds. For these reasons, mutual fund industry began to thrive well particularlyduring the 1990s’ in not only the developed countries, but the newly industrializedand developing countries as well.The immediate boos to mutual fund, however, was provided by the prolongedeconomic boom in the US, which fuelled dynamic growth in the stock market, andconsequently in the mutual fund industry. In India too, the growth of the stockmarket in the early 1990s, gave rise to unprecedented growth in the mutual fundindustry.Growth was unprecedented in the 1990s, with the total increasing fromUS$4156451 million in 1993 to US$7651618 million in 1998. While the assets ofthe U.S. and non-U.S. mutual funds were 49.8% and 51.2%, respectively, in 1993they amounted to 63.9% and 36.1% respectively. During the same period, the assetsof open ended mutual funds worldwide grew by 17% p.a. The growth of asset ofnon US mutual funds, however was much lower.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 10

In terms of the open ended mutual fund investment companies worldwide, with anunprecedented rise from 24474 in 1993 to 35424 in 1996. However the numberdecline marginally to 31570 in 1998.The rising trend continued in the US though, with the number increasing from4537 in 1993 to 6254 in 1996 and to 7248 in 1998. commensurately, the shareof US increased from 18.5% to 77%.The top five countries in terms of the open ended mutual funds in 1998 US,France, Japan, Spain, and UK.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 11

OBJECTIVE OF THE STUDYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 12

Objectives:- 1. To study the various offers of the company, services ranging from equities, commodities, portfolio management etc. 2. The objective of the study was to collect information on the various securities revolving in the market & thus providing customer service to clients to help them invest capital in profitable plans. 3. To know about returns of the fund which one is beneficial. 4. To know their portfolio management.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 13

SCOPE OF THE STUDYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 14

Scope of the study:- The study covers various aspects of mutual fund like basic concept, types,future of mutual fund in India & the schemes etc. But it does not cover these aspects indetail relating with the legal aspects and the provisions made in different acts. The time horizon selected for the study is from April 2007 to March 2008.All the schemes have been analyzed with the consideration of this time frame.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 15

COMPANY PROFILEALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 16

COMPANY PROFILE:Reliance Capital Ltd is a part of the Reliance - Anil Dhirubhai Ambani Group, and isranked among the 25 most valuable private companies in India.Reliance Capital is one of Indias leading and fastest growing private sector financialservices companies, and ranks among the top 3 private sector financial services andbanking groups, in terms of net worth.Reliance Capital has interests in asset management and mutual funds, life and generalinsurance, private equity and proprietary investments, stock broking, depository services,distribution of financial products, consumer finance and other activities in financialservices.The Reliance Anil Dhirubhai Ambani Group is one of Indias top 2 business houses, andhas a market capitalization of over Rs.2,90,000 crore (US$ 75 billion), net worth inexcess of Rs.55,000 crore (US$ 14 billion), cash flows of Rs. 11,000 crore (US$ 2.8billion) and net profit of Rs. 7,700 crore (US$ 1.9 billion).Reliance Capital Ltd. is a Non-Banking Financial Company (NBFC) registered with theReserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. RCLwas incorporated as a public limited company in 1986 and is now listed on the BombayStock Exchange and the National Stock Exchange (India). With a net worth of over Rs3,300 crore and over 165,000 shareholders, Reliance Capital has established its presenceas a leading player in the financial services sector in the country. On conversion ofoutstanding equity instruments, the net worth of the company will increase to about Rs4,100 crore.Reliance Capital sees immense potential in the rapidly growing financial services sectorin India and aims to become a dominant player in this industry and offer fully integratedfinancial services. It is headed by Anil Ambani.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 17

Reliance Capital is one of India’s leading and fastest growing private sectorfinancial services companies, and ranks among the top 3 private sector financial servicesand banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, life andgeneral insurance, private equity and proprietary investments, stock broking and otheractivities in financial services.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 18

