Mutual fund

MUTUAL FUNDS: ITS OVERVIEW AND PREFRENCES AMONG INVESTORS AT
KADAM CAPITAL
© MGM IOM/MBA Inplant Training -III SEM 2017 Page 1
PART-I Introduction
1.1 Executive Summary.
In the contemporary world, many fast mushrooming financial institutions are, offering
new product and services to the investors.
They entice them to invest their funds by providing incentives and facilities in terms of
flexible investment options and withdrawal plan. Mutual fund comes into this category.
The mutual fund industry has grown up in leaps and bounds, particularly during the last
two decades of the 20th
century.
Moreover, the entry of private funds (since 1993) has injected a sense of competition
and the industry has been witnessing a structural transformation from a public sector
monopoly to monopolistic industry.

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1.2 INTRODUCTION TO THE CONCEPT
1.2.1 HISTORY OF MUTUAL FUNDS IN INDIA:
In India the setting up of Unit Trust of India (UTI) in 1963 marked the advent of mutual
fund industry. Unit Trust of India was set up by an Act of Parliament. The purpose of
establishing of Unit Trust of India was to give a fillip to the equity market. In the wake
of Indo-China war of 1962, there was shortage of savings going into industrial
investment for economic development. There was a need to mobilize adequate amount
of risk capital for industrial enterprise. The household savings were sought to be
canalized into primary and secondary market through units. However, in the initial
years, the emphasis in UTI was on income product. Master Share launched in 1986
ushered in the equity-oriented schemes in India. Unit Trust of India launched a variety
of innovative products suited to meet diverse needs of investors, virtually the complete
life cycle of investors.
EVOLUTION OF MUTUAL FUND IN INDIA:
The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank the. The history of
mutual funds in India can be broadly divided into four distinct phases.
FIRST PHASE: 1964-1987
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)
1987 marked the entry of non- UTI, public sector mutual funds set up by public
sector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund
established in June 1987 followed by 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 established its mutual fund in June
1989 while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47,
004 crores.

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THIRD PHASE: 1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS)
With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice of fund families. Also, 1993
was the year in which the first Mutual Fund Regulations came into being, under which
all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari
Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund
registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by
a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.
The 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.
FOURTH PHASE: SINCE 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI
was bifurcated into two separate entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs.29, 835 crores as at the end of
January 2003, representing broadly, the assets of US 64 scheme, assured return and
certain other schemes. The Specified Undertaking of Unit Trust of India, functioning
under an administrator and under the rules framed by Government of India and does not
come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund 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 assets under management and with the setting up of a UTI Mutual Fund, conforming
to the SEBI Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth. As at the end of September, 2004, there were 29 funds, which
manage assets of Rs.153108 cores under 421 schemes.
MUTUAL FUND –A NEW WAY OF INVESTMENT:
Mutual fund is an investment company or trust that pools the resources from Thousands
of its shareholders or unit holders, who share common investment, Goal, and then
diversifies its investment into different types of securities in order to realize potential
returns with reasonable safety.
In the era of globalization, first rapid price fluctuations are occurring for assets
like equity shares,bonds,real estate, derivatives,etc. second, an individual also finds it
difficult to keep track of ownership of his assets, investment, brokerage dues and bank
trasactions,etc.in this context, mutual fund are the solution to all these situation.

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Mutual fund helps the small and medium size investors can participate in mutual
Funds by buying the units. The income earned through these investment and Capital
appreciation realized by the schemes is shared by its unit holders in pro-Portion to the
number of units owned by them.
Mutual fund plays a vital role in mobilization of resources and their effective
allocation. These funds play a significant role in financial intermediation, development
of capital market and growth of the financial sector as a whole .The active involvement
of mutual fund companies, and tries to suggested whether the funds and schemes
outperform the market with the same level of risk or not.
Different investment avenues are available to investors, mutual funds also offer Good
investment opportunities to the investors.
 Mutual funds are investment products that operate on the principle of Strength in
numbers.
 Mutual fund is a trust, which collects money from a large group of investor Pool it
together & invest it in various securities e.g. shares, debentures and Other
securities in line with the financial objectives.
 Diversification reduces the risk because not all stocks may move in same
Direction in the same proportion at the same time.
 Units are issued to investors to as per quantum of money invested by Them.
Investors of mutual fund are known as unit holders.
 Different schemes of different objectives are launched time to time by Mutual
fund.
 Investors have to share profits/losses in proportion to their investment.
 Mutual fund is required to be registered with SEBI, which regulates
Securities markets, before it can collect funds from public.
WHAT IS MUTUAL FUND?
Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost.

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NET ASSET VALUE (NAV)
Net Asset Value of the fund is the cumulative market value of the assets fund net
of its liabilities. In other words, if the fund is dissolved or liquidated, by selling off all
the assets in the fund, this is the amount that the shareholders would collectively own.
This gives rise to the concept of net asset value per unit, which is the value, represented
by the ownership of one unit in the fund. It is calculated simply by dividing the net asset
value of the fund by the number of units. However, most people refer loosely to the
NAV per unit as NAV, ignoring the "per unit". We also abide by the same convention
NAV= Net assets of the scheme / Number of units outstanding

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THE FLOW CHART BELOW DESCRIBES BROADLY THE WORKING OF A
MUTUAL FUND :
ORGANISATION OF A MUTUAL FUND:
There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund:
The
mutual
fund
industry
in India
began
with the
setting
up of the
Unit Trust in India (UTI) in 1964 by the Government of India. During the last 36 years,
UTI has grown to be a dominant player in the industry with assets of over Rs.76,547

