216282008 reliance-mutual-fund-recovered

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COMPANY PROFILE
Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Assets Under
Management (AUM) of Rs. 48,828 crore (AUM as on 30th Apr 2007) and an investor
base of over 3.1 million.
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of
the fastest growing mutual funds in the country. RMF offers investors a well-rounded
portfolio of products to meet varying investor requirements and has presence in 115 cities
across the country.
Reliance Mutual Fund constantly endeavors to launch innovative products and customer
service initiatives to increase value to investors.
Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management
Ltd., a wholly owned subsidiary of Reliance Capital Ltd.
Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financial
1

services companies, and ranks among the top 3 private sector financial services and
banking companies, in terms of net worth
.
Reliance Capital Ltd. has interests in asset management, life and general insurance,
private equity and proprietary investments, stock broking and other financial services.
Investment Manager : Reliance Capital Asset Management Limited. The Sponsor, the
Trustee and the Investment Manager are incorporated under the Companies Act 1956.
General Risk Factors : Mutual Funds and securities investments are subject to market
risks and there is no assurance or guarantee that the objectives of the Scheme will be
achieved. As with any investment in securities, the NAV of the Units issued under the
Scheme can go up or down depending on the factors and forces affecting the capital
markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the
future performance of the Scheme. The Sponsor is not responsible or liable for any loss
resulting from the operation of the Scheme beyond their initial contribution of Rs.1 lakh
towards the setting up of the Mutual Fund and such other accretions and additions to the
corpus. The Mutual Fund is not guaranteeing or assuring any dividend/ bonus. The
Mutual Fund is also not assuring that it will make periodical dividend/bonus
distributions, though it has every intention of doing so. All dividend/bonus distributions
are subject to the availability of the distributable surplus in the Scheme. For details of
scheme features apart from those mentioned above and scheme specific risk factors,
please refer to the provisions of the offer document. Offer Document and KIM is
available at all the DISCs/ Distributors of RMF.
2

RELIANCE MUTUAL FUND
Reliance mutual fund, promoted by the Anil Dhirubhai Ambani (ADAG) group, is one of
the fastest growing mutual funds in India having doubled its assets over the last one year.
In March, 2006, the Reliance mutual fund emerged as the largest private sector fund
house in the country, overtaking Prudential ICICI which has been holding that position
for many years.
The sponsor of the fund is Reliance Capital Limited, the financial services arm of ADAG.
Reliance Capital Asset Management Limited, a wholly owned subsidiary of Reliance
Capital Limited, acts as the AMC to the fund. Directors of the company include Amitabh
Jhunjhunwala, a senior executive of ADAG. Amitabh Chaturvedi is the managing
director of the AMC.
As of end August 2006, Reliance mutual fund has Rs 28,753 crore of assets under
management. Reliance Equity Fund, launched by Reliance MF in early 2006, is the
largest mutual find scheme in the country with a fund size of over Rs 5,500 crore.
Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act,
1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor and Reliance Capital
Trustee Co. Limited (RCTCL), as the Trustee.
RMF has been registered with the Securities & Exchange Board of India (SEBI) vide
registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital
Mutual Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide
SEBI's letter no. IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was
formed to launch various schemes under which units are issued to the Public with a view
to contribute to the capital market and to provide investors the opportunities to make
investments in diversified securities.
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The main objectives of the Trust are :
 To carry on the activity of a Mutual Fund as may be permitted at law and
formulate and devise various collective Schemes of savings and investments for people
in India and abroad and also ensure liquidity of investments for the Unit holders.
 To deploy Funds thus raised so as to help the Unit holders earn reasonable
returns on their savings and
 To take such steps as may be necessary from time to time to realise the effects
without any limitation.
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Here is a list of mutual funds of Reliance:
Debt/Income Funds
Reliance Income Fund
Reliance Monthly Income Plan
Reliance Fixed Term Scheme
Reliance Gilt Securities Fund
Reliance Liquid Fund
Reliance Medium Term Fund
Reliance Short Term Fund
Reliance Floating Rate Fund
Reliance NRI Income Fund
Reliance Fixed Maturity Fund Series - I
Reliance Fixed Maturity Fund Series - II
Reliance Liquidity Fund
Reliance Regular Savings Fund
Reliance Fixed Tenor Fund
Reliance Fixed Tenor Fund Plan B
Reliance Fixed Horizon Fund Plan A & B
Equity Funds
Reliance Growth Fund
Reliance Vision Fund
NRI Equity Fund
Reliance Index Fund
Reliance Equity Opportunities Fund
Reliance Tax Saver (ELSS) Fund
Reliance Equity Fund
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Sector Specific Funds
Reliance Banking Fund
Reliance Diversified Power Sector Fund
Reliance Pharma Fund
Reliance Media & Entertainment Fund
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OUR CORPORATE GOVERNANCE POLICY
Reliance Capital Asset Management Ltd. has a vision of being a leading player in the
Mutual Fund business and has achieved significant success and visibility in the market.
However, an imperative part of growth and visibility is adherence to Good Conduct in the
marketplace. At Reliance Capital Asset Management Ltd., the implementation and
observance of ethical processes and policies has helped us in standing up to the scrutiny
of our domestic and international investors.
Management
The management at Reliance Capital Asset Management Ltd. is committed to good
Corporate Governance, which includes transparency and timely dissemination of
information to its investors and unitholders. The Reliance Capital Asset Management
Limited Board is a professional body, including well-experienced and knowledgeable
Independent Directors. Regular Audit Committee meetings are conducted to review the
operations and performance of the company.
Employees
Reliance Capital Asset Management Ltd. has a preset code of conduct for all its officers.
It has a clearly defined prohibition on insider trading policy and regulations. The
management believes in the principles of propriety and utmost care is taken while
handling public money, making proper and adequate disclosures.
All personnel at Reliance Capital Asset Management Ltd. are made aware of the dos and
donts as part of the Dealing policy laid down by the Securities and Exchange Board of
India (SEBI). They are taken through a well-designed HR program, conducted to impart
work ethics, the Code of Conduct, information security, Internet and e-mail usage and a
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host of other issues.
One of the core objectives of Reliance Capital Asset Management Ltd. is to identify
issues considered sensitive by global corporate standards, and implement
policies/guidelines in conformity with the best practices as an ongoing process.
Reliance Capital Asset Management Ltd. gives top priority to compliance in true letter
and spirit, fully understanding its fiduciary responsibilities.
8