I have done my project in Reliance Money and thestudy of mutual funds of Reliance products or schemes.About Reliance Money:Reliance Money is a group company of Reliance Capital; one of Indias leading andfastest growing private sector financial services companies, ranking among the top 3private sector financial services and banking companies, in terms of net worth. RelianceCapital is a part of the Reliance Anil Dhirubhai Ambani Group.Reliance Money which commenced commercial operations in April 2007 has over300,000 customers and 4,300 outlets in more than 3,500 locations across India.Reliance Money is a comprehensive electronic transaction platform offering a wide rangeof asset classes. Its Endeavour is to change the way India transacts in financial marketsand avails financial services. Reliance Money is a single window, enabling you to access,amongst others in Equities, Equity & Commodities Derivatives, Mutual Funds, IPO’s,Life & General Insurance products, Off share Investments, Money Transfer, MoneyChanging and Credit Cards.Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with AverageAssets Under Management (AAUM) of Rs. 84563.92 Crs (AAUM for June 30th 08 ) andan investor base of over 68.38 Lakhs.Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one ofthe fastest growing mutual funds in the country.RMF offers investors a well-rounded portfolio of products to meet varying investorrequirements and has presence in 118 cities across the country.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 19

Reliance Mutual Fund constantly endeavors to launch innovative products and customerservice initiatives to increase value to investors."Reliance Mutual Fund schemes are managed by Reliance Capital Asset ManagementLimited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-upcapital of RCAM, the balance paid up capital being held by minority shareholders."Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financialservices companies, and ranks among the top 3 private sector financial services andbanking companies, in terms of net worth.Reliance Capital Ltd. has interests in asset management, life and general insurance,private equity and proprietary investments, stock broking and other financial services.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 20

ABOUT RELIANCE MUTUAL FUND:Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with AverageAssets Under Management (AAUM) of Rs. 84563.92 Crs (AAUM for June 30th 08 ) andan investor base of over 68.38 Lakhs.Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one ofthe fastest growing mutual funds in the country.RMF offers investors a well-rounded portfolio of products to meet varying investorrequirements and has presence in 118 cities across the country.Reliance Mutual Fund constantly endeavors to launch innovative products and customerservice initiatives to increase value to investors."Reliance Mutual Fund schemes are managed by Reliance Capital Asset ManagementLimited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-upcapital of RCAM, the balance paid up capital being held by minority shareholders."Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financialservices companies, and ranks among the top 3 private sector financial services andbanking companies, in terms of net worth.Reliance Capital Ltd. has interests in asset management, life and general insurance,private equity and proprietary investments, stock broking and other financial services.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 21

THEORETICAL BACKGROUNDALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 22

ORIGIN OF MUTUAL FUND INVESTING:-When three Boston Securities executives pooled their money together in 1924 to createthe first mutual fund, they have no idea how popular mutual funds would become. Theidea of pooling money for investing purposes started in Europe in mid 1800s. The firstpooled in the US was created in 1893 for the faculty and staff of Harvard University. OnMarch 21st, 1924 the first official mutual fund was born. It was called the MassachusettsInvestors Trust. After one year the Massachusetts Investor Trust grew from $ 50000 inassets to 3, 92,000 in assets (with around 200 share holders). In contrast there are morethan 10000 mutual funds in US today totaling around $7 trillion (with approximately 83million individual investors) according to the Investment Company Institute.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 23

Concept of Mutual Funds:A Mutual Fund is a trust that pools the savings of a number of investors who share acommon financial goal. The money thus collected is then invested in capital marketinstruments such as shares, debentures and other securities. The income earned throughthese investments and the capital appreciation realized are shared by its unit holders inproportion to the number of units owned by them. Thus a Mutual Fund is the mostsuitable investment for the common man as it offers an opportunity to invest in adiversified, professionally managed basket of securities at a relatively low cost. The flowchart below describes broadly the working of a mutual fund: Mutual Fund Operation Flow ChartALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 24

