Customer awareness in Mutual Fund and Systematic Investment Plan

1. 1
Summer Internship Project
Project Title
Customer awareness in Mutual fund & SIP
Submitted by
Mohit Kumar Khandelwal
PGD18054
Institute of Insurance and Risk Management
Hyderabad
August, 2019

2. 2
Declaration
I hereby declare that this project titled
“Customer awareness in Mutual fund & SIP”
submitted is a bonafide work undertaken by me.
Student sign
Mohit Kumar Khandelwal

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Executive Summary
Sl.
No
Subject Page No
1 Introduction to Mutual funds 6-15
2 Company Profile 16-22
3 Research Methodology 23
4 Industry allocation 24-26
5 Analysis 27-32
6 Conclusion 33

4. 4
The main purpose of study is to know about the functioning of the mutual fund. The report
givesan ideaabout howmutual fundare betterinvestmentoption thenmanyotheroptions
available in the market. It helps in understanding the different types of schemes available
under the Reliance Mutual Funds and how the fund managers diversified the risk.
The reportgivesanideaaboutthe workingof mutual fund andbenefitsof investinginmutual
funds how investing inmutual funddifferentfrom other investment and the risk involved in
it.ItmainlyfocusonsystematicinvestmentplanSIP.How SIPgivesaninvestoranopportunity
to visualize his financial goal and invest accordingly small amount of money every month in
other to achieve his financial goals.Every mutual fund investor knows that a Systematic
InvestmentPlanorSIPis the best wayto investinequitymutual fundstocreate wealthover
a longperiod.Apartfrominvestingregularly,italsoimpartsfinancial discipline inthe livesof
investors.Mutual funds do not guarantee any returns. The performance of the investments
made bythe scheme willdeterminethe returnsyouwillgetfromthe scheme.However, if you
are investing in equity mutual funds, you can assume an annual return of 12 per cent to
calculate your future corpus. A Mutual Fund is a trust that pools the savings of a number of
investorswhoshare a common financial goal.The money,thus collected,istheninvestedin
capital market instruments such as shares, debentures and other securities. The income
earned through these investments and the capital appreciation realized is shared by its unit
holdersinproportiontothe numberof unitsownedbythem.ThusaMutual Fundisthe most
suitable investmentforthe commonmanas itoffersanopportunitytoinvestinadiversified,
professionallymanagedbasketof securitiesata relativelylow cost. MonthlyIncome Plans
or MIPs invest maximumof their total corpus in debtinstrumentswhile they take minimum
exposure in equities. It gets benefit of both equity and debt market. These schemes rank
slightly high on the risk-return matrix when compared with other debt schemes. There is
considerableamountof researchbeingdoneregardinginvestmentinmutual funds.However
verylittle researchhasbeendone to studythe perceptionof investorsregardinginvestment
in mutual funds especially MIP funds.
Literature Review

5. 5
Ippolito(1992) statesthat an investorisreadytoinvestinthose fundorschemeswhichhave
resulted in good rewards and most investors’ are attracted by those funds or schemes that
are performing better over the worst.
Goetzman (1997) opined that investor’s psychology affects mutual fund selection for
investment and to withdraw from the fund.
Syama Sunder (1998) conducted a survey with an objective to get an in-depth view into the
operationsof privatesectormutualfundwithspecialreference toKothari Pioneer. The survey
tellsthatknowledge aboutmutual fundconceptwasunsatisfactoryduringthattime in small
cities like Visakapatanam. It also suggested that agents can help to catalyse mutual fund
culture, open-ended options are much popular than any other schemes, asset management
company’s brand is chief consideration to invest in mutual fund.
Anjan Chakarabarti and Harsh Rungta (2000) emphasised the importance of brand in
ascertaining competence of asset management companies.
Shankar (1996) suggested that for penetrating mutual fund culture deep in to society asset
managementcompanieshave to work and steer the consumer product distribution model.
RajaRajan (1997) underlinedsegmentationof investorsandmutualfundproductstoincrease
popularity of mutual funds.
Mutual Funds provide a platform for a common investor to participate in the Indian capital
market with professional fundmanagementirrespective of the amount invested. The Indian
mutual fund industry is growing rapidly and this is reflected in the increase in Assets under
management of various fund houses. Mutual fund investment is less risky than directly
investing in stocks and is therefore a safer option for risk averse investors. Monthly Income
Plan funds offer monthlyreturns and invest majorly in debt oriented instruments with little
exposure to equity. However it has been observedthat most of the investors are not aware
of the benefits of investment in mutual funds.
Mutual Fund Overview

6. 6
Mutual Funds :
Mutual fundsare vehicle tomobilize moneyfrominvestorstoinvestindifferentmarketand
securities. A mutual fund is a type of professionally managed investment fund that pools
moneyfrominvestors.HedgeFundsnotmutual funds,primarilybecause they cannotbe sold
to the general public. Investors in the mutual fund have a common financial goal and their
moneyisinvestedindifferentassetclassesinaccordance withthe fundsinvestmentobjective
investments in mutual fund Intel comparatively small amounts giving retail investors the
advantage of having financial professionals control their money even if it is a few thousand
rupees.
Mutual funds are called investment vehicles actively managed order by professional fund
managersorpassivelytrackbyanindex orindustry.Thefundsare generallywell-diversifiedto
upset potential looses. They offer an attractive way for saving to be managed in a passive
mannerwithoutpayinghighfeesor requiring constant attention from individual investors.
How a Mutual Fund Company is set up:
A Mutual fundissetup in a form of a trustthat has a Sponsor,Trustees,Assetsmanagement
company (AMC). The trust is established by a sponsor who is like a promoter of a company
and the saidtrust isregisteredwithSecurity ExchangeBoardof India(SEBI) as a mutual fund.
The trustees of mutual fund hold its property for the benefit of unit holders. The AMC
approvedbySEBImanagesthe fundbymakinginvestmentsinvarioustypesof securities.SEBI
regulation require that at least two third of the directors of trustee company or board of
trustees must be independent that is they should not be associated with the sponsors.Also,
50% of the directors of AMC must be independent. All mutual fund are required to be
registered with SEBI before they launch any scheme.
Mutual Fund Organizations :

