Reliance capitak mangement limited report

“INVESTOR AWARENESS AND PERCEPTION REGARDING
RELIANCE MUTUAL FUND ESPECIALLY ON SIP & STP
Marwadi Education Foundation’s Group of Institutions
In partial fulfilment of the requirement of the award for the degree of
Master of Business Administration
Gujarat Technological University
Faculty Guide:
Mr. pratik joshi Mr. Mohit Arora
Affiliated to Gujarat Technological University
A PROJECT REPORT
ON
INVESTOR AWARENESS AND PERCEPTION REGARDING
RELIANCE MUTUAL FUND ESPECIALLY ON SIP & STP
FOR
“RELIANCE CAPITAL ASSET
MANAGEMENT LIMITED”
Submitted to
Education Foundation’s Group of Institutions
Master of Business Administration
Under
Gujarat Technological University
Under the guidance of
Faculty Guide: Company Guide:
Submitted by
Zinkal M Sheta
Enrolment No.: 138270592116
MBA Semester III
Affiliated to Gujarat Technological University
Ahmedabad July 2014
INVESTOR AWARENESS AND PERCEPTION REGARDING
RELIANCE MUTUAL FUND ESPECIALLY ON SIP & STP”
Education Foundation’s Group of Institutions
Company Guide:

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DECLARATION
I, ZINKAL M SHETA, student of Marwadi education foundations group of
institution Studies, Rajkot, Affiliated to Gujarat Technological University, Hereby
declare that this project is a result of culmination of my sincere efforts in one of
reputed financial company RELIANCE MUTUAL FUND during the academic
year 2014 – 2015.
I declare that this submitted work is done solely by me and to best of my
knowledge; no such work has been submitted by any other person for the award
of degree of diploma. I also declare that all the information collected from various
primary and secondary sources have been duly acknowledged in this project
report.
Place : signature:
Date :

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PREFACE
“Experience is the best teacher.” This saying plays a guiding role in our lives and
also in project reports those are an integral part of the M.B.A. programmed in
Gujarat Technological University.
Today’s age is an age of management. Management is the backbone of any
organization or any activity done. The real success of management lies in
applying the professional management techniques in all managerial activities. As
we move into an era of intense competition and high performance expectations, it
is important that we develop the winning edge.
Practical study is eminent, and plays vital role for the students of management,
because classroom coaching and theoretical study alone are not enough. To
survive in this highly competitive world, practicality outweighs theoretic. Students
are supposed to learn the various principles of business administration
conceptually but accuracy and efficiency in their implementation is possible only
through exposure to practical environment.
Hence, to attain this objective and to have the outlook of all intricacies of
corporate world I have undertaken the Training at Reliance Mutual Fund. It’s all
about “Investor awareness and perception regarding SIP & STP” I have tried my
best and have applied all my efforts, knowledge and sources available in mega
project report.

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EXECUTIVE SUMMERY
Mutual fund is a trust or an investment company that pool resources from
thousands of investors who share common investment goal and the n diversifies
its investment into different types of securities in order to provide potential return
and reasonable safety.
The active involvement of mutual fund in economic development can be seen by
their dominant presence in the money and capital market. Mutual funds are
popular financial intermediaries and manage disposable income of the investors
so as to bring them the benefit of equity investment. History of mutual funds
management in India is rather new, vis-à-vis, mutual fund in USA and UK. Yet,
the mutual fund industry in India has caught the attention of millions of investors
with diverse interests around the basic principles of investments viz. safety,
liquidity and returns. Emergence and rapid growth of mutual fund can be
ascribed as diversified dimension of Indian money and capital market.
It has been become major vehicle for mobilization of savings, especially from the
small and household savers for investment in the capital market. And mutual
fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed portfolio relatively
at a low cost.

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ACKNOWLEDGEMENT
We are indebted to Dr. Chinnam Reddy, Dean of “MARWADI
EDUCATION FOUNDATION GROUP OF INSTITUTION”, for providing an
Opportunity of preparing a project of “INVESTOR AWARENESS AN
PERCEPTION REGARDING RELIANCE MUTUAL FUND ESPECIALLY ON
SIP & STP”I” and allowing us to use the resources of the institution during this
project.
We are extremely thankful to our Project Guide Prof. Pratik joshi his
precious guidance regarding the preparation format of the project report. His
guidance has proved to be very useful and without which the preparation of
this report might not had been possible.
We are also thankful to the other faculty members of the MARWADI
EDUCATION FOUNDATION for extending their valuable support for this
project.
I would like to thank RELIANCE MUTUAL FUND, for giving me
thisopportunity to be associated with an esteemed organization as theirs.
I would like to express my gratitude to all the respondents who took
out time from their schedules and discussed about their investment patterns
and their views about Mutual Fund.

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CONTENTS
Sr.
No
Particulars Page
no
1 Introduction :
Company Details
Product Details
Swot Analysis
Industry Details
Competitors Details
Regulatory Environment
14
25
26
28
37
40
2 Review of Literature 43
3 Problem Formulation 45
4 Research Objectives 45
5 Research Methodology :
Research Design
Sampling Design
Data Collection Methods
Data analysis
46
47
48
50
6 Findings 66
7 Recommendations 67
8 Conclusions 68
9 Limitations of the study 69
10 Bibliography 70
11 Appendixes :
Questionnaire
Glossary
71
74

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INTRODUCTION
CONCEPT
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned
through these investments and the capital appreciation realized is shared by its unit
holders in proportion to the number of units owned by them. Thus a Mutual Fund is
the most suitable investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a relatively low
cost. The flow chart below describes broadly the working of a mutualfund
Mutual Fund Operation Flow Chart

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The first mutual fund was started in the Netherland in 1774. Then mutual funds
spread across Scotland, the U.K. and France before entering the U.S. These early
mutual funds are called Investment Trusts. The first American mutual fund was New
York stock Trust, Established in 1889. Then most of the mutual funds were started in
Boston in early 1920’s , including the State Street Fund. Massachusetts Investor’s
Trust (MFS), Fidelity, Pioneer, and the Putnam Fund.
In 1960s there were hundreds of aggressive mutual funds with high risk were
started. In 1970s there started ‘no load funds’ with zero sales commission. There
was a tremendous growth in this industry in 1980s and 1990s especially after the
World War 2.
A mutual fund is a type of professionally managed collective investment vehicle that
pools money from many investors to purchase securities While there is no legal
definition of the term "mutual fund", it is most commonly applied only to those
collective investment vehicles that are regulated and sold to the general public. They
are sometimes referred to as "investment companies" or "registered investment
companies." Most mutual funds are "open-ended," meaning investors can buy or sell
shares of the fund at any time. Hedge funds are not considered a type of mutual
fund.
The term mutual fund is less widely used outside of the United States and Canada.
For collective investment vehicles outside of the United States, see articles on
specific types of funds including open-ended investment companies, SICAVs,
unitized insurance funds, unit trusts and Undertakings for Collective Investment in
Transferable Securities, which are usually referred to by their acronym UCITS.
In the United States, mutual funds must be registered with the Securities and
Exchange Commission, overseen by a board of directors (or board of trustees if
organized as a trust rather than a corporation or partnership) and managed by a
registered investment adviser. Mutual funds are not taxed on their income and profits
if they comply with certain requirements under the U.S. Internal Revenue Code.

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Mutual funds have both advantages and disadvantages compared to direct investing
in individual securities. They have a long history in the United States. Today they
play an important role in household finances, most notably in retirement planning.
There are 3 types of U.S. mutual funds: open-end, unit investment trust, and closed-
end. The most common type, the open-end fund, must be willing to buy back shares
from investors every business day. Exchange-traded funds (or "ETFs" for short) are
open-end funds or unit investment trusts that trade on an exchange. Open-end funds
are most common, but exchange-traded funds have been gaining in popularity.
Mutual funds are generally classified by their principal investments. The four main
categories of funds are money market funds, bond or fixed income funds, stock or
equity funds and hybrid funds. Funds may also be categorized as index or actively
managed.
Investors in a mutual fund pay the fund’s expenses, which reduce the fund's
returns/performance. There is controversy about the level of these expenses. A
single mutual fund may give investors a choice of different combinations of expenses
(which may include sales commissions or loads) by offering several different types of
share classes.

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WORKING OF MUTUAL FUND
A Mutual Fund is a collection of stocks, bonds, or other securities owned by a
group of investors and managed by a professional investment company. For
an individual investor to have a diversified portfolio is difficult. But he can approach
to such company and can invest into shares. Mutual funds have become very
popular since they make individual investors to invest in equity and debt securities
easy. When investors invest a particular amount in mutual funds, he becomes the
unit holder of corresponding units. In turn, mutual funds invest unit holder’s money in
stocks, bonds or other securities that earn interest or dividend. This money is
distributed to unit holders. If the fund gets money by selling some stocks at higher
price the unit holders also are liable to get capital gains.
DIFFERENT PLANS OF MUTUAL FUND SCHEMES
The different plans available are:
Growth:
Where the income generated by the way of capital appreciation stays in the fund and
is reflected by rise in NAV.
Bonus:
Where the unit holder receives additional units are as bonus when the value of the
fund appreciates.
Dividend Pay-out:
Where the capital appreciation is passed on to the unit holder by the way of
dividends.
Dividend Reinvestment:
Where the dividends are reinvested into the fund by buying additional units on the
request of unit holders.