Organization of Mutual Funds in India:-There are many entities involved and the diagram below illustrates the organizational setup of a mutual fund: Organization of a Mutual FundALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 25

Mutual Funds Industry in India:-The origin of mutual fund industry in India is with the introduction of the concept ofmutual fund by UTI in the year 1963. Though the growth was slow, but it acceleratedfrom the year 1987 when non-UTI players entered the industry.In the past decade, Indian mutual fund industry had seen dramatic improvements, bothquality wise as well as quantity wise. Before, the monopoly of the market had seen anending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sectorentry to the fund family raised the AUM to Rs. 470 bn in March 1993 and till April 2004;it reached the height of 1,540 bn.Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it isless than the deposits of SBI alone, constitute less than 11% of the total deposits held bythe Indian banking industry.The main reason of its poor growth is that the mutual fund industry in India is new in thecountry. Large sections of Indian investors are yet to be intellectuated with the concept.Hence, it is the prime responsibility of all mutual fund companies, to market the productcorrectly abreast of selling.The mutual fund industry can be broadly put into four phases according to thedevelopment of the sector. Each phase is briefly described as under.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 26

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 schemes Balanced fund --- has three objectives moderate long term growth of capital, moderate income, and moderate stability.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 27

Advantages of Mutual Funds:The advantages of investing in a Mutual Fund are:  Diversification: The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value.  Professional Management: Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell.  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. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific indexALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 28

Phases of mutual fundsFirst Phase - 1964-87:-Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set upby the Reserve Bank of India and functioned under the Regulatory and administrativecontrol of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and theIndustrial Development Bank of India (IDBI) took over the regulatory and administrativecontrol in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At theend of 1988 UTI had Rs.6,700 crores of assets under management.Second Phase - 1987-1993 (Entry of Public Sector Funds)Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by CanbankMutual 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).LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets undermanagement.Third Phase - 1993-2003 (Entry of Private Sector Funds)With the entry of private sector funds in 1993, a new era started in the Indian mutual fundindustry, giving the Indian investors a wider choice of fund families. Also, 1993 was theyear in which the first Mutual Fund Regulations came into being, under which all mutualfunds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer(now merged with Franklin Templeton) was the first private sector mutual fund registeredin July 1993.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 29

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensiveand revised Mutual Fund Regulations in 1996. The industry now functions under theSEBI (Mutual Fund) Regulations 1996.The number of mutual fund houses went on increasing, with many foreign mutual fundssetting up funds in India and also the industry has witnessed several mergers andacquisitions. As at the end of January 2003, there were 33 mutual funds with total assetsof Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets undermanagement was way ahead of other mutual funds.Fourth Phase - since February 2003This phase had bitter experience for UTI. It was bifurcated into two separate entities. Oneis the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (ason January 2003). The Specified Undertaking of Unit Trust of India, functioning under anadministrator and under the rules framed by Government of India and does not comeunder the purview of the Mutual Fund Regulations.The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It isregistered with SEBI and functions under the Mutual Fund Regulations. With thebifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores ofAUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI MutualFund Regulations, and with recent mergers taking place among different private sectorfunds, the mutual fund industry has entered its current phase of consolidation and growth.As at the end of September, 2004, there were 29 funds, which manage assets ofRs.153108 crores under 421 schemes.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 30