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Key Constituents of AMC:
1. Sponsor: Sponsor of a mutual fund is akin to the promoter of a company as he gets the
fundregisteredwithSEBI.UnderSEBI regulations,sponsorisdefinedasanypersonwho
actingalone orincombinationwithanotherbodycorporateestablishesthe mutualfund.
At least40% of capital of AMC has to be contributedbythe sponsors.Sponsorsare also
free to get incorporated an AMC as well as to appoint a board of trustees.
2. Trustee: Trustees may be appointed as an individual or as a trustee company with the
prior approval of SEBI. A trustee acts as a protectorsof a unitholdersinterestandisthe
primary guardians of a unit holders funds and assets. There must be at least four
membersinthe boardof trusteesandleasttwothirdof them need to be independent.
3. Asset Management Company: Assets management company is a body engaged to run
the show of amutual fund.The sponsorof thetrustee appointAMCtomanage the affairs
of mutual fundtoensure efficientmanagement.SEBIdesiresthatAMCmusthave agood
sound track record in term of net worth, dividend paying capacity, profitability, general
reputation and fairness in transactions. AMC is involved in basically 3 activities as
portfoliomanagement,investmentanalysisandfinancial administration.Therefore,the
directorsof AMCshouldbe expertinthisfields.AMCcannotengageinanybusinessother
than that of financial advisory and investment management.

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4. Custodian: SEBI requires that each mutual fund shall have a custodian who is
independent and registered with it. SEBI regulations provide for the appointment of a
custodianbytrusteesof a mutual fundwhoare responsible forcarryingonthe activities
of asafe keepingofsecuritiesandparticipatinginanyclearingsystemonbehalf of mutual
fund.
5. Transfer Agent: Registrar and transfer (R&T) agents are responsible for creating and
maintaininginvestorsrecordskeptinnumberedaccountcalledfoliosandservicingthem.
They accept and process investor transactions and also operate investor service centre
(ISC) whichact as an official pointsforacceptinginvestortransactionwithfund.Banking
the paymentinstrumentssuchas draft and cheque givenby investorsandnotifyingthe
AMC is done by them.
MUTUAL FUND OPERATION
Source : www.amfi.com
History of Mutual Fund:
MUTUAL
FUND
INVESTORS
FUND
MANAGER
SECURITIES
RETURNS
Pool their
money
Invest in
generates
Passed
back in

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The mutual fundindustryinIndiastartedin1963 withthe formationof UnitTrust of India,at
the initiative of the Government of India and Reserve Bank of India.In early 1990’s,
Government allowed public sector bank and institution to set up Mutual funds. In the year
1992, SecuritiesandExchange Boardof India(SEBI) act was passed.The objective of SEBIare
- to protect the interest of investors in securities and to promote the development and to
regulate the securities market.
The history of mutual funds in India can be broadly divided into distinct phases:
First Phase 1964-1987
Unit trust of India UTI was established in 1963 by an act of parliament. It was set up by the
Reserve Bank of India and functioned used under the regulatory and functioned under the
Regulatory and administrative control of Reserve Bank of India. In 1978 UTI was de-linked
from the RBI and Industrial Development Bank of India (IDBI) took over the regulatory and
administrativecontrol in the place of RBI. The firstscheme launchbyUTIscheme1964.Atthe
end of 1988 UTI had Rs 6.7 crore of assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds)
1987 markedthe entryof non-UTI,publicsectormutual fundsetupbypublicsectorbankand
Life insurance corporation (LIC) and general insurance corporation (GIC)
At the endof 1993, mutual fundindustryhadassetsundermanagement of Rs 47,004 crores.
Third Phase 1993-2003 (Entry of Private Sector Funds)
Withthe entryof Privatesectorfundsin1993,anew ErastartedinIndianmutualfundindustry
giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which
the first mutual fund regulation came into being, under which all mutual fund, except UTI
where tobe registeredandgoverned.The erstwhileKothariPioneer(nowmergewithFranklin
Templeton) were the first private sector mutual fund registered in July 1993.
As the end of January 2003, there were 33 mutual funds with the total assets of Rs 121805
crore.
Fourth Phase since February 2003,
In February 2003, following the repeal of the Unit Trust of India at 1963 UTI was bifurcated
into two separate entities. One is the specified undertaking of the Unit Trust of India with
assets under management of Rs 29,835 crores at the end of the January 2003, representing
broadly,the assetsof US64 scheme,assuredreturnandcertainotherschemes.The specified
undertaking of Unit Trust of India, functioning under and administrator and under the rules
frame by Government of India and does not come under the purview of mutual fund
regulation.
The secondis the UTI Mutual fund,sponsoredby SEBI,PNB,BOB andLIC. It isregisteredwith
SEBI and functions under the mutual fund regulation.With the bifurcation the erstwhile UTI
which had in March 2000 more than Rs 76,000 crore of assets under management and with
the settingupof a UTI Mutual fund,conformingtothe SEBImutual fundRegulation,andwith
recentmergertakingplaceamongdifferentprivatesectorfunds,the mutualfundindustryhas
entered its current phase of consolidation and growth.