RELIANCE CAPITAL LIMITED
Corporate & Registered Office
Reliance Capital Ltd. H Block, 1st Floor, Dhirubhai Ambani Knowledge
City, Koparkhairne, Navi Mumbai - 400 710.Tel. 022 – 30327000, Fax. 022
- 30327202
Reliance Capital Asset Management Ltd.
is a wholly owned subsidiary of Reliance Capital Limited, the sponsor. The
entire paid-up capital (100%) of Reliance Capital Asset Management Ltd is
held by Reliance Capital Ltd.
Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd
(RCL). Reliance Capital is India’s fastest growing private sector financial
services company. Ranking among the top 3 private sector banking and
finance companies in India, with a shareholder base of over 1.3 million.
Reliance Capital has interests in asset management and mutual funds, life
and general insurance, private equity and proprietary investments, stock
broking and other financial services with a net worth in excess of Rs. 5,262
crore (as of March 31, 2007)
Reliance Capital Ltd. has contributed Rupees One Lac as the initial
contribution to the corpus for the setting up of the Mutual Fund. Reliance
Capital Ltd. is responsible for discharging its functions and responsibilities
towards the Fund in accordance with the Securities and Exchange Board of
India (SEBI) Regulations.
The Sponsor is not responsible or liable for any loss resulting from the
operation of the Scheme beyond the contribution of an amount of Rupees
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one Lac made by them towards the initial corpus for setting up the Fund and
such other accretions and additions to the corpus.
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About Reliance Capital Asset Management Ltd.
Reliance Capital Asset Management Limited (RCAM), a company
registered under the Companies Act, 1956 was appointed to act as the
Investment Manager of Reliance Mutual Fund.
Reliance Capital Asset Management Limited is a wholly owned subsidiary
of Reliance Capital Limited, the sponsor. The entire paid-up capital (100%)
of Reliance Capital Asset Management Limited is held by Reliance Capital
Limited.
Reliance Capital Asset Management Limited was approved as the Asset
Management Company for the Mutual Fund by SEBI vide their letter no
IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an
Investment Management Agreement (IMA) with RCAM dated May 12,
1995 and was amended on August 12, 1997 in line with SEBI (Mutual
Funds) Regulations, 1996. Pursuant to this IMA, RCAM is authorised to act
as Investment Manager of Reliance Mutual Fund. The networth of the Asset
Management Company including preference shares as on March 31, 2005 is
Rs.30.13 crores. Reliance Mutual Fund has launched twenty five Schemes
till date, namely: Reliance Vision Fund (September 1995), Reliance Growth
Fund (September 1995) Reliance Income Fund (December 1997), Reliance
Liquid Fund (March 1998), Reliance Medium Term Fund (August 2000),
Reliance Short Term Fund (December 2002), Reliance Fixed Term Scheme
(March 2003), Reliance Banking Fund (May 2003), Reliance Gilt Securities
Fund (July 2003), Reliance Monthly Income Plan (December 2003),
Reliance Diversified Power Sector Fund (March 2004) Reliance Pharma
Fund ( May 2004), Reliance Floating Rate Fund (August 2004), Reliance
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Media & Entertainment Fund (September 2004), Reliance NRI Equity Fund
(October 2004), Reliance NRI Income Fund (October 2004), Reliance Index
Fund (January 2005), Reliance Equity Opportunities Fund (February 2005),
Reliance Fixed Maturity Fund - Series I (March 2005), Reliance Fixed
Maturity Fund - Series II (April 2005), Reliance Regular Saving Fund (May
2005), Reliance Liquidity Fund (June 2005), Reliance Tax Saver (ELSS)
Fund (July 2005), Reliance Fixed Tenor Fund (November 2005) and
Reliance Equity Fund (Feb 2006).
RCAM has been registered as a portfolio manager vide SEBI Registration
No. INP000000423 and renewed effective 1st August, 2003. RCAM has
commenced these activities. It has been ensured that key personnel of the
AMC, the systems, back office, bank and securities accounts are segregated
activity wise and there exists systems to prohibit access to inside
information of various activities. As per SEBI Regulations, it will further
ensure that AMC meets the capital adequacy requirements, if any, separately
for each such activity.
RCAM has been appointed as the Investment Manager of "Reliance India
Power Fund", a Venture Capital Fund registered with SEBI vide
Registration no.IN/VCF/05-06/062 dated June 16, 2005 but this activity is
yet to commence.
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Name and Address Other Directorships
Mr. Amitabh Chaturvedi *
Raheja Empress,
Flat No. 1201/1202,
12th Floor, Veer Savarkar Marg,
Opp. Siddhi Vinayak Temple,
Prabhadevi, Mumbai - 400 025.
Senior Corporate Executive
Director :
Reliance Asset Management (Singapore) Pte
Limited,
Reliance Asset Management (Mauritius) Limited,
Reliance Infoinvestments Limited.
Financial Planning Standards Board of India
Mr. Kanu Doshi
102, Shivala, Khatau Road,
Cuffe Parade, Mumbai - 400 005.
Chartered Accountant
Chairman :
Matrix Advisors (India) Private Limited
Director :
BOB Capital Markets Limited,
Peoples Financial Services Limited
Alphaplus Investment Management Private
Limited.
Mr. Manu Chadha
C-35, Malcha Marg,
Chankyapuri,
New Delhi - 110 021.
Chartered Accountant
Director :
TRC Financial Services Limited, Himalayan Crest
Power Limited, GIC Housing Finance Limited, Kotla
Hydro Power Limited,
Ispat Industries Limited,
TRC Corporate Consulting (P) Limited
Brady Air Limited.
Partner :
M/s T.R. Chadha & Co., Chartered Accountants
Mr. Sushil C. Tripathi, I.A.S. Director :
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(Retd.)
27, Sector 15A,
NOIDA - 201 301(UP)
(Former Secretary to
Government of India,
Ministry of Petroleum &
Natural Gas /
Ministry of Education)
IL&FS Infrastructure Development Corporation
Limited
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INTRODUCTION
A mutual fund is created when investors put their money together in a
particular fund which is providing them maximum investment opportunities.
The fund thus collected through particular mutual fund scheme is managed
by expertise having great knowledge of investment & market.
TYPES OF MUTUAL FUNDS
Mutual Funds are classified by structure into:
Open – Ended Schemes
Close – Ended Schemes.
Interval Schemes
By objective into:
Equity (Growth) Schemes
Income Schemes
Money Market Schemes
Tax Saving Schemes
Balanced Schemes
Offshore funds
Special Schemes like index schemes etc.
RETURN OPTION IN MUTUAL FUNDS
Dividend Option
Growth Option
Reinvestment Option
THE ADVANTAGES OF INVESTING IN A MUTUAL FUND ARE
Diversifications
Professional Management
Regulatory oversight
Liquidity
Convenience
Low Cost
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Open – Ended Schemes
In an open- ended fund an investor can buy and sell units of the fund at
NAV related prices, at any time, directly from the fund. This is called as
open- ended fund because, the pool of funds is open for additional sales and
purchases. The price at which the investors buy or sell units is linked to the
NAV.
Open Ended Funds are offered for sale at a per-specified price, say Rs.10, in
the initial offer period. After a per-specified period, say 30 days, this is
declared open for sale further sales and repurchases. These transactions
happen at the computed NAV related prices.
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CLOSED ENDED FUNDS
A closed ended fund is open for sale to investors for a specific period, after
which further sales are closed. Any further transaction for buying the units
or repurchasing them, happen in the secondary markets, where closed funds
are lists. Therefore new investors bye from the existing investors, and they
can liquidate their units by selling them to other willing buyers.
The price at which the units can be sold redeemed depends on the market
prices, which are fundamentally linked to the NAV. Investors in closed
funds receive either certificates of depository receipts, for their holding in
closed ended mutual fund.
INTERVAL SCHEMES
Interval Schemes are those that combine the features of open-ended and
close ended schemes. The units may be traded on the stock exchange or may
be open for sale or redemption during pre-determined intervals at NAV
related prices.
GROWTH SCHEMES
Growth Schemes are also known as equity schemes. The aim of these
schemes is to provide capital appreciation over medium.
These schemes normally invest a major part of their fund in equities and are
willing to bear short-them decline in value for possible future appreciation.
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INCOME SCHEMES
Income Schemes are also known as debt schemes. The aim of these schemes
is to provide regular and steady income to investors. Theses schemes
generally invest in fixed income securities such as bonds and corporate
debentures. Capital appreciation in such schemes may be limited.
TAX SAVING SCHEMES
Tax-saving schemes offer tax rebates to the investors under tax laws
prescribed from time to time. Under Sec. 88 of the Income Tax Act,
contributions made to any Equity Linked Savings Scheme (ELSS) are
eligible for rebate & 20% for a maximum investment on Rs 10,000 per
financial year.
MONEY MARKET SCHEMES
