A project report on ulips v


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A project report on ulips v

  1. 1. “ULIPS v/s Mutual fund” as an Investment Option among the Investors of Ludhiana<br />Presented by-<br />Maninder Vadhrah<br />
  2. 2. Historical background of the group <br /><ul><li>It was established in 1865.
  3. 3. Aimed to finance the growing trade between Europe, India & China.
  4. 4. By 1880s, the bank was acting as banker to Hong Kong Government.
  5. 5. It is also participated in the management of British government accounts in China, Japan, Penang & Singapore.</li></li></ul><li>Introduction to HSBC<br /><ul><li>HSBC is world’s local bank.
  6. 6. Headquarters in London.
  7. 7. HSBC’s international network comprises over 9500 offices in 76 countries & territories in Europe, the Asia-Pacific region, the Americas, the Middle East & Africa. </li></li></ul><li>HSBC provides a comprehensive range of financial services like- <br />Personal financial services<br />Commercial Banking<br />Corporate Banking<br />Investment Banking<br /> <br />
  8. 8. HSBC Group in India<br /><ul><li>It offers a full range of Banking & Financial Services to its over 2.8 million customers.
  9. 9. It has 47 branches & 170 ATMs across 26 cities.
  10. 10. It has over 34,000 employees in its Banking, Investment Banking & Capital Markets.
  11. 11. With Asset Management, 2 Global IT development centres & 6 Global resourcing operations in the country.</li></li></ul><li>Sale of Stake in Investsmart to HSBC<br /><ul><li>HSBC acquired 29.36% stake in IL&FS InvestSmart Ltd.
  12. 12. HSBC acquired 43.85% of InvestSmart from E*TRADE Mauritius Ltd.
  13. 13. HSBC has accepted shares to Public shareholders equivalent to 20.65% of InvestSmart’s capital.
  14. 14. Thus, it has completed its acquisition of 93.86% of IL&FS for a consideration of US$296.4 million.</li></li></ul><li>Vision & Mission<br /> Vision :To become the preferred long term financial partner to a wide base of customers whilst optimizing stakeholders value.<br />Mission: To establish a base of 1 million satisfied customers by 2010. We will create this by being a responsible and trustworthy partner.<br />
  15. 15. PRODUCT PROFILE<br />All the products of IL&FS can be broadly divided into the following two categories:<br /><ul><li>Online Trading Products.
  16. 16. Advisory Services.
  17. 17. Other services.</li></li></ul><li>Online Trading Product of IL&FS Investsmart<br />Basically IL&FS Investsmart offers three types of products to its retail customers. <br /><ul><li>Smart Start
  18. 18. Smart Invest
  19. 19. Smart Trade</li></li></ul><li>Advisory Services<br />Mutual fund advisory services.<br />Portfolio management services.<br />IPO Advisory and Distribution Services.<br />Insurance Advisory Services.<br />Investment Advisory services<br />
  20. 20. Other Services<br />Online services.<br />Research and Financial Analysis.<br />Value added services.<br />
  21. 21. Organisational Members<br /><ul><li>Mr. ManasijeMishra MD & CEO
  22. 22. Mr. AvdhootDeshpande Head - Equity and Capital Markets
  23. 23. Mr. Vipul Shah Head - NBFC
  24. 24. Mr. Dharmen shah Vice President - Institutional Equity
  25. 25. Mr. JaideepAnandSenior Vice President - Institutional Sales & Dealing
  26. 26. Mr. C. Diwakar Chief Information Officer
  27. 27. Mr. K. Venkatesh Head – Distribution</li></li></ul><li>Organization Chart<br />
  28. 28. SWOT ANALYSIS<br />Strengths:-<br />Customization.<br />Expertise.<br />Unique Features.<br />Research Agency.<br />Extensive reach.<br />Brand image.<br />Competitive pricing.<br />Weaknesses:-<br />Expensive Products.<br />Tedious Procedures.<br />Fund Transfer.<br />Attrition.<br />
  29. 29. Continued……….<br />Opportunities:-<br />Right Time to Investors to re-enter into market.<br />Huge untapped Markets.<br />Increasing number of Graduates.<br />Increase Tie-ups for Fund Transfer.<br />Threats:-<br />Stiff Competition.<br />Increasing awareness of Mutual Funds & ULIPS.<br />
  30. 30. RATIO ANALYSIS<br />Current Ratio<br />
  31. 31. Quick Ratio<br />
  32. 32. Return on Total Assets<br />
  33. 33. Net Profit Ratio<br />
  34. 34. Debt-Equity Ratio<br />
  35. 35. Introduction to the ULIPs<br /><ul><li>Unit-linked insurance plans, popularly known as Ulips are life insurance policies which offer a mix of investment and insurance similar to traditional life insurance policies, but with one major difference.