10. 10
BENEFITS TO INVEST IN SIP
Small and regular investment

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Systematic Investment Plan helps you achieve your bigger financial goals even with a
small sum of amount invested every periodic interval. SIP is lighter on your wallet. It
allows you to invest a small amount as per your wallet size with as low as Rs. 500/-
with periodic intervals of investments such as weekly, fortnightly, monthly, quarterly.
It is a simple and affordable way for beginners to start investing in Mutual Fund
Schemes.
Disciplined Investment
Investors often fail to maintain the habit of investing over the period of time. A
dedicated approach and focus is the key to any investment. As the name says,
systematic investment plan is a system to invest a particular amount regularly. This
naturally brings a discipline to your investing habits. Inculcating a habit of investing
with aregular investment of asmallsum is practicallymuch easierthan investing lump
sumamount every year. It is recommended to start an SIP if you haven’t yet inculcated
the discipline of investing.
Ease of investing
SIP can be implemented in two ways; Online and Offline SIP. Traditionally, you can
invest in SIP by filling up a mandate, however, in the current digital wave, you can
invest in SIP via invest online platforms. Invest Online portal avails you a paperless
transaction with quicker transactions and hassle free procedures. You can opt to link
your portfolio to your bank account, so that you can enable uninterrupted automatic
investments. Usually, salaried employees choose to map their SIP accounts to their
salary accounts so that the process continues to be regular and linear. This rectifies
the issues of regularity failures. You need to be a KYC complaint to start investing.
Power of compounding
The biggest force that drives investments ahead is the power of compounding.
Although, systematic investments are smaller, investors can benefit higher with the
power of compounding. Starting to invest early can build opportunities of higher
returns. Simply, the small amounts that you invest every month generate returns over
the invested period and similarlythe returns upon the previous investment gets added
to your new investments. An amount of Rs. 2000/- invested every month for 5 years
with an assumption of 10% CAGR will generate Rs. 1,54,874. Find out your monthly
SIP investment amounts to achieve your goals with our SIP Returns Calculator.
Rupee cost averaging
Nobody can time the market, not even half of the times! However, SIP does not
require you to time the market. Rupee cost averaging is an automatic market timing
mechanism. Since the investments in SIP are made at regular intervals, more units are
bought in declining market and hence when the markets head upwards, the value of
your investments grows in sync. As the SIP thrives on volatility, the divergence in
returns between SIP and lump sum widens.
Limitation Of Systematic Investment Plan (SIP) IN MUTUAL FUND
1. SIP returns are lower in consistently rising markets:

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Imagine this situation – Its New Year eve of 2018 and your rich uncle impressed by you
& your cousin gifts both of you Rs 1 Lac. You both being financially prudent want to
grow this windfall. You approach a financial planner and as every good planner would,
he recommend you to invest in NIFTY BeeS using SIP. So you follow him and plan
investment in 12 monthly SIP installments while your cousin puts his entire money as
lump sum investment in the same NIFTY BeeS. Who do you think made more money
by 2019 New Year eve? Your cousin would have around Rs 1.72 Lac while you would
have Rs. 1.37 Lac. So your cousin gained 25% more just by doing lump sum.
Lesson Learned: SIP is a good way to invest but occasional lump sum
investment when the markets are highly undervalued adds to your
gains.
2. Limited options of dates:
For a SIP in Mutual Fund you need to decide a date in advance when you like to do
your SIP and give an ECS mandate for the same. Most of the MFs have limited option
(mainly 1st, 5th, 7th, 10th, 15th, etc). So you tend to invest in multiple mutual funds
on the same date. You want to lessen your risk by spreading your SIP in the entire
month by choosing different dates for different funds.
Way out: For funds having an online option you can do SIP yourself but
without emotions coming into play or second option is do SIP with
fundsindia.com that provide SIP on all dates.
3. Fixed Amount:
There are times when you feel that markets are undervalued and you want to invest
more but then in SIP only a predetermined fixed sum gets invested. Same is the case
when you want to invest less, you can’t do it.
Way out: Try VIP (Value Averaging Investment Plan) because it is a
method of investing in the market that tries to lower the cost of
purchase of units more effectively than a regular systematic
investment plan.
4. Stopping intermediate payment:
It may so happen that you got an emergency or have a major expense this month and
so you don’t want to invest. But with SIP this is not possible; if there’s money in your
bank it will get debited and invested. The only way out is to cancel the SIP which can
be a nightmare if you have a lot of SIPs and also when you want to start again you
need to go through all the formalities to start the SIP. Also for cancellation you need
to inform 2 weeks in advance and even then you may not be sure that SIP would not
be debited.
5. Lot of delay between actual application & start/stop of SIP:

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I feel this is very irritating and you may miss one monthly installment; MF houses need
at least a month to start a SIP and around two weeks to stop your SIP. I think it’s the
time they should try to come up with quicker processing of SIPs.
6. Does not suit people with unpredictable cash flows:
Think of someone who doesn’t have a predictable cash flow like a self-employed
professional. He won’t be able to do SIP as he would be unable to commit a fixed sum
every month.
Parameters to be Considered before Investing in Mutual Funds

