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A project report on consumer behaviour at uti mutual funds
A project report on consumer behaviour at uti mutual funds
<br /> <br />A Project Report<br />ON<br />CONSUMER BEHAVIOUR<br />AT<br />In Partial Completion of<br />Masters of Business Administration (MBA) <br /> <br />2009-10<br />SUBMITED TO: SUBMITED BY:<br /> <br />ACKNOWLEDGEMENT<br />The completion of any task depends upon the co-operation, coordination and consolidated efforts of several resources of knowledge, energy, time and above all the proper guidance of the experienced. Therefore I approached this matter of acknowledgement through these lines trying my best to give full credit where it deserves. <br />I wish to express my gratitude to those who generously helped me to compile this project with their knowledge and expertise. Firstly, I owe a great debt to ……………….., Chief Manager UTI Mutual Fund, Ahmedabad. Who were responsible for making this project possible.<br />They have given me the opportunity to choose this topic and the necessary guidelines regarding the project to track first hand information and supporting me in the completion of the project successfully, as well as insulating a belief in me which was essential for the completion of this project. The learning during the project was of immense importance & invaluable. <br />Index<br /><ul><li>Sr. No.SubjectPage No.Executive Summary5UTI MF- An Introduction6Subsidiaries7Mutual Fund Assets Type8Vision and Mission9History9Mutual Fund- An Introduction18Corporate Profile 20Rights of Unit holder24Organizational structure of MF25Awards27Different Investment Plan28Types of Mutual Fund29Products of UTI34SIP Returns42Key Terms47Area of Study48Consumer Buying Behaviour- An Introduction56Research Methodology 61Data Analyses and Interpretation65Key Findings73Conclusion74Learning75Recommendations75Questionnaire 77
Executive Summary</li></ul>UTI Mutual Fund is among one of the largest financial Institution. It is doing its business by continuously delivering a differentiated product and services that provide high business value in return.<br /> <br />The main objectives are<br />To know the awareness of mutual fund amongst the investor<br />To know the investors knowledge and perceptions about mutual fund.<br />To know the investor priority level between different criteria of investment like safety level, returns, liquidity, tax benefits and maturity etc. of investment.<br />Find out reason for choice of mutual fund as an investment avenue.<br />Savings form an important part of the economy of any nation. With savings invested in various Assets available to the people like Gold, Debt market, Insurance, Mutual funds, Equity, Bank deposit etc the money acts as the driver for growth of the country. Indian financial sector avails multiple avenues to the investors. A basic principle of investing is that the investment avenue must match the investor's risk profile. Young investors have an edge over others on account of their age. In other words, a young age investor has a big ratio of disposable income. Now, India is seen as one of the best and deepest of markets in the world. It has huge potential growth rate in mutual fund and different financial instruments to provide reasonable options for an ordinary man to invest his savings and diversify the risk.<br />This report will seek to cover all the fundamental aspects relating to various investments Asset classes which are available for the investors in India. This report will also tell us the customer perception about different investment instruments which are available. In this report, Researcher comparing the various investment options with their growth, returns, risks etc.<br />UTI Mutual Fund- An Introduction<br />UTI AMC is one of the best Asset Management Company in India. Recently, Mr. U. K. Sinha has awarded as a best CEO of the year 2009 and Mr. Jaideep Bhattacharya has awarded as best Marketing Personality of the year 2009.<br /> UTI AMC is a company incorporated under companies act 1956. In UTI AMC the investment agreement is executed between UTI Trustee Company Ltd and UTI AMC on December 9 2002 UTI AMC was registered by SEBI to act as Asset Management Company for UTI Mutual Fund vide its letter of January 2003.<br />The paid up capital of UTI AMC has been subscribed equally by four sponsors: State Bank of India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank. UTIAMC, apart from managing the schemes of UTI Mutual Fund, also manages the schemes transferred/migrated from the erstwhile Unit Trust of India, in accordance with the provisions of the Investment Management Agreement, the Trust Deed, and the SEBI (Mutual Funds) Regulations.<br />Current AUM of UTI Mutual Fund is Rs.78, 617 Crores* as on 31st May 2010 (source: http://www.amfiindia.com/)<br />Subsidiaries <br />UTI Venture<br />UTI Venture is leading private equity firm. Focused on growth capital, they propel the ambitions of passionate Indian entrepreneurs, while unlocking superior returns for our investors. Our demonstrated track record of successful investments, led by an experienced management team, positions our funds among top performers in India.<br />UTI International Ltd<br />UTI International Ltd (UTI IL) is a 100% subsidiary of UTI Asset Management Company Ltd. (UTI AMC). UTI AMC is the largest retail Asset Management Company in India with more than 9 million investor accounts and Assets under Management of close to US$ 9.5bn (September 30, 2008). UTI International Ltd. is responsible for all international business activities of UTI AMC. The Assets under Management (AUM) of UTI International Ltd stands at USD 615 mn as on September 30, 2008.<br />UTI RSL (Retirement Solutions Limited)<br />UTI RSL has been set up to carry out the operations as Pension Fund as directed by the Board of Trustees of the New Pension System Trust, set up under the Indian Trust Act, 1882, and to undertake wholesale asset management as prescribed by the Government.<br />Worldwide Mutual Fund Assets by type of fund: <br />If we see the worldwide Mutual fund Assets by the type of fund for the third quarter in 2008, then it is seen that the major investments were in equities i.e. 40% of the total investments.<br />Source: Investment Company Institute<br />Worldwide Mutual Fund Assets by Region:<br />-125095979805By region, 55 percent of worldwide assets were in the Americas in the third quarter of 2008, 34 percent were in Europe and 11 percent in Africa and Asia/Pacific.<br />Vision:<br />“To be the most preferred Mutual Fund.”<br />Mission:<br /><ul><li>The most trusted brand, admired by all stakeholders
The largest and most efficient money manager with global presence
A socially responsible organisation known for best corporate governance</li></ul>History:<br />The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts of the Government of India and the Reserve Bank of India. Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years. <br />The history of mutual fund industry in India can be better understood divided into following phases: <br />Phase 1. Establishment and Growth of Unit Trust of India - 1964-87Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years. UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors. It launched ULIP in 1971, six more schemes between 1981-84, Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Mastershare (India’s first equity diversified scheme) in 1987 and Monthly Income Schemes (offering assured returns) during 1990s. By the end of 1987, UTI's assets under management grew ten times to Rs 6700 crores.<br />Phase II. Entry of Public Sector Funds - 1987-1993The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets under management of the industry increased seven times to Rs. 47,004 crores. However, UTI remained to be the leader with about 80% market share.<br />1992-93Amount MobilisedAssets Under ManagementMobilisation as % of gross Domestic SavingsUTI11,05738,2475.2%Public Sector1,9648,7570.9%Total13,02147,0046.1%<br />Phase III. Emergence of Private Sector Funds - 1993-96The permission given to private sector funds including foreign fund management companies (most of them entering through joint ventures with Indian promoters) to enter the mutual fund industry in 1993, provided a wide range of choice to investors and more competition in the industry. Private funds introduced innovative products, investment techniques and investor-servicing technology. By 1994-95, about 11 private sector funds had launched their schemes. <br />Phase IV. Growth and SEBI Regulation - 1996-2004The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilisation of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds. Investors' interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programmes were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry.<br />In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutual fund players on the same level. UTI was re-organised into two parts: <br />1. The Specified Undertaking, <br />2. The UTI Mutual Fund Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64, Assured Return Schemes) are being gradually wound up. However, UTI Mutual Fund is still the largest player in the industry. In 1999, there was a significant growth in mobilisation of funds from investors and assets under management which is supported by the following data: <br />GROSS FUND MOBILISATION (RS. CRORES)FROMTOUTIPUBLIC SECTORPRIVATE SECTORTOTAL01-April-9831-March-9911,6791,7327,96621,37701-April-9931-March-0013,5364,03942,17359,74801-April-0031-March-0112,4136,19274,35292,95701-April-0131-March-024,64313,6131,46,2671,64,52301-April-0231-Jan-035,50522,9232,20,5512,48,97901-Feb.-0331-March-03*7,259*58,43565,69401-April-0331-March-04-68,5585,21,6325,90,19001-April-0431-March-05-1,03,2467,36,4168,39,66201-April-0531-March-06-1,83,4469,14,71210,98,158<br />ASSETS UNDER MANAGEMENT (RS. CRORES)AS ONUTIPUBLIC SECTORPRIVATE SECTORTOTAL31-March-9953,3208,2926,86068,472<br />Phase V. Growth and Consolidation - 2004 OnwardsThe industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more international mutual fund players have entered India like Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players. <br /> <br />Global Scenario<br />Some basic facts:<br />In US, every third household is a mutual fund investor.<br />In US, the MF Industry size is about 67% of the US GDP whereas the Indian MF Industry is just 6% of our GDP.<br />In US, MF assets are 1.5 times the bank deposit.<br />In India the bank deposits are about 10.50 times the MF assets.<br />In India for the past 3 years it has been seen that nearly 2,500 crore is being transferred from bank deposits to Mutual funds on a yearly basis.