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Cores as of March 31, 2000. The UTI is governed by a special legislation, the Unit Trust
of India Act, 1963. In 1987 public sector banks and insurance companies were permitted
to set up mutual funds and accordingly since 1987, 6 public sector banks have set up
mutual funds. Also the two Insurance companies LIC and GIC established mutual
funds.
Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation)
1993, which for the first time established a comprehensive regulatory framework for the
mutual fund industry. Since then several mutual funds have been set up by the private
and joint sectors.
TYPES OF MUTUAL FUNDS
The Mutual Funds are of four types, namely:
1. Aggressive Funds
2. Growth Funds
3. Balanced Funds
4. Conservative Funds
And, they depend on the proportion invested in the following:
1. Stocks
2. Bonds
3. Short –Terms
AGGRESSIVE FUNDS:
This strategy might be appropriate for investors who seek High growth and who can
tolerate wide fluctuations in market values, over the short terms.
85%,
15%
Stocks
Bonds

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1.2.2 GROWTH FUNDS:
This strategy might be appropriate for investors who have a preference for growth and
who can withstand significant fluctuation in market values.
BALANCED FUNDS:
Capital appreciation and income. This strategy might be appropriate for investors who
want the potential for capital appreciation and some growth, and who can withstand
moderate fluctuations in market values.
70%
25%
Short-Term, 5%
Stocks
Bonds
Short-Term
50% 40%
10%
Stocks
Bonds
Short-Term

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CONSERVATIVE FUNDS:
Income and Capital appreciation. This strategy might be appropriate for investors who
want to preserve their capital and minimize fluctuations in market value.
OTHER TYPES OF MUTUAL FUND
1.OPEN ENDED & CLOSED ENDED
An open-end fund is one that has units available for sale and repurchases all times. An
investor can buy or redeem units from the fund itself at a price based on the Net Asset
Value (NAV). NAV per unit is obtained by dividing the amount of the market value of
the fund’s assets (plus accrued income minus the fund’s liabilities) by the number of
units outstanding.
The number of units outstanding goes up or down every time the fund issues new units
or repurchases existing units. In other words, the ‘unit capital’ of an open-end mutual
fund is not fixed but variable.
Whereas, in close–end fund it makes a one time of sale of fixed number of units Later
on, unlike open-end funds do not allow investors to buy or redeem units directly from
funds. In this, the fund units can be traded at a discount or premium to NAV based on
investor’s perception about the funds future performance and other market factor
affecting the demand for or supply of fun’s units. The number of units outstanding of a
close-end fund does not vary on account of trading the fund’s units at stock
20%
50%
30%
Stocks
Bonds
Short-Term

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2. LOAD AND NOLOAD FUNDS:
Marketing of a new Mutual Fund scheme involves initial expenses. The
expenses may be recovered from the investors in different ways at different times. Three
usual ways in which a fund’s sales expenses may recover from the investors are:
At the time of investor’s entry into the fund/scheme by deducting a specific amount
from his initial contribution, or By charging the fund/scheme with a fixed amount each
year, during the stated number of years,
At the time of investors exit from the funds/scheme, by deducting a specified
amount from the redemption precedes payable to the investor. These charges made by
the fund managers to the investors to cover distribution /sales/marketing expenses are
often called ?Loads”. The load amount charged to the scheme over a period of time is
called as “deferred load”. The load that an investor pays at the time of his exit is called
“back-end” or “Exit Load”.
Funds that charge front-end, back-end or deferred loads are called “LOAD FUNDS”
Funds that make no such charges or loads for sales expenses are called “NO-LOAD
FUNDS”.
3. TAX-EXEMPT AND NON-TAX-EXEMPT FUNDS:
When a fund invests in tax-exempt securities, it is called a tax-exempt fund. In
India, after the 1999 union government budget, all of the dividend income received from
any of the mutual funds is tax free in the hands of investor. However, funds other than
Equity funds have to pay a distribution tax, before distributing income to investors. In
other words, equity mutual fund scheme are tax-exempt investment avenues, while other
funds are taxable for distributable income.
When a fund invests in non-tax-exempt securities, it is called a non-tax-exempt fund.
 MERITS OF MUTUAL FUND:-
 The Merits of investing in a Mutual Fund are:
 Diversification:
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 is 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 top flight 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.

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 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:
Mutual Fund schemes are said to be Transparent because they show the clear allocation
of Funds to Investors.
 Flexibility:
Mutual fund are flexible because they change time to time and also if an Investor wants
his money back before the maturity of the Fund He/she can easily redeem it.
DEMERITS OF MUTUAL FUNDS:-
Mutual funds have their demerits and may not be for everyone:
 No Guarantees:
No investment is risk free. If the entire stock market declines in value, the value of
mutual fund shares will go down as well, no matter how balanced the portfolio.
Investors encounter fewer risks when they invest in mutual funds than when they buy
and sell stocks on their own. However, anyone who invests through a mutual fund runs
the risk of losing money.
 Fees and commissions:
All funds charge administrative fees to cover their day-to-day expenses. Some funds
also charge sales commissions or "loads" to compensate brokers, financial consultants,
or financial planners. Even if you don't use a broker or other financial adviser, you will
pay a sales commission if you buy shares in a Load Fund.
 Taxes:
During a typical year, most actively managed mutual funds sell anywhere from 20 to
70 percent of the securities in their portfolios. If your fund makes a profit on its sales,
you will pay taxes on the income you receive, even if you reinvest the money you made.
 Management risk:
When you invest in a mutual fund, you depend on the fund's manager to make the
right decisions regarding the fund's portfolio. If the manager does not perform as well as
you had hoped, you might not make as much money on your investment as you
expected. Of course, if you invest in Index Funds, you forego management risk, because
these funds do not employ managers.

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1.3 OBJECTIVES OF THE PROJECT STUDY
1. To find which feature of Mutual Fund investors find most attractive.
2. To find mode of investment in Mutual Fund by the investors.
3. To find Preference of investors about different investment options in Mutual Fund.
4. To find what investment plan do investors prefer in Mutual Fund.