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Here are fewparametersthatare to be consideredorlookedatbefore investingintomutual
funds. They are:
1. Defining Goals:
Investmentsare normallybackedbyspecificgoalslike children’seducation,marriage,
home construction and so on. The investor should be investing their money witha
specificgoal inmind.Thishelpsindisciplinedsavingsandlettingthesavingsgrow and
earn returns.
2. Defining the Time:
Decidingthe goal of investmentwouldletthe investordecide,forhow longhe would
continue hisinvestments,thatis,for how many years the investmentisto be made.
Example, to attain a certain amount as return, the time that would be required is to
be ascertained and have patience until the desired amount is achieved.
3. Know the Risk Appetite:
Riskappetite referstothe extentof abilitythataninvestorhastoaccept risk.Mutual
funds are subject to market risk and the prices are of fluctuating nature. The risk
appetite be of the investor can be low risk, medium risk, high risk or a risk averter.
Differentschemeshavedifferentrisksassociatedwiththem,likeequityfundsare high
risk funds, bonds are medium risk funds. Depending uponthe risk-taking ability, the
investor may decide to invest a particular fund.
4. Mode of Investment:
There are two key modes of investment. They are Lumpsum Investment where the
investorputsthe moneyat once.Or the investormay alsochoose optionof SIPthat
is Systematic Investment Plan where, the investor may invest a particular amount
eithermonthly,quarterly,half yearlyorannually.The investormaychoose anymode
as per the interest and flexibility.
5. Investment Objective:
Having an investment objective means to have an idea about investing in different
assetclassessoastoreachthe goal.Choosingafundandstylethatalignwiththeaims
help in achieving the goals faster.
6. Past Performance of Fund:
The performance of the fundhastobe consideredbecause,itgivesapicture how the
fundorscheme hasperformedoveraperiodof timeinthe past.Thisactionstephelps
in identifying the returnsit has generated and the risks that were involvedwith the
fund and this would help in making a decision regarding the fund or scheme.
7. Experience of Fund Manager:
Everyfund managerplaysa significantrole inmutual fundsbecause he isthe person
who going to invest the pooled money after performing the fundamentals and
technical analysis. Their tenure and experience can help in deciding on how reliable
they are.
8. Tax Benefits:
If the investmentisbackedbyagoal oraimtosave tax,thentheinvestormayconsider
those schemesthat letthem avail tax benefits.There are mutual fundschemeswith

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tax benefits like ELSS (Equity Linked Savings Scheme), but they come with a lock in
period of three years.
9. Expense Ratio:
Expense ratioconsistsof brokeragefeesandothermutual fundcoststhatthe mutual
fundhouse chargesfrom the investorsanditaffectsthe investmentsdirectly.Higher
the expense ratio,higherthe costinvolved.Fewfundsthatcharge highexpense ratio
have high NAV and hence in a way decision can be taken.
10. Exit Load:
The other cost that is involved other than expense ratio is the exit load. Exit load
comesintopicture when unitsare tobe sold.The feeschargedforleavingthe scheme
is known as the exit load.
11. Investor Service & Transparency:
Servicesofferedbythe mutual fundhousesmayvaryfromone fundhousetoanother
fund house. Some fund houses may be friendly towards the investors and offer
regular information time to time. Not all fund houses may disclose all the details in
the fact sheets,so it is necessary to assess the disclosure norms of the fund house.
Disadvantages of Mutual Funds
 Costs to Manage Funds: -
The salaryof the marketanalystsandfundmanagerbasicallycomesfromthe investors.Total
fundmanagementcharge isone of the mainparameterstoconsiderwhenchoosingamutual
fund. Greater management fees do not guarantee better fund performance.
 Lock-in Periods: -
Many mutual fund schemes have lock-in periods ranging from 3-8 years which make exiting
the fund before the lock-in period an expensive affair.
 Dilution: -
As diversificationreducesthe riskof loss,italsodilutesthe profits.So,itisbetterto investin
right number of schemes than investing in huge number like 7-8 schemes at once.
Though,the advantagesandbenefitsmayoutweighthe disadvantagesbutcanbe happenonly
when informed choices and decisions are made.
Company Profile

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Reliance mutual fund is a part of Anil Dhirubhai Ambani whose sponsor is reliance capital.
Reliance mutualfundoffersinvestorawell-roundedportfolioof productstomeetwellvarying
investorrequirement.Ithasapresence of over300 citiesacrossthe country.Reliance mutual
fundis fourthlargestassestmanagementcompanyinthe country maintainingthe assetsRs.
2,33,628.56 crore (January2019 - March 2019 QAAUM) and90.67 lakhfolios(asonMarch31,
2019). The schemes are managed by Reliance Capital assets management limitedwhich is a
subsidiary of Reliance Capital Limited.
Reliance Mutual Fund(RMF) hasbeenestablishedasatrust underthe IndianTrustsAct, 1882
with Reliance Capital Limited (RCL), as the Settler/Sponsor and Reliance Capital Trustee Co.
Limited (RCTC), as the Trustee.
Reliance Mutual Fundhasbeenregisteredwiththe Securities&Exchange Boardof India(SEBI)
vide registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital
Mutual Fundwas changedto Reliance Mutual FundeffectiveMarch11,2004 vide SEBI'sletter
no. IMD/PSP/4958/2004 datedMarch 11, 2004. RMF was formedto launchvariousschemes
underwhichunitsare issuedtothe publicwithaview tocontribute tothe capital marketand
to provide investors the opportunities to make investments in diversified securities.
Reliance Mutual Fund has 55 schemes out of which 21 are equity oriented schemes, 29 are
debt oriented schemes, 4 are exchange traded fund and 1 is Fund of Fund.
Business of the company and it’s clients:
The majorarea of businessisprovidingavarietyof well-diversifiedportfoliosforthe investors
to investin.RMFmainlyprovidesalarge varietyof Mutual FundsandPortFolioManagement
Services to its customers.
Key Features:
RMF helps investors to fetch great returns on their investments. The key features are as
follows-
 It has a rich distribution network all over the country.
 It is a pioneer in the mutual fund industry.
 RMF is the expert in having an experience of over 20 years.
 It provides excellent customer service.
 It provides tax benefits on wide range of investment instruments.

