Summer Internship Project at Reliance Money, Cuttack

1. “Comparison of Mutual Fund with Other
Investment Products”
SUMMER INTERNSHIP REPORT - 2009
Submitted To:
Asian School of Business Management
Submitted By: Santosh Behera
PGPBIFSM/08-10/42
UUnnddeerr tthhee SSuuppeerrvviissiioonn ooff PPrrooff.. KKaallyyaann SSaannkkaarr RRaayy
AAssiiaann SScchhooooll ooff BBuussiinneessss MMaannaaggeemmeenntt,, BBhhuubbaanneesswwaarr

2. 2
CONTENTS
Sl. No. PARTICULARS PAGE NO.
1 CERTIFICATE FROM THE CORPORATE GUIDE 04
2 CERTIFICATE FROM THE FACULTY GUIDE 05
3 DECLARATION 06
4 ACKNOWLEDGEMENT 07
5 EXECUTIVE SUMMARY 08
6 CORPORATE PROFILE 09
 About the Company
 Hierarchy of the Company
 Vision and Mission
 Service Provided by the Company
7 REVIEW OF LITRETURE 13
 About Mutual Fund
 History of Mutual Fund
 Types of Mutual Fund
 Advantages and Disadvantages
 Term used in Mutual Fund
 Other Investment Products
 ULIP
 Equity
 Stock Broking
 Depository Participants
 Commodity Trading
 GOI Bonds
 Fixed Deposits
 Gold
 Real-estate and etc.
 Mutual Fund Vs. Other Investment Products

3. 3
8 RESEARCH METHODOLOGY 44
 Objectives
 Scope of the study
 Data Sources
 Research Procedure
 Questionnaire Design
 Methodology
9 DATA ANALYSIS 51
 Sample Size
 Tabulation
10 GRAPHICAL REPRESENTATIONS
11 FINDING AND CONCLUSION 58
12 SUGGESTIONS 59
13 BIBLIOGRAPHY 60

4. 4
CERTIFICATE FROM THE CORPORATE GUIDE
This is to certify that the project work entitled “Comparison of
Mutual Fund with other Investment Products” is an authentic
record of the project work done by Santosh Behera of Asian School of
Business Management, during the period 13th April, 2009 to 6th June,
2009 in this organization under my guidance and supervision for the
partial fulfillment of the degree of PGPBIFSM, Asian School of
Business Management, Bhubaneswar.
To the best of my knowledge and belief, the thesis:
a. Embodies the work of the candidate himself.
b. Has duly been completed.
c. Fulfills the requirements of the rules and regulations relating to the
summer internship of the institute.
d. Is up-to the standard both in respect to contents and language for
being referred by the examiner.
Date: Signature of the Corporate Guide
Mr. Shantanu Das
Centre Manager
Reliance Money, Cuttack

5. 5
CERTIFICATE BY THE FACULTY GUIDE
This is to certify that the project work entitled “Comparison
of Mutual Fund with other Investment Products” at
Reliance Money, Badambadi, Cuttack has been carried out
under my guidance by Mr. Santosh Behera for partial
fulfillment of his Post Graduate Program in Banking,
Insurance and Financial Service Management during the
academic year 2008-2010.
To the best of my belief and knowledge this is an original piece
of work based on his own research and methodology.
Date: Prof. Kalyan Sankar Ray
Dean, ASBM
Bhubaneswar.

6. 6
Student Declaration
I hereby declare that project report titled “Comparison of
Mutual Fund with other Investment Products”
submitted to the Asian School of Business Management, in
partial fulfillment of the degree of Post Graduate Program in
Banking, Insurance and Financial Service Management is my
original work and not submitted for the award of any other
degree, diploma or similar title or prizes.
Date: - Santosh Behera
PGPBIFSM/08-10/42
ASBM, Bhubaneswar.

7. 7
Acknowledgement
A project is a confluence of mind, imagination, fact and concept of
human being. It leads to treat a path from unrealistic realm (facts,
concepts and imagination) to a realistic realm (implementation).
First of all I would like to thank my esteemed Director Prof. (Dr.)
Biswajeet Pattanayak for providing me opportunity to work on his
topic in Reliance Money Ltd.
I acknowledge my gratitude and indebtedness to my corporate guide,
Mr.Shantanu Das (Centre Manager). It is beyond my literal and
material means to express my heartfelt thanks and deep gratitude to
him. I am obliged to him for his constructive patience, valuable
comments and suggestions throughout my training period.
Those days, which I Spent in Reliance Money Ltd., has given me a
perfect platform for my transition from academic to professional life.
Therefore I am thankful to Mr. Ashis Sahoo, Sales Executive and Mr.
Subhasis Hota (Centre Manager) for giving me the opportunity to
be a part of an excellent work environment at Reliance Money Ltd. I am
also thankful to employees and co-trainees for their co-operation,
encouragement and support.
This report is the result of an unbelievable amount of motivation
inspiration and the moral support to that I have received from my faculty
guide Prof. Kalyan Sankar Ray.
I would also like to express my sincere gratitude to the Department of
BIFSM, Asian School of Business Management to provide me
excellent for providing training.

8. 8
EXECUTIVE SUMMARY
The study titled “Comparison of mutual funds with other investment
products” was carried out with the aim of locating the usefulness of
investment planning while making any investment decision. It is seen in
India that, most of the investors do not possess any technical knowledge
of investment.
Financial planning means achieving a financial target with a given time
frame. It covers many things like desired degree of financial
independence, retirement objectives, children education, taxes, and cash
flow problems, not having a savings strategy, etc. In other words, the
project is all about analyzing the benefits of investment planning before
making an investment decision. The main tool that is decided to collect
data and reactions is a questionnaire. Then those data is analyzed using
some statistical tools like Pie chart and Bar Diagram.
Through my study, I have found out that the favorite or preferred stocks
and mutual funds have not performed upon its expectation though there
are some exceptions also. The investors reacted late to the market and as
a result- many of them fallen into huge losses due to market volatility.
Again, investments are not done only for „investment‟ purpose. Some
investors invest to save tax as the only purpose behind it. Bank FDs are
also a popular method of investment. Now while analyzing the values
and services that drives the clients of a company to stay with them are
mainly correctness of information and timely attention to them.
Relationship also plays a major role in this regards.
About concluding the report, it is demonstrated how a good investment
planning can do wonders. It is recommended in the report that the
company should take due initiatives to develop the knowledge of its
clients which could be done through organizing events like investors
meets.

9. 9
COMPANY PROFILE
Company Hierarchy
CEO
Deputy CEO
Head Administration Head Sales Head HR
Country Head (Sales) Product Head Marketing Head
Zonal Sales Head
Regional Head
Area Head
Cluster Head Cluster Head Cluster Head
(Capital Market) (Direct Channel) (Household)
Centre Manager Centre Manager Centre Manager
Centre Manager Trainee Team Leader BDE PFC

10. 10
About Reliance Money in brief
Reliance money is a part of the reliance Anil Dhirubhai Ambani Group
and is promoted by Reliance capital, the fastest growing private sector
financial services company in India, ranked amongst the top 3 private
sector financial companies in terms of net worth.
Reliance money is a comprehensive financial solution provider that
enables you to carry out trading and investment activities in a secure,
cost-effective and convenient manner. Through reliance money, you can
invest in a wide range of asset classes from Equity, Equity and
commodity Derivatives, Mutual Funds, insurance products, IPO‟s to
availing services of Money Transfer & Money changing.
Reliance Money offers the convenience of on-line and offline
transactions through a variety of means, including its Portal, Call &
Transact, Transaction Kiosks and at it‟s network of affiliates.
Vision of Reliance Money
To achieve & sustain market leadership, Reliance Money shall aim for
complete customer satisfaction, by combining its human and
technological resources, to provide world class quality services. In the
process Reliance Money shall strive to meet and exceed customer's
satisfaction and set industry standards.
Mission Statement
“Our mission is to be a leading and preferred service provider to our
Customers, and we aim to achieve this leadership position by building an
innovative, enterprising, and technology driven organization which will
set the highest standards of service and business ethics.”