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PART-II
2.1 INDUSTRY PROFILE
2.1.1 HISTORY OF STOCK BROKING IN INDIA
• During the 11th century-French began regulating and trading agricultural debts on behalf
of the banking community, creating the first brokerage system.
• In 1602-Dutch East India Company became the first publicly traded company.
• In 1801- London Stock Exchange.
The Indian Securities market has become one of the most dynamic and efficient securities
market in Asia today.
During the latter half of the 19th century shares of companies used to be traded in India
occasionally.
A small group of stock brokers in Bombay joined together in 1875 to form an association
called Native Share and Stockbrokers Association. The association drew up codes of conduct
for brokerage business and mobilized private funds for investment in the corporate sector. It was
with this association which later becomes the Bombay Stock Exchange which is oldest stock
exchange in Asia. This exchange is now known as the stock Exchange, Mumbai or BSE.
In 1894 the brokers of Ahmadabad formed Ahmadabad Share and stock brokers
Association which later become Ahmadabad Stock exchange, the Second stock Exchange of
country. During the 1900s Kolkata become another major center of share trading on account of
the starting of several indigenous industrial enterprises. A result the third stock exchange of the
country was started by Kolkata stock brokers at 1908.
Yet Another Stock Exchange was started in 1920 at Chennai. However, by 1923, it
ceased to exist. Later, in 1937 the Madras stock exchange was revived as many new cotton
textile mills and plantation companies were floated in South India.
Three more stock Exchange were established before independence
At Indore in Madhya Pradesh in 1930, at Hyderabad in 1943 and at Delhi in 1947 thus at
the time of independence Seven stock exchanges were functioning in the major cities of the
country. The number of stock exchange virtually remained unchanged for nearly three decades
from 1947 to 1977, except for the establishment of the Bangalore Stock Exchange in 1957.
During the 1980s however many stock exchange were established. Some of them were:
1. Cochin Stock Exchange (1978)
2. Uttar Pradesh Stock Exchange (at Kanpur 1982)
3. Pune Stock Exchange (1982 )
4. Ludhiana Stock Exchange (1983)
5. Gauhati Stock Exchange (1984)

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6. Kanara Stock Exchange (At Mangalore 1985)
7. Magadh Stock Exchange (At Patna 1986 )
8. Jaipur Stock Exchange ( 1989)
9. Bhubaneswar Stock Exchange (1989 )
10. Saurashtra Kutch Stock Exchange ( at Rajkot 1989 )
11. Vadodara Stock Exchange (at Baroda1990 )
Thus, from seven stock exchanges in 1947, the number of stock exchanges in the country
increased to eighteen by 1990. Along with the increase in the number of stock exchanges, the
number of listed companies and the capital of the listed companies have also grown, especially
after 1985. Two more stock exchanges were set up at Coimbatore and Meerut during the 1990s
taking the total to twenty.

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2.1.2 GROWTH OF STOCK BROKING IN INDIA
The stock market woke up from its long hibernation in 2014, with the Sensex rallying 30
percent during the year. If not for the market correction in the last two months, Indian bourses
would have been the best performers in the world. The recovery was solely due to the optimism
generated by Prime Minister Narendra Modi, with FII investment in Indian equity crossing $16
billion.
But Modi confronted opposition in the Rajya Sabha, where the BJP-led coalition is in
minority. Lack of support from opposition parties stopped bills from being passed. However, the
government introduced ordinances (decrees) in respect of coal and insurance – the first to get
industry going and the second to create an environment for reform and attract foreign
investment. The government also made amendments to the Land Acquisition Act through an
ordinance, which is yet to receive the president’s approval.
The market now believes that the prime minister means business. Finance Minister Arun
Jaitley has also indicated that the next budget to be presented in February will adopt a tax system
which is globally compatible, adds clarity to the tax liability and is in tune with internationally
comparable tax levels. The budget has raised expectations and will be an important trigger for
the market.
But there can be disruptions. The rate of interest, which is a prime consideration with the
market, is outside the ambit of the government. It is the exclusive domain of the RBI and, with
inflation targeting initiated by Governor Raghuram Rajan, can take some time to be moderated.
There will also be external factors to contend with. First, world economic growth (except
the U.S.) is likely to drop, making exports a little difficult. Second, there is no certainty about the
international prices of crude oil. If prices rise again, energy importing countries like India will be
hit both in terms of inflation and current account deficit. Third, the U.S. Federal Reserve is
expected to increase interest rate which may reduce FII inflows into emerging market economies
and check rising equity prices. Fourth, there is always a possibility that monsoon will disappoint.
Even so, if the budget measures up to the indications given by the finance minister, it will
be a strong driver of the market. To sustain the bull market, the government will have to keep the
wheels of the reform process running, which is likely under Modi.
Most policy parameters appear to be very positive and corporate growth and profitability
should improve. With higher earnings per share and faster corporate growth, PEG (price/earnings
to growth ratio) will be lower, creating enough space for share prices to rise further. The Sensex
could possibly rise 20-25 percent in 2015.
The top 10 companies holding more than two thirds (66%) of the total terminals.
• Mumbai and Delhi account for the highest number of terminals with 26% and 15% share
respectively.
• Around 11% of companies collectively have 19 subsidiaries in the overseas market.
• Around 74% agree about the need for a strong regulatory body for the broking industry.
• 24% of the companies have plans to raise capital over the next one year largely through
private placement and IPOs.