Money Market Schemes aim to provide easy liquidity, preservation of
capital and moderate income. These schemes generally invest in safer, short-
term instruments, such as treasury bills, certificates of deposit, commercial
paper and inter-bank call money.
BALANCED SCHEMES
Balanced Schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gains they earn. These schemes
invest in both shares and fixed income securities, in the proportion indicated
in their offer documents (normally 50:50).
RETURN OPTION IN MUTUAL FUNDS
DIVIDEND OPTION
Investors who choose a dividend option as there investment, will receive
dividends from the mutual funds ,as and when such dividends are declared
There are further choices in the distribution of dividend .in a normal divided
plan, periodicity of dividends is left to the fund manager, who may pay
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annual dividend. The timing of payouts decided by the fund manager which
can vary form daily, weekly, quarterly, half yearly and annually. Investor
choosing this option having affix number of units invested in the fund and
earn income on this investment the NAV of these investors holdings will
vary with the value of portfolio.
GROWTH OPTION
Investors who do not require periodic income distribution can choose the
growth option where income earned are retained in the investment portfolio
and are allowed to grow rather being distributed to the investors. The return
to the investors is the rate at which his initial investment has grown over the
period for which he has invested in the fund. The NAV of investors will
vary with value of the investment while the number of units remains
constant
REINVESTMENT OPTION
Investors reinvest the dividends that are declared by the mutual funds back
into the fund itself at NAV that prevalent at the time of reinvestment .In this
option the numbers of unit held by the invests will change with every
reinvestment .The value f the units will be similar to that under the dividend
options
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Why should you invest in Mutual Funds?
1) Reduce your risks - Mutual Funds diversify your portfolio by investing
in various securities & minimise the risk.
2) Maximise your opportunities - The fund managers with the strong
research take
3) Liquidity: Quick access to your money - Mutual Funds can be bought
and sold on any dealing day
4) Affordability - Of course you don’t need to be millionaire to invest in
mutual fund as the minimum investment in mutual fund starts from Rs.500/-.
A Mutual Fund because of its large corpus allows even a small investor to
take the benefit of its investment strategy.
5) Low Costs - Mutual Funds are a relatively less expensive way to invest
compared to directly investing in the capital markets because the benefits of
scale in brokerage, custodial and other fees translate into lower costs for
investors.
6) Tax Benefits - The tax benefits that Mutual Funds investors enjoy at the
moment is the treatment of long-term capital gains.
Investors have two options as regards long-term capital gains:
Tax @ 10% on capital gains without indexation (plus surcharge)
Tax @ 20% on capital gains after indexation (plus surcharge)
7) Transparency - The investor gets regular information on the value of his
investment in addition to disclosure on the specific investments made by the
fund, the invested in each class of assets and the fund manager's investment
strategy and outlook.
8) Regulated for investor protection - All Mutual Funds in India are
registered with the regulator of the Indian securities industry - the
Securities and Exchange Board of India (SEBI). The funds function
within the framework of regulations designed by SEBI and these
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regulations are intended to protect the interests of investors. The
operations of the mutual funds are also regularly monitored by SEBI.
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THE ADVANTAGES OF INVESTING IN A MUTUAL FUND ARE:
Diversifications: The best mutual funds design their portfolios so individual
investments will react differently to the same economic conditions. For
example, economic conditions like a rise in interest rates may cause certain
securities in a diversified portfolio to decrease in value. Other securities in
the portfolio will respond to the same economic conditions by increasing in
value. When a portfolio in balanced in this way, the value of the overall
portfolio should gradually increase over time, even if some securities lose
value.
Professional Management: Most mutual funds pay topflight professionals
to manage their investments. These managers decide what securities the
fund will buy and sell.
Regulatory oversight: Mutual funds are subject to many government
regulations that protect investors from fraud.
Liquidity: It’s easy to get your money out of a mutual fund. Write a check,
make a call, and you’ve got the cash.
Convenience: You can usually buy mutual fund shares by mail, phone, or
over the Internet.
Low Cost: Mutual fund expenses are often no more than 1.5 percent of your
investment. Expenses for Index Funds are less than that, because index
funds are not actively managed. Instead, they automatically buy stock in
companies that are listed on a specific index.
Transparency
Flexibility
Choice of schemes
Tax benefits
Well regulated
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Mutual Funds Industry in India
The origin of mutual fund industry in India is with the introduction of the
concept of mutual fund by UTI in the year 1963. Though the growth was
slow, but it accelerated from the year 1987 when non-UTI players entered
the industry.
In the past decade, Indian mutual fund industry had seen a dramatic
improvements, both quality wise as well as quantity wise. Before, the
monopoly of the market had seen an ending phase, the Assets Under
Management (AUM) was Rs. 67bn. The private sector entry to the fund
family rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it
reached the height of 1,540 bn.
Putting the AUM of the Indian Mutual Funds Industry into comparison, the
total of it is less than the deposits of SBI alone, constitute less than 11% of
the total deposits held by the Indian banking industry. The main reason of its
poor growth is that the mutual fund industry in India is new in the country.
Large sections of Indian investors are yet to be intellectuated with the
concept. Hence, it is the prime responsibility of all mutual fund companies,
to market the product correctly abreast of selling. The mutual fund industry
can be broadly put into four phases according to the development of the
sector. Each phase is briefly described as under.
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First Phase - 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.
It was set up by the Reserve Bank of India and functioned under the
Regulatory and administrative control of the Reserve Bank of India. In 1978
UTI was de-linked from the RBI and the Industrial Development Bank of
India (IDBI) took over the regulatory and administrative control in place of
RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end
of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by
Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug
89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of
Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of
1993 marked Rs.47,004 as assets under management.
Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund
families. Also, 1993 was the year in which the first Mutual Fund
Regulations came into being, under which all mutual funds, except UTI
were to be registered and governed. The erstwhile Kothari Pioneer (now
merged with Franklin Templeton) was the first private sector mutual fund
registered in July 1993.
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The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry
now functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign
mutual funds setting up funds in India and also the industry has witnessed
several mergers and acquisitions. As at the end of January 2003, there were
33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of
India with Rs.44,541 crores of assets under management was way ahead of
other mutual funds.
Fourth Phase - since February 2003
This phase had bitter experience for UTI. It was bifurcated into two separate
entities. One is the Specified Undertaking of the Unit Trust of India with
AUM of Rs.29,835 crores (as on January 2003). The Specified Undertaking
of Unit Trust of India, functioning under an administrator and under the
rules framed by Government of India and does not come under the purview
of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and
LIC. It is registered with SEBI and functions under the Mutual Fund
Regulations. With the bifurcation of the erstwhile UTI which had in March
2000 more than Rs.76,000 crores of AUM and with the setting up of a UTI
Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with
recent mergers taking place among different private sector funds, the mutual
fund industry has entered its current phase of consolidation and growth. As
at the end of September, 2004, there were 29 funds, which manage assets of
Rs.153108 crores under 421 schemes.
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GROWTH IN ASSETS UNDER MANAGEMENT
:
.
26