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Systematic Investment Plan (SIP):
An SIP lets you invest in parts instead of one single lump sum amount. All you have
to do is issue post – dated cheques to the fund, which will be presented to your bank
on the specified dates. Nowadays, SIPs come with another convenient feature, an
auto debit cheques. The fund debits the money directly from your bank account.
Systematic Transfer Plan (STP):
STP allows you to transfer a fixed amount of money from one scheme to the other.
Systematic Withdrawal Plan (SWP):
SWP enables you to withdraw a fixed amount according to a predetermined
frequency that you specify to the fund.
Switch Between Schemes:
A switch lets you exit from one scheme without filling in the redemption request and
issuing a cheque. All you have to do is fill a form informing the fund about which
scheme you wish to redeem and which scheme you wish to buy.
What is a Mutual Fund?
A Mutual Fund is a body corporate registered with the Securities and Exchange
Board of India (SEBI) that pools up the money from individual / corporate investors
and invests the same on behalf of the investors /unit holders, in equity shares,
Government securities, Bonds, Call money markets etc., and distributes the profits.
In other words, a mutual fund allows an investor to indirectly take a position in a
basket of assets

ORGANISATION OF A MUTUAL
There are many entities
organizational set up of a mutual fund:
Organization of a Mutual Fund
ADVANTAGES OF MUTUAL FUNDS
The advantages of investing in a Mutual Fund are:
• Professional Management
• Diversification
• Convenient Administration
• Return Potential
• Low Costs
• Liquidity
• Transparency
• Flexibility
• Choice of schemes
• Tax benefits
• Well regulated
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MUTUAL FUND
entities involved and the diagram below
organizational set up of a mutual fund:
Organization of a Mutual Fund
ADVANTAGES OF MUTUAL FUNDS
The advantages of investing in a Mutual Fund are:
Professional Management
Convenient Administration
below illustrates the

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TYPES OF MUTUAL FUND SCHEMES
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an
overview into the existing types of schemes in the Industry.
(1) By structure
• Open - Ended schemes
• Close - Ended schemes
• Interval schemes
(2) By Investment Objective
• Growth schemes
• Income schemes
• Balance schemes
• Money Market schemes
(3) Others Schemes
• Tax Saving schemes
• Special schemes
• Index schemes
• Sector specific schemes.

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Myths about Mutual Fund
1. All Mutual Funds invest only in shares.
2. Mutual funds are prone to very high risk / actively traded.
3. Mutual funds are totally new to financial market.
4. Mutual funds are not reliable and people rarely invest in them.
5 All Mutual Funds are poor performers.
6 US-64 is an assured return fund, immune to vagaries of the market.

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Facts about Mutual Funds
1. Equity instruments like shares form only securities held by Mutual Funds. Mutual
Fund also invests in debt market, which is relatively much safer.
2. The biggest advantage of Mutual Funds is their ability to diversify the risk
3. Mutual Funds exist in India since 1963.Mutual Fund market is very evolved in
India and they’re for last 60 years.
4. Mutual Funds the best solutions for the people who want to manage their risk and
get good returns.
5. The size of Mutual Fund market in India is Rs.107728 crores and that in USA
many times of it.
6. According to the SEBI-NCAER survey of Indian Investor about 15 million or 8.7%
of households have invested in Mutual Funds and about 23 million are unit
holders in India.
7. In USA there are more deposits in Mutual Funds than bank fixed deposits.
8. The largest MF in US, Fidelity Magellan is about $800 billion and that in India is
$12 billion.

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What is a Systematic Investment Plan and how does it operate?
A systematic investment plan is one where an investor contributes a fixed amount
every month and at the prevailing NAV the units are credited to his account. Today
many funds are offering this facility.
Which was the First Mutual Fund to be set up in India?
Unit Trust of India is the first Mutual Fund set up under a separate act, UTI Act in
1963, and started its operations in 1964 with the issue of units under the scheme
US-64.
What are the benefits of Systematic Investment Plan?
A systematic investment plan (SIP) offers 2 major benefits to an investor:
• It avoids lump sum investment at one point of time
• In a scenario of falling prices, it reduces your overall cost of acquisition by a
process of rupee-cost averaging. This means that at lower prices you end up
getting more units for the same investment.
Which are the other institutions that have floated Mutual Funds in India?
Currently public sector banks like SBI, Canara Bank, Bank of India, and institutions
like IDBI, GIC, and LIC Foreign Institutions like Alliance, Morgan Stanley, Templeton
and Private financial companies like Kothari Pioneer, DSP Merrill Lynch, Sundaram,
and Kotak Mahindra etc. have floated their own mutual funds.

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How many Mutual Funds are there in India currently?
Presently there are 33 Mutual Funds in India and close to 400 mutual fund schemes.
We will very soon be putting up detailed analysis of major schemes operating in
India.
What proportion of my investment should be invested in mutual funds?
Once again this decision will depend on factors like your income, risk aversion and
tax status. We at http://www.karvy.com/ are shortly putting up a personal portfolio
analyzer where based on your income, expenditure, investments, tax status etc. we
will advice you on the proportion you need to allocate to mutual funds.
Can a Mutual Fund assure fixed returns?
As per SEBI Regulations, mutual funds are not allowed to assure returns. However,
funds floated by AMCs of public sector banks and financial institutions were
permitted to assure returns to the unit holders provided the parent sponsor was
willing to give an explicit guarantee to honor such a commitment. But in general,
mutual funds cannot assure fixed returns to their investors.
Why should I choose to invest in a mutual fund?
For retail investor who does not have the time and expertise to analyze and invest in
stocks and bonds, mutual funds offer a viable investment alternative. This is
because:
• Mutual Funds provide the benefit of cheap access to expensive stocks
• Mutual funds diversify the risk of the investor by investing in a basket of
assets

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• A team of professional fund managers manages them with in-depth research
inputs from investment analysts.
• Being institutions with good bargaining power in markets, mutual funds have
access to crucial corporate information which individual investors cannot
access.
How much return can I expect by investing in mutual funds?
Investors need to be clear that mutual funds are essentially medium to long term
investments. Hence, short-term abnormal profits will not be sustainable in the long
run. But in the medium to long run the mutual funds tend to outperform most other
avenues of investments at the same time avoiding the risk of direct investment
accompanied with professional fund management.
How does the concept of entry load work in case of unit purchases?
An entry load is an additional cost that an investor pays at the point of entry. Assume
that your proposed investment is Rs.10,000/-. Also assume that the current NAV of
the fund is Rs.12.00 and that the entry load is Rs.0.50. Then you will receive
10000/12.50 = 800 units. For detailed explanation of entry load, refer our mutual
fund glossary.
How does the concept of exit load work in case of unit redemptions?
An exit load is levy that an investor pays at the point of exit. This is levied to
dissuade investors from exiting the fund. Assume that the current NAV of the fund is
Rs.12.00 and that the exit load is Rs.0.50. Now if you sell 800 units then you stand to
receive 800X11.5 = Rs. 9200. For detailed explanation of exit load, refer our mutual
fund glossary.

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Can an investor redeem part of the units?
Yes. One can redeem part units also.
What are open-ended and closed-ended mutual funds?
In an open-ended mutual fund there are no limits on the total size of the corpus.
Investors are permitted to enter and exit the open-ended mutual fund at any point of
time at a price that is linked to the net asset value (NAV). In case of closed-ended
funds, the total size of the corpus is limited by the size of the initial offer.
Will there be any tax deducted at source when I redeem?
For resident unit holders, currently no tax is deducted at source irrespective of the
amount redeemed. In case of non-resident tax is deducted at source at the
applicable tax rates. It may be noted that the above is indicative and is subject to
changes in accordance with the tax laws.
Can an NRI have a joint account in Mutual Funds with a resident Indian?
Yes. An NRI investor can have a joint holder with a resident Indian or a Non-
resident Indian.

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COMPANY DETAILS
About Reliance Mutual Fund
Reliance Mutual Fund (RMF) has been established as a trust under the Indian
Trusts Act, 1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor and
Reliance Capital Trustee Co. Limited (RCTCL), as the Trustee. RMF has been
registered with the Securities & Exchange Board of India (SEBI) vide registration
number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual
Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide
SEBI's letter no. IMD/PSP/4958/2004 date 11th
March 2004. Reliance Mutual Fund
was formed to launch various schemes under which units are issued to the Public
with a view to contribute to the capital market and to provide investors the
opportunities to make investments in diversified securities.
The main objectives of the Trust are:
• To carry on the activity of a Mutual Fund as may be permitted at law and
formulate and devise various collective Schemes of savings and investments
for people in India and abroad and also ensure liquidity of investments for the
Unit holders;
• To deploy Funds thus raised so as to help the Unit holders earn reasonable
returns on their savings and
• To take such steps as may be necessary from time to time to realise the
effects without any limitation.