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• Industry Gained momentum in terms of scope and scale.
• Competition in the broking space has intensified (increased very high) with entry of new
firms.
• Market experiencing rapid growth and financial integration gaining speed, the role of
intermediation will strengthen further.
Western region has highest number of companies
• More than 50% companies, based in western India (Gujarat, Maharashtra and Dadra &
Nagar Haveli).
• City-wise, Mumbai leads the pack with 41% companies, followed by Delhi, Kolkata, Rajkot,
Bengaluru and Surat.

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2.1.3 NATIONAL AND INTERNATIONAL SCENARIO OF BROKING INDUSRY:
Introduction Capital market is the centre or arrangement that provides facilities for
buying and selling of long-term financial claims. It is the market where transactions are made in
long term securities such as stocks and bonds. The participants of this market includes various
financial institutions, mutual funds, agents, brokers, dealers and other borrowers and lenders of
long term debt and equity capital.
Capital market is not a compact unit but consists of two major parts:
 Primary Market
 Secondary market.
The primary market or otherwise called as new issue market is one in which long term
capital is raised by corporate directly from the public.
The secondary market or popularly called as the stock market refers to the market where
these long-term financial instruments which are already issued in the primary market are traded.
The initial emergence of stock markets in the world can be traced back over hundreds of
years to when industrialization and innovation took hold in Europe. The rapid economic growth
in the past one hundred years gave rise to the explosive development of stock markets.
At the same time the enhancement of stock markets has played an important role in
promoting the growth of the world 36 economy. The modern market economy depends to a
greater extent on a soundly operated stock market. Stock market provides liquidity to the
financial instruments which are issued in the primary market.
Players in the capital market are broadly divided in to three categories:
Companies issuing securities and includes new companies, existing
• Unlisted companies and the existing listed companies. Intermediaries who assist in the
process of transferring savings into.
• investment and they include merchant bankers, underwriters, registrars to issue and share
transfer agents, brokers, depositories, collecting agents, advertising agencies, agents, mutual
funds etc. Investors consisting of institutional investors and the general public.
• Capital market consists of equity market as well as debt market.

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2.1.4 SOME PROMINENT COMPANIES IN THE INDUSTRY,THEIR
PERFORMANCE/CONTRIBUTION
These are the top brokerage companies in India:-
Indiabulls Securities
Indiabulls Securities is the leading brokerage firm in India, which started functioning in the year
2000. The company's businesses include real estates, home loans, power, securities and IT.
Indiabulls securities is headquartered in Gurgaon, Haryana and employes over 4,000 people.
Across the nation, Indiabulls securities operates through its 450 branches. The company provides
its services both through off-line and on-line channels. Indiabulls Securities boasts of running
one of the most efficient and fastest trading base in India. Rs. 1200 is the trade account opening
fees at Indiabulls Securities.
Sharekhan Limited
Sharekhan Limited was also established in 2000 and is one of the top brokerage firms in India
today. With its head office in Mumbai, Maharashtra, Sharekhan is present in around 450 cities in
India and it is serving over 9,50,000 customers through its 429 outlets across the country.
Sharekhan has two branches in Oman and UAE as well. The services provided by Sharekhan
Ltd. include equities trade execution, portfolio management, distribution of mutual funds and
commodities, structured products and insurance. One can open their trade account with
Sharekhan Ltd. with Rs. 750 (Classic account) and Rs. 1000 (Trade Tiger).
Angel Broking Limited
Angel Broking started its operations in 1987 and has its headquarters in Mumbai, the commercial
capital of India. Angel Broking is involved in the businesses such as equity trading, portfolio

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management services, commodities, mutual funds, IPO, Life Insurance, Investment Advisory
and Depository Services. Angel Broking has more than 5,500 terminals in around 400 branches
across India.
Reliance Money
Reliance Money is retail brokerage company and a subsidiary of the prestigious Reliance
Industries. It was founded in 1987 and is based in Mumbai, Maharashtra. On a nationwide level,
Reliance Money runs its business through 150 brnaches and around 2,000 employees. Reliance
Money provides services related to mutual funds, fixed income, gold, portfolio management
services and structured products. Rs. 750 are charged by Reliance Money to open a Demat or a
trade account.
Kotak Securities Limited
With its headquarters in Mumbai, Kotak Securities Limited started its operations in 1994. It is
subsidiary of Kotak Mahindra Bank. Over 5.58 lakh customers have an account with Kotak
Securities. It has 450 branches in around 352 cities in India. The service base of Kotak Securities
consists of stock broking, portfolio management services and other customer oriented financial
services.
India Infoline Services
Like most of the other brokerage firms, India Infoline Services has its headquarters in Mumbai.
It was started in 1995 and serves more than 2 million customers. The company has around 650
locations in India and abroad. It is present in Sri Lanka, Mauritius, Singapore, Hong Kong,
Dubai, Switzerland, UK and USA. Rs. 750 is the amount required to open a demat account with
India Infoline Services.

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HDFC Securities
HDFC Securities is based in Mumbai and over 1 million customers have an account with it. The
business services that HDFC Securities provides are mutual funds, equity, IPO, national pension
system, NRI offerings, insurance, fixed deposits, bonds and loans. HDFC Securities has over 100
branches in India and has got over 1,500 employees working for it.
ICICI Direct
ICICI Direct is a subsidiary of the leading private bank the ICICI Bank and is headquartered in
Mumbai, Maharashtra. It is involved in businesses such as equity, mutual funds, ETF, life
insurance, fixed deposit, bonds and loans. ICICI Direct has around 300 branches across the
country and over 2,000 employees. A trade account at the ICICI Direct can be opened with a fees
of Rs. 750.
Bajaj Capital
A relatively new player in the brokerage market, Bajaj Capital started in 2008 and is based in
Mumbai. It operated via 150 branches on pan India basis and a strong base of around 2,500
employees. It serves its customers through services related to mutual funds, fixed deposits,
bonds, insurance, real estate and stocks.