  36. 36. Unlike traditional policies, in Ulips investment risk lies with the insured (i.e., policy holder) and not with the insurance company</li></li></ul><li>Different types of charges under ULIPs<br />Premium Allocation Charge<br />Fund Management Charge (FMC)<br />Policy Administration Charge<br />Surrender Charge<br />Switching Charge<br />Mortality charge<br />Rider premium charge<br />Partial withdrawal charge<br />
  37. 37. Working of ULIPs<br /><ul><li>ULIPs work on the lines of mutual funds. The premium paid by the client (less any charge) is used to buy units in various funds (aggressive, balanced or conservative) floated by the insurance companies.
  38. 38. Units are bought according to the plan chosen by the policyholder. On every additional premium, more units are allotted to his fund. </li></li></ul><li>USP of ULIPS<br /><ul><li>Insurance cover plus savings
  39. 39. Multiple investment options
  40. 40. Flexibility
  41. 41. Works like an SIP
  42. 42. Fund Switching Option</li></li></ul><li>HURDLES OF ULIP<br /><ul><li>No standardization
  43. 43. Lack of Flexibility in Life cover
  44. 44. Overstating the Yield
  45. 45. Internally made Sales Illustration
  46. 46. Not all Show the Benchmark Return
  47. 47. Early exit Options
  48. 48. Creeping Cost</li></li></ul><li>Introduction to Mutual Funds<br /><ul><li>A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.
  49. 49. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. </li></li></ul><li>J<br />
  50. 50. Set up of Mutual fund<br />
  51. 51. Types of Mutual Fund Scheme<br />By Structure<br />Open ended Scheme.<br />Close ended Scheme.<br />Interval Scheme.<br />By Investment Objective<br />Growth Scheme.<br />Income Scheme.<br />Balanced Scheme.<br />Money Market Scheme.<br />Other Schemes<br />Tax Saving Scheme.<br />Special Scheme.<br />
  52. 52. Advantages of Investing in Mutual Funds<br />Diversification<br />Professional management<br />Liquidity<br />Convenience<br />
  53. 53. Disadvantages of Investing in Mutual Funds<br />No Guarantees<br />Fees and commissions<br />Taxes<br />Management risk<br />
  54. 54. Comparison between ULIPS and Mutual fund<br /><ul><li>Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds in terms of their structure and functioning.
  55. 55. ULIPs can be termed as mutual fund scheme with a insurance component</li></li></ul><li>Points of difference between ULIPs & Mutual fund<br /><ul><li>Objective
  56. 56. Cost
  57. 57. Investment Duration
  58. 58. Flexibility
  59. 59. Liquidity
  60. 60. Investment Objective
  61. 61. Tax Implication</li></li></ul><li>Title<br />“ULIPS v/s Mutual fund” as an investment option among the investors of Ludhiana<br />
  62. 62. Objectives<br /><ul><li>To know the customers awareness about Ulips and Mutual Fund.
  63. 63. To compare the investment in ULIPS plan with the Mutual fund.