<br />75% of the core customer bases of mutual funds in the top 50-broking firms in the U.S. are expected to trade on-line by 2004. <br />On- line trading is a great idea to reduce management expenses from the current 2 % of total assets to about 0.75 % of the total assets and as we start using advanced technology in this industry this cost will further cut down the administration cost.<br />Internationally, on-line investing continues its meteoric rise. Many have debated about the success of e- commerce and its breakthroughs, but it is true that this aspect of technology could and will change the way financial sectors function. However, mutual funds cannot be left far behind. They have realized the potential of the Internet and are equipping themselves to perform better.<br />In fact in advanced countries like the U.S.A, mutual funds buy- sell transactions have already begun on the net, while in India the Net is used as a source of Information and also net is used for transaction purpose is on the initial stage but is catching up quickly with all dealing in this industry as it helps in reducing administrative cost.<br />Such changes could facilitate easy access, lower intermediation costs and better services for all. A research agency that specializes in internet technology estimates that over the next four years Mutual Fund Assets traded on- line will grow ten folds from $ 128 billion to $ 1,227 billion; whereas equity assets traded on-line will increase during the period from $ 246 billion to $ 1,561 billion. This will increase the share of mutual funds from 34% to 40% during the period.<br />Such increases in volumes are expected to bring about large changes in the way Mutual Funds conduct their business.<br />Here are some of the basic changes that have taken place since the advent of the Net.<br />Lower Costs: Distribution of funds will fall in the online trading regime by 2003. Mutual funds could bring down their administrative costs to 0.75% if trading is done on- line. As per SEBI regulations, bond funds can charge a maximum of 2.25% and equity funds can charge 2.5% as administrative fees. Therefore if the administrative costs are low, the benefits are passed down and hence Mutual Funds are able to attract more investors and increase their asset base.<br />Better advice: Mutual funds could provide better advice to their investors through the Net rather than through the traditional investment routes where there is an additional channel to deal with the Brokers. Direct dealing with the fund could help the investor with their financial planning.<br />In India, brokers could get more Net savvy than investors and could help the investors with the knowledge through get from the Net.<br />New investors would prefer online: Mutual funds can target investors who are young individuals and who are Net savvy, since servicing them would be easier on the Net.<br />India has around 1.6 million net users who are prime target for these funds and this could just be the beginning. The Internet users are going to increase dramatically and mutual funds are going to be the best beneficiary. With smaller administrative costs more funds would be mobilized .A fund manager must be ready to tackle the volatility and will have to maintain sufficient amount of investments which are high liquidity and low yielding investments to honour redemption.<br />Net based advertisements: There will be more sites involved in ads and promotion of mutual funds. In the U.S. sites like AOL offer detailed research and financial details about the functioning of different funds and their performance statistics a is witnessing a genesis in this area. <br />Future Scenario:<br />The asset base will continue to grow at an annual rate of about 30 to 35 % over the next few years as investor’s shift their assets from banks and other traditional avenues. Some of the older public and private sector players will either close shop or be taken over.<br />Out of ten public sector players five will sell out, close down or merge with stronger players in three to four years. In the private sector this trend has already started with two mergers and one takeover. Here too some of them will down their shutters in the near future to come.<br />But this does not mean there is no room for other players. The market will witness a flurry of new players entering the arena. There will be a large number of offers from various asset management companies in the time to come. Some big names like Fidelity, Principal, Old Mutual etc. are looking at Indian market seriously. One important reason for it is that most major players already have presence here and hence these big names would hardly like to get left behind.<br />In the U.S. most mutual funds concentrate only on financial funds like equity and debt. Some like real estate funds and commodity funds also take an exposure to physical assets. The latter type of funds are preferred by Corporate’s who want to hedge their exposure to the commodities they deal with.<br />For instance, a cable manufacturer who needs 100 tons of Copper in the month of January could buy an equivalent amount of copper by investing in a copper fund. For Example, Permanent Portfolio Fund, a conservative U.S. based fund invests a fixed percentage of it’s corpus in Gold, Silver, Swiss francs, specific stocks on various bourses around the world, short –term and long-term U.S. treasuries etc.<br />In U.S.A. apart from bullion funds there are copper funds, precious metal funds and real estate funds (investing in real estate and other related assets as well.).In India, the Canada based Dundee mutual fund is planning to launch gold and a real estate fund before the year-end.<br />In developed countries like the U.S.A there are funds to satisfy everybody’s requirement, but in India only the tip of the iceberg has been explored. In the near future India too will concentrate on financial as well as physical funds.<br />The mutual fund industry is awaiting the introduction of DERIVATIVES in the country as this would enable it to hedge its risk and this in turn would be reflected in its Net Asset Value (NAV).<br />SEBI is working out the norms for enabling the existing mutual fund schemes to trade in Derivatives. Importantly, many market players have called on the Regulator to initiate the process immediately, so that the mutual funds can implement the changes that are required to trade in Derivatives.<br />Assets Under Management:<br />UTIAMC presently manages a corpus of over Rs.78, 617 Crores* as on 31st May 2010. UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizens. It has a nationwide network consisting 143 UTI Financial Centres (UFCs) and UTI International offices in London, Dubai and Bahrain.<br /> (Source: http://www.amfiindia.com/)<br />Mutual Fund- An Introduction<br />Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual funds. All the mutual funds must get registered with SEBI. A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually.<br />Since 1940, there have been three basic types of investment companies in the United States: open-end funds, also known in the U.S. as mutual funds; unit investment trusts (UITs); and closed-end funds. Similar funds also operate in Canada. However, in the rest of the world, mutual fund is used as a generic term for various types of collective investment vehicles, such as unit trusts, open-ended investment companies (OEICs), unitized insurance funds, and undertakings for collective investments in transferable securities (UCITS).<br /> A mutual fund may be either an open-end or a closed-end fund. An open-end mutual fund does not have a set number of shares; it may be considered as a fluid capital stock. The number of shares changes as investors buys or sell their shares. Investors are able to buy and sell their shares of the company at any time for a market price. However the open-end market price is influenced greatly by the fund managers. On the other hand, closed-end mutual fund has a fixed number of shares and the value of the shares fluctuates with the market. But with close-end funds, the fund manager has less influence because the price of the underlining owned securities has greater influence.<br />Mutual Fund Global Overview<br />Mutual fund assets worldwide decreased 12.1 percent to $21.66 trillion at the end of the third quarter of 2008. Net cash flow to all funds was negative in the third quarter with $218 billion in outflows, the first worldwide outflow recorded since the third quarter of 2002. The decline in assets reported in U.S. dollars was exacerbated by strengthening of the dollar. Long-term funds had net outflows of $246 billion in the third quarter, after registering net inflows of $73 billion in the second quarter. All categories of long-term funds experienced outflows. Year-to-date, equity funds have had $254 billion in outflows, bond funds have had $39 billion in outflows, and balanced/mixed funds have had $24 billion in outflows. Money market funds experienced net inflows of $28 billion in the third quarter, compared with outflows of $70 billion in the second quarter of 2008. Year-to-date money market funds have had $444 billion of net inflows. MFs records Rs. 83081 crore net inflow in FY 2009-10. <br />Investment Philosophy<br />UTI Mutual Fund’s investment philosophy is to deliver consistent and stable returns in the medium to long term with a fairly lower volatility of fund returns compared to the broad market. It believes in having a balanced and well-diversified portfolio for all the funds and a rigorous in-house research based approach to all its investments. It is committed to adopt and maintain good fund management practices and a process based investment management.<br />UTI Mutual Fund follows an investment approach of giving as equal an importance to asset allocation and sartorial allocation, as is given to security selection while managing any fund. It combines top-down and bottom-up approaches to enable the portfolios/funds to adapt to different market conditions so as to prevent missing an investment opportunity.<br />Corporate Profile:<br />UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizens. It has a nationwide network consisting 114 UTI Financial Centers (UFCs) and UTI International offices in London, Dubai and Bahrain. With a view to reach to common investors at district level, 1 satellite office has also been opened.<br />UTIAMC has a well-qualified, professional fund management team, which has been fully empowered to manage funds with greater efficiency and accountability in the sole interest of the unit holders. The fund managers are ably supported by a strong in-house securities research department. To ensure investors’ interests, a risk management department is also in operation.<br />Benefits of investing in Mutual Funds: <br />There are several benefits from investing in a Mutual Fund:<br /><ul><li>Small investments: Mutual funds help you to reap the benefit of returns by a portfolio spread across a wide spectrum of companies with small investments.