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Aditya Birla Money
Aditya Birla Money is the brokerage arm of the Indian conglomerate the Aditya Birla Group. It
is headquartered in Mumbai, Maharashtra and has 150 branches across the nation. The business
solutions provided by Aditya Birla Money concern broking and distribution, wealth
management, corporate and treasury services, real estate advisory and online money
management. A total of 2,500 employees contribute to the operations of Aditya Birla Money.

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PART II
2 COMPANY PROFILE
CORPORATE OFFICE: Edelweiss House, Off. C.S.T. Road, Kalina, Mumbai, 400 098.
Tel:+91 22 2286 4400
COMPANY NAME: KADAM GROUP
ADDRESS: 10, first floor, Jyotirmay complex, near Atithi hotel,
Jalna Road, Aurangabad-431005.
CONTACT NO: 0240-2484181, 9765755993
9404015495.
Email: mahesk@kadamgroup.co.in
Kadammahesh55@yahoo.co.in
Website: www.kadamgroup.co.in
Kadam Capital is listed in Just Dail
2.1 BACKGROUND OF THE COMPANY:
KADAM GROUP is formed by the MAHESH KADAM in 2005 at Aurangabad
(Maharashtra).Mahesh Kadam has completed M.com, MBA (finance), CFP, NCFM qualification
Capital market, derivatives market, commodity market, AMFI module, investment analysis and
NSDL- depository module. BCFM qualifications capital market and derivatives market and
IRDA.
KADAM GROUP is the collaboration of KADAM INVESTMENTS, KADAM CAPITAL and
KADAM FINANCIAL SERVICES.
Kadam investment is the master franchise of EDELWEISS broking ltd and BMA wealth creator
ltd.

KADAM CAPITAL
Kadam investment is also business partner of NJ’s Network.
Kadam capital provides training of all NCFM modules, NISA modules, stock market basic
course, commodity and derivative market, currency market and certified planner and recruitment
in financial sector like bank, mutual fund, insurance and broking firms.
Kadam financial services provides all types of loans like personal loan, home loan, car loan and
two wheeler loan.
2.2 NATURE OF THE BUSINESS CARRIED:
KADAM GROUP is mainly a broking firm and partner of two well known trading firms. The
nature of business carried is serving its clients or investors by providing them the information of
current market situation and trading on behalf of the clients as per their request. Kadam group is
a service industry. The business carried is Finance & Investment, Broking, Commodities, Asset
Management.
2.2.3 Vision:
To be an innovative and renowned asset manager providing excellent investment solutions,
exemplary services and setting the highest ethical standards.
2.2.4 Mission:
Our reputation and Image is more important than any financial reward. Reputation is hard to
build and even harder to rebuild. Reputation will be impacted by our ability to think for our
clients, maintain confidentiality and by our adherence to our value system.
2.2.5 Service profile:
The services offered by Kadam investments are:
 Demat A/c
 Equity market trading
 Currency market
 F&O market
 Bonds
 Commodity market
 Mutual funds
 Life insurance
 General insurance
 Portfolio management service
 Wealth management.
2.2.6 Area of operation: Regional (Aurangabad, Jalna, Ahmadnagar, Pune)
2.2.7 Organizational Structure:
Mr.Kadam is the head of the firm or owner of the firm there are some trainees working under
him and assistant of Mr.Kadam.

KADAM CAPITAL
2.2.8 Hierarchy of the company
Director (Retail)
(Aurangabad branch) (Jalna Branch) (Pune branch) (Ahemdnagar Branch)
Branch manager Research Team
Dealer + marketing Relationship Manager Relationship Manager
Relationship Manager
Relationship Manager Tele – caller
Dealer
Advisors
Tele – caller
Tele – caller
There are some other employees provided by the broking to the retail that is to the Kadam Group
those are as follows:
1. Research team
2. Back office
3. HR
4. Accountant
These are all in Mumbai and are in centralized team.

KADAM CAPITAL
2.2.8 Ownership pattern: He is the sole and single proprietor of the firm.
2.2.9 Infrastructural Facility:
4 offices
PC’s
Furniture
Laptops
Scanners
Printers
2.2.10 Financial condition:
Year Net income(Rs)
2009-2010 7,67,560
2010-2011 8,90,980
2011-2012 14,92,450
2012-2013 11,30,230
2013-2014 26,97,960
2014-2015 28,36,620
2015-2016 33,85,860
Kadam Capital at Aurangabad
Brokerage ( Net Income) per month 1,50,000 -2,60,000
No. of Employees 11 Employee on Salary Basis
& 4 Employees on Commission Basis
Franchisees 8
Major Clients More than 65
Branches 4
Aurangabad, Jalna, Ahmadnagar, Pune.

KADAM CAPITAL
PART-III
3 LITERATURE REVIEW
• Ippolito (1992) stats that investor is ready to invest in those fund or schemes which have
resulted good rewards and most investors’ is 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 in and to withdraw from fund. De Bondt and
Thaler (1985) submitted that mean reversion in prices of stock is backed by investor’s
retrogression which is based upon investor’s psychology to overvalue firm’s resent
performance in forming future expected results which is also known as endowment
effect. Gupta (1994) surveyed household investor for the objective to find investors’
preferences to invest in mutual funds and other available financial assets. The findings of
the study were more relevant, at that time, to the policy makers and mutual funds to
design the financial products for the future. Kulshreshta (1994) in his study suggested
some guidelines to the investors’ that can help them to select needed mutual fund
schemes.
• Sharpe, William F. (1966) suggested a measure for the evaluation of portfolio
performance.Drawing on results obtained in the field of portfolio analysis,
economist Jack L. Treynorhassuggested a new predictor of mutual fund performance,
one that differs from virtually all thoseused previously by incorporating the
volatility of a fund's return in a simple yet meaningfulmanner.
• Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio
performance (Jensen’salpha) that estimates how much a manager’s forecasting ability
contributes to fund’s returns. Asindicated by Statman (2000), the e SDAR of a fund
portfolio is the excess return of the portfolioover the return of the benchmark index,
where the portfolio is leveraged to have the benchmark index’s standard deviation