11. 11
Your Single Window for…..
 Equity
 Equity and commodity derivatives
 Mutual funds & IPO‟s
 Life & General insurance
 Offshore investment
 Money transfer
 Money changing
 Credit cards
Equity
Reliance Money offers its clients competitively priced Equity broking,
PMS and Portfolio Advisory Services. Trading execution assistance
provided to clients. In addition Reliance Money provides independent
and unbiased view on markets along with trading strategies and entry /
exit points for taking an informed decision.
Mutual Funds
A mutual fund is a professionally managed fund of collective investments
that collects money from many investors and puts it in stocks, bonds,
short-term money market instruments, and/or other securities. Reliance
Money offers dedicated research & expert advice on Mutual Funds.
Mutual funds are considered to have low risk factors owing to
diversification of assets into various sectors and scripts or instruments
within.

12. 12
INSURANCE
Life-Insurance
Reliance Money assists its clients in choosing a customized plan which
will secure the family‟s future and their expenses post-retirement.
Clients can choose from different plans of almost all Insurance
Companies where they can invest their money. Clients can choose from
products and services that channelize their savings and protect their
needs while guaranteeing security and returns for life. A team of experts
will suggest the best Insurance scheme which suits the client‟s
requirement.
General Insurance
General Insurance is all about protecting against all kind of insurable
risks. Reliance Money assists you in areas of Health insurance, Travel
insurance, Home insurance and Motor insurance.
Commodities
A single platform to trade on both the major commodity exchanges i.e.
NCDEX and MCX. In addition In-house research desk shall provide
research reports on all major commodities which shall enable in getting
views for trading and diversify client‟s holdings. Trade Execution
assistance is also provided to clients.
Structured Products, Art Investments
Structured Products is a new class of financial products for investors
apprehensive of increased volatility in stock markets. Specially designed
products could include Equity, Index-linked in nature, Real Estate
Funds, Art Funds, Overseas Investments and Infrastructure
Investments.
Tax Planning
With a view to provide complete wealth management solutions, Reliance
Money‟s wealth management offerings include tax related services like:
Tax Planning & advisory Filing Tax returns for individuals
Real Estate Advisory Services
Broking Model for lease/rent and buy/sell of property Property
Valuation
Real-estate Consulting – Corporate earnings model, Lease rentals, etc.
Offshore Investments
Reliance Money provides a unique opportunity to invest in international
financial markets through the online platform which includes different
product ranges.

13. 13
REVIEW OF LITRETURE
Introduction
Different investment avenues are available to investors. Mutual funds
also offer good investment opportunities to the investors. Like all
investments, they also carry certain risks. The investors should compare
the risks and expected yields after adjustment of tax on various
instruments while taking investment decisions. The investors may seek
advice from experts and consultants including agents and distributors of
mutual funds schemes while making investment decisions. With an
objective to make the investors aware of functioning of mutual funds, an
attempt has been made to provide information in question-answer
format which may help the investors in taking investment decisions.
About Mutual Fund
A Mutual Fund is a body corporate registered with the Securities and
Exchange Board of India (SEBI), which 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 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.Presently there are 33 Mutual
Funds in India. Mutual funds are money-managing institutions set up to
professionally invest the money pooled in from the public. These
schemes are managed by Asset Management Companies (AMC), which
are sponsored by different financial institutions or companies. Each unit
of these schemes reflects the share of investor in the respective fund and
its appreciation is judged by the Net Asset Value (NAV) of the scheme.
The NAV is directly linked to the bullish and bearish trends of the
markets as the pooled money is invested either inequity shares or in
debentures or treasury bills.

14. 14
MUTUAL FUND
How is a Mutual Fund set up?
A mutual fund is set up in the form of a trust, which has sponsor,
trustees, Asset Management Company (AMC) and custodian. The trust is
established by a sponsor or more than one sponsor who is like promoter
of a company. The trustees of the mutual fund hold its property for the
benefit of the unit holders. Asset Management Company (AMC)
approved by SEBI manages the funds by making investments in various
types of securities. Custodian, who is registered with SEBI, holds the
securities of various schemes of the fund in its custody. The trustees are
vested with the general power of superintendence and direction over
AMC. They monitor the performance and compliance of SEBI
Regulations by the mutual fund. SEBI Regulations require that at least
two thirds of the directors of trustee company or board of trustees must
be independent i.e. they should not be associated with the sponsors.
Also, 50% of the directors of AMC must be independent. All mutual
funds are required to be registered with SEBI before they launch any
scheme.
There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund: Organization of a Mutual Fund

15. 15
History of Mutual Funds In India
In mutual fund industry in India started in 1963 with the formation of
Unit Trust of India, at the initiative of the Reserve Bank of India (RBI)
and the government of India. The objective then was to attract the small
investors and introduce them to market investment. Since then, the
history of mutual funds in India can be broadly divided into three
distinct phases.
Phase 1: 1964-87 (Unit Trust of India)
In 1963, UTI has established by an act of parliament and given a
monopoly. Operationally, UTI has set up by the Reserve Bank of India,
but was later de-linked from the RBI. The first and still one of the largest
schemes launched by UTI was Unit Scheme 1964. Over the year, US-64
attracted and probably still has the largest number of investor in any
single investment scheme. It was also at least partially the first open-end
scheme in the country, now moving towards becoming fully open-end.
Later in 1970‟s and 80‟s UTI started innovating and offering different
scheme to suit the need of different classes of investors. The mutual fund
industry in India not only started with UTI, but still counts UTI as its
largest player with the largest corpus of investible funds among all
mutual funds currently operating in India. Until 1980‟s, UTI‟s operation
in the stock markets often determined the direction of market moments.
Now, many Indian investors have taken to direct investing on the stock
market. Foreign and other institutional player have been brought in. so,
direct influence by UTI on the market may be less than before, though it
remains the largest player in the fund industry. In absolute terms, the
investible funds corpus of even UTI was still relatively small at about
Rs.600 Crores in 1984.
But, at the end of his phase one, UTI has grown large as evidence by the
following statistics:
Asset Under Management
UTI 6,700
TOTAL 6,700

16. 16
Phase 2: 1987-93 (Entry of Public Sector Funds)
1987 marked the entry of non-UTI, Public sector Mutual Funds, bringing
in competition. With the opening up of the economy, many public sector
banks and financial institutions were allowed to establish mutual funds.
The State Bank of India established the first non-UTI mutual fund: SBI
Mutual Fund in November 1987. From 1987 to 1992-93, the fund
industry expanded nearly seven times in terms of assets under
management, as seen in the following figure:
Asset Under Management
UTI 38,247
Public Sector 8,757
Total 47,004
Phase 3: 1993-96 (Emergence of Private Funds)
A new era in the mutual fund industry began with the permission
granted for the entry of private sector funds in 1993, giving the Indian
investors broader choice of “fund families” and increasing competition
for the existing public sector funds. Quite significantly, foreign fund
management companies were also allowed to operate mutual funds,
most of them coming into India through their joint venture with Indian
promoters.
These private funds have brought in with them the latest product
innovation, investment management techniques and investors Servicing
technology that make the Indian Mutual Fund industry today a vibrate
and growing financial intermediary. During the year 1993-94, five
private sector mutual funds launched their schemes followed by six
others in 1994-95.
Phase 4: 1996 (SEBI Regulation for Mutual Funds)
More investor friendly regulatory measures have been taken both by
SEBI to protect the investors and by the government to enhance
investor‟s returns through tax benefits. A comprehensive set of
regulation for all the mutual funds operating in India was introduced
with SEBI (Mutual Fund) Regulations, 1996. These regulation set
uniform standards for all funds.