TYPES OF PRODUCTS OFFERED BY MUTUAL FUNDS
 EQUITY FUNDS-
Equity funds are those that invest pre-dominantly in equity shares of
companies. There are variety of ways in which an equity portfolio can be
created for investors.
CHOICES FOR EQUITY FUND INVESTORS
 SIMPLE EQUITY FUNDS-
These funds invest a predominant portion of-the funds mobilized in equity
related products. In most cases about 80-90% of their investments are in
equity shares. These funds have the freedom to invest both in primary and
secondary markets for equity. One variation of simple fund is the ELLS
{Equity Linked Saving Schemes). It invests at least 90% of its funds in
equity and equity linked investments in eligible for tax-rebate up to a
maximum investment of Rs. 10000 under section 88 of the Income Tax Act
and the minimum lock-in period in 3 years, in order to avail the tax rebate.
27

 PRIMARY MARKET FUNDS-
The primary market funds invest in equity shares, but do so only when a
primary market offering is available. The focus is on capturing the
opportunity to buy those companies which issue their equity in primary
markets.
 SECTORAL FUNDS-
Sectoral funds choose to invest in one or more chosen sectors of the equity
markets. These vary depending on the investor preferences and the return
risk attributes of the sector. For Example during the technology boom in
stock markets, when prices of IT companies was rising sharply, investors
who wanted to participate in this sector could do so, by investing in sectoral
funds whose investment objective was to invest in few choosen sectors such
as information technology, media and telecommunication.
DEBT FUNDS
Debt are those that pre-dominantly invest in debt securities. These investors
are also known as Income Funds. The universe of the debt securities is
comprises of long term investments such as bond issues by central and state
governments,. Public sector organizations, public financial institutions and
private sector companies; and short-term instruments such as call money
lending; commercial papers, certificates of deposits; and treasury bills.
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 SIMPLE DEBT FUNDS-
These funds invests in a portfolio of debt securities chosen from the universe
of debt securities .. The fund manager has the freedom to choose from the
universe of debt securities,Govt. securities and others, as well as long and
short term.
 LIQUID FUNDS AND MONEY MARKET FUNDS-
These debt funds invest only in instruments with maturities less than a year.
The investment portfolio is very liquid, and enables investors to hold very
short horizons of a day or more. The fund is pre-dominantly invests in
money market instruments and provides investors the returns that returns
that are available on these instruments. In some cases, the funds also
provides investors with cheque writing facility, as an additional facility for
liquidity.
 GILT FUNDS
A Gilt fund invests only in securities that are issued by the government, and
therefore does not carry any credit risk. These funds invest in short term and
long term securities issued by the government. These funds are preferred by
institutional investors who have to invest only in government paper. Hence
the investor usually does not have to worry about credit risk since
29

Government Debt is generally credit risk free. HDFC Gilt Fund is an
example of such a scheme..
 SECTORAL DEBT FUNDS-
These funds invest in a pre-specified subset of the debt markets. For
example, there are debt funds that would invest only in AAA rated debt
securities issued by the corporate sector.
 BALANCED FUND-
Fund that invest both in debt and equity markets are called balanced funds.
A typical balanced fund would be almost equally interested in both the
markets. The benefits of diversification get further enhanced, as equity and
debt markets have different risks and return profiles. These funds seek to
enhance the income potential of their equity component, by bringing in debt.
HDFC Balanced Fund and HDFC Children’s Gift Fund are examples of
hybrid schemes.
THE STRUCTURE CONSISTS OF
Sponsor
Sponsor is the person who acting alone or in combination with another body
corporate establishes a mutual fund. Sponsor must contribute at least 40% of
the net worth of the Investment Managed and meet the eligibility criteria
prescribed under the Securities and Exchange Board of India {Mutual
Funds} Regulations, 1996. The Sponsor is not responsible or liable for any
loss or shortfall resulting from the operation of the Schemes beyond the
initial contribution made by it towards setting up of the Mutual Fund.
30

The Mutual Fund is constituted as a trust in accordance with the provisions
of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered
under the Indian Registration Act, 1908.
Trustee
Trustee is usually a company {corporate body } or Board of Trustees {body
of individuals}. The main responsibility of the Trustee is to safeguard the
interest of the unit holders and inter-alia ensure that the AMC functions in
the interest of investors and in accordance with the Securities and Exchange
Board of India {Mutual Funds} Regulations, 1996, the provisions of the
Trust Deed and the Offer Documents of the respective Schemes. At least 2/3
rd directors of the Trustee are independent directors who are not associated
with the Sponsor in any manner.
Asset Management Company {AMC}
The AMC is appointed by the Trustee as the Investment Manager of the
Mutual Fund. The AMC is required to be approved by the Securities and
Exchange Board of India {SEBI} to act as an asset management company of
the Mutual Fund. At lest 50% of the directors of the AMC are independent
directors who are not associated with the Sponsor in any manner. The AMC
must have a net worth of at least 10 crore at all times.
31