KADAM CAPITAL
PART-IV (A)
4. RESEARCH METHODOLOGY
4.1 Sources of data collection
Two sources of collecting data have been employed i.e. primary data and secondary data.
4.1.2 Primary data
 A questionnaire is used as a tool for the systematic collection of relevant information.
 A well questionnaire consisting of simple questions has been prepared & directed to the
respondents. (Ref. Annexure pg.40)
 The questionnaire prepared consists of open ended and closed-ended questions which
includes:
1 Multiple choices
2 Rating scale.
 The first section of questionnaire is prepared mainly for collecting the personal
information about the respondents.
 The second section contains multiple choice questions. It is prepared to collect the
information about customer perception.
 The close- ended questions are very easy to answer from the questionnaire responded by
the respondents.
4.1.3 Secondary Data
There are two sources of collecting Secondary data.
1. Published data
2. Unpublished data
Secondary data is collected from the company’s websites, fact sheet etc.
4.1.4 Sampling Procedure
Sample size: 30
Sample unit: Kadam capital (Aurangabad)

KADAM CAPITAL
PART-IV (B)
4 For Inplant Training involving no research work
4.1 Details of the assigned task
Dematerialized accounts, or demat accounts as they are better known, help investors store and
keep track of certificates of shares, bonds, and mutual funds and other securities held in
electronic format. A Demat account facilitates document-free trade and transfer transactions.
In order to have this account, listed below is the procedure of open a Demat account.
 Select a Depository Participant (DP): Select a Depository Participant (DP) you would
like to open your account with; this entity will serve as the intermediary between you and
the depository. DPs can be banks, brokers or online investment platforms.
 Submit your KYC Documents: Submit the form given to you for opening an account,
the KYC form, passport size photographs, your PAN card (Permanent Account Number),
and other photocopied documents.
 Appear for In-Person Verification: An In-Person Verification may be carried out by a
person from your DP’s firm to ensure that the details provided by you in the form are
authentic.
 Get Beneficiary Owner Identity (BOID): Once your application has been processed
and your DP has facilitated the opening of your account, he/she will give you a
Beneficiary Owner Identity (BOID) – a unique account number – that you can use during
future transactions and to access your account.
After getting sufficient training on ground level for couple of weeks, I finally got a chance to do
buying and selling of shares over the terminal , under the supervision of experts of Kadam
capital . Moreover I got to make certain calls as well to the investors informing them about the
current position of the shares they were holding and whether they would like to sell it off or set
any stop loss for the same.
While completing my summer internship at Kadam capital I got opportunities to even interact
with the aspiring investors who were visiting the office, came to know about the doubts a
beginner level investor has in his/her mind , explained them about SEBI will be safeguarding
them against any kind of fraud activities .
1. Work done
 Filling De-mat A/C form
 Dealing in equity market
 Providing information to aspiring investors.
2. Accomplishments
Got real time trading experience
Better understanding of stock market basics

KADAM CAPITAL
PART-V
5. Data Analysis and Interpretation
Data collected, if not subjected to analysis is meaningless. For the purpose, data after
collection has to be presented in the form of tables, diagrams and graphs. It is only after
presentation that data can be analyzed, interpreted and inferences can be drawn.
To find which feature of Mutual Fund investors find most attractive.
 From the questionnaire, clients were asked to fill in the feature which they liked about
Mutual Fund.
 Data of 30 clients was taken
 The data was later on entered into a table in MS Excel and with the graph optioned
inference were made. The graph obtained was as follows:
a) Age of the clients/investors.
Interpretation- From the above data, Out of 30 respondents 14 are 18 to 30 years in age, 7 are
in group of 30 to 40 years of age, 4 are in age of 41 to 50 and 5 are 50 and above.
b) Gender of the respondents.
Interpretation- From the above data, Out of 30 respondents, 22 are Male and 8 are Female
0
2
4
6
8
10
12
14
16
18 to 30
years
30 to 40
years
40 to 50
years
50 and
above
22
8
MALE FEMALE
GENDER

KADAM CAPITAL
Q1. What is your monthly family income approximately?
Interpretation- From the above data, Out of 30 respondents 4 have family income upto
10,000 PM, 7 have income from 10,000 to 15,000 PM, 9 have income of 15,000 to
30,000 and 9 have income 30,000 and above.
Q2. What kind of investments you prefer most?
Interpretation- From the above data, Out of 30 respondents 3 prefers Fixed deposits, 4
prefers insurance, 11 prefers Mutual funds, 8 prefers share debentures, 2 prefers Gold-
Silver and 2 prefers Real-estate.
0
1
2
3
4
5
6
7
8
9
10
Up to
10,000
10,000 to
15,000
15,000 to
30,000
30,000 and
above
0
2
4
6
8
10
12
Fixed
deposit
Insurance Mutual
funds
Shares
Debentures
Gold-Silver Real Estate

KADAM CAPITAL
Q3. While investing your money which factor you prefer?
Interpretation- From the above data, Out of 30 respondents 12 prefers the factor of Low
Risk, 4 prefer Moderate Risk, 3 prefer High Risk, 6 prefer Company Reputation and 5
prefer Liquidity.
Q4. Have you ever invested your money in Mutual fund?
Interpretation- From the above data, Out of 30 respondents 8 have invested in Mutual Fund
and 22 have never invested in Mutual Fund.
12
4
3
6
5
Low Risk Moderate Risk High Risk Company
Reputatio
Liquidity
8
22
YES NO
Q4. Have you ever invested your money in Mutual
fund?