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Reliance Capital Asset Management Ltd.
Reliance Capital Asset Management Limited (RCAM), a company registered under
the Companies Act, 1956 was appointed to act as the Investment Manager of
Reliance,mutual,fund.
Reliance Capital Asset Management Limited is a wholly owned subsidiary of
Reliance Capital Limited, the sponsor. The entire paid-up capital (100%) of Reliance
Capital Asset Management Limited is held by Reliance Capital Limited.
Reliance Capital Asset Management Limited was approved as the Asset
Management Company for the Mutual Fund by SEBI vide their letter no
IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an
Investment Management Agreement (IMA) with RCAM dated May 12, 1995 and was
amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996.
Pursuant to this IMA, RCAM is authorised to act as Investment Manager of Reliance
Mutual Fund. The networth of the Asset Management Company including preference
shares as on March’ 2014 is Rs 1,03,542 crore. and an investor count of over 58.42
and 60 Lekh folios.
RCAM has been registered as a portfolio manager vide SEBI Registration
No.INP000000423 and renewed effective 1st August, 2003.RCAM has commenced
these activities. It has been ensured that key personnel of the AMC, the systems,
back office, bank and securities accounts are segregated activity wise and there
exists systems to prohibit access to inside information of various activities. As per
SEBI Regulations, it will further ensure that AMC meets the capital adequacy
requirements, if any, separately for each such activity.

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Sponsors Reliance Capital Limited
Trustee Reliance Capital Trustee Co. Limited
Investment Manager Reliance Capital Asset Management Ltd
THE SPONSORS
Reliance Capital Limited
Registered Office
Reliance Capital Ltd, Village Meghpar, Padana Taluka Lalpur, District Jamnagar -
361280 - Gujarat.
Corporate Office
Reliance Capital Ltd. Old ICI Godown, Fosbery Road, Off Reay Road Station (East),
Mumbai - 400033.
Reliance Capital Asset Management Ltd. is a wholly owned subsidiary of Reliance
Capital Limited, the sponsor. The entire paid-up capital (100%) of Reliance Capital
Asset Management Ltd is held by Reliance Capital Ltd.
Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd (RCL).
RCL has been promoted by Reliance Industries Ltd., one of India's largest private
sector enterprise. Reliance Industries Ltd. has a net worth of Rs.40,483 crores as on
March 31, 2005 and currently has a large family of shareholders. Reliance Capital
Limited is a Non Banking Finance Company engaged in leasing, investment and

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other fund based activities. The networth of Reliance Capital Ltd. is Rs. 1,437.92
crores as on March 31, 2005. Given below is a summary of Reliance Capital Ltd.'s
financials:
Annual results in brief :
(Rs crore)
Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Sales 3,828.00 3,267.52 1,840.39 2,366.62 2,974.85
Operating
profit 2,872.00 2,662.57 1,378.08 1,682.83 2,292.55
Interest 2,179.00 2,064.69 1,256.61 1,259.60 1,236.75
Gross
profit 733.00 647.30 215.09 446.49 1,098.24
EPS (Rs) 26.91 21.10 9.31 13.79 39.32
Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to
the corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible
for discharging its functions and responsibilities towards the Fund in accordance with
the Securities and Exchange Board of India (SEBI) Regulations.
The Sponsor is not responsible or liable for any loss resulting from the operation of
the Scheme beyond the contribution of an amount of Rupees one Lac made by them
towards the initial corpus for setting up the Fund and such other accretions and
additions to the corpus.

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TRUSTEES
Reliance Capital Trustee Co. Limited
Regd. Office: EO1, Reliance Greens, Village Motikhavdi, P.O. Digvijaygram,
District Jamnagar - 361 140. Gujarat. Tel: 0288 3011556, Fax: 02880 3011598.
Corporate Office: Kamala Mills Compound, Trade World, B Wing, 7th. Flr, S.B.
Marg, Lower Parel (w) Mumbai 400 013.
Reliance Capital Trustee Co. Limited (RCTC), a company incorporated under the
Companies Act, 1956, has been appointed as the Trustee to the Fund vide the
Trust Deed dated April 25, 1995 executed between the Sponsor and the Trustee.
THE CUSTODIAN
Deutsche Bank, AG
The Trustee has appointed Deutsche Bank, AG located at Kodak House, Ground
Floor, 222 Dr. D.N.Road, Mumbai-400 001, as the Custodian of the securities that
are bought and sold under the Scheme. A Custody Agreement has been entered
with Deutsche Bank in accordance with SEBI Regulations. The Custodian is
approved by SEBI under registration no. IN/CUS/003 to act as Custodian for the
Fund.
Deutsche Bank AG, the Custodian shall, inter alia:
• Provide post-trading and custodial services to the Mutual Fund;
• Keep Securities and other instruments belonging to the Scheme in safe
custody;
• Ensure smooth inflow/outflow of securities and such other instruments as and
when necessary, in the best interests of the unitholders;
• Ensure that the benefits due to the holdings of the Mutual Fund are
recovered; and

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• Be responsible for loss of or damage to the securities due to negligence on its
part on the part of its approved agents.
OUR CORPORATE GOVERNANCE POLICY
Reliance Capital Asset Management Ltd. has a vision of being a leading player in
the Mutual Fund business and has achieved significant success and visibility in the
market.
However, an imperative part of growth and visibility is adherence to Good Conduct
in the marketplace. At Reliance Capital Asset Management Ltd., the
implementation and observance of ethical processes and policies has helped us in
standing up to the scrutiny of our domestic and international investors.

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MANAGEMENT
The management at Reliance Capital Asset Management Ltd. is committed to good
Corporate Governance, which includes transparency and timely dissemination of
information to its investors and unitholders. The Reliance Capital Asset
Management Limited Board is a professional body, including well-experienced and
knowledgeable Independent Directors. Regular Audit Committee meetings are
conducted to review the operations and performance of the company.
EMPLOYEES
Reliance Capital Asset Management Ltd. has a preset code of conduct for all its
officers. It has a clearly defined prohibition on insider trading policy and regulations.
The management believes in the principles of propriety and utmost care is taken
while handling public money, making proper and adequate disclosures.
All personnel at Reliance Capital Asset Management Ltd. are made aware of the
dos and donts as part of the Dealing policy laid down by the Securities and
Exchange Board of India (SEBI). They are taken through a well-designed HR
program, conducted to impart work ethics, the Code of Conduct, information
security, Internet and e-mail usage and a host of other issues.
One of the core objectives of Reliance Capital Asset Management Ltd. is to identify
issues considered sensitive by global corporate standards, and implement
policies/guidelines in conformity with the best practices as an ongoing process.
Reliance Capital Asset Management Ltd. gives top priority to compliance in true
letter and spirit, fully understanding its fiduciary responsibilities.

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THE REGISTRAR
Reliance Capital Asset Management Limited has appointed M/s. Karvy
Computershare Pvt. Limited to act as the Registrar and Transfer Agent to the
Schemes of Reliance Mutual Fund. M/s. Karvy Computershare Pvt. Limited (KCL)
having their office at No.21, Avenue 4, Street No.1, Adjacent to Rainbow Hospital,
Banjara Hills, Hyderabad - 500 034, is a Registrar and Transfer Agent registered
with SEBI under registration no. INR000000221.
Reliance Capital Asset Management Ltd. and the Trustee have satisfied themselves,
after undertaking appropriate due diligence measures, that they can provide the
services required and have adequate facilities, including systems facilities and back
up, to do so. The Trustee has also laid down broad parameters for supervision of the
Registrar. As Registrar to the Schemes, KCL will accept and process investor's
applications, handle communications with investors, perform data entry services,
dispatch Account Statements and also perform such other functions as agreed, on
an ongoing basis.
The Registrar is responsible for carrying out diligently the functions of a Registrar
and Transfer Agent and will be paid fees as set out in the agreement entered into
with it and as per any modification made thereof from time to time.