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Key Products and Services offered:
1. Reliance equity opportunities fund:
There are two main objectivesof thisscheme.The foremostaimof the scheme isto
offerlongterm capital appreciationtoinvestorsandgenerate growth opportunities
by investinginaportfolioconsistingof equitysecuritiesandequityrelatedsecurities.
The secondaryobjective istocreate consistentreturnsbyinvestinginmoneymarket
and debt securities.
Date of allotment: 28 march 2005
Inception date: 21 march 2005
Minimum investment: Rs 5000.
2. Reliance vision fund (open ended):
Throughanexploratoryinvestmentapproach,thescheme triestogenerate longterm
capital growth by investing in equity securities and equity related securities.
Date of allotment: 08 October 1995
Inception date: 08 October 1995
Minimum investment: Rs 1000.
3. Reliance small cap fund (open ended):
The objective of this scheme is to generate capital appreciation for the investors by
investing in equity shares of small cap companies. And also generate consistent
returns by investing in money market and debt securities.
Date of allotment: 16 September 2010
Inception date: 21 September 2010
Minimum investment: Rs 5000.
4. Reliance growth fund(open ended):
The core objective of this scheme is to generate long term capital growth using an
exploratoryinvestment approachby investinginequitysecuritiesandequityrelated
securities.
Date of allotment: 08 October 1995
Inception date: 08 October 1995
Minimum investment: Rs 1000
Awards and Achievements:
 Reliance Mutual FundunderReliance AssetManagementCompanywasawardedwith
the most prestigious Asia Risk awards for being the first Indian asset management
company, to implement an enterprise-wide risk management system

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 CRISIL’sComposite PerformanceRankings(CRISL~CPR) forthe periodJuly-September
2009 where one sawReliance Mutual Fundemergingasthe bestfundhouse withthe
most number of CPR 1 ranks, repeating its first quarter performance.
 The Asia Risk Awards. Reliance’s focus on careful risk management has yielded it
stellarresultsin2009, and it is graduallyemergingasone of the Asianheavyweights
from the nascent, but fast-growing Indian asset management market.
 Reliance Mutual Fundhaswonthe ‘NSEMarket AchieversAward2018 forLiquidETF.
 Reliance wasrecognisedasIndia’sMostTrustedMutual FundbyThe EconomicTimes’
Brand Equity and ACNielsen .
 Reliance Asset Reconstruction Company won the ‘Best Asset Reconstruction
Company’ award at the event- A mile stone for us all.
Organizational Structure:
 Sponsors: Reliance Capital Limited (RCL)
 Co-sponsors: Nippon Life Insurance Company (NLIC)
 Trustee: Reliance Capital Trustee Company Limited
 Investment Manager/ AMC: Reliance Nippon Life Asset Management Limited
 Statutory details: the sponsor, the trustee and the investment manager are
incorporated under companies act 1956 and the co-sponsor is a mutual company
registered under the laws of Japan.
SWOT Analysis:
I. STRENGTHS
a. Brand strategy:
as opposed to some of its competitors (e.g. HSBC), Reliance ADAG operates a multi-brand
strategy.The companyoperatesundernumerouswell-knownbrandnames,whichallowsthe
company to appeal to many different segments of the market.

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b. Distribution channel strategy:
Reliance is continuously improving the distribution of its products. Its online and Internet-
basedaccessoffersa combinationof excellentgrowthprospectsanditsretail directbusiness
also saw growth.
Various sources of income:
Reliance has many sources of income throughout the group, and this diversity within the
group makes the company more flexible and resistant to economic and environmental
changes.
1. Large pool of installed capacities.
2. Experienced managers for large number of Generics.
3. Large pool of skilled and knowledgeable manpower.
4. Increasing liberalization of government policies.
II. WEAKNESS
Emerging markets: Since there is more investment demand in the United States, Japan and
the restof Asia,Reliance shouldconcentrateonthesemarkets,especiallyinview of lowglobal
interest rates.
Mutual funds are like many other investments withouta guaranteed return: There is always
the possibility that the value of your mutual fund will depreciate. Unlike fixed-income
products,such as bonds and Treasury bills,mutual fundsexperience price fluctuationsalong
withthe stocksthat make up the fund.Whendecidingona particularfundto buy,you need
to researchthe risksinvolved±justbecause aprofessionalmanagerislookingafterthe fund,
that does not mean the performance will be stellar.
Fees:
In mutual funds, the fees are classified into two categories:
shareholderfeesandannual operatingfees- The shareholderfees,inthe formsof loads and
redemption fees are paid directly by shareholders purchasing or selling the funds.
The annual fundoperatingfeesare chargedasan annual percentage - usuallyrangingfrom1-
3%. These fees are assessed to mutual fund investors regardless of the performance of the
fund. As you can imagine, in years when the fund doesn’t make money, these fees only
magnify losses.
III. OPPORTUNITIES.
 Fragmented markets: It provides many opportunities for reliance mutual funds to
expands and increase market shares.
 Innovation: Greater innovation can help reliance mutual fund to produce unique
products and services that meet customer’s needs.

20. 20
 Emergingmarkets:Asthe newmarketsare comingup,more andmore people are taking
interest in investing in mutual fund.
IV. THREATS
 Mature markets: mature marketsare competitive.Inorderfor reliance mutual fundsto
grow in a mature market it has to increase the market shares which is difficult and
expensive.
 Government Regulation: Changes to government rules and regulation can negatively
effects the reliance mutual funds.
 Volatile Currencies:ItmakesReliance mutual fundinvestmentdifficultbecause costand
revenues change so rapidly.
Advantages of Mutual Funds
 Professional Management: -
Professional managers or the qualified fund managers skilled in the industry manage the
money of the investors and endeavor to yield high returns for the investment made.
 Liquidity: -
The open-ended schemes of the mutual funds can be partially or fully redeemable and the
presentvalue of the investmentscanbe availedbythe investoranytime.Mutual fundshave
higher liquidity than shares, bonds etc.
 Well Regulated: -
Every mutual fund is supposed to be registered with SEBI and adhere to the rules and
regulations laidby SEBI to operate as a mutual fund. The regulations are made to safeguard
the investors and all the operations are monitored.
 Small Amounts: -
The mutual fund investments can be made from amount as small as 500 rupees through
systematicinvestmentplan.Thisletsinvestorswithlessincometoinvest into mutual funds.
 Cost-Efficiency / Low Cost: -
The investormaychoosethosefundsthatmayhavenoloadsinvolvedinthemorchoosethose
with low loads on schemes. Expense ratio can be considered by the investor to make this
decision.
 Automated Payments: -
The amount will be debited from the investors account every month on a particular and
invested in the markets. This can be possible only when the investor signs for electronic
clearingservice.The investorisnotrequiredtorememberabouthispaymentas the amount
is debited automatically.
Risks Involved in Mutual Funds
 Market Risk: -