17. 17
Similarly, the 1999 Union Government Budget took a big step in
exempting all mutual fund dividends from income tax in the hands of
investors. Both the 1996 regulations and the 1999 budget must be
considered of historic importance, given in their far reaching impact on
the fund industry and investors.
Types of Mutual fund
Mutual Fund
Schemes according to Scheme according to
Maturity Period Investment objective
Open Close Income Taxation Growth Balance Gilt Money
Ended Ended Fund Fund Fund Fund Fund Market
Schemes according to Maturity Period:
A mutual fund scheme can be classified into open-ended scheme or
close-ended scheme depending on its maturity period.
 Open-ended Fund/Scheme
An open-ended fund or scheme is one that is available for subscription
and repurchase on a continuous basis. These schemes do not have a fixed
maturity period.
Investors can conveniently buy and sell units at Net Asset Value (NAV)
related prices which are declared on a daily basis. The key feature of
open-end schemes is liquidity.
 Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7
years. The fund is open for subscription only during a specified period at
the time of launch of the scheme. Investors can invest in the scheme at
the time of the initial public issue and thereafter they can buy or sell the

18. 18
units of the scheme on the stock exchanges where the units are listed. In
order to provide an exit route to the investors, some close-ended funds
give an option of selling back the units to the mutual fund through
periodic repurchase at NAV related prices. SEBI Regulations stipulate
that at least one of the two exit routes is provided to the investor i.e.
either repurchase facility or through listing on stock exchanges. These
mutual funds schemes disclose NAV generally on weekly basis.
 Schemes according to Investment Objective
A scheme can also be classified as growth scheme, income scheme, or
balanced scheme considering its investment objective. Such schemes
may be open-ended or close-ended schemes as described earlier. Such
schemes may be classified mainly as follows:
 Growth / Equity Oriented Scheme
The aim of growth funds is to provide capital appreciation over the
medium to long- term. Such schemes normally invest a major part of
their corpus in equities. Such funds have comparatively high risks. These
schemes provide different options to the investors like dividend option,
capital appreciation, etc. and the investors may choose an option
depending on their preferences. The investors must indicate the option
in the application form. The mutual funds also allow the investors to
change the options at a later date. Growth schemes are good for investors
having a long-term outlook seeking appreciation over a period of time.
 Income / Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such
as bonds, corporate debentures, Government securities and money
market instruments. Such funds are less risky compared to equity
schemes. These funds are not affected because of fluctuations in equity
markets. However, opportunities of capital appreciation are also limited
in such funds. The NAVs of such funds are affected because of change in
interest rates in the country. If the interest rates fall, NAVs of such funds
are likely to increase in the short run and vice versa. However, long term
investors may not bother about these fluctuations.

19. 19
 Balanced Fund
The aim of balanced funds is to provide both growth and regular income
as such schemes invest both in equities and fixed income securities in the
proportion indicated in their offer documents. These are appropriate for
investors looking for moderate growth. They generally invest 40-60% in
equity and debt instruments. These funds are also affected because of
fluctuations in share prices in the stock markets. However, NAVs of such
funds are likely to be less volatile compared to pure equity funds.
 Money Market or Liquid Fund
These funds are also income funds and their aim is to provide easy
liquidity, preservation of capital and moderate income. These schemes
invest exclusively in safer short-term instruments such as treasury bills,
certificates of deposit, commercial paper and inter-bank call money,
government securities, etc. Returns on these schemes fluctuate much
less compared to other funds. These funds are appropriate for corporate
and individual investors as a means to park their surplus funds for short
periods.
 Gilt Fund
These funds invest exclusively in government securities. Government
securities have no default risk. NAVs of these schemes also fluctuate due
to change in interest rates and other economic factors as is the case with
income or debt oriented schemes.
 Taxation Funds
It is basically a growth-oriented fund. But it offers tax rebates to the
investors either in domestic or foreign capital market. It is suitable to
salaried persons who want to enjoy the tax benefit.
 Index Funds:
Index Funds replicate the portfolio of a particular index such as the BSE
Sensitive index, S&P NSE 50 index (Nifty), etc, these schemes invest in
the securities in the same weightage comprising of an index. NAV‟s of
such schemes would rise or fall in accordance with the rise or fall in the
index, though not exactly by the same percentage due to some factors
known as "tracking error" in technical terms. Necessary disclosures in
this regard are made in the offer document of the mutual fund scheme.

20. 20
Mutual fund investing strategies:
Systematic Investment Plans (SIPs)
These are best suited for young people who have started their careers
and need to build their wealth. SIPs entail an investor to invest a fixed
sum of money at regular intervals in the Mutual fund scheme the
investor has chosen. An investor commits to invest certain sum on
money every month/quarter/half-year in the scheme.
Systematic Withdrawal Plans (SWPs)
These plans are best suited for people nearing retirement. In these
plans, an investor invests in a mutual fund scheme and is allowed to
withdraw a fixed sum of money at regular intervals to take care of his
expenses. A systematic withdrawal plan is a financial plan that allows a
shareholder to withdraw money from an existing mutual fund portfolio
at predetermined intervals. The money withdrawn through a systematic
withdrawal plan can be reinvested in another portfolio or used to pay
for something else.
Systematic Transfer Plans (STPs)
They allow the investor to transfer on a periodic basis a specified
amount from one scheme to another within the same fund family –
meaning two schemes belonging to the same mutual fund. A transfer
will be treated as redemption of units from the scheme from which the
transfer is made. Such redemption or investment will be at the
applicable NAV. This service allows the investor to manage his
investments actively to achieve his objectives. Many funds do not even
charge any transaction fees for his service – an added advantage for the
active investor.
MUTUAL FUND SERVICES
To cater the needs of the different categories of investors, mutual fund
launch schemes involving services to the investors. These are special
services in addition to the returns to the returns which fund offer to the
investors. These services are vulnerable to investors and attract them to
invest their saving in those mutual funds which have such plans to meet
their various needs. For example regular income plan, saving and
reinvestment plans, health insurance schemes, equity linked saving,
plans for tax exemption purpose etc.

21. 21
Saving schemes
This is one of the inherent objectives of investors to accumulate their
saving. Voluntary saving plan can be added to mutual funds through
which an investor can save on monthly or quarterly basis and thus the
amounts so saved will be added to purchase the units into mutual funds.
Saving could be made through voluntary saving plans which are at the
option and free will of the investors to contribute any sum at any time
Automatic Reinvestment Plan
UTI in India has also started this plan where like in USA the amount of
dividend and other income accrued on mutual fund investments is
automatically reinvestment in purchasing additional units or shares in
the open ended funds. Other mutual funds in public sector have followed
the suit.
Regular Income Plan
Systematic withdrawal is allowed to investors of their money looked in
mutual funds investments in the form of regular income by way of
monthly or quarterly installments to meet their regular financial needs.
Shifting Advantage on Conversion Privileges
Many mutual fund companies offer different investment plans for
investors and many of them provide the facility to investors within the
family of the plans to shift or convert or exchange them afterwards from
one plan to another at nominal costs or at no costs.
Retirement Pension Plans
Mutual funds are now very much linked with retirement pension plans.
Regular monthly income plans in India offered by UTI and other mutual
funds established by nationalized banks are alike.
Insurance Plan
Mutual funds offer in USA a relatively new service in the form of
insurance program that project an investment in mutual fund against a
long-term loss. The insurance cover is available for a period ranging
from 10-15 years. LIC mutual fund, UTI and GIC mutual fund have come
out with scheme providing life insurance covers and medical insurance
covers to investors.

