Mutual Funds and Investors’ Awareness About Mutual Fund Companies

UNDERTAKING

SUMMER INTERNSHIP REPORT

ON

MUTUAL FUNDS AND INVESTORS AWARENESS ABOUT MUTUAL FUND COMPANIES

SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN BUSINESS ADMINISTRATION

BY:

ANKIT OMARRoll No. : A0101907051UNDER THE GUIDANCE OF:

DR.R.S.RAI

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

24th July2008

DECLARATION

I, student of M.B.A. from AMITY BUSINESS SCHOOL, AMITY UNIVERSITY UTTAR PRADESH, declare that I have completed this project Mutual Funds And Investors Awareness About Mutual Fund Companies at ING VYASA BANK within two months under the guidance of my Faculty Guide DR. R.S. RAI at Amity Business School, Amity University Uttar Pradesh.

I further declare that the work inside the report is authentic to the best of my knowledge.

Date: 25.07.2008 Ankit Omar

Place: Noida A0101907051

CERTIFICATEThis is to certify that Ankit Omar, a student of M.B.A, AMITY BUSINESS SCHOOL, AMITY UNIVERSITY UTTAR PRADESH, has worked under the guidance of his Faculty Guide Dr. R.S. Rai for two months, on a project Mutual Funds And Investors Awareness About Mutual Fund Companies at ING VYASA BANK. He worked hard displaying enthusiasm and determination for the completion of his project.I hereby declare that the work done by him is true as per my knowledge.

Date: 25.07.2008 R.S. RAIPlace: Noida

ACKNOWLEDGEMENTAt the very outset I would like to express my sincere gratitude to my respected Faculty Guide Dr. R.S Rai of AMITY BUSINESS SCHOOL, AMITY UNIVERSITY UTTAR PRADESH for giving me his wholehearted support, guidance and encouragement at every step of this project. His valuable suggestions and advices have been a constant source of inspiration to me in completing this project.

I would like to express my sincere thanks to ING ASSEST MANAGEMENT COMPANY for providing me an opportunity to work with them and to undertake this project on MUTUAL FUNDS AND INVESTORS AWARENESS ABOUT ASEST MANAGEMENT COMPANIES. I feel proud to be associated with an esteemed organization like ING.I feel especially indebted to Mr. Vikash Mishra (Sr. wealth Manager of ING VYSYA Bank); without whose consent this project couldnt have been carried out. I express my sincere gratitude to MR. Naveen Goyal (Sr. Manager ING Investment Management). I am highly indebted and thankful to all of them for sparing valuable time from their busy schedule to provide me constant guidance and cooperation for completing this project.I am very keen to express my gratefulness to my friends, family members and classmates for their tremendous support, contribution and assistance at many step of this project which made this difficult job a nice experience. Ankit Omar

CONTENTS

Declaration

Certificate

AcknowledgmentPrefaceExecutive Summary

Chapter No.: Subject: Page No:

1. Introduction 8-102. Review of Literature 11-133. Industry Profile 14-584. Company Profile 59-63

5. Comparison between funds 64-76 5. Project Profile 77-78 6. Research Methodology 79-81 7. Data Analysis and Interpretation 82-928. Observation 939. Limitations 94 10. Conclusion 95 Reference Annexure- questionnairePreface

This project report has been made on Rising Demand of Mutual Funds in the present market. The basic idea of this report is to conduct an analysis of rising need of Mutual Funds in order to highlight the change in services with the passage of time. The basic motive is to cover the Upper Middle and Lower segment of the people investing in mutual funds..

Mutual Fund Industry has grown in a trillion dollar industry by this year and this is due to the performance given by mutual funds and because of investors faith in making their money to grow at higher pace than FDs (Fixed deposit)The data is collected by means of FACTSHEETS provided by Asset Management Companies and it is analyzed with the help of graphs & tables. I hope this report will satisfy the readers & present them with detailed information.EXECUTIVE SUMMARYI did my S.I.P with ING VYASA BANK, from 2nd May till 30th June 2008. The basic objective of this project was to develop an understanding of mutual funds and determine the level of awareness of the investors about the various mutual fund companies.With such a large population and the untapped market of population, Mutual funds happen to be a very big opportunity in India. In spite of all the growth, the statistics of the penetration of the mutual funds in the country is not good. This is an indicator that growth potential for the mutual funds is immense in India . Seeing the past performance of various funds it can be stated that these funds can provide better options for investors to invest in. As it is less risky compared to direct investments in stock market.INTRODUCTION

A mutual 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 are 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. Mutual funds belong to a group of financial intermediaries known as investment companies, which are in the business of collecting funds from investors and pooling them for the purpose of building a portfolio of securities according to stated objectives. They are also known as open-end investment companies. Other members of the group are closed-end investment companies (also known as closed-end funds) and unit investment trust.Mutual funds are generally organized as corporations or trusts, and, as such, they have a board of directors or trustees elected by the shareholders. Almost all aspects of their operations are externally managed. They engage a management company to manage the

investment for a fee, generally based on a percentage of the fund's average net assets during the year. The management company may be an affiliated organization or an independent contractor. They sell their shares to investors either directly or through other firms such as broker-dealers, financial planners, employees of insurance

companies, and banks. Even the day-to-day administration of a fund is carried out by an outsider, which may be the management company or an unaffiliated third party.