Registrar and Transfer Agent
The AMC if so authorized by the Trust Deed appoints the Registrar and
Transfer Agent to the Mutual Fund. The Registrar processes the application
form, redemption requests and dispatches account statements to the unit
holders. The Registrar and Transfer agent also handles communications with
investors and updates investor records.
32

MAJOR PLAYERS IN MUTUAL FUNDS IUNDUSTY
PRUDENTIAL ICICI MUTUAL FUND
Net worth – as on Mar 31st
, 2002 of Rs 69..89 crores.
Objective- To provide Indian investor mutual fund products to suit a variety of
investment needs and to suit different risks and maturity profiles.
KEY INDICATORS:
SCHEMES-
Equity Funds-
Prudential ICICI-
 Growth Plan
 Tax Plan
 FMCG Plan
 Technology Plan
 Power Plan
 Index Plan
 Dynamic Plan
33
No. of schemes 66
No. of schemes including option 121
Equity Schemes 15
Debt Schemes 59
Short term debt Schemes 17
Equity & Debt 4
Gilt Fund 6
As of May 1998 As on June 30,2004
Assets under Management Rs. 160 Crore Rs.16,246,91 Crore
Number of Funds Managed 2 17

Debt Funds-
Prudential ICICI-
 Liquid Plan
 Income Plan
 Gilt Plan
 Monthly Income Fund
 Sweep Plan
 Gilt Investment-PF
 Fixed Maturity Plan
 Short term Plan
 Flexible Rate Plan
 Deposit plus NRI series
 Income Multiplier Fund
Funds Balanced-
1. Prudential ICICI Balanced Fund
2. Prudential ICICI Child Care Plan
Birla Sun Life AMC
It places a lot of emphasis on quality of management and risk control. This
is done through extensive analysis that includes factory visit and field
research. It has largest team of research analyst in the industry
34

SCHEMES-
Equity Schemes
Birla Advantage Fund
Birla Divident Fund
Birla Equity Plan
Birla Index Plan
Birla India Opportunities Fund
Birla Midcap Fund
Birla MNC Fund
Birla Tax Plan 98
Debt Schemes
Birla Bond Exchange
Birla Bond Index Fund
Birla Floating Rate Fund
Institutional Plan for BCP
Birla MIP
Birla Cash Plus
Institutional Plan for BB
Unit Trust of India Mutual Fund
UTI Asset Management Company Private Limited, established in Jan 14,
2003, manages the UTI Mutual Fund with the support of UTI Trustee
Company Privete Limited. UTI Asset Management Company presently
manages a corpus of over Rs.20000 Crore. The sponsorers of UTI Mutual
Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank
of India (SBI), and Life Insurance Corporation of India (LIC).
35

The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset
Management Funds, Index Funds, Equity Funds and Balance Funds.
Reliance Mutual Fund
Reliance Mutual Fund (RMF) was established as trust under Indian Trusts
Act, 1882. The sponsor of RMF is Reliance Capital Limited and Reliance
Capital Trustee Co. Limited is the Trustee. It was registered on June 30,
1995 as Reliance Capital Mutual Fund which was changed on March 11,
2004. Reliance Mutual Fund was formed for launching of various schemes
under which units are issued to the Public with a view to contribute to the
capital market and to provide investors the opportunities to make
investments in diversified securities.
Standard Chartered Mutual Fund
Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored
by Standard Chartered Bank. The Trustee is Standard Chartered Trustee
Company Pvt. Ltd. Standard Chartered Asset Management Company Pvt.
Ltd. is the AMC which was incorporated with SEBI on December 20,1999.
36

Association of Mutual Funds in India (AMFI)
With the increase in mutual fund players in India, a need for mutual fund
association in India was generated to function as a non-profit organisation.
Association of Mutual Funds in India (AMFI) was incorporated on 22nd
August, 1995.
AMFI is an apex body of all Asset Management Companies (AMC) which
has been registered with SEBI. Till date all the AMCs are that have launched
mutual fund schemes are its members. It functions under the supervision and
guidelines of its board of directors.
Association of Mutual Funds India has brought down the Indian Mutual
Fund Industry to a professional and healthy market with ethical lines
enhancing and maintaining standards. It follows the principle of both
protecting and promoting the interests of mutual funds as well as their unit
holders.
Objectives of ( AMFI)
The Association of Mutual Funds of India works with 30 registered AMCs
of the country. It has certain defined objectives which juxtaposes the
guidelines of its Board of Directors. The objectives are as follows:
This mutual fund association of India maintains a high professional and
ethical standards in all areas of operation of the industry.
It also recommends and promotes the top class business practices and code
of conduct which is followed by members and related people engaged in the
activities of mutual fund and asset management. The agencies who are by
37

any means connected or involved in the field of capital markets and financial
services also involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBIs guidelines in the
mutual fund industry.
Association of Mutual Fund of India do represent the Government of India,
the Reserve Bank of India and other related bodies on matters relating to the
Mutual Fund Industry.
It develops a team of well qualified and trained Agent distributors. It
implements a prog ramme of training and certification for all intermediaries
and other engaged in the mutual fund industry.
AMFI undertakes all India awareness programme for investors in order to
promote proper understanding of the concept and working of mutual funds
At last but not the least association of mutual fund of India also disseminate
informations on Mutual Fund Industry and undertakes studies and research
either directly or in association with other bodies.
The sponsorers of Association of Mutual Funds in India
Bank Sponsored
SBI Fund Management Ltd.
BOB Asset Management Co. Ltd.
Canbank Investment Management Services Ltd.
UTI Asset Management Company Pvt. Ltd.
38

Institutions
GIC Asset Management Co. Ltd.
Jeevan Bima Sahayog Asset Management Co. Ltd.
Private Sector
Indian:-
BenchMark Asset Management Co. Pvt. Ltd.
Cholamandalam Asset Management Co. Ltd.
Credit Capital Asset Management Co. Ltd.
Escorts Asset Management Ltd.
JM Financial Mutual Fund
Kotak Mahindra Asset Management Co. Ltd.
Reliance Capital Asset Management Ltd.
Sahara Asset Management Co. Pvt. Ltd
Sundaram Asset Management Company Ltd.
Tata Asset Management Private Ltd.
Predominantly India Joint Ventures:-
39

Birla Sun Life Asset Management Co. Ltd.
DSP Merrill Lynch Fund Managers Limited
HDFC Asset Management Company Ltd.
Predominantly Foreign Joint Ventures:-
ABN AMRO Asset Management (I) Ltd.
Alliance Capital Asset Management (India) Pvt. Ltd.
Deutsche Asset Management (India) Pvt. Ltd.
Fidelity Fund Management Private Limited
Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.
HSBC Asset Management (India) Private Ltd.
ING Investment Management (India) Pvt. Ltd.
Morgan Stanley Investment Management Pvt. Ltd.
Principal Asset Management Co. Pvt. Ltd.
Prudential ICICI Asset Management Co. Ltd.
Standard Chartered Asset Mgmt Co. Pvt. Ltd.
40