22. 22
Advantages of Investing Through Mutual Fund
If mutual funds are emerging as the favorite investment vehicle, it is
because of the many advantages they have over other forms and avenues
of investing, particularly for the investor who has limited resources
available in terms of capital and ability to carry out detailed research and
market monitoring. The following are the major advantages offered by
mutual funds to all investors.
 Portfolio diversification
Mutual Funds invest in a number of companies across a broad cross-
section of industries and sectors. This diversification reduces the risk
because seldom do all stocks decline at the same time and in the same
proportion. You achieve this diversification through a Mutual Fund
with far less money than you can do on your own.
 Tax benefits
Dividends given by equity oriented mutual funds are tax-free in the
hands of the investor. In case of Debt funds, the funds pay dividend
distribution tax.
 Flexibility
Mutual fund offers features such as regular investment plans, regular
withdrawal plans and dividend reinvestment plans; you can
systematically invest or withdraw funds according to your needs and
convenience.
 Liquidity
In open-end schemes, the investor gets the money back promptly at
net asset value related prices from the Mutual Fund. In closed-end
schemes, the units canbe sold on a stock exchange at the prevailing
market price or the investor can avail of the facility of direct
repurchase at NAV related prices by the Mutual Fund.
 Professional Management
Mutual Funds provide the services of experienced and skilled
professionals, backed by a dedicated investment research team that
analyses the performance and prospects of companies and selects
suitable investments to achieve the objectives of the scheme.

23. 23
 Low Costs
Mutual Funds are a relatively less expensive way to invest compared
to directly investing in the capital markets because the benefits of
scale in brokerage, custodial and other fees translate into lower costs
for investors.
 Reduction/Diversification of risk
An investor in a mutual fund acquires a diversified portfolio, no
matter how small his investment. Diversification reduces risk of loss,
as compared to investing directly in one or two shares or debentures
or other instrument. When an investor invests directly, all the risks of
potential loss is own. A fund investor also reduces his risk in another
way, while investing in the pool of the funds with other investors. The
risk reduction is one of the most important benefits of a collective
investment vehicle like the mutual fund.
 Well regulated
All mutual funds are registered with SEBI and they function within
the provisions of strict regulations designed to protect the interests of
investors. The operations of mutual funds are regularly monitored by
SEBI.
 Return potential
Over a medium to long term, mutual funds have the potential to
provide a high return as they invest in a diversified basket of selected
securities.
 Transparency
Regular information available on the value of one‟s investment
made, the proportion invested in each class of assets and the fund
manager‟s investment strategy and outlook.
DISADVANTAGES OF INVESTNG THROUGH MUTUAL FUNDS
While the benefits of investing through mutual funds far outweigh the
disadvantages, an investor and his advisor will do well to be aware of a
few short coming of using the mutual funds investment vehicles.
No control over costs:-
An investor in a mutual fund has no control over the overall cost of
investing. He plays investment management fees as long as he remains
with the fund and in return for the professional management and
research. Fees are usually payable as a percentage of the value of his
investment, whether the fund value is rising or decline. A mutual funds

24. 24
investor also pays fund distribution cost which he would not incur in
direct investing. However, this shortcoming only means that there is a
cost to obtain the benefit of mutual find services. However this cost is
often less than the cost of direct investing by the investors.
No tailor made portfolio:-
Investors who invest on their own can build their own portfolio of
shares, bonds and other securities. Investing through funds means he
delegates this decision to the fund manager. An investor can chose from
different investment plans and construct a portfolio of his choice.
No Guarantees:-
No investment is risk free. If the entire stock market declines in value,
the value of mutual fund shares will go down as well, no matter how
balanced the portfolio. Investors encounter fewer risks when they invest
in mutual funds than when they buy and sell stocks on their own.
However, anyone who invests through a mutual fund runs the risk of
losing money.
Taxes:-
During a typical year, most actively managed mutual funds sell anywhere
from 20 to 70 percent of the securities in their portfolios. If your fund
makes a profit on its sales, you will pay taxes on the income you receive,
even if you reinvest the money you made
Risks associated with the Mutual Fund
Equity Funds are open to market risk i.e. there is a possibility that the
price of the stocks in which the Fund has invested may decrease. Of
course, the prices may also go up, making it possible for the Fund to earn
profits Debts Funds are open to two main risks - Credit Risk and Interest
Rate Risk. Credit Risk refers to the possibility that the company that has
issued the bond or debenture in which the Fund has invested may
default on interest or on principal payments. Debt Fund managers take
care of this by investing in bonds which have good credit rating Interest
Rate Risk refers to the possibility that the price of the bond in which the
Fund has invested may go down because of an increase in the interest
rates in the economy. In general, it is useful to remember that this is a
"see-saw" relationship - a bond price (and therefore, NAV) goes up when
interest rates drop and drops when interest rates rise.

25. 25
How to invest in a scheme of a mutual fund?
Mutual funds normally come out with an advertisement in newspapers
publishing the date of launch of the new schemes. Investors can also
contact the agents and distributors of mutual funds who are spread all
over the country for necessary information and application forms. Forms
can be deposited with mutual funds through the agents and distributors
who provide such services. Now a day, the post offices and banks also
distribute the units of mutual funds. However, the investors may please
note that the mutual funds schemes being marketed by banks and post
offices should not be taken as their own schemes and no assurance of
returns is given by them. The only role of banks and post offices is to
help in distribution of mutual funds schemes to the investors. Investors
should not be carried away by commission/gifts given by
agents/distributors for investing in a particular scheme. On the other
hand they must consider the track record of the mutual fund and should
take objective decisions.
Are investments in mutual fund units safe?
No stock market related investments can be termed safe with certainty;
they are inherently risky. However, different funds have different risk
profile, which is stated in its objective. Funds which categorize
themselves as low risk, invest generally in debt which is less risky than
equity. Anyway, as mutual funds have access to services of expert fund
Managers, they are always safer than direct investment in the stock
markets.
Reason for investing in 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. It reduces the risk of putting all eggs in one basket. This is
because:
1) Money is being managed by experienced and skilled professionals.
2) Investment is automatically diversified over a large number of
companies and industries, thus reducing the element of risk.
3) Money is very liquid, especially in an open-end fund.
4) The potential to provide a higher return over the medium to long
term is better in a wide range of securities than in any one.

26. 26
5) The costs of research and investing directly in the individual
securities are spread over a large corpus and thousands of investors
thus minimizing individual share.
6) There is a high degree of transparency in the operation of a mutual
fund, so you can take investment decisions based on more information.
7) It provides a wide range of choice to suit the need.
8) The industry is well regulated with many measures oriented
towards investor protection
9) Mutual Funds provide the benefit of cheap access to expensive stocks
FREQUENTLY USED TERMS
Net Asset Value (NAV)
The purchase price is always linked with the Net Asset Value (NAV). The
NAV is nothing but of market price of each unit of a particular scheme in
relation to all assets of the scheme. It can otherwise call as intrinsic value
of each unit. It is the actual indicator of performance of fund. If the NAV
is more than the face value of unit, then it is clear that the money which
is invested is performing well.
The net asset value (NAV) is the market value of the fund's underlying
securities. It is calculated at the end of the trading day. Any open-end
funds buy or sell order received on that day is traded based on the net
asset value calculated at the end of the day. The NAV per units is such
Net Asset Value divided by the number of outstanding units
Market Value of Assets - Liabilities
NAV =- - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Units Outstanding
Sale Price
The price you pay when you invest in a scheme is also called Offer Price.
It may include a sales load.
Repurchase Price
The price at which a close-ended scheme repurchases its units and it may
include a back-end load; this is also called Bid Price.