Performance of Mutual Funds in India:-Let us start the discussion of the performance of mutual funds in India from the day theconcept of mutual fund took birth in India. The year was 1963. Unit Trust of India invitedinvestors or rather to those who believed in savings, to park their money in UTI MutualFund.For 30 years it goaled without a single second player. Though the 1988 year saw somenew mutual fund companies, but UTI remained in a monopoly position.The performance of mutual funds in India in the initial phase was not even closer tosatisfactory level. People rarely understood, and of course investing was out of question.But yes, some 24 million shareholders were accustomed with guaranteed high returns bythe beginning of liberalization of the industry in 1992. This good record of UTI becamemarketing tool for new entrants. The expectations of investors touched the sky inprofitability factor. However, people were miles away from the preparedness of risksfactor after the liberalization.The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let meconcentrate about the performance of mutual funds in India through figures. From Rs.67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figurehad a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.The net asset value (NAV) of mutual funds in India declined when stock prices startedfalling in the year 1992. Those days, the market regulations did not allow portfolio shiftsinto alternative investments. There was rather no choice apart from holding the cash or tofurther continue investing in shares. One more thing to be noted, since only closed-endfunds were floated in the market, the investors disinvested by selling at a loss in thesecondary market.The performance of mutual funds in India suffered qualitatively. The 1992 stock marketscandal, the losses by disinvestments and of course the lack of transparent rules in theALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 31

whereabouts rocked confidence among the investors. Partly owing to a relatively weakstock market performance, mutual funds have not yet recovered, with funds trading at anaverage discount of 1020 percent of their net asset value.The supervisory authority adopted a set of measures to create a transparent andcompetitive environment in mutual funds. Some of them were like relaxing investmentrestrictions into the market, introduction of open-ended funds, and paving the gateway formutual funds to launch pension schemes.The measure was taken to make mutual funds the key instrument for long-term saving.The more the variety offered, the quantitative will be investors.At last to mention, as long as mutual fund companies are performing with lower risks andhigher profitability within a short span of time, more and more people will be inclined toinvest until and unless they are fully educated with the dos and don’ts of mutual funds.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 32

SCHEMES OF MUTUALFUND IN RELIANCEMONEYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 33

SCHEMES OF RELIANCE MONEY:- 1. Equity/Growth Schemes:The aim of growth funds is to provide capital appreciation over the medium to long-term. Such schemes normally invest a major part of their corpus in equities. Such fundshave comparatively high risks. These schemes provide different options to the investorslike dividend option, capital appreciation, etc. and the investors may choose an optiondepending on their preferences. The investors must indicate the option in the applicationform. The mutual funds also allow the investors to change the options at a later date.Growth schemes are good for investors having a long-term outlook seeking appreciationover a period of time.Reliance Natural Resources Fund :(An Open Ended Equity Scheme) The primary investment objective of the scheme is toseek to generate capital appreciation & provide long-term growth opportunities byinvesting in companies principally engaged in the discovery, development, production, ordistribution of natural resources and the secondary objective is to generate consistentreturns by investing in debt and money market securities.Reliance Equity Fund:-(An open-ended diversified Equity Scheme.) The primary investment objective of thescheme is to seek to generate capital appreciation & provide long-term growthopportunities by investing in a portfolio constituted of equity & equity related securitiesof top 100 companies by market capitalization & of companies which are available in thederivatives segment from time to time and the secondary objective is to generateconsistent returns by investing in debt and money market securities.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 34

Reliance Tax Saver (ELSS) Fund :-(An Open-ended Equity Linked Savings Scheme.) The primary objective of the scheme isto generate long-term capital appreciation from a portfolio that is invested predominantlyin equity and equity related instruments.Reliance Equity Opportunities Fund :-(An Open-Ended Diversified Equity Scheme.) The primary investment objective of thescheme is to seek to generate capital appreciation & provide long-term growthopportunities by investing in a portfolio constituted of equity securities & equity relatedsecurities and the secondary objective is to generate consistent returns by investing indebt and money market securities.Reliance Vision Fund:(An Open-ended Equity Growth Scheme.) The primary investment objective of theScheme is to achieve long term growth of capital by investment in equity and equityrelated securities through a research based investment approach.Reliance Growth Fund:(An Open-ended Equity Growth Scheme.) The primary investment objective of theScheme is to achieve long term growth of capital by investment in equity and equityrelated securities through a research based investment approach.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 35