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Management Team
Board of Directors
Kanu Doshi Sushil Tripathi Shinichi Okamoto Soumen Ghosh
Management Team
• CEO Sundeep Sikka
• Deputy CEO Himanshu Vyapak
• Head - Equity Investments Sunil B. Singhania
• Fixed Income Amit TripathiHead
Equity Fund Managers
• Shailesh Raj Bhan
• Ashwani Kumar
• Krishan Daga
• Omprakash S. Kuckian
• Sanjay Parekh
Debt Fund Managers
• Prashant Pimple
• Anju Chhajer
Commodities
• Hiren Chandaria Fund Manager

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Head Of Departments
• Prateek Jain Chief Financial Officer
• Ajay Patel Banking Operations
• Pradeep Andrade Infrastructure & Admin
• Raghuvir Mukherji Head Risk Management
• Rajesh Derhgawen Head - HR, Admin & Infrastructure
• Vinay Nigudkar Information Technology
• Bhalchandra Joshi Head - Service Delivery & Investor Relations
• Muneesh Sud Legal, Secretarial & Compliance
• Sanjay Kumar Singh Head - Product Development
Zonal Heads
• Gurbir Chopra Northern Zone Head
• Sanjiv Gudal Western Zone Head
• Gopal Khaitan Southern Zone Head
• Vikas Rathie Eastern Zone Head

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VISION & MISSION OF RELIANCE MUTUAL FUND
Vision Statement
Reliance mutual fund’s vision statement is to be a globally Respected wealth creator
with an emphasis on customer care and a culture of good corporate governance.
Successful Wealth Creation of Our Customers
Total customer Satisfaction
Commitment to Excellence
Mission statement
Reliance mutual fund’s mission statement is to create and nurture a world-class, high
performance environment aimed at delighting our customers.
The main objectives of the Trust are:
• To carry on the activity of a Mutual Fund as may be permitted at law and
formulate and devise various collective Schemes of savings and investments
for people in India and abroad and also ensure liquidity of investments for the
Unit holders;
• To deploy Funds thus raised so as to help the Unit holders earn reasonable
returns on their savings and
• To take such steps as may be necessary from time to time to realize the
effects without any limitation.

33
PRODUCTS OF RELIANCE MUTUAL FUND
Reliance Growth Fund
Reliance Vision Fund
Reliance Income Fund
Reliance Liquid Fund
Reliance Medium Term Fund
Reliance Short Term Fund
Reliance GILT Securities Fund
Reliance Banking Fund
Reliance Monthly Income Plan
Reliance Diverisified Power Sector Plan
Reliance Pharma Fund
Reliance Floating Rate Fund
Reliance Media & Entertainment Fund
Reliance NRI Equity fund
Reliance NRI Income Fund
Reliance Index Fund
Reliance Equity Opportunities fund
Reliance Regular Savings Fund
Reliance Liquidity Fund
Reliance Tax Saver ELSS Fund
Reliance Fixed Tenor Fund
Reliance Equity Fund
Reliance Fixed Horizon Fund
Reliance Long Term Equity Fund

34
SWOT ANALYSIS
STRENGTHS
Brand strategy: As opposed to some of its competitors (e.g. HSBC), Reliance
ADAG operates a multi-brand strategy. The company operates under numerous
well-known brand names, which allows the company to appeal to many different
segments of the market.
Distribution channel strategy: Reliance is continuously improving the
distribution of its products. Its online and Internet-based access offers a
combination of excellent growth prospects and its retail direct business also saw
growth of 27% in 2002 and 15% in 2003.
Various sources of income: Reliance has many sources of income throughout
the group, and this diversity within the group makes the company more flexible
and resistant to economic and environmental changes.
Large pool of skilled and knowledgeable manpower.
Increasing liberalization of government policies.
WEAKNESS
Emerging markets: Since there is more investment demand in the United
States, Japan and the rest of Asia, Reliance should concentrate on these
markets, especially in view of low global interest rates.
OPPORTUNITIES
Potential markets: The Indian rural market has great potential. All the major
market leaders consider the segments and real markets for their products. A
senior official in a one of the leading company says foray into rural India already
started and there has been realization that the rural market is both price and
quantity conscious.

• Rules & Regulation
• Investors Awareness
• Increased Competition
RELIANCE ANY TIME MONEY CARD
Reliance mutual fund offers Reliance Any Time Money Card, linked to mutual fund
schemes offering you instant access to your investment. The card will allow you to
withdraw / spend against your own mutual fund investment by
in visa-enabled ATMs and merchant outlets across the world.
Key Features Of Reliance Any Time Money Card:
The card offers you the benefit of mutual fund investment along with the
convenience of debit cards.
Allow cash withdrawal and
powered ATM/ POS terminals.
Allows balance enquiry in visa
35
THREATS
Rules & Regulation
Investors Awareness
Increased Competition
RELIANCE ANY TIME MONEY CARD
withdraw / spend against your own mutual fund investment by providing you access
enabled ATMs and merchant outlets across the world.
Key Features Of Reliance Any Time Money Card:
convenience of debit cards.
Allow cash withdrawal and transaction in point of sales terminals in visa
powered ATM/ POS terminals.
Allows balance enquiry in visa-enabled ATMs.
providing you access
transaction in point of sales terminals in visa-

36
You have the choice to withdraw from any scheme linked to the card in HDFC
bank ATMs.
In non-HDFC bank ATMs and POS terminals, transaction will happen only
through primary account only (i.e. reliance liquid fund – treasury plan or
Reliance Money Manager Fund).
The card will offer instant liquidity up to a permissible limit as fixed /
determined by the bank for ATM cash withdrawals or 50% of the balance in
scheme account or rs. 500000 (whichever is lower) as set by RMF, per day.
INDUSTRY DETAILS
HISTORY OF M/F INDUSTRY IN INDIA
The end of millennium marks 36 years of existence of Mutual Funds in this country.
The ride through these 36 years is not been smooth. Investor opinion is still divided.
While some are for Mutual Funds others are against it.

37
First Phase 1987- 1964
Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set
up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from
the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory
and administrative control in place of RBI. The first scheme launched by UTI was
Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crore of assets under
management.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non-UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non-UTI Mutual Fund
established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab
National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of
India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund
in June 1989 while GIC had set up its mutual fund in December 1990. At the end of
1993, the mutual fund industry had assets under management of Rs. 47,004 crores.
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
fund industry, giving the Indian Investors a wider choice of fund families. Also, 1993
was the year in which the first Mutual Fund Regulations came into being, under
which all mutual funds, except UTI were to be registered and governed. The
erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private
sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund)
Regulations were substituted by a more comprehensive and revised Mutual Fund
Regulations in 1996. The industry now functions under the SEBI (Mutual Fund)
Regulations 1996. The number of mutual fund houses went on increasing, with many

38
foreign mutual funds setting up funds in India and also the industry has witnessed
several mergers and acquisitions. As at the end of January 2003, there were 33
mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.
44,541 crores of assets under management was way ahead of other mutual funds.
Fourth Phase - since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs. 29,835 crores as at the end of
January 2003, representing broadly, the assets of US 64 scheme, assured return
and certain other schemes. The Specified Undertaking of Unit Trust of India,
functioning under an administrator and under the rules framed by Government of
India and does not come under the purview of the Mutual Fund Regulations. The
second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76,000
crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth.

39
IN M/F INDUSTRY HOW THE PICTURE HAS CHANGED FROM THE PAST TO
THE PRESENT
Mutual Funds In the past At present
Scheme structure Close-end schemes with
ling locking periods.
Open-end schemes with bank
like convenience.
Investment focus Equity products. Debt products and equity
Range of products Equity products Full range of income, growth,
balanced and liquid funds.
Investor
expectations
Little understanding of the
concept, unreasonable
expectations of returns.
Better understanding of the
concept. Values transparency
and service. Convenience and
tax efficiency are the key
decision drivers.
Selling methods Vast networks of
untrained sub brokers
and agents.
Direct selling and reliance of
fewer distributors who are more
committed and knowledgeable.
Market competition Many players but each
offered similar products.
Investors hardly bothered
to check credentials.
Fewer players with good
performance and service track
record control bulk of the market.
Promotion Large media splashes
with lots of hype.
Low key and focused approach
towards brand building.