27. 27
Redemption Price
The price at which open-ended schemes repurchase their units and
close-ended schemes redeem their units on maturity is called as
redemption price. Such prices are NAV related.
Sales Load:
It is a charge collected by a scheme when it sells the units, also called
„Front-end‟ load. Schemes that do not charge a load are called „No Load‟
schemes.
Repurchase or „Back-end‟ Load
Is a charge collected by a scheme when it buys back the units from the
unit holders?
Entry Load
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.
Major players in the field of Mutual Fund
 UTI Mutual Fund
 Reliance Mutual Fund
 SBI Mutual Fund
 ABN AMRO Mutual Fund
 Tata Mutual Fund
 Birla Sun Life Mutual Fund
 ICICI Prudential Mutual Fund
 Kotak Mutual Fund
 Fidelity Mutual Fund
 Franklin Mutual Fund & Birla Sun Life Freedom Fund

28. 28
Profile
Essentials
Fund category Equity - Balanced Fund
Scheme plan Growth
Scheme type Open Ended
Launch date October 12, 1999
Fund manager Mr. Maneesh Dangi
Fund info
AMC Birla Sun life Asset Management Co. Ltd.
Objective
To balance income requirements with growth of capital through balance
mix of investments in equity and debt.
Asset (Rs crore) 85.51 (March 31, 2009)
NAV (Rs) 31.92
Date 05 Jun, 2009
Initial price Rs 10
Min investment Rs 5000
Entry load 2.50 %
Exit load 1 %
Top 10 industry allocation
Company Percentage
Pharmaceuticals 18.0
Finance - Term Lending Institutions 10.0
Finance - Banks - Public Sector 8.0
Diversified 7.0
Cigarettes 6.0
Electronics – Others 5.0
Sugar – Others 4.0

29. 29
Refineries 4.0
Beverages - Alcoholic – Distilleries 4.0
Computers – Software 4.0
Birla Sun Life Frontline Equity Fund
Profile
Essentials
Fund category Equity - Diversified
Scheme plan Growth
Scheme type Open Ended
Launch date August 30, 2002
Fund manager Mr. Mahesh Patil
Fund info
AMC Birla Sunlife Asset Management Co. Ltd.
Objective
Primary objective: To generate long term growth of capital, through a
portfolio with a target allocation of 100% equity by aiming at diversified
industries / sectors.
Asset (Rs crore) 433.45 (March 31, 2009)
NAV (Rs) 65.28
Date 05 Jun, 2009
Initial price Rs 10
Min investment Rs 5000
Entry load 2.50 %
Exit load 1 %

30. 30
Top 10 industry allocation
Company Percentage
Diversified 11.0
Telecommunications – Service 8.0
Computers – Software 7.0
Finance - Banks - Private Sector 6.0
Power - Generation/Distribution 5.0
Finance - Banks - Public Sector 4.0
Cigarettes 4.0
Refineries 3.0
Finance – Housing 2.0
Pharmaceuticals 2.0
Comparison
Duration Freedom Fund (in %) Frontline Equity
Fund (in %)
1 week 1.30 3.92
1 month 8.53 29.24
6 month 30.50 67.86
9 month 7.29 12.32
1 year 4.76 7.47
Analysis
Over a year return on frontline equity fund is much higher than freedom
fund. But return associated with frontline equity fund is more.
Data from bseindia.com
July 1990 Rs. 1 lakh
Jan 2008 Rs. 22 lakh
Jan 2009 Rs. 10.6 lakh

31. 31
It says Rs. 1 lakh invested in BSE sensex on July 1990 became Rs. 22
lakh on Jan 2008. But a sudden fall in sensex made its value Rs. 10.6
lakh. So, share market is highly unpredictable.
More than half the wealth created in last 17 years gone only in 12
months.
Conclusion
Return on frontline equity is more than freedom fund but risk associated
with frontline equity fund is more than freedom fund. So, frontline
equity fund is suitable for younger investors who want to take more risk.
But freedom fund is suitable for those investors who want steady return
with less risk.
OTHER INVESTMENT PRODUCTS
UNIT LINKED INSURANCE PLAN
Unit Linked Insurance Plan (ULIP) provides for life insurance
where the policy value at any time varies according to the value of the
underlying assets at the time. ULIP is life insurance solution that
provides for the benefits of protection and flexibility in investment. The
investment is denoted as units and is represented by the value that it has
attained called as Net Asset Value (NAV). A ULIP based insurance plan
is a combination of risk cover and investment. But the past performance
of the funds does not guarantee its future performance. Unit Linked
Insurance Plan - is a financial product that offers you life insurance as
well as an investment like a mutual fund. Part of the premium you pay
goes towards the sum assured (amount you get in a life insurance policy)
and the balance will be invested in whichever investments you desire -
equity, fixed-return or a mixture of both.
Tata AIG Life Insurance Company Ltd. Is a joint venture company,
formed by the Tata group and American International group,
Inc.(AIG).Tata AIG life combines Tata groups pre-eminent leadership
position in India and AIG‟s global presence as the world‟s leading
International insurance and financial services organization. The Tata
group holds 74% stake in the insurance venture with AIG holding the

32. 32
balance 26%.Tata AIG life provide insurance solutions to individuals and
corporate. Tata AIG Life Insurance Company was licensed to operate in
India on Feb.12, 2001 and started operation on April 1, 2001.Tata AIG
life offers a broad array of life Insurance coverage to both individuals
and groups, providing various types of add-on‟s and options on basic life
products to give consumers flexibility and choice.
ULIP products offered by Tata AIG:-
1. Product name -: Invest Assure GOLD
Invest Assure Gold, a whole life Unit linked plan, which offers you a
unique advantage of combining the protection and tax advantages of life
insurance with the attractive prospects of investing in different kinds of
securities through multiple fund options.
Key Benefits -:
 Choose your premium payment term: five year or the entire
duration of the policy.
 Entry age: 30 days to 70 years.
 Benefit period: For the entire life till 100 years of age.
 Provides security to your family in case of your unfortunate death.
 Facility to increase sum assured through top-up premium.
 Gives you flexibility to choose your fund based on your risk profile
– Whole life mid-cap equity, whole life aggressive growth, whole
life stable growth, whole life income, and whole life short term
fixed income. You may choose to switch between the funds any
time.
 Loyalty Benefit: Additional 0.25% of units under the regular
premium account every 5 years provided the policy is in force.
 Maturity benefit: Total fund value at the end of the policy.
 Death benefit: Sum assured or fund value which ever is higher
2. Product name -: Invest Assure FUTURE
Invest Assure future is a pension plan with a single purpose to prevent
and multiply your happiness even after you stop working .It builds as a
custom made retirement solution to meet your needs of capital
accumulation and growth. This ULIP pension plans invest money in the
fund of your choice and allow you to generate tremendous value by
making your money work harder.

33. 33
Key Benefits -:
 Flexibility of premium payment options: Single, regular with
limited premium payment option.
 Flexibility of policy terms:
Single premium - 5-35 years
Regular / limited premium – 10-35 years
 Flexibility to choose from amongst five fund options i.e Future
equity pension fund, Future income pension fund, Future capital
guarantee pension fund, future growth pension fund, future
balanced pension fund.
 Regular income post retirement.
 Tax benefits u/s 80CCC of the income tax act, 1961.
 Maturity benefit: Total fund value along with guaranteed bonus.
 Death benefit: Total fund value along with guaranteed bonus upto
that period. No life cover.
 Guaranteed bonus:
3. Product name -: Invest Assure OPTIMA
Invest Assure Optima, a ULIP plan that accumulates wealth
systematically, over a long term by giving you optional control over your
investment vehicle with right mix of investment and insurance.
Key benefits -:
 Guaranteed Addition is payable as a percentage of 1st year
annualized regular premium depending on policy term.
10-14 3.00 %
15-19 4.50 %
20-29 6.00 %
30-35 7.00 %

34. 34
Policy
term(in
years) 10 15 20 25 30
% of
annualized
regular
premium
110% 130% 160% 175% 200%
 Systematic money allocation and money transfer(SMART) -:
This is a systematic plan that automatically transfers a definite
portion of your fund to your chosen TARGET fund.
 Large numbers of funds to choose depending on risk i.e. large cap
equity fund, whole life mid-cap equity fund, select equity fund,
Whole life aggressive fund, whole life stable growth fund and etc.
 Maturity benefit: Guaranteed additions + regular premium fund
value.
 Death benefit: (Guaranteed additions + regular premium fund
value)
 Or sum assured whichever is higher.
EQUITY:
It is the market in which shares are issued and traded through either
exchanges or over-the-counter markets. Also known as the equity
market, it is one of the most vital areas of a market economy as it
provides companies with access to capital and investors with a slice of
ownership in the company and the potential of gains based on the
company's future performance. This market can be split into two main
sections: the primary and secondary market. The primary market is
where new issues are first offered, with any subsequent trading going on
in the secondary market. A market which is exists between companies
and financial institutions which are used to raise equity capital for the
companies. Some activities that companies operate in the equity capital
markets include overall marketing, distribution and allocation of new
issues; initial public offerings, special warrants, and private
placements. Along with stocks, the equity capital markets deal with
derivative instruments such as futures, options and swaps.
Equity capital markets are very dependent on the information provided
by companies regarding their current financial situations and estimates