Professional Fund Management: Professionals having considerable expertise, experience and resources manage the pool of money collected by a mutual fund. They thoroughly analyse the markets and economy to pick good investment opportunities.
Spreading Risk: An investor with limited funds might be able to invest in only one or two stocks/bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by investing a number of sound stocks or bonds. A fund normally invests in companies across a wide range of industries, so the risk is diversified.
Transparency: Mutual Funds regularly provide investors with information on the value of their investments. Mutual Funds also provide complete portfolio disclosure of the investments made by various schemes and also the proportion invested in each asset type.
Choice: The large amount of Mutual Funds offer the investor a wide variety to choose from. An investor can pick up a scheme depending upon his risk/ return profile.
Regulations: All the mutual funds are registered with SEBI and they function within the provisions of strict regulation designed to protect the interests of the investor.
Flexibility: Through features such as Systematic Investment Plans (SIP), Systematic Withdrawal Plans (SWP) and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience.
Return Potential: Over a medium to long term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities.
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.</li></ul>Limitation of Mutual Fund:<br /><ul><li>Entry and exit costs: Mutual Funds are a victim of their own success. When a large body like a fund invests in shares, the concentrated buying or selling often results in adverse price movements i.e. at the time of buying, the fund ends up paying a higher price and while selling it realizes a lower price. For obvious reasons, this problem is even more severe for funds investing in small capitalization stocks. However, given the large size of the debt market, excluding UTI, most debt funds do not face this problem.
Waiting time before investment: It takes time for a Mutual Fund to invest money. Since it is difficult to invest all funds in one day, there is dome money waiting to be invested. Further, there may be a time lag before investment opportunities are identified. This ensures that the fund under performs the index. For open-ended funds, there is the added problem of perpetually keeping some money in liquid assets to meet redemption. The problem of impracticability of quick investments is likely to be reduced to some extent with the introduction of index futures.
Fund management costs: The costs of the fund management process are deducted from the fund. This includes marketing and initial costs deducted at the time of entry itself, called “load”. Then there is the annual asset management fee and expenses, together called the expense ratio. Usually, the former is not counted while measuring performance, while the later is. A standard 2% expense ratio means that, everything else being equal, the Fund manager under performs the benchmark index by an equal amount.
Cost of churning: The portfolio of a fund does not remain constant. The extent to which the portfolio changes is a function of the style of the individual fund manager. It is also dependent on the volatility of the fund size i.e. whether the fund constantly receives fresh subscriptions and redemption. Such portfolio changes have associated costs of brokerage, custody fees, and registration fees etc. that lowers the portfolio return commensurately.
Change of index composition: The indices keep changing over the world to reflect changing market conditions. There is an inherent survivorship bias in this process, with the bad stocks weeded out and replaced by emerging blue chips. This is a severe problem in India with the Sensex having been changes twice in the last five years, with each change being quite substantial. Another reasons for change index composition is Mergers & Acquisitions. The weight age of the shares of a particular company in the index changes if it acquires a large company not a part of the index.</li></ul>Rights of Unit holders:<br />As a unitholder in a Mutual Fund scheme coming under the SEBI (Mutual Funds) Regulations, you are entitled to:<br /><ul><li>Receive unit certificates or statements of accounts confirming your title within 30 days from the date of closure of the subscription under open-ended schemes or within 6 weeks from the date your request for a unit certificate is received by the Mutual Fund.
Receive information about the investment policies, investment objectives, financial position and general affairs of the scheme.
Receive dividend within 30 days of their declaration and receive the redemption or repurchase proceeds within 10 working days from the date of redemption or repurchase.
Receive communication from the Trustees about change in the fundamental attributes of any scheme or any other changes which would modify the scheme and affect the interest of the unitholders and to have option to exit at prevailing Net Asset Value without any exit load in such cases.
Inspect the documents of the Mutual Funds specified in the scheme’s offer document.</li></ul>In addition to your rights, you can expect the following from Mutual Funds:<br /><ul><li>To publish their NAV, in accordance with the regulations: daily, in case of open-ended schemes and once a week, in case of close-ended schemes.
To disclose your schemes’ entire portfolio twice a year, unaudited financial results half yearly and audited annual accounts once a year. In addition many mutual funds send out newsletters periodically.
To adhere to a Code of Ethics which require that investment decisions are taken in the best interest of the unitholders.</li></ul>SponsorsUnit HoldersTransfer AgentAMCSEBITrusteesMutual FundOrganizational Structure of Mutual Fund Industry:<br />Custodian<br />Mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset Management Company (AMC) and a custodian. <br />The trust is established by a sponsor or more than one sponsor who is like a promoter of a company. A mutual fund in India is constituted in the form of a public Trust created under the Indian Trusts Act, 1882. The sponsor forms the Trust and registers it with SEBI. The fund sponsor acts as the settler of the Trust, contributing to its initial capital and appoints a trustee to hold the assets of the Trust for the benefit of the unit – holders, who are the beneficiaries of the Trust. The fund then invites investors to contribute their money in the common pool, by subscribing to ‘units’ issued by various schemes established by the Trust as evidence of their beneficial interest in the fund. Thus, a mutual fund is just a ‘pass through’ vehicle. Most of the funds in India are managed by the Board of Trustees, which is an independent body and acts as protector of the unit – holders interests. At least, 50 per cent of the trustees shall be independent trustees (who are not associated with an associate, subsidiary, or sponsor in any manner). The trustees shall be accountable for and be the custodian of funds/property of respective scheme.<br />The trustees of the mutual fund hold its property for the benefit of the unit-holders. The AMC, approved by SEBI, manages the funds by making investments in various types of securities. <br />The custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. <br />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.<br />The sponsor is required, under the provisions of the Mutual Fund Regulations, to have a sound track record, a reputation of fairness and integrity in all his business transactions. Additionally, the sponsor should contribute at least 40% to the net worth of the AMC. However, if any person holds 40% or more of the net worth of an AMC shall be deemed to be a sponsor and will be required to fulfil the eligibility criteria specified in the Mutual Fund Regulations. The sponsor or any of its directors or the principal officer employed by the mutual fund should not be guilty of fraud, not be convicted of an offence involving moral turpitude or should have not been found guilty of any economic offence.<br />Awards<br />UTI MF CNBC Award 2009.UTI Mutual Fund sweeps ICRA mutual fund Award 2009. UTI MF wins the Best Debt Fund House Award. Golden Peacock Innovative Product/Service Award-2008.Loyalty Awards – 2009.Lipper Fund Awards09-UTI Mahila Unit-5 yrs. Lipper Fund Awards09-UTI Mahila Unit-3 yrs. Reader’s Digest Trusted Brand 2008. Lipper Fund Awards - Gulf 2008. Top Performing Infrastructure Fund - Income. Brand loyalty Awards 2008. Four ICRA 7 Star Gold Award. Four ICRA 5 Star Award. ICRA Mutual Fund Award 2007. Lipper Fund Awards 2007. CRISIL-CNBC-TV18-Mutual Fund of the year Award 2007. ICRA Mutual Fund Award 2006. Lipper Fund Awards. CNBC-TV18-BNP Par-ibas Mutual Fund of the year Award 2006. CNBC-TV18-BNP Par-ibas Mutual Fund of the year Award 2004ICRA online Mutual Fund Award: UTI NIFTY INDEX FUND won the award for the year 2004. CNBC India Mutual Fund of the Year Award 2003.UTI Nifty Index Fund wins Gold at ICRA Online 2005. UTI Dynamic Equity Fund wins Silver at ICRA Online 2005. UTI Growth Value Fund has been ranked by CRISIL 2004. <br />What are the different investment plans that Mutual Funds offer?<br />The term ’investment plans’ generally refers to the services that the funds provide to investors offering different ways to invest or reinvest. The different investment plans are an important consideration in the investment decision, because they determine the flexibility available to the investor.