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The pricesof the securitiesare highlyvolatile,thatis,the pricesof the fundswillbe risingand
falling. The change in price is referred to Market Risk.
 Inflation Risk: -
Inflationriskisalso knownas lossof purchasingpower.With increase ininflation,the actual
value of moneydecreasesandthe returnsgainedwouldbe of nohighvalue.Simplythe value
of investment becomes less.
 Credit Risk: -
The money pooled will be invested into various companies and the companies should be
performing well. In the event of failure of the company’s performance, the moneyinvested
may not be credited back. Such kind of risk is called Inflation Risk.
 Interest Rate Risk: -
Interestrate movementsare highlyvolatileinthemarketsthatmaydecrease themarketvalue
of the securities eventually decreasing the Net Asset Value of a scheme.
Different Types of Mutual Funds
Mutual funds classified into different types on the basis of:
I. Asset Class:
a) Equity Funds
b) Debt Funds
c) Money Market Funds
d) Hybrid Funds
II. Structure:
a) Open Ended Funds
b) Closed Ended Funds
c) Interval Funds
III. Investment Goals:
a) Growth Funds
b) Income Funds
c) Liquid Funds
d) Tax Saving Funds
IV. Risk:
a) Very Low Risk Funds
b) Low Risk Funds
c) Medium Risk Funds
d) High Risk Funds
V. Specialized Funds:
a) Sector Funds
b) Index Funds
c) Funds of Funds
d) Global Funds
e) Real Estate Funds

22. 22
f) Commodity Funds
g) Foreign Funds
h) Leverage Funds
i) Gift Funds
j) Exchange Traded Funds
k) Market Neutral Funds
l) Asset Allocation Funds
m) Market Neutral Funds
Objectives of the study:
 To find out the awareness level of investors regarding mutual funds.
 To evaluate why customers are not investing in Reliance mutual fund.
 To evaluate Past performance of return with different schemes offered by
Reliance Mutual fund.

23. 23
 To Compare RMF with other mutual Fund sothat Customers would be kin interest
to invest in particular Mutual fund.
Research Methodology
Investor’smainobjectiveistoearnhigherreturnskeepinginmindtheriskandliquidityfactor.
Withthisobjective inmind,aninvestorislookingoutforvariousinvestmentavenues.Mutual
fundsoffercomparativelybetterreturnsandhave lessriskas comparedto directinvestment
instockmarket.Inthisresearchpaper,anattempthasbeenmade toevaluate the perception
of investors regardingmutualfundinvestmentwithspecial emphasisonMonthlyIncome Plan
funds. The method which I used for collecting data is Primary data and it is un structure
because Idiscussedwithretail investor,institutional Investorandmanagersof differentbanks
based on that I have made this report.
Mutual Fundgrowthcan be seeninpast10 yearsandinvestorhasstartedinvestinginMutual
fundsome investthroughSIP and some throughlump sum.The customerwhichI interacted
were focus on SIP because according to them it was safe and convenient and it has less risk
compare to stockmarketbecause there are expertwhoworksdayandnightlookingafterthe
fund rather then investor has no time to look over the market.
As we all know Mutual Fund are subjectto marketriskand investorfearto take riskbecause
they do not have idea about where to invest and how much to invest and what to invest.
Inmy3 monthof internshipwhichIinmonthof April,MayandJune Igottoknow peoplewant
to invest their money but they do not have awareness where to invest.
As we knowLiterate customershave more knowledge thenIlliterate Investorandtheyknow
where toinvestastheylistenthe newsbutnewsisalwaysnotcorrectanddue tothat literate
investor tends to loose their money and end up having bad customer experience.
INDUSTRY ALLOCATION
Reliance Large Cap Fund

24. 24
 Reliance Large CapFundinvestspredominantlyinstocksof top100 companiesby
full marketcapitalization
 Large cap stocksendeavortoprovide stability&liquiditytothe portfolio
 It endeavorstogenerate alphawhile owningbestof the index companies
 It endeavorstoinvestinleadersorpotentialleaderswithestablishedbusiness
models&sustainable free cashflows
 It endeavorsto investingrowthcompaniesatareasonable valuation&relatively
betterreturnon equity
 It investsinemerginglarge capcompanieswhichhave anestablishedbusiness
model withaprovenmanagementtrackrecordand a potential togenerate high
cash flows
RELIANCE GROWH FUND
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00%
banks
pharamactuical
industrial capital goods
construction project
consumer non durables
petroleum products
Auto
Industrial Products
Hotel,resorts & Resturant
software

25. 25
Investment Objective:
The primaryinvestmentobjective of the Scheme istoachieve long-termgrowthof capital by
investment in equity and equity related securities through a research based investment
approach. However, there canbe no assurance that the investmentobjective of the Scheme
will be realized, as actual market movements may be at variance with anticipated trends.
RELIANCE BALANCE ADVANTAGE FUND
Investment Objective:
The investment objective of the scheme is to capitalize on the potential upside in equity
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00%
Banks
Finance
ConsumerNon Durable
Software
Pharamaceuticals
Power
Consumer Durable
Construction
Textile Products
Cement
0.00% 5.00% 10.00% 15.00% 20.00% 25.00%
Banks
Software
FInance
Power
Consumer Non Durable
pettoleum Products
Construction
Phamaceuticals
Auto
Cement