40
REASON OF POOR PERFORMANCE OF M/F INDUSTRY IN INDIA (IN PAST)
Most investors associate Mutual Funds with Master gain, Monthly Equity
Plans of SBI Mutual Fund, UTI and Can bank Mutual Fund and of course
Morgan Stanley Growth Fund. This is so because these funds truly had
participation from masses, with a fund like Morgan Stanley having more than
1 million investors. Investors feel that after 5 years, Morgan Stanley Growth
Fund units still trade below the original IPO price of Rs 10.
It is incorrect to think that all Mutual Funds have performed poorly. If one
looks at some income funds, they have come with reasonable returns. It is
only the performance of equity funds, which has been poor. Their poor
performance has been amplified by the closed end discounts i.e. units of
these funds quoting at sharp discounts to their NAV resulting in an even
poorer return to the investor.
One must remember that a Mutual Fund does not provide assured returns
and neither can it "manufacture" returns out of thin air. Returns provided by
Mutual Funds are a function of the returns in the underlying asset class in
which the fund invests. Good funds can beat returns in their asset class to
some extent but that’s all. E.g. take the case of a sector specific fund like a
Pharma fund which invests only in shares of pharmaceutical companies. If the
Govt. comes with new regulation that severely restricts the pricing freedom of
these companies resulting in negative outlook for the sector, the prices of all
stocks in the sector could fall substantially resulting in severe erosion in the
NAV of the fund. No one can do anything about it.
Let us extend this example to an analysis of the investment climate in the last
7 years. The stock markets have done very badly in the last seven years. The
BSE Sensex crossed 3000 for the first time in early 1992. Since then it has
gone up and come down several times but has remained in the same range.
Effectively, for a seven-year investment period, the total return has been
almost zero. The prices of many leading stocks of yesteryear have fallen by
more than 50% in these seven years. If one considers the fact that the
Sensex has been changed several times, with all the weak stocks having

been weeded out, the effective returns on the old Sensex, existing in 1992,
have been substantially negative.
Most Mutual Fund managers took some time to realize the changed
circumstances wherein the open economy ushered in by the liberalization
took the full impact of the global deflation in commodity prices. This problem
was compounded further by the Asian crisis after which c
Asia caused severe pressure on profits.
To add to this, most funds had invested some part of their portfolio in medium
sized "growth" companies. Many of these companies have performed even
worse than bigger ones and quite a few have seen
90% from their 1994 highs. More important, funds could not sell these shares
because of complete lack of liquidity with, at best, few hundred shares being
traded every day.
Meanwhile, shares of companies in sectors like consumer
software were showing good growth and they went up rapidly in price. Most
fund managers were unwilling to sell shares of erstwhile "blue chips" at low
prices and buy shares of emerging "blue chips" at high prices. This resulted in
poor performance and negative returns.
Market Share Of
41
have been substantially negative.
d managers took some time to realize the changed
was compounded further by the Asian crisis after which cheap imports from
Asia caused severe pressure on profits.
worse than bigger ones and quite a few have seen share prices dip more than
Meanwhile, shares of companies in sectors like consumer goods (FMCG) and
formance and negative returns.
Market Share Of M/Fs In Total Fund Size
d managers took some time to realize the changed
heap imports from
share prices dip more than
goods (FMCG) and
M/Fs In Total Fund Size

42
AMC Market Share (%)
Banks 70
Private Sector 22
Public Sector & Financial Institution 8
INTERPRETATION
Until 1986, Bank was sole player in Mutual Fund sector, but in present situation
thighs are somewhat different. Now Mutual Fund sector is open for private and
foreign players, so that market share of Bank has come down to 70%. But still it
enjoys the leader position in the Mutual Fund sector. While other players like private
sector, public sector & Financial Institutes are still new for Mutual Fund.
IDEAL AUM SIZE FOR MUTUAL FUND
At present, the total mutual fund industry in India is of Rs1, 50,000crores,
which has grown by more than 100% in the last 6 years. I would like to say that there
is concept like idle size but we firmly belief that with the introduction of new and
innovative products, mutual fund companies would be able to more than double its
assets from the present levels going forward.
FOREIGN ASSET MANAGEMENT COMPANIES ENTERING INDIA
Yes, we will see a number of foreign AMC’s who would be willing to enter into the
Indian markets. Recently, Fidelity Investments, a global financial services major
based in the US, has received an in-principle approval from the SEBI to commence
mutual fund business in the India. With over US$1trillion in assets under
management worldwide, Fidelity fund operations are the world’s largest.
They would soon be starting their operation in India and are expected to come with
an MF NFO offering soon. Other giants like the Vanguard Group, which is an

43
investment management company offering a wide array of mutual funds and other
financial products and services in the United States and other countries may also opt
to make their presence in India. It is one of the world’s largest pure no load mutual
fund companies.
GLOBAL SCENARIO
The money market fund segment has a total corpus of $1.48 trillion in the US
against a corpus of $100 million in India.
Out of the top 10 mutual funds worldwide, eight are bank sponsored. Only Fidelity
and capital are non-bank mutual funds in this group.
In the US the total number of schemes is higher than that of the listed companies
while in India we have just 277 schemes.
Internationally, mutual funds are allowed to go short. In India fund managers do
not have such leeway.
In the US about 9.7 million households will manage their asset on-line by the year
2003, such a facility is not yet of avail in India.
On-line trading is great idea to reduce management expenses from the current
2% of total assets to about 0.75% of the total asset.
72% of the core customer base of mutual funds in the top 50-broking firms in the
US where expected to trade on line by-2003.

44
PRICING
Pricing of a different AMCs are differ as per the schemes offered by them. The
standard structure of pricing is as follows.
Minimum Application Amount/Number of Units:
Lump sum SIP
Resident Indians Rs. 5,000 Rs.500
Non-Resident Indians Rs. 5,000 Rs.500
and in multiples of Re. 1/- thereafter for both plans.
Load Structure: Continuous Offer
Entry Load
For Subscription below Rs. 2 crore 2.25%
For Subscription of Rs 2 crores & above but below
Rs. 5 crore
1.25%
For Subscriptions of rs. 5 crore & above Nill
Exit Load Nill

45
COMPITITORS DETAILS
(1) PRUDENTIAL ICICI MUTUAL FUND:-
The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the
largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was
setup on 13th of October, 1993 with two sponsors, Prudential Plc. and ICICI Ltd. The
Trustee Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential
ICICI Asset Management Company Limited incorporated on 22nd of June, 1993.
(2) TATA MUTUAL FUND:-
Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsor for
Tata Mutual Fund is Tata Sons Ltd., and Tata Investment Corporation Ltd. The
investment manager is Tata Asset Management Limited and its Tata Trustee
Company Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the
country with more than Rs. 7,703 crores (as on April 30, 2005) of AUM.
(3) FRANKLIN TEMPLETON INDIA MUTUAL FUND:-
The group, Franklin Templeton Investments is a California (USA) based company
with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest
financial services groups in the world. Investors can buy or sell the Mutual Fund
through their financial advisor or through mail or through their website. They have
Open end Diversified Equity schemes, Open end Sector Equity schemes, Open end
Hybrid schemes, Open end Tax Saving schemes, Open end Income and Liquid
schemes, closed end Income schemes and Open end Fund of Funds schemes to
offer.

46
(4) STATE BANK OF INDIA MUTUAL FUND:-
State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch
off short fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately.
Today it is the largest Bank sponsored Mutual Fund in India. They have already
launched 35 Schemes out of which 15 have already yielded handsome returns to
investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM.
SOME OF THE AMC WORKING CURRENTLY
Name of the AMC
Alliance Capital Asset Management company Private Limited
Birla Sun Life Asset Management Company Limited
Bank of Baroda Asset Management Company Limited
Bank of India Asset Management Company Limited
Can bank Investment Management Services Limited
Cholamandalam Cazenove Asset Management Company Limited
Dundee Asset Management Company Limited
DSP Merrill Lynch Asset Management Company Limited
Escorts Asset Management Limited
First India Asset Management Limited
GIC Asset Management Company Limited

47
IDBI Investment Management Company Limited
Indfund Management Limited
ING Investment Asset Management Company Private Limited
J M Capital Management Limited
Jardine Fleming (I) Asset Management Limited
Kotak Mahindra Asset Management Company Limited
Jeevan Bima Sahayog Asset Management Company Limited
Morgan Stanley Asset Management Company Private Limited
Punjab National Bank Asset Management Company Limited
Reliance Capital Asset Management Company Limited
State Bank of India Funds Management Limited
Shriram Asset Management Company Limited
Sun F and C Asset Management (I) Private Limited
Sundaram Newton Asset Management Company Limited
Tata Asset Management Company Limited
Credit Capital Asset Management Company Limited
Templeton Asset Management (India) Private Limited
Unit Trust of India
Zurich Asset Management Company (I) Limited

48
REGULATORY ENVIRONMENT
ASSOCIATION OF MUTUAL FUND IN INDIA (AMFI) BOARD:-
AMFI is not a self-regulatory organization. AMFI is regulated by its own board
made up of its members. It runs under the guidance of RBI and SEBI. It was
formed for promoting mutual funds into masses. To be a Mutual Fund Advisor,
AMFI Board takes an exam for it.
THE AMFI CODE OF ETHICS:-
One of the objects of the Association of Mutual Funds in India (AMFI) is to promote
the investors’ interest by defining and maintaining high ethical and professional
standards in the mutual fund industry. In pursuance of this objective, AMFI had
constituted a Committee under the Chairmanship of Shri A. P. Pradhan with Shri S.
V. Joshi, Shri C. G. Parekh and Shri M. Laxman Kumar as members. This
Committee, working in close co-operation with Price Waterhouse–LLP under the
FIRE Project of USAID, has drafted the Code, which has been approved and
recommended by the Board of AMFI for implementation by its members. I take
opportunity to thank all of them for their efforts The AMFI Code of Ethics, “The ACE”
for short, sets out the standards of good practices to be followed by the Asset
Management Companies in their operations and in their dealings with investors,
intermediaries and the public.
SECURITY EXCHANGE BOARD OF INDIA (SEBI):
Mutual Funds are regulated by SEBI Regulations, 1996. SEBI is the regulator of all
funds except offshore funds. In the year 1992 SEBI Act was passed. The objectives
of SEBI are – to protect the interest of investors in securities and to promote the
development of and to regulate the securities market.