35. 35
of future performance. Equity capital market teams from different
investments banks are responsible for helping companies execute
primary market transactions by managing the structure, syndication,
marketing and distribution. Riskier long-term saving requires that an
individual possess the ability to manage the associated increased risks.
Stock prices fluctuate widely, in marked contrast to the stability of
(government insured) bank deposits or bonds. This is something that
could affect not only the individual investor or household, but also the
economy on a large scale.. This is certainly more important now that so
many newcomers have entered the stock market, or have acquired other
'risky' investments (such as 'Investment' property, i.e., real estate and
collectables).With each passing year, the noise level in the stock market
rises. Television commentators, financial writers, analysts, and market
strategists are all over talking each other to get investors' attention. At
the same time, individual investors, immersed in chat rooms and
message boards, are exchanging questionable and often misleading tips.
Yet, despite all this available information, investors find it increasingly
difficult to profit. Stock prices skyrocket with little reason, then plummet
just as quickly, and people who have turned to investing for their
children's education and their own retirement become frightened.
Sometimes there appears to be no rhyme or reason to the market, only
folly.
STOCK BROKING
It is an undisputed fact that the stock market is unpredictable and yet
enjoys a high success rate as a wealth management and wealth
accumulation option. The difference between unpredictability and a
safety anchor in the market is provided by in-depth knowledge of market
functioning and changing trends, planning with foresight and choosing
one's options with care. This is what we provide in our Stock Broking
services. We offer services that are beyond just a medium for buying and
selling stocks and shares. Instead we provide services which are multi
dimensional and multi-focused in their scope. There are several
advantages in utilizing our Stock Broking services, which are the reasons
why it is one of the best in the country. It offers trading on a vast
platform; National Stock Exchange, Bombay Stock Exchange. More
importantly, we make trading safe to the maximum possible extent, by
accounting for several risk factors and planning accordingly. We are
assisted in this task by our in-depth research, constant feedback and
sound advisory facilities. Our highly skilled research team, comprising of
technical analysts as well as fundamental specialists, secure result-
oriented information on market trends, market analysis and market

36. 36
predictions. Our Stock Broking services are widely networked across
India, with the number of our trading terminals providing retail stock
broking facilities. Our services have increasingly offered customer
oriented convenience, which we provide to a spectrum of investors.
Depository Participants
The onset of the technology revolution in financial services Industry saw
the emergence of Reliance Money as an electronic custodian registered
with National Securities Depository Ltd (NSDL) and Central Securities
Depository Ltd (CSDL). Reliance Money set standards enabling further
comfort to the investor by promoting paperless trading across the
country and emerged as the top 3 Depository Participants in the country
in terms of customer serviced. Offering a wide trading platform with a
dual membership at both NSDL and CDSL, we are a powerful medium
for trading and settlement of dematerialized shares.
What is Demat?
Demat means dematerialization of money, i.e. through online and
off-line trading. Earlier before these broking companies came into
picture the people interested in share market trading and investments
had to trade through the nearest stock exchange. But now it‟s totally
client convenience process in which the client had to just open a Demat
account in a broking firm and can trade or invest according to his/her
convenience whenever and wherever he/she wants.
RELIANCE MONEY DEMAT A/C
Reliance money has over 22 lakhs customers and more than 10,000
branches in around 5,000 cities in India. Company is among the largest
broking and distribution house of financial products and having share of
more than 3% of total stock market volume of NSE and BSE.
Reliance Money offers Indian customers various options while
trading in shares.
Delivery: Using this facility client can buy scripts being traded on NSE
and BSE. Client can also sell Their Demat holding through this facility.
Margin: Use this facility to for Intraday Trading and leverage upto 4 to
5 times against the available funds. Client can initiate a Buy or a Sell
position anytime during the trading hours but will have to square off the
same before the prescribed time for Auto Square Off which normally is

37. 37
3:00 pm. Incase client want, they can also convert their trade to
“Delivery” subject to availability of funds/ shares.
Margin XL: This facility enables client to extra leverage their funds for
trading in select scripts. Infact client can trade upto 20 times of the
available funds soon to be introduced.
ATST: Overnight: Normally Client can sell the shares only 2 days post
their purchase i.e. after T+2 days. However “Overnight” allows client to
sell shares even the very next day.
Trade in Derivatives: Reliance Money, offers their clients the facility
to trade in Futures and Options of Index i.e. Nifty and other Stocks on
NSE under its Derivatives Section.
In futures trading, clients take buy/sell positions in index or stocks
contracts depending upon their view of the market. Normally three
contracts of Current, near and Far month are available for trading at any
given point of time. Client can trade in any of these.
Tools like Margin Calculator are available in the Derivatives section to
help the client calculate the actual margin requirement and know the
spread benefits if any.
Customer to Open Account with Reliance Money Limited.
One time account opening charges of Rs 750/- is to be paid by the
customer. This includes opening of Trading & Demat account. Bank
account with UTI, HDFC & IDBI Bank can be linked to trading account.
Call n Trade charges - In case customer places a trade and it gets fully
or partially executed he will be charged Rs.15/- per call. All service calls
are Free.
3 in 1 integrated access: Reliance Money offers integrated access to
your banking, trading and demat account. You can transact without the
hassle of writing cheques.
Customer can put in his trades at his convenience -
 At his residence / office ( PC‟s, Call & Trade facility)
 At Reliance Web Worlds (PCs / Kiosks)
 Reliance Money offices (Kiosks)

38. 38
 Kiosks located at convenient locations like Post
offices, shopping complex
 Partner‟s premises, etc.
 Dialing the Call Center Telephone No‟s.
 Security & Safety of trading via Portal is ensured through
issuance of high security tokens
which generates identity
verification no‟s (apart from
Customer id & Password) for
entering the portal. The number
changes every 32 seconds.
 Innovative use of technology for
facilitating convenient
trading/investments – kiosks
(similar to ATM‟s)
 Customer can avail any of the following schemes:
Card Type Trade
Value
Duration Margin Delivery
PR 500 2 Lacs 1 year 2 Lacs 2 Lacs
PR1000 1 Cr 2 Months 1 Cr 10 Lacs
PR 2500 3 Cr 6 Months 3 Cr 30 Lacs
PR 5000 7 Cr 1 Year 7 Cr 70 Lacs
PR 10000 20 Cr 1 Year 20 Cr 2 Cr
COMMODITY TRADING
We are focused on taking commodities trading to new dimensions of
reliability and profitability. We have made commodities trading, an
essentially age-old practice, into a sophisticated and scientific
investment option. Here we enable trade in all goods and products of
agricultural and mineral origin that include lucrative commodities like
gold and silver and popular items like oil, pulses and cotton through a
well-systematized trading platform. Our technological and

39. 39
infrastructural strengths and especially our street-smart skills make us
an ideal broker. Our service matrix is holistic with a gamut of
advantages, the first and foremost being our legacy of human resources,
technology and infrastructure that comes from being part of the
RELIANCE Group. Our wide national network, spanning the length and
breadth of India, further supports these advantages. Regular trading
workshops and seminars are conducted to hone trading strategies to
perfection. Every move made is a calculated one, based on reliable
research that is converted into valuable information through daily,
weekly and monthly newsletters, calls and intraday alerts. Further,
personalized service is provided here by a dedicated team committed to
giving hassle-free service while the brokerage rates offered are extremely
competitive. Our commitment to excel in this sector stems from the
immense importance those commodities broking has to a cross-section
of investors, farmers, exporters, importers, manufacturers and the
Government of India itself.
Reliance Money trading in commodity
Reliance Money brings both the major national level exchanges i.e.
NCDEX and MCX together on a single platform. It is the first Company
to provide an on-line Commodity Broking Service to the customers.
Commodity Futures trading has certain advantages over regular Index or
Stock futures such as:
 Low Margins: The average margin requirement for commodities
would range in between 5% - 10%.
 Cash Settlement or Delivery: Client has the option to settle in
cash/delivery depending upon contract specifications.
 Trade for longer hours: The market is open from 10.00am to
11.30pm on weekdays and also open on Saturdays.
 Training Programs: Training programs will be conducted
across India to educate lay investors on commodity trading.
 Low Turnover Cost: Reliance Money will pass on the benefit of
their aggregate Exchange Turnover to their clients. This means
that client will always be charged a very small exchange turnover
fee.