26. 26
markets while attempting to limit the downside by dynamically managing the portfolio
through investment in equity & equity related instruments and active use of debt, money
marketinstrumentsandderivatives.There isno assurance or guarantee that the investment
objective of the scheme will be achieved.
Reliance Small Cap
Investment Objective:
The primary investment objective of the scheme is to generate long term capital appreciation
byinvestingpredominantlyinequityandequityrelatedinstrumentsof smallcapcompaniesand
the secondaryobjectiveistogenerateconsistentreturnsbyinvestingindebtandmoneymarket
securities.
Source:Reliance Mutual Fund fact sheet May 2019
Peer Comparison Of Reliance Mutual Fund and other
1.EQUITY SCHEMES :
Comparison of Equity schemes of RELIANCE mutual funds with peer group
0.00% 2.00% 4.00% 6.00% 8.00% 10.00%
Industrial Capital Goods
Consumer Non Durable
chemicals
Consumer Durable
Banks
Industrial Products
Finance
Software
Pharameceuticals
Auto

27. 27
Annual returns trend of Equity schemes (large cap) from 2014to 2018:
Analysis: From above analysis we can see that almost every company are doing
average but the return in 2014 and 2017 was very impressive.
Interpretation:From the above we can interpret that fund manager performed well in
2014 because everycompany return was high in that particular year but after that next two
year return was drastically down due to which investor has to loose a lot of money again in
2017 fundmanagerplayedaverycrucial roleduetowhichreturnrosebutagainin2018return
came down.
2.DEBT SCHEMES:
Comparison of Debt schemes of ICICI and RELIANCE mutual funds.
ICICI RELIAN
CE
AXIS SBI HDFC
Name of the
scheme
ICICI -Blue
chip
RELIAN
CE-Large
cap
AXIS -
Blue chip
SBI -
Blue Chip
HDFC -
large cap
Type of structure Open end Open end Open end Open end Open end
Type of
investment
Equity Equity Equity Equity Equity
Capitalization
type
Large cap Large cap Large cap Large
Cap
Large cap
NAV 40.68 32.43 29.36 38.17 468.27
Years 2018 2017 2016 2015 2014
ICICI -0.22 32.58 7.32 -0.28 40.9
RELIANCE 0.3 38.34 1.75 0.93 54.64
AXIS 7.43 38.03 -3.97 -1.29 40.64
SBI -3.58 30.23 4.48 7.86 47.41
HDFC 0.75 31.97 7.82 -6.21 46.51

28. 28
Return Analysis of Debt Schemes:
Analysis: Both the funds had performed well on a consistent basis except in the year
2017. The highest annual return generated by ICICI and RELIANCE was 9.09% and
9.08% respectively in the year 2014.
Interpretation: RELIANCE has consistently given better returns than ICICI except
in 2016. The table clearly shows that the debt funds have performed well in the years
2018, and 2015 when the stock market wasn't performing well . Hence we can say
debt funds can reduce the downside potential of an investor’s portfolio when the
market is down.
3.BALANCED ADVANTAGE FUND
Comparison of Balanced schemes of ICICI and RELIANCE mutual funds.
ICICI RELIANCE
Name of the scheme ICICI Prudential Balanced
Advantage Fund
Reliance NRI Equity
Type of structure Open ended Open ended
Type of investment Hybrid: Dynamic asset
allocation
Hybrid: Dynamic asset
allocation
NAV 34.85 88.007
ICICI RELIANCE
Name of the scheme ICICI Prudential Liquid
Plan
Reliance Liquid Treasury
Type of structure Open ended Open ended
Type of investment Debt : Liquid Debt : Liquid
NAV 282.1015 1720.0181
Total Number of Securities
37 37
YEARS 2018 2017 2016 2015 2014
ICICI 7.38 6.6 7.64 8.31 9.09
RELIANCE 7.42 6.65 7.63 8.32 9.08

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Number of funds in category 17 17
Return Analysis of Balanced Schemes:
Analysis: From above table we can analyze that both RELIANCE AND ICICI have
given highest return in 1 year investment horizon 38.5% and 28.9% respectively
compared to other subsequent years .
Interpretation: ICICI have performed consistently better than RELIANCE expect in
2014(28.9%) and 2017 (18.67%). This is because RELIANCE have higher exposer
with 56.8% towards equity markets compared to ICICI with 51.28%.this shows that
RELIANCE fund managers have invested in more aggressive and volatile stocks.
4.MID CAP SCHEMES :
Comparison of Midcap schemes of ICICI and RELIANCE mutual funds
ICICI RELIANCE
Name of the scheme ICICI Prudential Midcap Fund Reliance Growth Fund
Type of Structure Open end Open end
Type of investment Equity: midcap Equity: midcap
NAV 86.98 1018.4039
Return Analysis of Midcap Schemes:
Analysis: The highest returns generated by the two funds are 84.32% and 53.85% in
the year 2014. both funds RELIANCE and ICICI have incurred negative returns -
11.27% and 10.78% in the year 2018.
Interpretation: It can be interpreted that ICICI has consistently given higher returns
when compared to RELIANCE. expect in the years 2015 and 2017.
YEARS 2018 2017 2016 2015 2014
ICICI 2.63 18.67 6.94 6.75 28.9
RELIANCE 1.26 25.14 5.5 0.59 38.5
YEARS 2018 2017 2016 2015 2014
ICICI -10.78 42.24 4.16 4.86 84.32
RELIANCE -11.27 43.06 3.02 6.17 53.85