Reliance Index Fund :-(An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Planis to replicate the composition of the Nifty, with a view to endeavor to generate returns,which could approximately be the same as that of Nifty. The Investment Objective underthe Sensex plan is to replicate the composition of the Sensex, with a view to endeavor togenerate returns, which could approximately be the same as that of Sensex.Reliance NRI Equity Fund :-(An open-ended Diversified Equity Scheme.) The Primary investment objective of thescheme is to generate optimal returns by investing in equity or equity related instrumentsprimarily drawn from the Companies in the BSE 200 Index.Reliance Regular Savings Fund:-(An Open-ended Scheme.) Equity Option: The primary investment objective of thisoption is to seek capital appreciation and/or to generate consistent returns by activelyinvesting in Equity &Equity-related Securities.Balanced Option:The primary investment objective of this option is to generate consistent returns andappreciation of capital by investing in mix of securities comprising of equity, equityrelated instruments & fixed income instruments.Reliance Long Term Equity Fund:(An close-ended Diversified Equity Scheme.) The primary investment objective of thescheme is to seek to generate long term capital appreciation & provide long-term growthopportunities by investing in a portfolio constituted of equity & equity related securitiesALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 36

and Derivatives and the secondary objective is to generate consistent returns by investingin debt and money market securities.Reliance Equity Advantage Fund:(An open-ended Diversified Equity Scheme.) The primary investment objective of thescheme is to seek to generate capital appreciation & provide long-term growthopportunities by investing in a portfolio predominantly of equity & equity relatedinstruments with investments generally in S & P CNX Nifty stocks and the secondaryobjective is to generate consistent returns by investing in debt and money marketsecuritiesALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 37

2. Debt/Income SchemesThe aim of income funds is to provide regular and steady income to investors. Suchschemes generally invest in fixed income securities such as bonds, corporate debentures,Government securities and money market instruments. Such funds are less riskycompared to equity schemes. These funds are not affected because of fluctuations inequity markets. However, opportunities of capital appreciation are also limited in suchfunds. The NAVs of such funds are affected because of change in interest rates in thecountry. If the interest rates fall, NAVs of such funds are likely to increase in the shortrun and vice versa. However, long term investors may not bother about these fluctuations.Reliance Monthly Income Plan :(An Open Ended Fund. Monthly Income is not assured & is subject to the availability ofdistributable surplus ) The Primary investment objective of the Scheme is to generateregular income in order to make regular dividend payments to unit holders and thesecondary objective is growth of capital.Reliance Gilt Securities Fund - Short Term Gilt Plan & LongTerm Gilt Plan :Open-ended Government Securities Scheme) The primary objective of the Scheme is togenerate Optimal credit risk-free returns by investing in a portfolio of securities issuedand guaranteed by the central Government and State GovernmentALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 38

Reliance Income Fund:(An Open-ended Income Scheme) The primary objective of the scheme is to generateoptimal returns consistent with moderate levels of risk. This income may becomplemented by capital appreciation of the portfolio. Accordingly, investments shallpredominantly be made in Debt & Money market instruments.Reliance Medium Term Fund:(An Open End Income Scheme with no assured returns.) The primary investmentobjective of the Scheme is to generate regular income in order to make regular dividendpayments to unit holders and the secondary objective is growth of capitalReliance Short Term Fund :(An Open End Income Scheme) The primary investment objective of the scheme is togenerate stable returns for investors with a short investment horizon by investing in FixedIncome Securities of short term maturity.Reliance Liquid Fund :(Open-ended Liquid Scheme). The primary investment objective of the Scheme is togenerate optimal returns consistent with moderate levels of risk and high liquidity.Accordingly, investments shall predominantly be made in Debt and Money MarketInstruments.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 39