40. 40
GOI BONDS
Bond refers to a security issued by a company, financial institution or
government, which offers regular or fixed payment of interest in return
for borrowed money for a certain period. However, out of all the bonds
in the market, the most popular is the Govt. of India bonds, which
generally gives a return of 8% p.a.. They are very safe instruments to
invest as the capital and interest thereupon is guaranteed. Bonds are of
two kinds:
 Taxable Bonds
 Non Taxable Bonds ( 6.5% tax free bonds are withdrawn from the
market) most of the time government uses these bonds to regulate
the supply of money in the economy. Hence, this is a very
important instrument from the perspective of macro or national
economy.
FIXED DEPOSITS
This is probably the most popular and known option available for
investment among any segment of people. Fixed Deposits in companies
that earn a fixed rate of return over a period are called Company Fixed
Deposits. Financial institutions and Non-Banking Finance Companies
(NBFCs) also accept such deposits. The Companies Act under Section
58A governs deposits thus mobilized. These deposits are unsecured, i.e.,
if the company defaults, the investor cannot sell the documents to
recover his capital, thus making them a risky investment option.
Benefits of investing in Company Fixed Deposits:
 High interest.
 Short-term deposits.
 Lock-in period is 3 months onwards.
 No Income Tax is deducted at source if the interest income is up to
Rs 5,000 in one financial year
 Investment can be spread in more than one company, so that
interest from one company does not exceed Rs. 5,000.
 The bank fixed deposits is the most popular in this category. They
generally give a return of 8-9.5% p.a. Perhaps every individual
investor invests in bank fixed deposits. The awareness about this
product in the market is quiet high. This instrument gives the
individual optimum

41. 41
 Security about both capital and return. The returns as stated above
are very much satisfactory taking into consideration the element of
risk involved in it.
GOLD
The yellow metal is one of the most precious and desired metal in the
world. An investment in gold is absolutely a new concept. Previously it
was used only as a metal, which is used to make jewellery. Nevertheless,
this concept is now changing after looking at the price appreciation of it
over the years. Investment in gold both in the physical form and in
dematerialized form is getting popular. Gold is now traded in the
commodity market as well as stock market in the form of exchange-
traded funds. It is now believed that the price of gold will increase every
time and hence is regarded as a safe instrument.
REAL ESTATE
Like gold real estate is also regarded to be appreciating every passing
day. With the advent of huge population pressure, there is a huge
demand of residences all over India. India‟s increased per capita income
also ignited this story of real estate boom. An investment in real estate
like land & building is good opportunity to earn huge returns after few
years (sometimes months even). Above all this opened a new window for
the investor community in India to invest in real estate.
Comparison Between Various Investment Products
TERMS USED
RETURN -: Income or profit arising from transaction.
SAFETY -: Risk associated with product.
VOLATILITY-: Unpredictable nature of product.
LIQUIDITY-: Easily convertible to cash.

42. 42
Return Safety Volatilit
y
Liquidity
EQUITY High Low High High
BONDS Moderate High Moderate Moderate
DEBENTURE Moderate Moderate Moderate Low
FIXED DEPOSITS Moderate High Low Low
BANK DEPOSITS Low High Low High
PPF Moderate High Low Moderate
LIFE INSURANCE Low High Low Low
GOLD Moderate High Moderate Moderate
REAL ESTATE High Moderate High Low
MUTUAL FUND High High Moderate High

43. 43
Return: -
Equity, mutual funds and real estate have higher return subject to
market risk but bonds, debentures, fixed deposit, PPF and gold gives
moderate return .Whereas, bank deposit and life insurance gives less
return in comparison with others.
Safety: -
Bonds, bank deposits, PPF, life Insurance, gold, fixed deposit and mutual
funds are safe as compare to Debentures and Real estate. But, Equity is
more risk prone.
Volatility:-
Equity, Real estate is highly unpredictable whereas bonds, debentures,
gold and mutual funds are moderate volatile in nature. But, fixed
deposit, bank deposit, PPF and life insurance are most predictable.
Liquidity: -
Equity, bank deposit and mutual funds can be easily converted into cash
whereas bonds, PPF and gold are moderate in nature but debentures
fixed deposits, life insurance and real estate cannot be easily converted
into cash.

44. 44
RESEARCH METHEDOLOGY
Objective of research
The main objective of this project is to know the opinion and awareness
of the people regarding different financial products.
Scope of the study
The research is restricted to Cuttack district only. I have visited people
randomly nearby my locality, different shopping malls, small retailers,
ATMs, hospitals and etc.
Data sources
Research is totally based on primary data. Primary data has been
collected by interacting with various people. The secondary data has
been collected through various journals and websites and some special
publications of R-MONEY.
Sampling
 Sampling procedure:
The sample is selected in a random way, irrespective of them being
investor or not or availing the services or not. It was collected through
personal visits to the known and unknown persons, by formal and
informal talks and through filling up the questionnaire prepared.
 Sample size
The sample size of my project is limited to 100 only.
 Sample design
Data has been presented with the help of bar graph, pie charts, line
graphs etc.
Research Procedure:
It is not possible for a researcher to collect data from every member of
the population for a particular research, so I have adopted Sampling
technique i.e. Random Sampling procedure. In this sampling
procedure, it assures each element in the population an equal chance of
being included in the sample. Therefore I have selected customers
randomly and then collected the information through a questionnaire
which is related to my research.

45. 45
Data collection procedure
The first phase will involve a survey of consumers using a questionnaire
administered by personal interviews. The conclusion of the study is
based on the survey. The secondary phase is by discussion among the
company people. In these two methods I am collecting the data that
needed for my project report.
Primary data source----
 The data that is collected from the first hand information by the
way of direct interview, observation and questionnaire.
Secondary data source----
 Collection of people from company people and websites.
Questionnaire Design:
There are 2 way of preparing a questionnaire that is a close ended
or/and open ended questionnaire. In case of open ended
questionnaire, the question is structured but responses are
unstructured. Here the respondent is expected to reply with whatever
words are considered to be relevant. In that case it may happen so
that the respondent answers may not relate to are requirements.
Similarly in case of close ended questionnaire, the respondent is
restricted to give his or her answer within a specified limit. This is
possible in multiple choices where the options are specified. They only
have to strike the option with a tick mark. According to my research I
can use several types of closed ended questionnaire such as
dichotomous, ranking, checklist, multiple choice and scales. But I have
prepared my questionnaire as per multiple choices so that it becomes
easier for the customer to answer the question within few minutes.
Here both the questionnaire and response are structure.
Limitation during survey:
It was quite unbalancing for me when I interviewed people. The
difficulties I faced in doing are:-
 More respondents did not like to spend time in filling the questionnaire
as it was immaterial to them.
 Many people did not like to waste their shopping time.
 Some people did not know the benefits of these products.

46. 46
 Many people did not respond after listening of Reliance Money’s
name.
 Most of the answers of the respondents did not base on their knowledge
but their feelings towards the brand name of the company
While filling questionnaire I did my project with the help of the
questionnaire. I took in to account only that people who are with positive
attitude while filling the questionnaire. I took maximum questionnaire
from corporate and business man as I want to know the real preference
of corporate people in investment. On that purpose I have collected data
from many places of cuttack and Bhubaneswar such as (Railway station,
AirPort, Forum Market, College square, Chauliaganj, B.K.Road,
Pithapur, mangalabag, etc.) and many corporate offices. I have also
collected data from businessmen and many others who have knowledge
about investment.
As many of them are busy, many of them filled in a hurry. I took in to my
project only those people who I thought gave the correct information.
With the help of the questionnaire, I can make my analysis separately for
each and every part of the research.