49
As far as Mutual Funds are concerned, SEBI formulates policies and regulates the
Mutual Funds to protect the interest of the investors. SEBI notified regulations for the
Mutual Funds in 1993. Thereafter, Mutual Funds sponsored by private sector entities
were allowed to enter the capital market. The regulations were fully revised in 1996
and have been amended thereafter from time to time. SEBI has also issued
guidelines to the Mutual Funds from time to time to protect the interests of investors.
Before starting an AMC the sponsor has to register it with the SEBI. Any changes
into the philosophy or investment pattern in the Company should be reported to
SEBI.
REGULATORY STRUCTURE OF MUTUAL FUNDS
The structure of mutual funds in India is governed by the SEBI (mutual fund)
Regulations, 1996. These regulations make it mandatory for mutual funds to have a
three-tier structure of
The sponsor is the promoter of the mutual fund, and appoints the Trustees. The
trustees are responsible to the investors in the mutual fund and appoint the AMC for
managing the investment portfolio. The AMC is the business face of the mutual fund,
as it manages all the affairs of the mutual fund. The mutual fund and the AMC have
to be registered with SEBI.SEBI regulations also provide for who can be a sponsor,
trustee and AMC, and specify the format of agreements between these entities.
Sponsor
Trustee
Asset Management Company

50
SPONSOR
The sponsor is the promoter of the mutual fund. The sponsor establishes the
mutual fund and registers the same with SEBI.
Sponsor appoints the trustees, custodians and the AMC with prior approval of
SEBI, and in accordance with SEBI Regulations.
Sponsor must have at least 5-year track record of business interest in the
financial markets.
Sponsor must have been profit making in at least 3 of the above 5 years.
Sponsor must contribute at least 40% of the capital of the AMC.
TRUSTEES
The mutual fund, which is a trust, is managed either by a trust company or a Board
of trustees. The provisions of the Indian Trust Act govern board of trustees and trust
companies. It is the responsibility of the trustees to protect the interest of investors,
whose fund is managed by the AMC. The AMC and other dictionaries are
functionally accountable to the trustees.
The sponsor executes and registers a Trust deed in favour of the trustees.
The third schedule of the SEBI regulations specifies the contents of the trust
deed. The trust deed has to be stamped and registered according to the
Indian Registration Act.
The appointment of all trustees has to be done with prior approval of SEBI.
There must be at least 4 members in the board of trustees and at least 2/3 of
the members of the board of trustees must be independent.
Trustees of one mutual fund cannot be trustees of another mutual fund, unless
he is an independent trustee in both cases, and has the approval of both the
boards

51
Review of Literature
Madhusudhan V Jambodekar (1996) conducted his study to size-up the direction of
mutual funds in investors and to identify factors influence mutual fund investment
decision. The study tells that SIP scheme is most favoured among other things that
income schemes and open-ended schemes. News papers are used as information
source, safety of principal amount and investor services are priority points for
investing in mutual funds.
Mehta Sushilkumar (2010) analyze the performance of mutual fund schemes of SBI
and UTI and found out that SBI schemes have performed better then the UTI in the
year 2007-2008. Selvam et.al (2011) studied the risk and return relationship of Indian
mutual fund schemes. The study found out that out of thirty five sample schemes,
eleven showed significant t–values and all other twenty four sample schemes did not
prove significant relationship between the risk and return. According to t-alpha
values, majority (thirty two) of the sample schemes' returns were not significantly
different from their market returns and very few number of sample schemes' returns
were significantly different from their market returns during the study period.
Agrawal Deepak & Patidar Deepak (2009) studied the empirically testing on the
basis of fund manager performance and analyzing data at the fund-manager and
fund-investor levels. The study revealed that the performance is affected by the
saving and investment habits of the people and at the second side the confidence
and loyalty of the fund Manager and rewards- affects the performance of the MF
industry in India.

52
Shankar (1996) suggested that for penetrating mutual fund culture deep in to society
asset management companies must have to work and steer the consumer product
distribution model.
Raja Rajan (1997) underlined segmentation of investors and mutual fund products to
increase popularity of mutual funds.

53
PROBLEM FORMULATION
Reliance Capital which is relatively new to the business has got a good penetration
in the market. With the reputed brand name, it has done a good business in very
short time. Reliance Money is the company formed under head Reliance Capital Ltd.
which is led by Mr. Anil Ambani. Reliance Capital is well reputed for its financial
services. Reliance Capital stepped in financial services sector in 1986 and started
managing portfolio of their clients in 1990.
Generally Indian investors, who regularly invest their money, don’t consider SIP or
STP or any other scheme of mutual fund nowadays in India important of mutual fund
or any other mutual fund scheme has increased but although it’s very less with
compare to USA. In India 75% of total investments are there in stock market while in
USA 75% of investments are there in mutual fund and they always prefers SIP or
STP most of times.
RESEARCH OBJECTIVE
Primary Objectives: - (1) To check the awareness of investors regarding SIP &
……………………………… STP in Surat city.
(2) To know the perception regarding SIP & STP Investor in
Surat city.
Secondary objective: - (1) To identify the AMC which is most preferred for SIP &
……………………………… STP in Surat city.
(2) To identify the preferred fund for SIP & STP in
………………………………. .Surat city.
IMPORTANCE OF THE STUDY
The study will be helpful to the company for getting information about the
awareness of SIP & STP in the population.
The study will be helpful have a complete knowledge about the Mutual fund
Industry.
The study will be useful to have a view about the investor’s needs, way of
investing and what they actually want/consider while investing.

54
Research Methodology
RESEARCH DESIGN
TYPE OF RESEARCH:
The research is an exploratory type of research. The few reasons for terming this
study as an exploratory study can be given as under:
The organization did not have any idea about the effectiveness of the program
that it was conducting; it was all to be gathered anew.
They did not have any other data that could be used as a substitute instead of
the new data, hence collected, to test the effectiveness. All the data had to be
collected from the respondents.
The survey was conducted for the first time in the organization so all the aspects
were to be looked into and the data was to be collected from these various
sources.
Many different points were to be evaluated and data was to be collected from all
the selected respondents.
This clearly shows that no data was readily available, based on which any analysis
could have been carried out earlier. All the data was to be collected anew. Thus it
can be concluded that it definitely is an Exploratory Study.

55
SAMPLING DESIGN
• AREA OF STUDY:
For the research, the Investors consisted of Walk in Walk out of investors at
Reliance capital asset Ltd. At their branch of surat, The population consisted of
100 Investors. The sampling frame included all the types of Investors.
• SIZE OF SAMPLE
The type of sampling is non-probability sampling. The research is based on
convenience sampling and Judgmental sampling. The size of sample selected
is 100 Investors.
• DURATION OF RESEARCH
The research was carried out for 6 weeks
(From 6th
June to 18th
July, 2013)
• TYPE OF DATA COLLECTED
The data collected was specifically investors who invested in Mutual Funds. The
main were the walk in walk outs of the Banks, high end investors that could give the
perfect results of the study.

56
TOOLS OF DATA COLLECTION
Primary Data Collection
As the research is based on primary and secondary data, the tool used for data
collection is collection of data through schedules. A structured questionnaire was
used for the purpose of research. A copy of it is attached in Annexure.
A specialized questionnaire was designed, for the investors who had invested in
Mutual Funds, keeping in mind the various aspects involved while investing in Mutual
Funds. By the means of different questions, the questionnaire evaluated the
“Investors Behavior for investing in Mutual Funds & especially for SIP & STP” The
questionnaire used had different questions that a investors take it as important while
investing in Mutual Funds. All that the respondents were required to do was to tick in
the box that represented their views on that particular aspect, and if their view were
different from the options given they had to specify other things which were the
answers to the questions.
After this plotting the responses of questions was combined wherever needed
according to the aspect that was evaluated with those questions and accordingly
analyzed. It is from this data that the final interpretations are drawn about the
effectiveness of the Investors Behavior.
Secondary Data Collection: -
The Secondary Data was collected from manager operation, Mr. Dharmesh Rana
and staff members of Reliance mutual fund, surat branch. The data were also taken
from the relevant information from Mr. Tejas Desai Branch Manager of Reliance
Mutual fund Ltd.