FUTURE OF MUTUAL FUND INDUSTRY
By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore.
It is estimated that by 2010 March-end, the total assets of all scheduled
commercial banks should be Rs 40,90,000 crore.
The annual composite rate of growth is expected 13.4% during the rest of
the decade. In the last 5 years we have seen annual growth rate of 9%.
According to the current growth rate, by year 2010, mutual fund assets will
be double.
Let us discuss with the following table:
Aggregate deposits of Scheduled Com Banks in India (Rs.Crore)
Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03
Mar-
04
Sep-04 4-Dec
Deposits
60541
0
85159
3
98914
1
113118
8
128085
3
-
156725
1
1622579
Change in
% over last
yr
15 14 13 12 - 18 3
Source - RBI
Mutual Fund AUM’s Growth
Month/Year
Mar-
98
Mar-
00
Mar-
01
Mar-
02
Mar-
03
Mar-04 Sep-04 4-Dec
MF AUM's 68984 93717 83131 94017 75306
13762
6
15114
1
149300
Change in % 26 13 12 25 45 9 1
42

over last yr
Source - AMFI
Some facts for the growth of mutual funds in India
100% growth in the last 6 years.
Number of foreign AMC's are in the queue to enter the Indian markets like
Fidelity Investments, US based, with over US$1trillion assets under
management worldwide.
Our saving rate is over 23%, highest in the world. Only channelizing these
savings in mutual funds sector is required.
In India there are only 29 mutual funds which is much less than US having
more than 800. There is a big scope for expansion.
'B' and 'C' class cities are growing rapidly. Today most of the mutual funds
are concentrating on the 'A' class cities. Soon they will find scope in the
growing cities.
Mutual fund can penetrate rural like the Indian insurance industry with
simple and limited products.
SEBI allowing the MF's to launch commodity mutual funds.
Investment options available with different risk profiles
Equity Diversified Funds -
Diversification - Mutual Funds reduces the risk by investing in all the
sectors. Instead of putting all your money in one sector or company it's
better to invest in various good performing sectors as you reduces the risk of
getting involved in a particular sector/company which may perform or may
not.
43

Who should invest - This is an ideal category for those who want to
participate in stock market & knows the risk involved in stock market but
have few rupees to invest in blue-chip stocks.
How they performed - Though the short term out look is volatile in long-
term equity diversified funds have outperformed other categories & stock
markets will lesser amount of risk than stock markets. The average returns of
equity-diversified funds are 102%.
Performance as on March 25, 2004
Absolute Simple Annualized
Scheme Name NAV 3 Months 1 Year 3 Years Since Inception
HSBC Equity 26.27 2.34 156.87 - 124.24
India Advantage 89.57 5.58 150.63 49.44 104.25
Reliance Growth 71.84 (6.29) 147.24 88.48 73.00
Average - (3.93) 102.19 40.17 33.96
S&P Nifty 1704.45 (5.76) 68.35 15.55 -
BSE Sensex 5414.44 (4.03) 72.21 16.27 -
Category Rating ****
Index Funds -
Follow the index - These are the index-based funds, which move with the
likes of Sensex & Nifty. These fund charges NIL or very low entry/exit
loads.
Who should invest - As you have seen in last few months Nifty & Sensex
have almost come down 17% from their tops, it is a good time to invest in
Index funds with the principal of "Investing at the lower levels".
How they performed - Though the short term out look is volatile in long-
term Sensex & Nifty could do well with improving economic conditions. It
has been seen that these Index funds have outperformed the indices making
them more attractive.
44

Scheme Name NAV 3 Months1 Year
3
Years
Since
Inception
Junior BeES 31.87 (1.59) 154.25 - (65.83)
HDFC Index - Sensex Plus 56.60 (3.50) 74.82 - 44.45
SENSEX Prud ICICI
Exchange Traded
54.55 (4.06) 73.77 - -
Average - (5.19) 70.70 16.62 27.80
S&P Nifty 1704.45 (5.76) 68.35 15.55 -
BSE Sensex 5414.44 (4.03) 72.21 16.27 -
Category Rating - *** -
SECTOR FUND:
Who should invest - You have to be selective while investing in these
funds, as you need to select particular sector, which will perform better in
the future. Investing in these funds carries some amount of risk but also give
you more returns.
How they performed - Sector funds have given average returns of 73% for
1 year period. Auto, Steel, Cement have done well the year '03 & the trend
will continue in year '04 but IT, FMCG sectors are experiencing downward
trend due to $ depreciation, price war in FMCG respectively. Though short-
term trend for pharma sector looks down in long term we look forward to lot
more action in the sector, as there exists a long-term, strong fundamental
story backed by immense growth potential for the Indian pharmaceutical
companies.
45

Absolute
Simple
Annualized
Scheme Name NAV 3 Months1 Year 3 Years
Since
Inception
Alliance Basic
Industries
27.82 1.20 135.99 83.23 42.48
UTI Growth Sector -
Petro
18.37 3.77 120.55 76.94 82.88
SBI Magnum Sector –
Pharma
15.82 (9.24) 111.78 32.15 15.58
Average - (7.98) 72.60 23.57 16.36
S&P Nifty 1704.45 (5.76) 68.35 15.55 -
BSE Sensex 5414.44 (4.03) 72.21 16.27 -
Category rating - **
Balanced Funds -
Balanced Act - Balanced funds gives you the stability with the potential to
grow with the equity help of equity investments. These funds invest in both
Equity & Debt markets.
Who should invest - The balanced funds are for those, who want to enjoy
the appreciation effects of equity market but at the same time like to play
safe with less volatile debt market. In this volatile market it is good to invest
in balanced funds as they carries less risk compare to equity funds.
How they performed - In the last 12 months balanced funds have given
descent returns with the up trend in the equity markets. Balanced funds
average returns are 60% for 1-year period.
Returns as on March 25, 2004
Scheme Name NAV 3 Months 1 Year 3 Years Since Incep.
46

HDFC Prudence 44.09 (1.63) 81.68 51.24 46.59
SBI Magnum Balanced 12.88 2.07 80.44 21.88 23.21
Franklin India Vista 8.39 (1.06) 77.54 16.83 (3.75)
Average (2.05) 60.54 27.54 18.15
S&P Nifty 1704.45 (5.76) 68.35 15.55 -
Crisil Balanced Index 1409.12 (1.07) 45.22 - -
Category rating - ***
Equity Linked Tax Savings Schemes (ELSS) -
Enjoy tax benefits - These schemes are becoming more popular as
traditional ways of tax saving becoming less interesting with declining
interest rates.
Who should invest - Equity Linked Savings Schemes (ELSS) is an ideal
way to save on tax as well as staying invested in equity mutual funds How
they performed - In last 1 year these funds have given above average
returns to keep you more & more interested in saving tax as well as counting
returns on your investment. The average returns for this category are 98%.
Birla Equity 26.90 (6.11) 137.32 53.56 46.87
Magnum Tax Gain 93 23.03 (3.43) 136.95 26.61 16.66
Tata Tax Saving 23.35 (2.73) 133.08 50.26 60.09
Average - (5.48) 98.30 37.17 51.73
S&P Nifty 1704.45 (5.76) 68.35 15.55 -
BSE Sensex 5414.44 (4.03) 72.21 16.27 -
Category rating - ****
Debt Funds -
47