<br />Some of the investment plans offered by mutual funds in India are:<br />Growth Plan and Dividend Plan<br />A growth plan is a plan under a scheme wherein the returns from investments are reinvested and very few income distributions, if any, are made. The investor thus only realizes capital appreciation on the investment. Under the dividend plan, income is distributed from time to time. This plan is ideal to those investors requiring regular income.<br />Dividend Reinvestment Plan<br />Dividend plans of schemes carry an additional option for reinvestment of income distribution. This is referred to as the dividend reinvestment plan. Under this plan, dividends declared by a fund are reinvested in the scheme on behalf of the investor, thus increasing the number of units held by the investors.<br />Types of Mutual Fund:<br />The objectives of Mutual Funds are to provide continues liquidity and higher yields with high degree of safety to investor. Based on these objectives, different types of Mutual Fund schemes have evolved.<br />Open Ended Schemes:<br />Open-ended schemes do not have a fixed maturity period. Investors can buy or sell units at NAV-related prices from and to the mutual fund on any business day. These schemes have unlimited capitalization, open-ended schemes do not have a fixed maturity, there is no cap on the amount investors can buy from the fund and the unit capital can keep growing. These funds are not generally listed on any exchange. <br />Open-ended schemes are preferred for their liquidity. Such funds can issue and redeem units any time during the life of a scheme. Hence, unit capital of open-ended funds can fluctuate on a daily basis. <br />The advantages of open-ended funds over close-ended are as follows: <br />Any time exit option, the issuing company directly takes the responsibility of providing an entry and an exit. This provides ready liquidity to the investors and avoids reliance on transfer deeds, signature verifications and bad deliveries. Any time entry option, an open-ended fund allows one to enter the fund at any time and even to invest at regular intervals. <br />Close Ended Schemes:<br />Close-ended schemes have fixed maturity periods. Investors can buy into these funds during the period when these funds are open in the initial issue. After that such scheme cannot issue new units except in case of bonus or rights issue. However, after the initial issue, investors can buy or sell units of the scheme on the stock exchanges where they are listed. The market price of the units could vary from the NAV of the scheme due to demand and supply factors, investors’ expectations and other market factors.<br />Interval Scheme:<br />Interval Scheme combines the features of open-ended and close-ended schemes. They are open for sale or redemption during predetermined intervals at NAV-related prices. <br />Portfolio Classification:<br />Income/ Debt Funds<br />These funds are low risk-low return funds, where in the investments are made in income bearing instruments such as bonds, debentures, government securities, commercial papers etc. The share prices of these funds tend to be more stable in value and are best suitable for regular income investment goals, provided minimum investment period is more than one year. The leading examples are monthly income funds of UTI, Prudential ICICI Income Plan, JM Income, Alliance Liquid Fund etc.<br />Growth/Equity Funds<br />These funds are high risk-high return funds, wherein major chunk of investment goes in equity shares of companies. The NAV of such funds keep fluctuating, but the potential to earn in such funds is higher provided they are invested with long-term (more than 5 years) financial goals. The leading examples of such funds are, Kothari Pioneer Prima Fund, Prudential ICICI Equity Fund, Birla Sun Life Fund, etc.<br />Balanced Funds<br />These funds invest in both, equity shares and income bearing instruments. The idea is to reduce volatility of fund, while providing some upside for capital appreciation. In all, it is a combination of income and growth funds more return – more risk than income funds and less return – less risk than growth funds. They are best suited for people looking for a combination for capital appreciation and regular income and best time – span for such investments is more than 3 years. The examples are PRUICICI Balanced Fund, IDBI-PRINCIPAL Balanced Fund, and IDBI-PRINCIPAL Child Benefit Fund etc.<br />Money Market Mutual Funds<br />These funds invest in highly liquid instruments such as certificate of deposits and short-term bonds. They have emerged as an alternative for savings and short-term fixed deposit accounts. They are best suited for capital preservation investment objectives, where time-span is least.<br />Geographical Classification<br />Domestic Funds<br />Funds which mobilize resources from a particular geographical locality like a country or region are domestic funds. The market is limited and confined to the boundaries of a nation in which the fund operates. They can invest only in the securities which are issued and traded in the domestic financial markets. <br />OTHER CLASSIFICATION<br />Sector Funds<br />Sector funds primarily invest in companies of a particular sector/ industry such as information technology, pharmaceuticals, FMCGs etc. These types of funds are subject to more risk as the performance of funds depends on the performance of the industry as a whole and also because the diversification of risk is reduced. Also with the new rule of government not allowing investing more than 10% in a particular company, is a big problem as the number of companies are not very large and at the same time all of them are not very successful. It is best suited to people willing to take high risk.<br />Tax Saving Funds (ELSS)<br />These funds offer tax rebate to the investor along wit capital growth and steady returns. An Equity United Savings Scheme is available wherein investments are made primarily in stocks. The investment can be made any time, but it gets lock-in for a period of 3 years and in return tax rebate @ 20% is obtained if investments exceed Rs.1, 00,000. Another such scheme is pension scheme, wherein tax rebate @ 20% can be obtained for investment up to Rs.60, 000.<br />Special Funds<br />Special purpose funds are those funds that target a specific customer segments, such as children, women, retired people etc. Making their fund oriented towards the need of the group they are targeting.<br />Gilt Funds<br />These funds are sort of government funds wherein the investments are made in debt instruments of the government, which carry no risk of non-payment of interest as the RBI manages the payment of interest and principal on the instruments. These funds are best suited to the regular income and long-term investment objectives. The time-span matters a lot as there are chances of price volatility, which may lead to possibility of loss of principal invested, if invested for short-term. Examples are PRUICICI Gilt Fund, IDBI-PRINCIPAL Government Securities Fund etc.<br />Index Funds<br />Index funds invest only in stocks of a particular index such as BSE, S&P CNX 500 etc. The principle is to duplicate performance of these widely followed indexes while keeping trading and other costs to a minimum. The returns in case of such funds depend on the index’s performance. It is best suited to the investors who are satisfied with the returns of an index.<br />Products of UTI AMC<br />Equity Fund Category<br /><ul><li>Diversified Funds</li></ul>UTI Master Share: An equity fund aiming to provide benefit of capital appreciation and income distribution through investing in equity.<br />UTI Master Plus Unit Scheme: Capital appreciation through investments in equities and equity related instruments, convertible debentures, derivate in India and also in overseas markets.<br />UTI Equity Fund: It is open ended equity scheme with an objective of investing at least 80% of its funds in equity and equity related instrument with medium to high risk profile and upto 20% in debt and money market instruments with low to medium risk profile.<br />UTI Contra Fund: To provide long term capital appreciation/ dividend distribution through investments in listed equities & equity related instruments. The fund offers an impact of non-rational investors that are currently undervalued because of emotional & behavioural patterns present in the stock market.<br />UTI Wealth Builder: The objective of the scheme is to achieve long term investing predominantly in a diversified portfolio of equity related instruments.<br />UTI Top 100: The fund aims to provide long term capital appreciation/ dividend predominantly in equity and equity related instruments of top 100 by market capitalisation.<br /><ul><li>Speciality/ Theme Based Fund</li></ul>UTI Infrastructure Fund: An open-ended equity fund with the objective to provide capital appreciation through investing in the stocks of the companies engaged in the sectors like Metals, Building materials, oil and gas, power, chemicals, engineering etc. The fund will invest in the stocks of the companies which from part of infrastructure industries.<br />UTI Dividend Yield Fund: An open-ended equity scheme. It aims to provide medium to long term capital gains and/or dividend distribution by investing predominantly in equity and equity related instruments, which offer high dividend yield.<br />UTI Services Industries Fund: An open-ended fund which invests in the equities of the services sector companies of the country. One of the growth sector fund aiming to provide growth of capital over a period of time as well as to make income distribution by investing the funds in stocks of companies engaged in service sector such as banking, finance, insurances, education, training, telecom, travel, entertainment etc.