47. 47
SURVEY QUESTIONNAIRE
Name:
Address.
Age: Gender: M ( ) F ( )
Contact no:
1. Occupation:
o Service
o Business
o Housewife
o Student
o Retired
o Other (Pls, Specify) ___________________
2. Annual Income:
o Less than 1 lakh ( )
o 1 lakh to 2 lakh ( )
o 2 lakh to 3 lakh ( )
o More than 3 lakh ( )
3. Have you an ever invested/ interested to invest in mutual fund or have
taken any ULIP?
a)Yes b) No
4. If Not, then why people do not show interest to invest in mutual fund
or ULIP?
a) Lack of knowledge b) Interested in other products
c) Risk associated with return d) No trust over company

48. 48
5. If yes, then which feature of mutual fund attract you must?
a) Diversification
b) Professional management
c) Reduction in risk & transaction cost
6. According to you which is the most suitable stage to invest in mutual
fund or share market?
a) Young unmarried
b) Young married
c) Married with children
d) Preretirement stages
7. Do you invest on a regular basis?
a) Yes b) No…
8. How do you know about these investment products?
a) Advertisement b) Agents c) Relatives
9. Are you familiar with RELINCE MONEY and product provided by it?
a)Yes b) No…
10. If yes, then are you satisfied with the quality of service provided by
Reliance money?
a) Yes b) No c) Can‟t say
11. ULIP is a better investment product than mutual funds.
a) Yes b) No
Thank you for giving us your valuable time

49. 49
METHODOLOGY:
To solve the problem I have applied the chi-square technique to the
data‟s that are collected from the questionnaire. Chi- square is a test
which determines significance in the analysis of frequency distribution.
It allows us to determine if the difference between the observed
frequency distribution and the expected frequency distribution can be
attributed to sampling variation. The steps for calculation in this process
are as follows:
 Formulate the null hypothesis and determine the expected frequency
of each answer.
 Determine the appropriate significance level.
 Calculation the x² value, using the observed frequencies from the
sample and the expected frequencies.
 Make the statistical decision by comparing the calculated x² value
with the critical x² value.
NULL HYPOTHESIS:
ULIP is better investment product than mutual funds.
ALTERNATIVE HYPOTHESIS:
ULIP is not a better investment product than mutual funds.
TABULATION
OPINION CDA BADAMBADI COLLEGE
SQUARE
CHAUDHURI
BAZAR
YES
18 14 20 15
NO
07 06 09 11

50. 50
There are 2 rows(r) and 4 columns (c)
Degree of freedom (D.O.F) =(r-1) * (c-1)
= (2-1) * (4-1)
= 1 * 3 = 3
Level of significance=5%=0.05
So tabulated value=7.815
EXPECTED VALUE
(Row Total * Column Total) / Grand Total
E.g. Expected value of 18 is = 25 * 67 = 16.75
100
∑ (0-E) 2 / E=1.429
OBSERVATION(O) EXPECTED
VALUE (E)
O-E (O-E)2 (O-E)2/E
`
18
14
20
15
07
06
09
11
16.75
13.40
19.43
17.42
8.25
6.60
9.57
8.58
1.25
0.60
0.57
-2.42
-1.25
-0.60
-0.57
2.42
1.562
0.360
0.324
5.856
1.562
0.360
0.324
5.856
0.093
0.026
0.016
0.336
0.189
0.054
0.033
0.682

51. 51
CONCLUSION
Calculated value <Tabulated value
So null hypothesis is accepted i.e. ULIP is better investment product
than mutual funds.
DATA ANALYSIS
1. Have you a ever invested/ interested to invest in mutual fund or
have taken any ULIP?
Yes
61%
No
39%
0% 0%
No. of Person =100
Yes 61
No 39

52. 52
2. Why people do not show interest to invest in mutual fund or ULIP?
(out of 39 participants)
0
5
10
15
20
25
lack of knowledgeInterested in other productsRisk associated with returnNo trust over company
AxisTitle
Lack of knowledge 21
Interested in other products 05
Risk associated with return 07
No trust over company 06

53. 53
3. Which feature of mutual fund attract you must?
Diversification 24
Professional management 20
Reduction in risk & transaction cost 17
0
5
10
15
20
25
Diversification Professional
Management
Reduction in
risk &
transactional
cost
Chart Title

54. 54
4. According to you which are the most suitable stage to invest in
mutual fund or share market?
Young unmarried 24
Young married 17
Married with children 13
Preretirement stages 07
39%
28%
21%
12%
Young Unmarried

55. 55
5. Do you invest on a regular basis?(out of 61)
Yes 37
No 24
0
5
10
15
20
25
30
35
40
Yes No

56. 56
6. How do you know about these investment products?(out of 61)
a) Advertisement b) Agents c) Relatives
Advertisement 13
Agents 41
Relatives 07
0
5
10
15
20
25
30
35
40
45
Advertising Agents Relatives

57. 57
7. ULIP is a better investment product than mutual funds.
Yes 67
No 33
0
10
20
30
40
50
60
70
Yes
No

58. 58
Research Findings and Conclusions
All the test result shows that there is significant difference among the
opinion of the customers
 At the survey conducted upon 100 people, 61 (61%) are already
 mutual fund investors/an insurance policy owner or are interested
to invest in future or take an insurance policy and the remaining 39
(39%)are not interested in doing either of it. So there is enough
scope for the company in future.
 Now, when those 39 people were asked about the reason of not
investing in mutual funds or taking an Insurance policy, then
21(53.8%) were confused and lack of knowledge was the main
reason .Where as 07(17.9%) people showed their reluctance to
invest due to risk associated with return. 06(15.3%) people
expressed no trust over company. Whereas just 05(12.8%) people
enjoyed investing in other option. so financial advisors of company
can attract these people by educating them about these products
and creating trust regarding investment.
 When asked about the most attractive feature of MFs, 24(39.3) out
of 61 opted for diversification, followed by 20(32.7%) and
17(27.8%) who prefer professional management and Reduction in
risk & transaction cost are main reason for investing in mutual
funds. With little fund one can‟t go for diversified portfolio, which
is possible in mutual fund and it is the strong point of mutual fund.
 24 (39.3%) out of 61 people are unmarried who preferred to invest
more. Then 17(27.8%) married person interested to invest.13
(21.3%) and 07(11.4%) person of marriage with children and pre-
retirement stage shows their preference to invest in these products.
This is because with the passage of time, responsibility and
expenses for family increases. so they prefer to take less risk and
invest less.
 Only 37(60.6%) out of 61 investors invest on a regular basis and
24(39.4%) prefer to invest one time. so there is an opportunity for
company to motivate those non-regular investors to invest.
 41(67.2%) investors out of 61 got knowledge from agents, then
13(21.3%) got from advertisement and only 07(11.4%)got to know
about product from relatives. So an agent plays a vital role in
investment market.

59. 59
Recommendations & Suggestions
The most important problem is lack of awareness. Investors should be
made aware of the benefits. Nobody will invest until and unless he is
fully convinced and satisfied with the product. People only see mutual
funds and ULIP as just another investment option. So the advisors
should try to change their mindsets and motivate them to invest. There is
enough scope for the investment companies in future. Financial advisors
of company can attract these people by educating them about these
products and creating trust regarding investment. It is the responsibility
of agents/sales executives to teach and guide potential customers
properly.

60. 60
BIBLIOGRAPHY:
Basic information is collected from websites like:
www.moneycontrol.com
www.valueresearchindia.com
www.mutualfundsindia.com
www.sebi.com
www.nseindia.com
www.bseindia.com
www.amfiindia.com
www.reliancemoney.co.in and
Books like
Indian Financial System by Dr. G. Ramesh Babu & some
Magazine were also referred.