KADAM CAPITAL
Q5. If yes, where do you find yourself as a mutual fund investor?
Interpretation- From the above data, Out of 30 respondents 8 have invested previously in
Mutual Fund and among those 1 is totally ignorant, 3 have partial knowledge of Mutual
Funds, 3 prefers specific scheme in which are investing and 1 is Fully aware.
Q6. Which feature of the Mutual fund you find most attractive?
Interpretation- From the above data, Out of 30 respondents 9 are attractive towards
Diversification, 7 are attractive towards better return and safety, 8 are attractive
towards Regular income and 6 are attractive towards Tax benefits.
1
3 3
1
Totally Ignorant Partial knowledge
of mutual funds
Anywhere only of
specific scheme in
which you
invested
Fully Aware
9
7
8
6
Diversification Better return
and safety
Regular income Tax benefits

KADAM CAPITAL
Q7. What is your mode of investment in mutual fund?
Interpretation- From the above data, Out of 30 respondents 8 wants to do Lump sum
investment and 22 want to do SIP (systematic investment Plan)
Q8. Which type of fund would you prefer to invest in?
Interpretation- From the above data, Out of 30 respondents 12 prefer to invest in Equity, 6
prefer to invest in Debt, 8 prefer to invest in Hybrid and 4 prefers to invest in other.
Q10. How would you like to receive the returns every year?
Interpretation- From the above data, Out of 30 respondents 14 likes to receive the returns in
Dividend Payout Option every year, 11 likes to receive the return in Dividend re-
investment and 5 likes to receive the returns in Growth in NAV.
8
22
Lump sum Investment Systematic Investment Plan (SIP)
12
6 8
4
Equity Debt Hybrid Others
14
11
5
Dividend Payout Option Dividend re-investment Growth in NAV

KADAM CAPITAL
PART-VI
6.1 FINDINGS
After conduction the survey and analyzing the data collected, the findings were as follows,
Findings from the study of which feature of Mutual Fund investors find most
attractive
 It was observed that younger clients and clients having insufficient information
preferred to invest in Mutual Fund as it is managed by a professional Funds manager.
Fund manager being an experienced person, he can diversify and manage our funds
much better than us.
 Most of the clients who had their businesses preferred tax benefit feature of Mutual
Funds. As we know that we can avail tax benefits of up to Rs 1,50,000. Thus
businesses men who tend to pay higher taxes invest in such to reduce their tax
liability.
 Many investment options do not offer well diversified portfolio as a Mutual Funds
offers, thus few clients chose Mutual Fund because of they have a well diversified
portfolio, thus minimizing the risk of loss.
Findings from the study of preferred most of investment:
 It was noted that younger people or the early investors started their investment
through SIP and then moved on to Lump sum. This was basically because SIP’s can
be started with very small amounts, thus a proportion of people’s saving went into
SIP.
 It was also noted that there with increase in age the contribution in SIP also increased
this was only to the fact that with increase in age the income levels also rise.
 To invest in Lump sum amount a larger capital is required, thus most of the clients
who invested in Lump sum were people who had set businesses or were in middle of
their careers.
Findings from the study of investor options preference of investors:
 The younger generation prefers investing in risky funds which give higher returns,
thus majority of people invested in equity funds. It is for the fact that younger
generation are enthusiastic to enter the markets, their basic goal is profit
maximization and they can afford to take risks as they have fewer responsibilities on
them.
 The ability to take risk was inversely proportional to the age of the clients i.e as the
age went on increasing, the capability to take risk reduced; thus, elder the clients was,
more was his investment in debt funds.
 Debt instruments being much safer assets than equity, risk averse clients chose debt
funds.

KADAM CAPITAL
Findings from study of preferred investment policy by investors:
 It was found that majority of clients had opted for growth plan for their fund. When one
is planning for longer term, growth plan provides best returns thus many of them choose
growth plan.
 Dividend payout option were opted by few clients whose objective was to get a regular
income out of their funds.
 Very few clients opted dividend reinvestment option as its growth in NAV is
comparatively less when compared to growth option.
General Findings:
 It is reveled from the research that people did not have adequate knowledge about Mutual
Funds and relied heavily on asset manager’s advice for making their choices.
 It was surprising to know that people who invest in capital markets, mostly equity and
derivative markets, almost all of them had some part of their savings into Mutual Fund
schemes.
 The profits that the clients earn from equity, derivative markets, a share of it is diverted
into Mutual Funds in form of SIP to have a good financial plan.
 The research found that some investors had two or three mutual funds in different
schemes, while the younger ones invested in one or two schemes of the same type.

KADAM CAPITAL
6.2 SUGGESTIONS
 One should diversify the investments between a few funds. This strategy ensures that the
portfolio is not dependent on the performance of one single fund. However, one needs to
avoid over-diversification as that would achieve nothing.
 Investor can also plan one mutual fund of diversified equity plan, second mutual fund of
balanced type and third one you can plan of debt type etc. In this manner the money will
get diversified, risk is reduced and the investor will get excellent profit.
 Investors should check for past returns, dividend etc. the mutual fund has declared. Instead
of blindly following what the asset manager has to say, to be rest assured we can cross
check past performances.
 Many investors are aware of Mutual Fund but do not have the proper or adequate
knowledge about the same. Though awareness is being created through many
advertisements, but proper knowledge through courses, seminars should be encouraged.
 Courses or knowledge about Mutual Funds should be introduced in the curriculum to
increase awareness and knowledge amongst students who can be potential investors.