<br />UTI Master Value Fund: An open ended equity fund investing in stocks which are currently undervalued to their future earning potential and carry medium risk profile to provide Capital appreciation.<br />UTI Mid Cap Fund: An open ended fund with the objective to provide ‘Capital Appreciation’ by investing primarily in mid cap stocks.<br />UTI Leadership Equity Fund: The scheme seeks to generate capital appreciation and/ or income distribution by investing the funds in stocks that are ‘Leader” in their respective industries/ sectors/ sub sectors.<br />UTI MNC Fund: The investments of funds under the scheme will be predominantly in stocks of multinational corporations and other Liquid stocks.<br />UTI Opportunities Fund: The scheme seeks to generate capital appreciation and/ or income distribution by investing the funds of the scheme in the equity shares and equity related instruments. The focus of the scheme is to capitalise on opportunities arising in the market by responding to the dynamically changing Indian economy by moving its investments amongst different sectors as prevailing trends change.<br />UTI Wealth Builder Fund Ser- II: To achieve long term capital appreciation by investing predominantly in a diversified portfolio of equity and equity related instruments along with investments in GOLD ETF’s and Debt and Money Market Instruments.<br /><ul><li>Sector Funds: These funds invest primarily in equity shares of companies in a particular business sector or industry. These funds are targeted at investors who are bullish or fancy the prospects of a particular sector.</li></ul>UTI Banking Sector Fund: open ended fund with the objective to provide ‘Capital Appreciation through investment in stocks of companies/ institutions engaged in the banking and financial services activities.<br />UTI Energy Fund: Investment will be made in stocks of these companies engaged in the following areas: .(a) Petro sector, (b) Power Generation Companies, (c) Energy Storage Companies, (d) Companies which makes parts for energy generation, (e) Consulting and Finance Companies.<br />UTI Pharma and Health Care Fund: An open-ended fund which exclusively invest in the equities of the Pharma and Healthcare sector companies.<br />UTI Transportation and Logistics Fund: An open-ended Equity fund with the objective to provide Capital appreciation through investment in the stocks of the companies engaged in the Transportation and Logistics sector.<br /><ul><li>Tax Planning Funds</li></ul>UTI Equity Tax Saving Plan: An open ended fund investing a minimum of 80% in equity and related instruments. It aims at enabling members to avail tax rebate under section 80C of the IT act and provide them with the benefit of growth.<br />UTI Spread Fund: The investment objective of the scheme is to provide capital appreciation and dividend distribution through arbitrage opportunities arising out of price differences between the cash and derivative market by investing predominantly in equity and related securities, derivatives and the balance portion in debt securities.<br /><ul><li>Index Fund Category: These funds invest in the same pattern as popular market indices like S&P CNX Nifty or CNX Midcap 200. The money collected from the investors is invested only in the stocks, which represent the index.</li></ul>UTI Master Index Fund: The principle investment objective of the scheme is to invest in securities of companies comprising the SENSEX and endeavour to achieve return equivalent to SENSEX by passive investment.<br />UTI Nifty Index Fund: The principle investment objective of the scheme is to invest in stock of companies comprising the Nifty and endeavour to achieve return equivalent to Nifty by passive investment.<br />UTI Sunder: Investment objective of the fund is to endeavour to provide returns that, before expenses, closely track the performance and yield of basket of securities underlying S&P CNX Nifty Index.<br /><ul><li>Asset Fund Category</li></ul>UTI Variable Investment Scheme: This is an open-ended scheme aiming to make dividend distribution periodically. The scheme will, as part of the investment objective take a contrarian outlook on the equities.<br /><ul><li>Balanced Fund Category: These funds invest both in equity shares and fixed-income-bearing instruments (debt) in some proportion. They provide a steady return and reduce the volatility of the fund while providing some upside for capital appreciation. They are ideal for medium to long-term investors who are willing to take moderate risks.</li></ul>UTI Balanced Fund: The scheme aims to invest in a portfolio of equity/equity related securities and fixed income securities with a view to generating regular income together with capital appreciation.<br />UTI Unit linked Insurance Plan: Investment objectives of the scheme are primarily to provide return through growth inters NAV or through dividend distribution and reinvestment thereof.<br />UTI CRTS: Investment objectives of the scheme are the primarily provide regular income to unit holders of the scheme.<br />UTI Children Career Balanced Plan: Funds collected under the plan will be invested in equities, convertible and nonconvertible debentures/ bonds of companies/ corporates etc. and others capital and money market instrument subject to the condition that (1) non less than 60% of the funds will be invested in debt instruments of law to medium profile having a rating of A+ and above or equivalent at the time of investment and (2) not more than 40% of the funds in equities and related instruments.<br />UTI Retirement Benefit Pension Plan: Investment objective and policies of the scheme are primarily to provide pension in the form of periodical income / cash flow to the unit holders to the extent of redemption value of their holding after they complete 58 years of age.<br />UTI Mahila Unit Scheme: Investment objectives of the scheme is to invest in portfolio of equity/ equity related securities and debt and money market instrument with a view to generating reasonable income with moderate capital appreciation.<br />UTI CCP Advantage Fund: Equity and related instruments minimum- 70% to 100%, debt and money market instruments including securitized debt* minimum- 0% to maximum 30%* investment in securitized debt will not normally exceed 20% of the net assets of the scheme.<br />UTI Monthly Income Scheme: An open-ended debt oriented scheme with no assured returns. The scheme aims at distributing income, if any, periodically.<br />UTI MIS Advantage Plan: The investment objective of the scheme is to generate regular income through investment in fixed income securities and capital appreciation/ dividend income through investment of a portion of a net asset of the scheme in equity and related instruments so as to endeavour to make periodic income distribution to unit holders.<br /><ul><li>Income Fund Category: These funds invest predominantly in high-rated fixed-income-bearing instruments like bonds, debentures, government securities, commercial paper and other money market instruments. They are best suited for the medium to long-term investors who are averse to risk and seek capital preservation. They provide a regular income to the investor.</li></ul>UTI Bond Fund: The scheme will retain the flexibility to invest in the entire range of debt and money market instruments. The flexibility is being retained to adjust the portfolio in response to a change in the risk to return equation for asset classes under investment, with a view to maintain risks within manageable risks limits.<br />UTI Treasury Advantage Fund: The scheme will endeavour to generate an attractive return for its investors consistent with capital preservation and liquidity by investing in a portfolio of quality debt securities, money market instruments and structured obligations.<br />UTI G-Sec Investment Plan- STP: The investment objective of the scheme is to generate credit risk- free return by way of income or growth by investing in central Government securities, treasury bills, call money and repos.<br />UTI Gilt Advantage Fund: To generate credit risk-free return through investment in sovereign securities issued by the central Government and/or a State Government and/or any security unconditionally guaranteed by the central Government and/or a State government for repayment of principle and interest.<br />UTI Short Term Income Fund: To Generate Steady and Reasonable income, with low risk and high level of liquidity from a portfolio of money market securities and high quality debt.<br />UTI Floating Rate Fund: The investment objective of the scheme is to generate regular income though investment in a portfolio comprising substantially a floating rate debt/ money market instruments, fixed rate debt/ money market instrument swapped for floating rate returns.<br />UTI G-Sec STP: The investment objective of the scheme is to generate credit risk-free return by way of income or growth by investing in Central Government securities, treasury bills, call money and repos.<br /><ul><li>Liquid Fund Category: These funds invest in highly liquid money market instruments. The period of investment could be as short as a day. They provide easy liquidity. They have emerged as an alternative for savings and short-term fixed deposit accounts with comparatively higher returns. These funds are ideal for corporate, institutional investors and business houses that invest their funds for very short periods.</li></ul>UTI Money Market Fund: To provide highest possible current income consistent with preservation of capital and providing liquidity from investing in a diversified portfolio of short term money market securities.<br />UTI Liquid Fund Cash Plan: The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of money market securities and high quality debt.