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5. INDEX FUNDS SCHEMES :
Comparison of Index funds of ICICI and RELIANCE mutual funds.
ICICI RELIANCE
Name of the scheme ICICI Prudential Nifty Index
Fund
Reliance Index Fund - Nifty
Plan
Type of Structure Open end Open end
Type of investment Equity: Large cap Equity: Large cap
NAV 105.1723 18.2057
Return Analysis of Index fund Schemes:
Analysis: ICICI and RELIANCE have gained the highest returns for a 3-year
investment horizon. Also, ICICI and RELIANCE have constantly given lower
returns after a 3-year investment period, compared to the 3-year returns.
Interpretation: It is better to invest in ICICI for a 3-year as it gives the highest
return. Both the funds have performed equally well in terms of their CAGR
Analysis Of Different Customers .
Lots of customers have do not have knowledge about Mutual Fund. People feel scare
to invest because they do not want to loose their hard earn money and return in
market is not good.
Some of Customers Feedback regarding investing in Reliance Mutual Fund.
“Have a bad experience in stock market so don’t want to take any risk.”
YEARS 2018 2017 2016 2015 2014
ICICI 4.32 28.81 3.33 -3.65 32.49
RELIANCE 4.42 29.07 2.31 -3.96 31.94

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It is very difficult for retail investor to have complete knowledge about market. Many
of new investor comes to market having no knowledge and end up with loosing their
money and do not want to invest again.
“Brokers, to earn commission they manipulate people”.
 Many o investor thinks that to earn commission broker encourage investor to
invest in those fund which are of high risk. They manipulate investor by giving
wrong information regarding market.
“Full amount are not invested if any investor is investing,some of the amount is deduct
able from the investor money”.
Generally investor thinks that the amount which they are investing is not fully invested
some of amount are deducted towards tax or different commission but its not true
what ever investor invest in in funds fully amount of units get transferred to their
accounts and when ever they want to see they can see. Generally there are 4 types of
charges which any Mutual Fund House has they are:
 Tamped duty/charges on delivery: 0.01% of the transaction amount
 Securities transaction tax on delivery: 0.1% on the transaction amount
 Turn over tax/transaction charges: 0.0035% on the turnover
 Service Tax: 15% (inclusive of 0.5% Swachh Bharat Cess + 0.5% Krishi Kalyan Cess) on
t the brokerage + sum of the above three charges
“No knowledge about Mutual Fund”
It is one of the major concern for mutual fund house becauseinvestor do not have any
knowledge about mutal fund and they ends up thinking stock market and mutal fund
same thing thought they invest in same stocks but they are different from each other.
Awareness should be given to investor regarding the fund to investor so that they
could make difference in investing.
“Its good to invest in Real estate rather then investing in Mutual Fund”
Many of hyderabad people who have good source of money thinks that investing in
real estate is good than comparing to investing in market because there they can get
fix and safe return compare to market but they donot think the return which investor
will get is very long and no guarantee too.
“Very poor Return in Reliance Mutual Fund compare to other Mutual Fund Company”
When news was published that Reliance Mutual Fund is going to sell its share to
Nippon Life insurance then many of rumor came in market regarding bad image of
Reliance Mutual Fund but it was not true.
“Bad experience with Reliance Mutual Fund in customer point of view”

32. 32
Investor when they loose money in mutual fund generally blames the house which
they are investing because they do not know its market which is not performing well
and RMF have nothing to do with that and when the market gets down investor looses
their money and ends up blaming RMF.
“Some bad reputation regarding company and Anil Ambani”
People thinks that anil ambani regulates RMF but it is not true though he was CEO but
he cannot do anything with investor money because RMF was regulated by SEBI.
“If customer invest in RMF then Anil Ambani will clear its debt from that money”
When the news came regarding Anil Ambani has high debt Investor started to panic
that he will take their money and clear his debt which is not true because mutual fund
is fully controlled by SEBI and they regulate full market.
“Muslim Culture do not allow its people to invest, according to them earning intrest
from money is a Sin”
According to culture of muslim its written in Quran that if they accept intrest amount
then Aalla will never forgive them so they fear to invest the money what ever they
have rather they would prefer to keep at home rather then investing it in market.
“Cannot Invest for long period of time”
Investor wants return but they do not want to wait for long period of time. Mutual
fund gives return when an investor invest for long period of time but eventually
Investor are aggressive and do not want to invest for long period of time.
“Fear of Government policy which will effect market in large scale”
When budget is announced every year there is high volatility in market due to which
investor panic and withdraw their money as mutual fund gives return in long term
when the market is down it will recover sooner or later which will not effect investor.
Suggestion and Conclusion
Intermsof investmentperiod,investorshouldparktheirfundforlongperiodof time inorder
to get good return.Investor who are willing to invest should be given knowledge about the
fund in which they have to invest. Lots of people,investor is not aware about Mutual funds.
Investor thinks Stock market as Mutual Fund.

33. 33
Awarenessshouldbe provideatGraduationlevelsothatstudentswill have knowledge about
Mutual Funds and investing activities shouldhave pratical experience with small amountso
that they will have confidence in markets.
Investorare notaware aboutreturnswhichare generatedbyanyAMCdue towhichtheyhave
a poor perception about Companies.
Due to some companies poor performance other companies get impact.
Reliance Nipponshouldcome outwithainnovativeideawherecustomersshouldgetatleast
some amount of profit while investing.
The objectives of study towards mutual fund as per the sample size and method which is
applied to the study and found that the investors are not choosing or feeling confident in
investing in mutual fundbecause they think that mutual fundis risky than other investment
options.The awarenesslevelof mutualfundamongtheinvestorsare verylowbecauseof only
havingthe partial knowledge aboutthe mutual fundwhichpreventthemtoInvestin mutual
fund to avoid risk bearing factor and fear of losing money.