57
The other source of Secondary Data is as follows
• Secondary Source: -
(1) Internet (Website described in Bibliography)
(2) Various magazines/bulletins
(3) Related books

DATA INTERPRETATION & ANALYSIS
1. Occupation status
Options
govt. servant
pvt. Employee
Business
profession
Others
The above Chart shows the Occupation followed by the Respondents. The
analysis show that from the 100 Respondent about 43% were Private Employees
Working in an Private Organization, 38% were Business class People, 2% were
Professionals and 6% were others that inclu
being Government Employee invested in Mutual Funds.
0
10
20
30
40
50
govt. servent
pvt.
Employee
11
43
58
DATA INTERPRETATION & ANALYSIS
1. Occupation status.
ptions respondents
servant 11
pvt. Employee 43
usiness 38
profession 2
thers 6
Chart shows the Occupation followed by the Respondents. The
Professionals and 6% were others that included Labour Class, Student etc. 11%
being Government Employee invested in Mutual Funds.
Employee
business
profession
others
38
2 6
respondents
respondents
Chart shows the Occupation followed by the Respondents. The
Class, Student etc. 11%
respondents

2. Percentage of respondents who already invested in mutual fund
Above graph shows that 77% of investors from the total respondents (surveyed
people) are current investor or they are aware of mutual fund before.
23%
Percentage of respondents who
already invested in mutual fund
Option
YES
NO
59
Percentage of respondents who already invested in mutual fund
77%
23%
already invested in mutual fund
Respondents (%) Respondents
77 %
23 %
Percentage of respondents who already invested in mutual fund
YES
NO
Respondents
77
23

3. Belief about mutual fund investment option
Options
Excellent
Good
Highly preferred
Somewhat preferred
Poor
Very poor
33 respondents believes that mutual fund option is good for investment, 27
believes that it’s excellent ,9 believe that it’s highly preferred so ultimately it shows
that mutual fund & it’s schemes are being captured the heart of investors. it’s a
good sign for all those who are concern with it.
0
Excellent
Good
Highly preferred
Somewhat preferred
Poor
Very poor
Belief about mutual fund investment
60
Belief about mutual fund investment option
Respondents
27
33
preferred 9
Somewhat preferred 18
10
3
it’s schemes are being captured the heart of investors. it’s a
good sign for all those who are concern with it.
9
18
10
3
5 10 15 20 25
Respondents
it’s schemes are being captured the heart of investors. it’s a
27
33
30 35

4. Awareness about SIP & STP
Option
NO
YES
23 % investors from mutual fund investors are not aware of
of mutual fund it shows that
shows good sign about SIP & STP
77%
Awareness about SIP & STP
61
Option Respondents
NO 23
YES 77
23 % investors from mutual fund investors are not aware of SIP & STP
of mutual fund it shows that SIP & STP schemes are such a popular in investors it
SIP & STP future.
23%
SIP & STP schemes
schemes are such a popular in investors it
NO
YES

5. As per investor’s view SIPs are best for
Options
Market volatility
Sectorial investing
Maximum return
Other
Unknown
Most of investors believe that SIP is best to get a gain of market volatility.
36
0
5
10
15
20
25
30
35
40
Market
volatility
As per investor’s view SIPs are best for
62
5. As per investor’s view SIPs are best for
respondents
Market volatility 36
Sectorial investing 9
Maximum return 32
0
23
9
32
0
Sectorial
investing
Maximum
return
other unknown
respondents
23
unknown

6. Why investor choose STP
Options
market volatility
sectorial investing
maximum return
Other
unknown
Most of investors believe that STP is best to get a gain of sartorial investing
17
0
5
10
15
20
25
30
35
40
market volatility sectorial investing
As per investor’s view STPs are best for
63
Why investor choose STP?
respondent
market volatility 17
sectorial investing 38
maximum return 19
3
23
38
19
3
sectorial investing maximum return Other
respondent
23
unknown

7. Investor preference towards plan
Options
SIP
STP
Total
Most of the respondents prefer SIP as the best option among SIP &
STP
36%
Investor preference on SIP/STP
64
Investor preference towards plan.
Plan
64
36
100
Most of the respondents prefer SIP as the best option among SIP &
Investor preference on SIP/STP
Most of the respondents prefer SIP as the best option among SIP & STP.
SIP
64%

8. Investors recommend on AMC
AMC
Reliance M/F
HDFC M/F
UTI M/F
SBI M/F
Other
Above chart shows that investors shows a
SIP & STP.
38
0
5
10
15
20
25
30
35
40
Reliance M/F HDFC M/F
Investors recommend on AMC
65
Investors recommend on AMC for SIP & STP.
No. of respondent
Reliance M/F 38
HDFC M/F 22
UTI M/F 07
SBI M/F 15
06
Above chart shows that investors shows a great trust in reliance mutual fund for
22
7
15
HDFC M/F UTI M/F SBI M/F
Investors recommend on AMC
No. of respondent
reliance mutual fund for
6
Other

66
9. Investors prefer area for investment
Options No. of respondent
SIP 25
STP 15
NFO 43
EXISTING SCHEMES 8
ELSS 9
Above chart shows that 43 investors means 43 % of total investors like to invest
during the NFO and 25 investors likes to invest through SIP as the same time
investors prefers STP very rarely.
0
5
10
15
20
25
30
35
40
45
50
No. of respondent
Investors prefer area for investment
SIP STP NFO EXISTING SCHEMES ELSS

10. Importance of Time Horizon.
Response on Investing on Time
Horizon
YES
NO
The above chart shows the Does the respondents give importance to the Time
Horizon while investing in Mutual Funds, the analysis showed that 87% of the
respondent do keep the time horizon while investing (Duration of Time Horizon is
shown in next analysis), and 13% don’t see the Time Horizon but do invest and
redeem according to their requirement of the fund.
87%
13%
67
Importance of Time Horizon.
Respondents
87
13
, and 13% don’t see the Time Horizon but do invest and
redeem according to their requirement of the fund.
13%
Horizone
YES
NO
Respondents
, and 13% don’t see the Time Horizon but do invest and
YES
NO

Duration of Time Horizon
Time Horizone
< 1 year
2-5 year
5-10 year
>10 year
As per the Scheme
The above chart shows the Duration of the Time Horizon taken by the 87% of the
respondents it is been analyzed that 24 of the respondent keep it for less than 1
year, and 35 invest 2 –
invest in new funds, 3 of the r
suitable to them, 20 keep Time Horizon between 5 to 10 years, for long term
schemes of SIP and ELSS, 5 respondents invest till 10 years.
24
0
5
10
15
20
25
30
35
40
< 1 year
Response on Time Horizone
68
Duration of Time Horizon
Time Horizone Response
24
35
20
5
As per the Scheme 3
shows the Duration of the Time Horizon taken by the 87% of the
5 years seeing the market growth, this respondent major
invest in new funds, 3 of the respondent keep Time Horizon as per the scheme
schemes of SIP and ELSS, 5 respondents invest till 10 years.
35
20
5
2-5 year 5-10 year >10 year As per the
Scheme
Response on Time Horizone
Response
shows the Duration of the Time Horizon taken by the 87% of the
5 years seeing the market growth, this respondent major
espondent keep Time Horizon as per the scheme
3
As per the
Scheme

11. Preferable option while investing in Mutual Funds.
Option
Growth
Dividend
The above chart shows the Preferable Option while investing in Mutual Funds, the
analysis shows that 68% of the respondent went for Growth Option as the Money
that has been invested the returns are again reinvested and the
could be high, and 32% respondents went for Dividend, as they want to earn per
intervals, but here the returns are low compared to Growth.
32%
Responses Showing Preferable option while
69
Preferable option while investing in Mutual Funds.
Option Response
Growth 68
Dividend 32
that has been invested the returns are again reinvested and the
intervals, but here the returns are low compared to Growth.
68%
Investing
Response
that has been invested the returns are again reinvested and the rate of return
68%
Growth
Dividend

12. Other Sources of the income of the Respondents.
Option
YES
NO
The above chart shows the analysis of t
Respondents, other than the basic income from their profession. 62% of the
respondents were having other sources of income (that we would see in the next
chart), but 38% were not hav
invested in Mutual Funds) but were planning in near future to have some other
sources of returns.
38%
Other Source of Income
70
Other Sources of the income of the Respondents.
Option Respondents
YES 62
NO 38
chart shows the analysis of the other sources of the income of the
chart), but 38% were not having any other source of income (they had just
62%
Other Source of Income
YES
he other sources of the income of the
ing any other source of income (they had just
YES NO

13. Monthly Average Income of the Respondents in (‘000)
Option
5 TO 15
15 TO 25
26 TO 35
36 TO 45
> 45
It was analyzed that 42% were having their Monthly inco
Thousand, 6% were earning more than 45 Thousand, 20% were earning between
26 to 35 Thousand, 18% were having their
were earning as high as 36 to 45 thousands From this chart we can find that every
different income group were investing in Mutual Funds.
20%
14%
Monthly Average Income of Respondents (in
71
Monthly Average Income of the Respondents in (‘000)
Option Respondents
5 TO 15 18
15 TO 25 42
26 TO 35 20
36 TO 45 14
6
It was analyzed that 42% were having their Monthly income between 15 to 25
% were earning more than 45 Thousand, 20% were earning between
26 to 35 Thousand, 18% were having their income of 5 to 15 thousand
different income group were investing in Mutual Funds.
18%
42%
6%
'000)
Monthly Average Income of the Respondents in (‘000)
Respondents
me between 15 to 25
% were earning more than 45 Thousand, 20% were earning between
income of 5 to 15 thousand and 14%
5 TO 15
15 TO 25
26 TO 35
36 TO 45
> 45