<br />SIP (Systematic Investment Plan):<br />SIP is an investment program that allows you to contribute a fixed amount (as low as Rs.1000) in mutual funds at regular intervals.<br />Build your future: To meet largest expenses of your life like marriages, education or a house you need to start investing early. Save a small amount every month/quarter and look forward to a bright future. <br />Relax and accumulate wealth: With SIP you don’t require investing a huge sum of money and start with an amount as little as Rs. 500. You can accumulate wealth over long-term. <br />Reduce risk: For efficient participation in this highly volatile market, SIP helps you average out your cost by generating superior returns in the long run. It reduces risk associated with lump sum investments. <br />Enjoy the ease: Set yourself free from cumbersome paperwork. Just identify the amount and scheme you wish to invest in and then choose from options like Auto Debit/ECS. The amount will automatically get debited on a date of your choice. You can also give monthly/quarterly post-dated cheques for the amount you wish to invest.<br />SIP Returns of two months:<br /><ul><li>SIP return for April:</li></ul>1 yr.3 yr5 yrScheme NameInvestment Amount120003600060000DiversifiedUTI Opportunities FundInvestment Value1458851520Yield (%)42.39%24.73%UTI Master Value FundInvestment Value166385436197546Yield (%)78.85%28.70%19.52%UTI Midcap FundInvestment Value165345203489318Yield (%)76.96%25.46%15.92%UTI Dividend Yield FundInvestment Value1532853049Yield (%)55.30%26.88%UTI Equity FundInvestment Value147694907993720Yield (%)45.52%21.21%17.88%Service Industries FundInvestment Value151684533282462Yield (%)52.47%15.56%12.68%UTI Leadership FundInvestment Value1414043300Yield (%)34.75%12.37%UTI MastershareInvestment Value144694639590491Yield (%)40.36%17.20%16.45%UTI Infrastructure FundInvestment Value139504267388421Yield (%)31.54%11.37%15.51%Sectoral FundUTI Banking Sector FundInvestment Value1559653929108710Yield (%)60.03%28.10%24.00%UTI Transportation & Logistics FundInvestment Value165565811993374Yield (%)77.35%33.73%17.73%UTI MNC FundInvestment Value154365158293414Yield (%)57.20%24.82%17.75%<br />SIP returns are worked out assuming investment of Rs. 1000/- every month at NAV per unit of the scheme as on the first working day of the respective time periods. The loads have not been taken into account.<br /><ul><li>SIP returns for May:</li></ul> 1 yr.3 yr5 yrScheme NameInvestment Amount120003600060000DiversifiedUTI Opportunities FundInvestment Value1394651423 Yield (%)31.72%24.66% UTI Master Value FundInvestment Value1621356670101637Yield (%)71.75%31.90%21.25%UTI Midcap FundInvestment Value158955375491975Yield (%)65.96%27.93%17.14%UTI Dividend Yield FundInvestment Value1472853133 Yield (%)45.18%27.07% UTI Equity FundInvestment Value140394876992815Yield (%)33.30%20.81%17.51%Service Industries FundInvestment Value145544631783578Yield (%)42.15%17.12%13.24%UTI Leadership FundInvestment Value1344143011 Yield (%)23.25%11.94% UTI MastershareInvestment Value137644588189165Yield (%)28.65%16.45%15.87%UTI Infrastructure FundInvestment Value132304207086217Yield (%)19.74%10.42%14.50%Sectoral FundUTI Banking Sector FundInvestment Value1522255771112542Yield (%)53.88%30.69%25.49%UTI Transportation & Logistics FundInvestment Value158345964295606Yield (%)64.84%35.81%18.73%UTI MNC FundInvestment Value1489815232594456Yield (%)49.63%25.94%18.23%<br />SIP returns are worked out assuming investment of Rs. 1000/- every month at NAV per unit of the scheme as on the first working day of the respective time periods. The loads have not been taken into account. <br />(Reference: From the Factsheet by UTI)<br />Key terms: <br />NAV: NAV or Net Asset Value of the fund is the cumulative market value of the assets of the fund net of its liabilities. NAV per unit is simply the net value of assets divided by the number of units outstanding. Buying and selling into funds is done on the basis of NAV-related prices.<br />The NAV of a mutual fund are required to be published in newspapers. The NAV of an open end scheme should be disclosed on a daily basis and the NAV of a close end scheme should be disclosed at least on a weekly basis.<br />Exit/Entry load: Is a charge collected by a scheme when it sells the units is exit load. Is a charge collected by a scheme when it buys back the units from the unit holders is entry load<br />Open/Close Ended: Whenever investor invest in any open ended scheme then he can make entry and exit at any time but in close ended scheme he can exit at the time of maturity.<br />Sales Price: Is the price you pay when you invest in a scheme, also called Offer Price. It may include a sales load.<br />Re-purchase Price: Is the price at which units under open-ended schemes are repurchased by the Mutual Fund. Such prices are NAV related.<br />Area of Study:<br />There are so many schemes were introduced by UTI AMC, due to time constraints we have only focused on following schemes.<br />Equity Funds Category FeaturesMaster ShareTop 100 FundDividend Yield FundMaster Value FundObjectiveAn equity fund aiming to provide benefit of capital appreciation and income distribution through investing in equity.The fund aims to provide long term capital appreciation/ dividend predominantly in equity and equity related instruments of top 100 by market capitalisation.An open-ended equity scheme. It aims to provide medium to long term capital gains and/or dividend distribution by investing predominantly in equity and equity related instruments, which offer high dividend yield.An open ended equity fund investing in stocks which are currently undervalued to their future earning potential and carry medium risk profile to provide Capital appreciation.Asset allocationEquity Minimum 70% and Debt maximum 30%Equity Minimum 65% and Debt maximum 35%Equity Minimum 65% and Debt maximum 35%100% in equityMin. invest Amt.Rs. 5000/-Rs. 5000/-Rs. 5000/-Rs. 5000/-Exit LoadWithin year 1% after that NilWithin year 1% after that NilWithin year 1% after that NilWithin year 1% after that NilPlans/OptionsDividend GrowthDividend GrowthDividend GrowthDividend GrowthSIPYesYesYesYesSWPTriggerYesYesYesYesFund Size (Rs. In Cr)2,2758041,794420Expense Ratio1.81%2.33%2.09%1.63%Equity Funds Category FeaturesMid Cap FundOpportunity FundWealth Builder Fund Ser. 2Banking Sector FundObjectiveAn open ended fund with the objective to provide ‘Capital Appreciation’ by investing primarily in mid caps stocks.The scheme seeks to generate capital appreciation and/ or income distribution by investing the funds of the scheme in the equity shares and equity related instruments. The focus of the scheme is to capitalise on opportunities arising in the market by responding to the dynamically changing Indian economy by moving its investments amongst different sectors as prevailing trends change.To achieve long term capital appreciation by investing predominantly in a diversified portfolio of equity and equity related instruments along with investments in GOLD ETF’s and Debt and Money Market Instruments.An open ended fund with the objective to provide ‘Capital Appreciation through investment in stocks of companies/ institutions engaged in the banking and financial services activities.Asset allocationEquity Minimum 90% and Debt maximum 10%Equity Minimum 90% and Debt maximum 10%Equity 65% and Debt 35% or Gold ETF 35%90% EquityMin. invest Amt.Rs. 5000/-Rs. 5000/-Rs. 5000/-Rs. 5000/-Exit LoadWithin year 1% after that NilWithin year 1% after that NilWithin year 1% after that NilWithin year 1% after that NilPlans/OptionsDividend GrowthDividend GrowthDividend GrowthDividend GrowthSIPYesYesYesYesSWPTriggerYesYesYesYesFund Size (Rs. In Cr)3071,293501123Expense Ratio2.40%2.32%2.37%2.50%<br />Balanced Funds Category FeaturesCCP Advantage FundChildren Career Balanced PlanUnit Linked Insurance Plan (ULIP)Retirement Benefit Pension FundObjectiveEquity and related instruments minimum- 70% to 100%, debt and money market instruments including securitized debt* minimum- 0% to maximum 30%* investment in securitized debt will not normally exceed 20% of the net assets of the scheme.Funds collected under the plan will be invested in equities, convertible and nonconvertible debentures/ bonds of companies/ corporates etc. and others capital and money market instrument subject to the condition that (1) non less than 60% of the funds will be invested in debt instruments of law to medium profile having a rating of A+ and above or equivalent at the time of investment and (2) not more than 40% of the funds in equities and related instruments.Investment objectives of the scheme are primarily to provide return through growth inters NAV or through dividend distribution and reinvestment thereof.Investment objective and policies of the scheme are primarily to provide pension in the form of periodical income / cash flow to the unit holders to the extent of redemption value of their holding after they complete 58 years of age.Asset allocationEquity Minimum 70% and Debt maximum 30%Equity Minimum 40% and Debt maximum 60%Equity Minimum 40% and Debt maximum 60%Not more than 40% in EquityMin. invest Amt.Rs. 1000/-Rs. 1000/-Target amount enhance to 15,00,000/- and min 15000/-Rs. 500/- to gain Rs. 10000/-Exit Load4% < 1yr3% >= 1yr & < 3yr1% >= 3yr & < 5yr3% < 2yr2% >= 2yr & < 4yr1% >= 4yr & < 5yr2% for premature withdrawal5% < 1yr3% >= 1yr & < 3yr1% >= 3yr & < 5yrPlans/OptionsIncome GrowthScholarship Growth10yr Plan/ 15yr PlanSIPYesYesYesYesSWPYesTriggerFund Size (Rs. In Cr)45.312,729.532,915.45610.39Expense Ratio1.40%1.64%1.65%1.47%<br />Income Funds Category FeaturesShort Tern Income FundTreasury Advantage