Reliance Floating Rate Fund:(An Open End Liquid Scheme) The primary objective of the scheme is to generateregular income through investment in a portfolio comprising substantially of FloatingRate Debt Securities (including floating rate securitized debt and Money MarketInstruments and Fixed Rate Debt Instruments swapped for floating rate returns). Thescheme shall also invest in fixed rate debt Securities (including fixed rate securitizeddebt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixedreturnsReliance NRI Income Fund:(An Open-ended Income scheme) The primary investment objective of the Scheme is togenerate optimal returns consistent with moderate levels of risks. This income may becomplimented by capital appreciation of the portfolio. Accordingly, investments shallpredominantly be made in debt Instruments.Reliance Liquidity Fund:(An Open - ended Liquid Scheme) The investment objective of the Scheme is to generateoptimal returns consistent with moderate levels of risk and high liquidity. Accordingly,investments shall predominantly be made in Debt and Money Market Instruments.Reliance Interval Fund:(A Debt Oriented Interval Scheme) The primary investment objective of the scheme is toseek to generate regular returns and growth of capital by investing in a diversifiedportfolioALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 40

Reliance Liquid plus Fund:(An Open-ended Income Scheme.) The investment objective of the Scheme is to generateoptimal returns consistent with moderate levels of risk and liquidity by investing in debtsecurities and money market securities.Reliance Fixed Horizon Fund –I:(A closed ended Scheme) The primary investment objective of the scheme is to seek togenerate regular returns and growth of capital by investing in a diversified portfolio.Reliance Fixed Horizon Fund –II:(An closed ended Scheme.) The primary investment objective of the scheme is to seek togenerate regular returns and growth of capital by investing in a diversified portfolio.Reliance Fixed Horizon Fund –III:(An Close-ended Income Scheme.) The primary investment objective of the scheme is toseek to generate regular returns and growth of capital by investing in a diversifiedportfolioReliance Fixed Tenor Fund:(An Close-ended Scheme.) The primary investment objective of the Plan is to seek togenerate regular returns and growth of capital by investing in a diversified portfolio.Reliance Fixed Horizon Fund -Plan C:(An closed ended Scheme.) The primary investment objective of the scheme is to seek togenerate regular returns and growth of capital by investing in a diversified portfolio.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 41

Reliance Fixed Horizon Fund - IV:(An Close-ended Income Scheme.) The primary investment objective of the scheme is toseek to generate regular returns and growth of capital by investing in a diversifiedportfolioReliance Fixed Horizon Fund - V:(An Close-ended Income Scheme.) The primary investment objective of the scheme is toseek to generate regular returns and growth of capital by investing in a diversifiedportfolio of: - Central and State Government securities and Other fixed income/ debt securities normally maturing in line with the time profile ofthe scheme with the objective of limiting interest rate volatilityReliance Fixed Horizon Fund - VI:(An Close-ended Income Scheme.) The primary investment objective of the scheme is toseek to generate regular returns and growth of capital by investing in a diversifiedportfolio of: -Central and State Government securities andOther fixed income/ debt securities normally maturing in line with the time profile of theseries with the objective of limiting interest rate volatilityALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 42

Reliance Fixed Horizon Fund - VII:(An Close-ended Income Scheme.) The primary investment objective of the scheme is toseek to generate regular returns and growth of capital by investing in a diversifiedportfolio of: -Central and State Government securities andOther fixed income/ debt securities normally maturing in line with the time profile of theseries with the objective of limiting interest rate volatility.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 43

3. Sector Specific Schemes:These are the funds/schemes which invest in the securities of only those sectors orindustries as specified in the offer documents. E.g. Pharmaceuticals, Software, FastMoving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds aredependent on the performance of the respective sectors/industries. While these funds maygive higher returns, they are more risky compared to diversified funds. Investors need tokeep a watch on the performance of those sectors/industries and must exit at anappropriate time. They may also seek advice of an expert.Reliance Banking FundReliance Mutual Fund has an Open-Ended Banking Sector Scheme which has theprimary investment objective to generate continuous returns by actively investing inequity / equity related or fixed income securities of banks.Reliance Diversified Power Sector Fund:Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme.The primary investment objective of the Scheme is to seek to generate consistent returnsby actively investing in equity / equity related or fixed income securities of Power andother associated companies.Reliance Pharma Fund:Reliance Pharma Fund is an Open-ended Pharma Sector Scheme.The primary investment objective of the Scheme is to generate consistent returns byinvesting in equity / equity related or fixed income securities of Pharma and otherassociated companies.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 44