Banking on Debt Markets - Debt funds invest in the government securities,
Corporate Bonds, Treasury Bills, etc.
Who should invest - The conservative investors like to go for capital safety.
How they performed - From Last 12 months in the declining interest rate
scenario debt funds remained flat. In 3 years debt funds have given average
returns of 12%. As equity market is looking volatile its better to invest part
of your money in these funds.
Scheme Name NAV 6 Months
1
Year
3
Years
Since
Inception
Deutsche Premier Bond –
Institutional
11.17 3.31 13.65 - 9.93
Sundaram Select Debt - D A
P
12.11 2.83 12.17 - 13.43
HSBC Institutional Income
– Invest
11.39 3.04 11.88 - 10.61
Average - 2.33 9.07 13.98 10.79
S&P Nifty 1704.45 25.59 68.35 15.55 -
NSE G Sec Composite
Index
247.17 2.64 12.61 16.80 -
48

Gilt Funds -
Government Sec. - Gilt funds invest in government securities.
Who should invest - The investors who like to avail the benefits of capital
safety with government security.
How they performed - From Last 6-12 months Gilt funds have given
average returns. As equity market is looking volatile its better to invest part
of your money in these funds as they provide adequate security to your
investments. The average returns for 1-year period are 10.41% compare to
the NSE G Sec Composite Index has given 12.60% returns.
Absolute
Simple
Annualized
Scheme Name NAV
6
Months
1 Year 3 Years
Since
Inception
FT India Gilt Investment
Plan – Growth
14.88 5.63 19.64 - 21.22
Chola Gilt Investment –
Growth
17.96 6.58 16.98 19.83 19.93
Tata Gilt Securities Fund –
Growth
22.25 3.33 15.46 25.46 26.36
Average - 2.56 10.41 16.19 9.58
Crisil Composite Bond
Fund Index
1203.29 2.23 9.03 - -
NSE G Sec Composite
Index
247.17 2.64 12.61 16.80 -
MIP -
Monthly Income - These schemes gives you monthly income.
49

Who should invest - Those who seek monthly income. In the current
scenario where debt market is very volatile it's better to invest in hybrid
funds like MIP with suitable time horizon for capital appreciation.
How they performed - In Last 6-12 months MIP's have given descent
returns compare to debt funds. The average returns of MIP's stands at
15.68%, which looks good, compared to income funds.
Alliance MIP 19.98 8.48 20.64 17.03 21.22
FT India MIP - Plan A 15.77 7.90 19.20 16.13 16.54
SBI Magnum MIP 13.65 7.40 15.22 - 12.12
Average - 6.19 15.68 14.76 7.31
S&P Nifty 1704.45 25.59 68.35 15.55 -
Crisil MIP Blended
Index
1255.07 6.15 17.34 - -
Category rating - ****
STP -
Short-term Plans - These schemes provides short-term saving option with
more liquidity than FD's to park your investments.
with more liquidity than Bank fixed deposit.
How they performed - While savings accounts would give you 3.5% per
annum, bank FD's annually return up to 6.5%, Liquid funds would typically
give you more than 5% and short-term plans 6 to 6.5% per annum. In Last 6-
12 months STP's have given descent returns.
50

Scheme Name NAV 6 Months
1
Year
3
Years
Since
Inception
First India Short Term 11.15 2.77 7.90 - 7.50
Reliance Short Term 10.89 2.81 7.30 - 7.02
Deutsche Short Maturity 10.76 2.64 7.03 - 6.47
Average - 2.41 6.33 9.27 6.42
CRISIL Composite Bond
Index
1203.29 2.23 9.03 - -
CRISIL short-term Bond
Index
1138.91 2.19 5.68 - -
(***** Out performer **** Good Performer *** Average Performer ** Ok
Performer * Bad Performer)
51

AMFI MONTHLY
Mutual Fund Data Of January 2010
(Rs. in Crores)
Table 1:-
Category Sales-All Schemes Redemption
Assets
Under
Manage
ment
From new
schemes
From
Existi
ng
schem
es
Total
For
the
Month
Cumulat
ive
Apr'03
to Jan'04
Total
For
the
Month
Cumulat
ive
Apr'03
to
Jan'04
As on 31st
Jan 2004
No. Amou
nt
Amou
nt
A) Bank
Sponsored (5)
1 41 6364 6405 35008 5053 31934 27313
B) Institutions
(3)
- - 2804 2804 17802 2061 14620 7499
C) Private Sector
1 Indian (8) 2 616 10853 11469 115775 10597 104818 21168
2 Foreign (1) - - 2376 2376 16548 2072 14703 3656
3 Joint
Ventures :
Predominantly
Indian(5)
- - 12513 12513 114296 10741 100158 34464
4 Joint
Ventures :
Predominantly
Foreign (9)
- - 18498 18498 177006 17648 157994 51272
Total (1+2+3+4)
2 616 44240 44856 423625 41058 377673 110560
Grand Total 3 657 53408 54065 476435 48172 424227 145372
52

(A+B+C)
*3537
0
*248979
*3417
7
*232367 *121805
Released on 25th February 20
Table 2:- Open End
Close End Assured Returns Total
2.1
No. Of
Schemes
Amount
No. Of
Schemes
Amount
No. Of
Schemes Amount
No. Of
Schemes
Amoun
t
Income 2 296 - - - - 2 296
Growth 1 361 - - - - 1 361
Balanced - - - - - - - -
Liquid/Mone
y Market
- - - - - - - -
Gilt - - - - - - - -
ELSS - - - - - - - -
Total 3 657 - - - - 3 657
EXISTING SCHEMES (Rs.in Crores)
2.2
Open End
No Of
Schemes
Amount
No Of
Schemes
Amount
No Of
Schemes Amount
No Of
Schemes
Amount
Income 115 11720 11 ^54 3 - 129 11774
Growth 120 3894 3 - - - 123 3894
Balanced 36 240 2 - - - 38 240
Liquid /
Money
Market
33 36827 - - - - 33 36827
Gilt 31 664 - - - - 31 664
ELSS 19 9 24 - - - 43 9
Total 354 53354 40 54 3 - 397 53408
^Amount mobilized by new plans launched under existing schemes
53