FundFloating Rate FundObjectiveTo Generate Steady and Reasonable income, with low risk and high level of liquidity from a portfolio of money market securities and high quality debt.The scheme will endeavour to generate an attractive return for its investors consistent with capital preservation and liquidity by investing in a portfolio of quality debt securities, money market instruments and structured obligations.The investment objective of the scheme is to generate regular income though investment in a portfolio comprising substantially a floating rate debt/ money market instruments, fixed rate debt/ money market instrument swapped for floating rate returns.Asset allocationEquity Minimum 65% and Debt maximum 35%100% in DebtFixed Debt 35% and Floating Rate Debt 65 to 100%Min. invest Amt.Rs. 30000/-Rs. 100000/-Rs. 5000/-Exit Load1% redeemed before 90 dayNil0.75% redeemed within 3 daysPlans/OptionsIncome Growth and STPLTP and Growth Dividend BonusDividend GrowthSIPYesYesSWPTriggerFund Size (Rs. In Cr)1,371.0829,129.524,965.60Expense Ratio0.26%0.35%0.20%<br />Liquid Funds CategoryFeaturesMoney Market FundLiquid Fund Cash PlanObjectiveTo provide highest possible current income consistent with preservation of capital and providing liquidity from investing in a diversified portfolio of short term money market securities.The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of money market securities and high quality debt.Asset allocation100% debt and money marketEquity Minimum 65% and Debt maximum 35%Min. invest Amt.Rs. 10000/-Cash Plan- Rs. 1,00,000/-Exit LoadNilNilPlans/OptionsDividend GrowthIncome Growth and CPSIPSWPTriggerFund Size (Rs. In Cr)1,270.955,716.92Expense Ratio0.20%0.26%<br />Consumer Buying Behaviour- An Introduction<br />Consumer is God, Consumer is always right, Consumer is the most important guest in our premises — these are some of the phrases that have been in use since the advent of business. Earlier, the market used to be small and limited to a few manufacturers and consumers, but as it expanded beyond geographical boundaries, sellers as well as buyers increased several folds. The free market has led to cutthroat competition among the manufacturers who are trying to capture as much market share as possible.<br />Almost all major companies, whether in telecommunication, banking, credit card, finance or IT, have realized the importance of consumer and are therefore trying to retain their loyalty. Organizations are now, just not only selling product or services, but also expanding their operations to understand their consumer’s demographic profile, buying behaviour and preferences in order to build long-lasting relationship.<br />According to Phillip Kotler,<br />“Consumer Buying Behaviour refers to the behaviour of ultimate user of the product”.<br />“The decision processes and acts of final household consumers associated with evaluating, buying, consuming, and discarding products for personal consumption.” <br />“An analysis of the consumer’s behaviour in terms of consumer consumption patterns, consumer preferences, consumer motivation, consumer buying process and shopping behaviour is very much helpful to formulate a firm’s marketing strategy. “<br />Objectives of studying Consumer Buying Behaviour:<br /><ul><li>Buyers’ reactions to a firms marketing strategy has a great impact on the firms’ success.
The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyse the what, where, when and how consumers buy. </li></ul>Marketers can better predict how consumers will respond to marketing strategies.<br />The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how<br />The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); <br />The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); <br />The behaviour of consumers while shopping or making other marketing decisions; <br />Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; <br />How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and <br />How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. <br /> Understanding these issues helps us adapt our strategies by taking the consumer into consideration. For example, by understanding that a number of different messages compete for our potential customers’ attention, we learn that to be effective, advertisements must usually be repeated extensively. We also learn that consumers will sometimes be persuaded more by logical arguments, but at other times will be persuaded more by emotional or symbolic appeals. By understanding the consumer, we will be able to make a more informed decision as to which strategy to employ.<br />So the ultimate objective of a business firm is to create a consumer who is said to be pivot around which the entire business of a firm revolves. Thus the marketing concept is consumer oriented and the emphasis is more on the consumer rather than on the product. The essence of modern marketing lies in building of profit along with creating meaningful value satisfaction for the costumers, whose needs and desires have to be coordinated with the set of products and production programmes. Therefore, marketing success an enterprise depends as its ability to create a community of satisfied consumers. All the business activities should be carried out in ways which are directed towards the satisfaction of the consumer needs.<br /> The marketing concept is consumer oriented and the emphasis is more on the consumer rather than on the product. The essence of modern marketing lies in building of profit along with creating meaningful value satisfaction for the costumers, whose needs and desires have to be coordinated with the set of products and production programmes. Therefore, marketing success an enterprise depends as its ability to create a community of satisfied consumers. <br /> All the business activities should be carried out in ways which are directed towards the satisfaction of the consumer needs. Consumer behaviour is affected by a host of variables ranging from personal, professional needs, attitudes and values, personality characteristics, social economic and cultural background, age, gender, professional status to social influences of various kinds exerted a family, friends, colleagues, and society as a whole. The combination of these factors help the consumer in decision making further Psychological factors that as individual consumer needs, motivations, perceptions attitudes, the learning process personality characteristics are the similarities, which operate across the different types of people and influence their behaviour. <br />Marketing starts with the consumers and ends with the consumer. Satisfaction of the consumers becomes the most important goal of a business enterprise. The effort to ensure consumer satisfaction lies in understanding the consumer, his likes dislikes, his expectations and motivation. <br />Buying Behaviour is the decision processes and acts of people involved in buying and using products.<br />Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer. A firm needs to analyze buying behaviour for: <br />Buyers’ reactions to a firms marketing strategy has a great impact on the firms’ success.<br />The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. <br />Marketers can better predict how consumers will respond to marketing strategies.<br />The Investor Prospective Towards Various Assets<br />ASSETInvestmentObjectiveRiskToleranceInvestmentHorizonEquityCapitalAppreciationHighLongMutual FundCapitalAppreciationModerate LongBank DepositIncomeFlexibleGenerally LowFlexible all TermsPPFIncomeLowLongGoldInflation HedgeLowLongLife InsuranceRisk Cover LowLong<br />This table shows investors prospective towards Assets like Equity, Mutual Fund, Bank Deposit, PPF, Gold and Life Insurance. From this table it is clearly understand the Investment objective, Risk tolerance & Time horizon for different Asset Classes.<br /> <br />RESEARCH METHODOLOGY<br />Research is a systematic activity carried out in the pursuit of truth, which is a purposive investigation. It is a way of finding new ways of looking a familiar thing in order to explore ways of changing it. It is an activity that extends, corrects and verifies knowledge. It includes introduction of the study, objectives, benefits & limitations of the project.<br />Over here researcher has applied exploratory research which will take into consideration the following points.<br /><ul><li>A review of pertinent literature.
It helps in assessing the feasibility of further study.
It attempts to see what is there rather than predicting the same.</li></ul>Limitations:<br /><ul><li>It is a pilot studies thus usually an ill structured.
It is not specific in nature.</li></ul>Research Objectives:<br />Primary Objective:<br /><ul><li>To know the Consumer behaviour of investors towards Mutual Funds.</li></ul>Secondary Objectives:<br />To know people’s awareness about various schemes for investment in Mutual Fund.<br />To know the investors knowledge and perceptions about mutual fund.<br />To know the investor priority level between different criteria of investment like safety level, returns, liquidity, tax benefits and maturity etc. of investment.<br />Find out reason for choice of mutual fund as an investment avenue.<br />To identify the social factors that affect investors’ buying behaviour in Ahmedabad.<br />To measure the satisfaction level of investors regarding various parameters for investment in Mutual fund.<br />Find out reason for choice of mutual fund as an investment avenue.<br />METHODOLOGY- The science dealing with principles of procedure in research and study.<br /><ul><li>Various investment options have been selected like Mutual Fund, Gold, Bank Deposits, Post Office Savings and Insurance.