Reliance Media & Entertainment Fund:Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sectorscheme.The primary investment objective of the Scheme is to generate consistent returns byinvesting in equity / equity related or fixed income securities of media & entertainmentand other associated companies. 4. Exchange Traded FundReliance Gold Exchange Traded Fund:(An open-ended Gold Exchange Traded Fund) the investment objective is to seek toprovide returns that closely correspond to returns provided by price of gold throughinvestment in physical Gold (and Gold related securities as permitted by Regulators fromtime to time). However, the performance of the scheme may differ from that of thedomestic prices of Gold due to expenses and or other related factors.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 45

LIMITATION OF THESTUDYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 46

Limitation of the Study:1. This study is limited to only schemes of mutual fund.2. This study is restricted to Pune city only.3. The study is limited up to the mutual funds operating in India.4. The returns of mutual fund are related to the share market conditions and hence it isdifficult to measure them accurately.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 47

FINDINGSALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 48

FINDINGS:  Most of the investors want guaranteed returns from the investment.  Every fund has some what percentage in debt product to avoid high risk of market.  The investors are aware of mutual funds they do not invest in proportionate.  Midcap fund has high risk but potential of high returns.  Most of the investors are interested in banks that too in saving deposit and it is very popular tool of investment.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 49

SUGGESTIONSALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 50

 If investor wants to diversify their allocation to reduce risk then they should select Reliance Money as their allocation in equity and debt is in proportion.  Investor should be made aware of the schemes existing in market according to their portfolio.  Reliance Money should attract investors to invest in mutual funds by introducing new schemes.  While investing, investors should not only take in to consideration their past performance asset allocation and the returns given during their inception.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 51

RESEARCH METHODOLOGYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 52

The research methodology helps to build the project on the basis of data collected.I have collected the data which has helped me to frame the project through primary andsecondary data.PRIMARY DATA:In this case, I had discussion with the company guide and senior colleagues to gather theinformation related to my project work and then I approached the customers of RelianceMoney.During my project not only the primary data helped me but I have to take help of thesecondary data.Secondary Data:In this case, I have referred to various books, magazines, company brochure, net etc.toextract the information that was needed for my project.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 53

CONCLUSIONALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 54

CONCLUSION: From the analysis it is found that most of the customers go with bankdeposits because of current needs. They should divert their investors mind from banksaving deposit and make them aware of the high returns gained by investing in mutualfund. Guidance is an important criterion for the investors to make them awareabout mutual fund schemes and their returns. Hence asset management companiesshould start promotional campaigns for exploring the knowledge and information aboutthe mutual fund. Hence by analyzing the schemes of Reliance mutual fund it can be statedthat most of the investors invest in ELLS. The representatives of Reliance Money areable to satisfy all the queries offered by the clients. In turn, helping them to serve in abetter way.ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 55

BIBLIOGRAPHYALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 56

BIBLIOGRAPHY:  THE INDIAN FINANCIAL SYSTEM BY VASANT DESAI.  FINANCIAL INSTITUTIONS & MARKETS BY MUKUND MAHAJAN.  FINANCIAL SERVICES MARKETS BY ANIL AGASHA.  MARKETING & FINANCIAL SERVICES BY V.A. AVDHANI.  BROACHURE of THE COMPANY.WEBSITES:-www.reliancemoney.comwww.googlesearch.comALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 57

Analysis of Mutual Fund Schemes of Reliance Money By Mohammed Sarfaraz Siddique

by jaydeepchaurasia

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