TOTAL OF ALL SCHEMES (Rs. in Crores)
2.3
Open End
No. Of
Schemes
Amount
No. Of
Schemes
Amount
No. Of
Schemes Amount
No. Of
Schemes
Amount
Income 117 12016 11 54 3 - 131 12070
Growth 121 4255 3 - - - 124 4255
Balanced 36 240 2 - - - 38 240
Liquid/Money
Market
33 36827 - - - - 33 36827
Gilt 31 664 - - - - 31 664
ELSS 19 9 24 - - - 43 9
Total 357 54011 40 54 3 - 400 54065
Note: The change in number of schemes is because of the maturity and reclassification of
existing schemes by some of the funds.
*New Schemes:
Open End Income: SBI Magnum NRI Investment Fund.
Open End Growth: Kotak Mahindra Global India Scheme & Sundaram Monthly Income Plan.
REDEMPTION / REPURCHASE DURING THE MONTH JANUARY, 2004
Table 3:- Open End Close End Assured return Total
Income 15183 132 - 15315
Growth 2553 3 - 2556
Balanced 222 1 - 223
Liquid / Money
Market
29133 - - 29133
Gilt 899 - - 899
ELSS 18 28 - 46
Total 48008 164 - 48172
54

ASSETS UNDER MANAGEMENT AS ON 31st
JANUARY, 2004
Table 4:- Open End Close End Assured return Total
Income 68973 242 105 69320
Growth 21651 1492 - 23143
Balanced 3605 799 - 4404
Liquid/Money
Market
40112 - - 40112
Gilt 6617 - - 6617
ELSS 541 1235 - 1776
Total 141499 3768 105 145373
DATA ON FUND OF FUNDS
Table 5:-
No of
Schemes
Sales Redemptions
AUM as on 31st
Jan 2004
Fund of Funds 3 197 119 721
*Note: Fund of Funds is a scheme wherein the assets are invested in the existing schemes
of mutual funds and hence, the figures indicated herein are included in the tables 1 to 4 and
6. Data on fund of funds is given for information only.
Table6 :-
ASSETS UNDER MANAGEMENT AS ON 31st
January, 2004
55

Sr. No. Name of the Asset Management Company
Asset Under Management
(Rs. in Crores)
A BANK SPONSORED
BOB Asset Management Co. Ltd. 346
Canbank Investment Management Services Ltd. 1814
PNB Asset Management Co. Ltd. 138
SBI Funds Management Ltd. 5354
UTI Asset Management Company Pvt. Ltd. 19661
Total A 27313
B INSTITUTIONS
GIC Asset Management Co. Ltd. 265
IL & FS Asset Management Co. Ltd. 2580
Jeevan Bima Sahayog Asset Management Co.
Ltd.
4654
Total B 7499
C1 PRIVATE SECTOR
(i) INDIAN
Benchmark Asset Management Co. Pvt. Ltd. 63
Cholamandalam Asset Management Co. Ltd. 1169
Escorts Asset Management Ltd. 123
First India Asset Management Pvt. Ltd. 407
J.M.Capital Management Pvt. Ltd. 4387
Kotak Mahindra Asset Management Co. Ltd. 5173
Reliance Capital Asset Management Ltd. 7028
Sundaram Asset Management Company Ltd. 2818
Total C(i) 21168
C2 (ii) FOREIGN
Principal Asset Management Co. Pvt. Ltd. 3656
Total C(ii) 3656
C3
(iii) JOINT VENTURES-
PREDOMINANTLY INDIAN
56

Birla Sun Life Asset Management Co. Ltd. 9641
Credit Capital Asset Management Co. Ltd. 155
DSP Merrill Lynch Fund Managers Ltd. 5475
HDFC Asset Management Co. Ltd. 15320
Tata TD Asset Management Private Ltd. 3873
Total C(iii) 34464
C4
JOINT VENTURES - PREDOMINANTLY
FOREIGN
Alliance Capital Asset Management (India) Pvt.
Ltd.
2306
Deutsche Asset Management (India) Pvt. Ltd. 2476
HSBC Asset Management (India) Private Ltd. 3945
ING Investment Management (India) Pvt. Ltd. 1283
Morgan Stanley Investment Management Pvt.
Ltd.
1352
Prudential ICICI Asset Management Co. Ltd. 15673
Standard Chartered Asset Mgmt Co. Pvt. Ltd. 8021
Sun F & C Asset Management (India) Pvt. Ltd. 222
Templeton Asset Management (India) Pvt. Ltd. 15994
Total C4(iv) 51272
Total C (i + ii +iii+iv) 110560
Total (A + B + C) 145372
57

RESEARCH METHODOLOGY
Research Objective
 To study about various mutual fund schemes & their utility to investors
 To study the reasons behind the success of Mutual funds in India.
 To study about the structure & regulatory body of mutual fund in India.
Research Design
Descriptive research design is used in order to find out which product is
giving maximum investment advantage to investors.
Data Collection design
For the purpose of data collection secondary sources like books, Journal,
Magazines, newspapers & data from company record has been used.
Analysis
Mutual fund products are market driven and for a market driven product its
designing, pricing, distribution & promotion assume critical importance. The
most important determinant of the success of any financial product is
consumer satisfaction mutual fund needs to optimize consume satisfaction
along with cost minimization in the deregulated competitive market.
58

CONCLUSION
In the past decade Indian Mutual fund industry had seen dramatic
improvement both quality wise as well as quantity-wise. The private sector
entry to the fund family raised the asset under management to Rs. 420
billion in March 1993 and till April 2004 it reached the height of 1540
billion. It is estimated that by 2010 March end the total assets of mutual
funds will be doubled.
Following are the main reasons behind the growth of mutual funds in India:
No. of foreign Asset Management Companies are in queue to enter the
Indian Market like fidelity investment US based with over $1 trillion assets
under management worldwide.
Our saving rate is 23% highest in the world. Only channelizing the savings
in mutual funds sector is required.
As compared to US there are less mutual funds companies in India,
therefore, chances of expansion are more.
59

SUGGESTION
There are a few things that I would advise any investor and they are:
 You should know what you are buying. For example you cannot buy an
equity fund and especially a tech fund and expect that there would be
very little volatility.
 You should be clear about the time frame and purpose that you are
buying for.
 Most importantly, there is a tendency among investors to buy high and
sell low. You cannot be driven by sentiments Importance of systematic
investing. Always invest in smaller lots over a period of time. An initial
investor has lost about 45% since inception. But someone who has
invested over a period of time would have averaged well
60

BIBLIOGRAPHY
Books
Kothari C.R-1995, “Research Methodology”, 2nd ed. wishwa prakashan
Kumar Ranjit-1995, “Research Methodology”, 2nd
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Newspaper
Times of India
Economic Times
Websites
www.nseindia.com
www.reliancemutual.com
www.indiainfoline.com
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