Liquidity</li></ul>Type of Data <br />Primary Data:<br />Utilizing the information from the Secondary data, questionnaire was prepared to study the investors’ behaviour. Primary data were collected directly from the respondents to solve the problem.<br />Secondary Data: <br />Secondary data were collected from many sources like books, websites and company’s report. <br />Research Approach:<br />Survey method was adopted to gather the primary data. This survey included face-to-face interview with respondents. <br />Sampling Plan<br />Target population: Investor who invests money into various investment options. <br />Sampling Element: High Net worth Investors (HNI) and middle class retail investors.<br />Sampling technique: The sampling technique used for sampling is:<br /> Random sampling.<br /> Quantitative Sampling.<br /> Convenience sampling <br />Sample size: The sample size of the study is around 60 respondents.<br />Area of Survey: Ahmedabad<br />The main statistical tools used for the collection and analyses of data in this project are:<br /><ul><li>Questionnaire
Bar Diagrams</li></ul>Data Analysis and Interpretation:<br />Data analysis will be done through graphical method and using SPSS software and Chi square test, where questionnaire will be analyzed and various test will be performed on it to reach to the final conclusion. Result will be given on the basis of the descriptive statistical technique.<br />Limitations: <br />As we limited time span so it is not possible to cover each & every detail of the topic.<br />Company uses various software’s which have certain financial information and I as a trainee cannot access them.<br />As the samples are taken randomly and population size of Ahmedabad is large, sample errors are inevitable.<br />The study will heavily depend on primary data which will be collected from public at large; hence the authenticity of data can be a limitation.<br /><ul><li>Age Group:</li></ul>FrequencyPer cent18 years - 30 years91531 years - 40 years305041 years - 50 years915Above 50 years1220<br />From the questionnaire we got different age groups. From the above chart, it can be derived that most of the investors are in the age group of 31 to 40. The reason being, they have enough money to invest in risky market because they have job and they are well settled. This would help us to know to whom we have to target.<br /><ul><li>Business or Job/service
FrequencyPer centBusiness610Job5490</li></ul>Most of the people, who are interested in investment, have jobs and we met very few business class people who are likely to invest in market. Through this we come to know that we should target on investor who is in job.<br /><ul><li>Annual Income
FrequencyPer CentUp to 2 lac6102 lac to 5 lac3965Above 5 lac1525</li></ul>As per income status, most of the investors belong to income group of 2 lac to 5 lac. From this we come to know that investors belong to income group 2 lac to 5 lac invests more than above 5 lac.<br /><ul><li>Where do you invest?
FrequencyPer CentBank Deposit1220Share Market2440Mutual Fund1525Others915</li></ul>From the above table we have come to know that the preference of the different investment of the investor while investing their money that is bonds & insurance products are most important investment avenue for the investors. Than after money market instrument and equity share are important for the investors. <br />Most of the investors like to invest in share market. As per above chart, about 40% investor invest in share market. The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2009. Participants in the stock market range from small individual stock to large hedge fund traders, who can be based anywhere. That’s reason why more people invest in stock market.<br /><ul><li>Are you regular investor?
FrequencyPer centYes4270No1830</li></ul>Most of the investors choose to make safe investments for the long-term, but have to rely on stock tips from friends or rumors doing rounds of the stock market. Most investors try to time the market and often get unduly influenced by market rumors and tips and end up making losses on investments that lack rationale. We concluded from the data that about 70% people we met are regular investor and only 30% investors invest occasionally.<br /><ul><li>Do you want to invest in Mutual Fund?
FrequencyPer centYes2745No3355</li></ul>From the above table we have come to know criteria’s considered while investing in MF by the investors that is finance planner advice and the AMC image are most important criteria’s for the investors while investing in mutual fund. Than after fund performance and tax incentive are important. <br />From the surveys which we have done, we have come to know that the people who want to invest in mutual fund are less than the people who want to invest in other money market instruments. The major challenge is that how we can convert their investments from other money market instruments towards mutual fund.<br /><ul><li>Are you aware about all the features of Mutual Fund?
FrequencyPer centYes3660No2440</li></ul>The investor who knew about mutual fund intensely is 60% and others are not aware about mutual fund schemes and mutual fund as a system. <br /><ul><li>Would you like to have information on Mutual Fund?
FrequencyPer centYes2440No3660</li></ul>As above, there are 40% people are not aware about mutual fund and 60% are aware of the mutual fund. From that 40% people only 8% want to have full information.<br />From the survey, we come to know the purpose to investing in MF is that low risk and collective investments are most important purpose of the investor for the investing in mutual fund. Than after return potential and advantage of professional management are important while investing in mutual fund. <br /><ul><li>What do you consider during making any investment?
FrequencyTransparency27Liquidity18Returns30Tax Saving18Regular Income25Risk18</li></ul>From the above table we have come to know that the important criteria considered by most of the investors more about the returns and focus equally on regular income and transparency. So there should such schemes which provide them what they actually want or they consider while investing. This helps us to know that to what scheme does investor is looking for. These also help us to easily crack the deal. <br />Key Findings<br />This training program has played a significant role in understanding the Consumer Behavior. It help to know about the preferences of investors it give them knowledge about the different investment options available for investment. <br />Our Key findings are as follows:<br />69 % people are aware of the mutual fund.<br />Convenience and risk are most important criteria considered by the investor while investing their money.<br />Tax benefit and safety of the investment are most important objective of the investors.<br />48% have shown interest to invest in mutual fund.<br />Income fund & specialized fund are most important for the investing in mutual fund.<br />66% people have income level of Rs. 50,000- Rs.10000/-<br />In this current scenario Mutual Funds & Bank deposits become the most preferred investment option.<br />Now a day’s investors want to invest their money for long term prospective to reach their financial goal and maximizing wealth.<br />Yield and return is the most important preference at the time of investment.<br />Age group & Income is the most important factor in determining the risk capacity of individual<br />Concluding Observation: <br />The present study looks at customer expectation levels in a mutual fund product. This kind of customer orientation is necessary in a market like India where the market is turning competitive due to large number of players with varied financial muscle powers and expertise of reinvestment. The small investors purchase behaviour does not have a high level of coherence due to the influence of different purchase factors. The buying intent of a mutual fund product by a small investor can be due to multiple reasons depending upon customers risk return trade off. Due to the reduction in the bank interest rates and high degree of volatility in Indian stock market, investors are looking for an alternative for their small time investments which will provide them a higher return and also safety to their investments. The bond market is also passing through a recession due to its interest parity with bank instruments. So mutual funds offer the best alternative to the small investors in India. A prudent product design by adding the features expected by investors and spelt out in this research will make the new mutual fund products attractive for the Indian investors. The factors identified in the study provide key information inputs regarding investor’s preferences and priorities that will guide future mutual fund product managers in designing attractive mutual fund products for the Indian market.<br />Learning:<br />Convenience & risk are most important criteria considered by the investor while investing their money.<br />Tax benefit and safety of the investment are most important objective of the investors.<br />Investors are concerned about the returns. <br />MF is good investment tool because of several benefits like Professional Management, Risk Reduction, Flexibility, Transparency and Low Transaction Cost.<br />As Mutual Fund provides more returns than PPF, Post, Bonds, Fixed Deposit, and Equity in Long Term so more investors are diverted towards it.<br /><ul><li>Age group & Income is the most important factor in determining the risk capacity of individual</li></ul>Recommendations:<br /><ul><li>Most of the investors belong to age category of 30 to 40, so there is huge market available for new and young investor. Fresher are not able to make huge investment at once so there should be one scheme, especially for the new comer.
Income group of 2 lac to 5 lac is making more investment than others, so there is scope and market for mutual fund in this market.
About 70% of investors are regular investors, so there is need to catch that market as well.
Mutual Fund, the concept is widely known, but many people are still unaware about various schemes of mutual fund, increasing awareness is also very important thing.
There is a need to introduce very aggressive scheme which can give maximum returns to investor as they are more concern about return, transparency and regular income than risk and liquidity.</li></ul>References<br />Websites:<br />www.amfiindia.com<br />www.utimf.com<br />www.mutualfundindia.com<br />www.mutualfunds.about.com<br />www.utiamc.com<br />PDF’s: <br /><ul><li>Mutual Fund Investors Guide
Trainer Note AMFI </li></ul>Books: <br /><ul><li>Fact sheet of UTI mutual fund
Understanding Mutual Fund- Sunita Abraham & Uma Shashikant</li></ul>Questionnaire- UTI AMC<br />Anjali Kathuria Management Trainee08905573195Kunjkant Pandya<br />Management Trainee<br />09978426133 <br />(Note: This information is used only for academic Purpose.)<br />Personal Details:<br />Name: ____________________________________________Age:__________<br />Address:_________________________________________________________<br />E-Mail: ______________________________Contact No.:__________________<br />Designation:__________________<br />Professional Details:<br /><ul><li>BusinessJob/Service