14. Percentage of Monthly Income Investment
Options
<10%
10-20%
20-30%
>30%
The analysis shows that 34% of respondents were not investing more than 10% of
their income in investment, because of their low salary, different other factors as Lic
Premium and having a fear to
investments between 10 –
of their Income, these are the respondents who have high end salary and invest to
have a enjoy the taxation policy. 16% of the respondents invested 20
income.
34
0
5
10
15
20
25
30
35
40
45
<10%
Percentage of Monthly Income Invested
72
Percentage of Monthly Income Investment
Options Respondents
<10% 34
20% 42
30% 16
>30% 08
Premium and having a fear to lose their money in investments, 42 % were having
– 20 %, 8% of the Respondents invested more than 30%
have a enjoy the taxation policy. 16% of the respondents invested 20
42
16
8
10-20% 20-30% >30%
Respondents
their money in investments, 42 % were having
20 %, 8% of the Respondents invested more than 30%
have a enjoy the taxation policy. 16% of the respondents invested 20 – 30% of their
8
>30%

15. Gender of the Respondents.
Option
Male
Female
The chart above shows the gender of the respondents. The sample size
comprised of 78% male respondents and 22% female respondents.
Female
22%
Gender of the Respondents.
73
r of the Respondents.
Option Respondents
Male 78
Female 22
Male
78%
Gender of the Respondents.
Male
78%

74
FINDINGS
Survey carried out shows what Investors behave while investing in Mutual
Funds & especially in SIP & STP.
The findings and conclusions of the research are listed below:
Majority of the respondents are Private employees other than Govt. servants,
businessman and Professionals.
Most of the investors know SIP & STP schemes of mutual fund who have
already invested in mutual fund.
Most of the respondents have other sources of income other than mutual funds
which mostly includes rent and other various sources. The sample size consists
of respondents from various income segments who invest mostly 10-20% of
their income in banks, mutual funds and Govt. securities.
While investing, the duration of time horizon is important and the respondents
mostly believe it to be less than a year.
The study reveals that while investing in mutual funds, respondents more prefer
growth compare to dividend.

75
RECOMMENDATIONS
The recommendations are listed below:
The company should focus and create awareness of SIP & STP among
individuals of different occupations, educational qualifications and different
income segments.
AMC should look for schemes, which could provide tax free returns like
insurance and PPF.
Investors should be encouraged in order to invest a higher percentage of their
monthly income and savings into SIP & STP.
Tax Benefits is another factor, which could make the investors to invest. So
AMC try to market more tax oriented schemes which could motivate the
investors to invest.
AMC should try to target the people with less income to invest in SIP’s with low
investment periodically.

76
CONCLUSION
From the project of one-half month at the Reliance Mutual Fund, Surat, I can
conclude that the investment market for mutual fund schemes SIP & STP are
threatened by bank deposits, PPF, Life insurance, post office, etc. Main reason
behind that is people are more concern about the security of money and life after
retirement and also fixed rate of return. The misconception that prevails among the
most of investor and investment advisor is that mutual fund’s schemes SIP & STP
are only for middle class & it is invested in stock markets. Very small numbers of
investor are aware about the mutual fund and its concept. So, the success lies in
creating awareness among investor and brokers.
Many investor are through being now aware about the mutual fund market but still
lots has to be done to create awareness and aggressive marketing is needed to be
done in these SIP & STP sector. This is one of the reasons why an investor is not
able to trust the advisor in some cases of their investment. But due to benefits and
advantages being offered SIP & STP we can say that it will emerges as reliable
investment avenue.
I feel pleased to conclude my training. It is not possible to get a good practical
knowledge without better response from the trainee head. I get fully support from the
Mr. Mohit Arrora. I am also thankful to my project guide prof. Pratik Joshi to give
an appropriate guide line when I needed. Still mutual fund industry is in growth stage
and I hope it is continue in future also. Still many small scale entrepreneurs are not
aware about mutual fund that is poor indicator for this industry. I hope Reliance will
take care about this and in future it is come up as a one of the biggest mutual fund
distributor company. During my training I get the both the knowledge and practical
aspect also. At last I thank full to Mr. Tejas Desai (manager) for give permission to
take training at Reliance mutual fund.

77
LIMITATIONS OF STUDY
Every work has its own limitations. Limitations are extent to which the
process should not exceed. The following limitations for the project are:
Duration of Project was not enough to make our conclusion on such a vast
Subject.
Time constraints have also become a major limitation.
The sample size taken for drawing the conclusion was not sizeable.
Customers ignorance was faced during discussions with respondents.
As sampling technique is convenient sampling so it may result in personal
bias.
Even respondents may give bias answer.
This research is only for Surat city. It cannot be generalized for other cities.

78
BIBLIOGRAPHY
BOOKS
Kotler, P. (2003). Marketing Management . Delhi: Prentice Hall of India.
Naresh, M. (2004). Marketing Research. New Delhi: Pearson Education.
Sankaran, M. S. (2013). National Institute of Securities Markets. Navi
Mumbai: National Institute of Securities Markets.
Schindler, D. R. (2009). Business Research Method. New Delhi: Tata
McGraw Hill.
Websites
http://portal.amfiindia.com/showhtml.aspx?page=mfconcept
http://newdimensions-albania.org.pandastats.net/
http://www.investopedia.com/articles/basics/11/3-s-simple-
investing.asp
http://www.mutualfundindia.com/home/mfbasics
http://www.reliancecapital.co.in/ourbusiness_rmf.html

79
ANNEXURE
Perception of small scale entrepreneur towards mutual fund in Surat city.
I am Zinkal M Sheta. M.B.A. sem III MEFGI. Surat, request you to kindly fill up
the following questionnaire for my research project as a part of my curriculum for
completing of M.B.A. program.
We assume that information revealed here will remain confidential and will be
used for academic only.
Questionnaire
For
“INVESTOR AWARENESS AND PERCEPTION REGARDING
RELIANCE MUTUAL FUND ESPECIALLY ON SIP & STP”
(PLEASE TICK (√) IN APPROPRIATE PLACE )
Personal Information
Name :
Contact No :
Gender :
Age :
1. What is your occupation status?
Govt. Servant Pvt. Employee Profession
Business Specify if other ___________
2. Have you ever invested in mutual funds?
Yes No
If yes please specify since_________ years.
3. What do you believe about the mutual fund investment option?
Excellent Good Highly preferred
Somewhat preferred Poor Very poor

80
4. Do you know about SIP & STP schemes of mutual fund?
No Yes
If yes than please specify how is it for investment?
Excellent Good Highly preferred
Somewhat preferred Poor Very poor
5. You generally invest in SIP for what ? Means it’s best for
To get an advantage of market volatility To get an advantage f
sectorial investing
To get maximum return Other please specify__________
6. You generally invest in STP for, means it’s best for
To get an advantage of market volatility To get an advantage f
sectorial investing
To get maximum return Other please specify__________
7. As per your view which one is best?
SIP STP
Why? Please specify reason : _____________________
8. In which company /fund do you generally recommend for SIP or STP?
Reliance M/F HDFC M/F UTI M/F
SBI M/F Other please specify________
9. Generally your area of investing in mutual fund.
SIP STP NFO
Existing scheme ELSS
10. Do you keep in mind the time horizon while investment?
No Yes
If yes than please specify, how much time horizon do you keep in mind?
<1 Yr 2 – 5 Yrs 5 – 10 Yrs
>10 Yrs As per scheme
11. Which plan do you prefer while investing in Mutual Funds?
Growth Dividend
12. Do you have any other source of income?
Yes No

81
If yes, which is the other source of income?
Interest Dividend
Rent Specify if other ________
13. What is your monthly average income? (Rs. '000)
5 - 15 15 – 25 25 – 35
35 – 45 Above 45
14. Approximately what percentage of your monthly income do you invest?
<10% 10% – 20%
20% – 30% >30%
15. Any Suggestion.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
“THANKS FOR YOUR CO-OPERATION”

82
GLOSSARY
AMC Assets Management Company
M/F Mutual Fund
NFO New Fund Offer
IPO Initial Public Offer
NAV Net Asset Value
ELSS Equity Linked Saving Schemes
SIP Systematic Investment Plan.
IAB Investment Advisory and Broking Division
RCAML Reliance Capital Asset Management Limited
IEB Institutional Equity Business
SCMF Standard Chartered Mutual Funds

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