KADAM CAPITAL
6.3 Learning Experience and contribution to the host organization
• It was a good experience to be a part of kadam group for a period of 45days. The
organization has created a great impact on my professional behavior.
• The main thing that I learned from the organization is the true meaning of famous proverbs
“TIME IS MONEY” and “LOOK BEFORE YOU LEAP”.
• My views on Mutual Fund topic got cleared in Inplant training when It has been experienced
that Mutual Funds works on theoretical basis as well as on practical basis.
• How growth in Mutual fund sector reflects on Indian Economy is learned.
• Mutual fund schemes are learned along with different types of mutual funds.
• How to interact with clients for various investments.
• While investing in a particular investment what factors should be consider while taking
decision is studied.

KADAM CAPITAL
PART-VII
7 SWOT Analyses
7.1 Strength:
 Innovative range of financial products
 Active aggressively on social media.
 Innovative I. T solutions for customers
 Emphasis on building stronger bond with customers
 Wide range of services and products offered like Demat A/c, Equity market trading,
Currency market, F&O market, Bonds, C01mnodity market, Mutual funds, Life
insurance, General insurance, Portfolio management service, wealth management
services offered include Equity Trading, Commodities, Portfolio Management Services,
Mutual Funds, Life Insurance, Investment Advisory.
7.2 Weakness:
 Less penetration in rural areas
 Communication is an issue, not well verse with English.
 Compared to bigger players, Kadam Capital is still a weaker brand.
7.3 Opportunities:
 Growing rural market.
 Earning urban youth.
 Increasing market sentiment and optimism
7.4 Threats
 Stringent Economic measures by Government and Reserve Bank of India
 Bigger competitors tend to poach investors.
 Very volatile capital market.

KADAM CAPITAL
Bibliography
Books:
1. M. Ranganatham , R. Madhumathi (2013). Security Analysis and Portfolio Management
(English) 2nd Edition. Pearson India.
2. (2014) Mutual Fund Distributors Certification Examination, National Institute of Securities
Markets
3. D. V. Ingle (2012). Mutual Funds in India (English) 1st Edition. New Century Publication
Websites:
1. Corporate Website Kadam Capital http://www.kadamgroup.co.in/ sdsaccvdvbvievj/;.vdsbub
2. National Institute of Securities Management http://www.nism.ac.in/ bkjvdbfebv/vsbb
3. Association of Mutual Fund in India (AMFI) https.//www.amfiindia.com/ abciuaevkjb
Journal Articles:
1. Deepti Goel, Richa Gupta (May 2016), Mutual Fund Industry in India: An Overview,
International Journal of Emerging Research in Management &Technology IS SN: 22789359
(Volume-3, Issue-5)
2. Dr. Vikas Kumar (December 2011), Performance Evaluation of Open Ended Schemes of
Mutual Funds, International Journal of Multidisciplinary Research Vol.1 Issue 8, December
2011, ISSN 2231 57 80
3. Dr.R.Narayanasamy, V. Rathnamani (April 2015), Performance Evaluation of Equity Mutual
Funds, International Journal of Business and Management Invention, IS SN (Online): 2319 8028,
ISSN (Print): 2319 801X
4. Dr. Ravi Vyas, Altius Institute of Universal Studies, Indore, MP. India, Journal of Arts,
Science & Commerce, E-ISSN 2229-4686
5. DR.Shantanu Mehta (September 2012), Preference of Investors for Indian Mutual Funds and
its Performance Evaluation, Pacific Business Review International, Volume 5 Issue 3
6. Pierre Hereil, Philippe Mitaine (June 2010), Mutual Fund Ratings and Performance
Persistence, Lyxor Asset Management, Paris

KADAM CAPITAL
Annexure
Questionnaire
MUTUAL FUNDS: ITS OVERVIEW AND PREFRENCES AMONG
INVESTORS
a) NAME: Mr./Mrs./Ms_____________________________________
b) AGE: ______.
c) GENDER- MALE FEMALE
Q1. What is your monthly family income approximately?
a) Up to 10,000
b) 10,000 to 15,000
c) 15,000 to 30,000
d) 30,000 and above
Q2. What kind of investments you prefer most?
a) Fixed Deposits d) Shares Debentures
b) Insurance e) Gold-Silver
c) Mutual funds f) Real Estate
Q3. While investing your money which factor you prefer?
a) Low Risk d) Company Reputation
b) Moderate Risk e) Liquidity
c) High Risk
Q4. Have you ever invested your money in Mutual fund?
a) Yes b) No
Q5. If yes, where do you find yourself as a mutual fund investor?
a) Totally Ignorant
b) Partial knowledge of mutual funds
c) Anywhere only of specific scheme in which you invested
d) Fully Aware
Q6. Which feature of the Mutual fund you find most attreactive?
a) Diversification
b) Better return and safety
c) Regular income
d) Tax benefits
Q7. What is your mode of investment in mutual fund?
a) Lump sum Investment
b) Systematic Investment Plan (SIP)

KADAM CAPITAL
Q8. Which type of fund would you prefer to invest in?
a) Equity c) Hybrid
b) Debt d) Others
Q9. Your percentage of your investment equity debt (in%)?
a) Equity______%
b) Debt_______%
Q10. How would you like to receive the returns every year?
a) Dividend Payout Option
b) Dividend re-investment
c) Growth in NAV

KADAM CAPITAL
Daily Dairy
Sr.No. Date Work done Signature of the Student
1 05/05/2017 Got training on Capital Markets.
2 06/05/2017 Got a debt insight on Mutual Fund.
3 07/05/2017 Form filling, KYC of clients done.
4 08/05/2017 Started work on my Primary Data.
5 15/05/2017 Collected information from clients.
6 22/05/2017 Prepared overdraft of the project.
7 29/05/2017 Practical Knowledge on System
8 05/06/2017 Interaction with CEO of Kadam Capital.
9 12/06/2017 Exposure to real time trading
Signature of the Company Guide

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