  64. 64. To study the degree of risk involved in both.
  65. 65. To analyze the future prospective of these investment option.</li></li></ul><li>Research Methodology<br /><ul><li>Research Design: -</li></ul>Descriptive Research Design.<br /><ul><li>Data Collection: -</li></ul>Primary Research:- Questionnaires <br />
  66. 66. <ul><li>Secondary Research: - Journals & Magazines.
  67. 67. Sampling Unit:-</li></ul>People of Ludhiana who are investing in ULIPs or Mutual fund<br /><ul><li>Sample Size:- 100.</li></li></ul><li>Percentage of people who have invested in ULIPS, in Mutual fund and both<br />
  68. 68. Annual income of the investors<br />
  69. 69. Factors consider by investors before investing in ULIPS and Mutual fund<br />
  70. 70. Information Sources helpful to the investor in making investment decision<br />
  71. 71. Preference of investor regarding different types of funds<br />
  72. 72. The reasons for investing in ULIPS<br />49<br />31<br />11<br />7<br />2<br />53<br />34<br />8<br />3<br />2<br />38<br />34<br />14<br />9<br />5<br />22<br />23<br />13<br />29<br />13<br />
  73. 73. The reason for investing in Mutual Fund<br />24<br />26<br />8<br />21<br />16<br />48<br />39<br />5<br />6<br />2<br />32<br />28<br />7<br />24<br />9<br />
  74. 74. Preference of ULIPS or mutual fund on the basis of following factors<br />
  75. 75. Investment in ULIPS and Mutual fund by risk profile<br />
  76. 76. Expected annual Return from both ULIPS and Mutual fund<br />
  77. 77. Preferred tenure of investment for ULIPS and Mutual Fund<br />
  78. 78. Awareness among peoples regarding the controversy of ULIPS<br />
  79. 79. Preferred investment option for investing their money in future <br />
  80. 80. Findings<br />People are aware regarding ulips &Mutual fund but, the awareness regarding mutual fund is high comparative to ulips.<br />People with high income group are more likely to invest their money but, people who invest in both ulips and mutual fund mostly belongs to the income group of more than 6 lacs. <br />Broker and reference group plays an important role while making an investment decision of an investor. <br />Open ended funds & closed funds are more popular among investors of Ludhiana.<br />
  81. 81. <ul><li>Insurance and tax rebate is the most important reason for investing in ulips & people are investing in mutual fund for the appreciation of the capital invested by them.
  82. 82. Among the various advantages liquidity & flexibility plays the most important role for the preference of mutual fund over ulips</li></li></ul><li><ul><li>Low risk is taken in case of ulips & moderate risk in case of mutual funds.
  83. 83. The expected annual return is high for mutual fund comparative to ulips.
  84. 84. The preferred tenure of investment is same for both ulips & mutual fund</li></li></ul><li><ul><li>The recent controversy related to ulips will going to affect its future demand &in future also more number of investors will like to invest their money in mutual fund.
  85. 85. So future is bright for mutual funds.</li></li></ul><li>Conclusion<br />
  86. 86. RECOMMENDATIONS<br /><ul><li>The people do not want to take risk. The AMC should launch more diversified funds so that the risk becomes minimize. This will lure more and more people to invest in mutual funds and ulips.
  87. 87. The expectation of the people from the mutual funds is high. So, the portfolio of the fund should be prepared taking into consideration the expectations of the people.
  88. 88. Try to reduce fund charges, administration charges and other charges which help to invest more funds in the security market and earn good returns</li></li></ul><li><ul><li>Different campaigns should be launched to educate people especially regarding SIP.
  89. 89. Companies should give regular dividends as it depicts profitability.
  90. 90. Companies should give handsome brokerage to brokers so that they get attracted towards distribution of the funds.
  91. 91. ULIPs is good for those who prefer investment plus insurance.</li></li></ul><li>