Benefits from investing in a mutual fund:

The advantages of investing in a Mutual Fund are:

Professional Management

Diversification

Convenient Administration

Return Potential

Low Costs

Liquidity

Transparency

Flexibility

Choice of schemes

Tax benefits

Well regulated

USAGE

Mutual funds can invest in many different kinds of securities. The most common are

cash, stock, and bonds, but there are hundreds of Sub-categories. Stock funds, for

instance, can invest primarily in the shares of a particular industry, such as technology

or utilities. These are known as sector funds. Bond funds can vary according to risk

(e.g., high-yield junk bonds or investment-grade corporate bonds), type of issuers (e.g.,

government agencies, corporations) or maturity of the bonds (short- or long-term).

Most mutual funds' investment portfolios are continually adjusted under the supervision

of a professional manager, who forecasts the future performance of investments

appropriate for the fund and chooses those which he or she believes will most closely

match the fund's stated investment objective.

Mutual funds are liable to a special set of regulatory, accounting, and tax rules. Unlike

most other types of business entities, they are not taxed on their income as long as they

distribute substantially all of it to their shareholders. Also, the type of income they earn

is often unchanged as it passes through to the shareholders.

REVIEW OF LITERATURE

This chapter contains the review of the existing research literature on MUTUAL FUNDS

A prominent study (Switzer, N., Lorne, 2007) examined whether small and mid-cap fund performance related to fund manager human capital characteristics including tenure, investment experience, education (MBA designation), professional training (CFA), and gender. The study identified sample of 1,004 small and mid-cap equity funds on the Morningstar database as of 31 December 2005 and applied several statistical tests which considered fund performance, risk, expenses, and turnover simultaneously.

A prominent article ( Jonson, T, Don, 2006) examined whether real estate investments

will provide better return to investors as it is probably the largest category of asset for

the investors , it can provide investors better margins as it is a sector specific fund .

According to the findings these funds can provide higher management fess to asset

management companies as they are associated with higher returns.

The article ( Shank ,T, Hill Ron 2005) examined a statement Doing well is doing

good within the financial management literature, using comparisons using socially

responsible mutual funds in NYSE ( New York Stock Exchange). It describes the short

term performance and long term performance of mutual funds and stated the

comparison between them. The performance indicated that the performance for long

term fund were much better than the short term funds.

The prominent study (Glenn, J, Patrick, Thomas 2004) examines the performance of

both open-ended and closed-ended mutual funds-as a fixed income securities and

vehicles of capital gains. A determination is made of which one category outperforms

the other and it tells us about the performance better or worse. This will help to

determine the fund and help the investors in choosing it.

The article (Baris, G, Jay, Warshall, A 2004) examines the mutual funds scandals

involving market timings and late day trading, The Securities and commission issued

Investment Company Governance. The new rule ensure that the investment companies

directors and the company board of chairman should be independent. The new rule also require most funds to adopt other governance practices, including annual self-evaluations and meetings in executive session without the presence of fund management. In the adopting release, the SEC also provided guidance on how fund directors should fulfill their fiduciary duties to fund shareholders.

The study (Ramasamy, Bala, Yeung, C, H, Mathew 2003) examines both, in terms of size and choice, in the mutual fund industry among emerging markets has been impressive. However, mutual fund research in emerging markets hardly exists. This paper intends to fill this gap. In particular, the paper surveys the relative importance of factors considered important in the selection of mutual funds by financial advisors in

emerging markets.This survey focuses on Malaysia where the mutual industry started in the 1950s but only gained importance in the 1980s with the establishment of a government initiated programme. The results of the survey point to three important factors which dominate the choice of mutual funds. These are consistent past performance, size of funds and costs of transaction. Factors which relate to fund managers and investment style are not considered to be relatively important. With the impending liberalization of the financial markets in the developing world, the findings would assist those international funds that are considering expanding their operations into these emerging markets. The article ( NealO, Edward, Page,E,Daniel 2002) examine the sources of performance for a sample of mutual funds that invest primarily in utility companies. Given

deregulation developments in the utility industry and the sub-market performance of

utility stocks in the 1990s, the hypothesize that utility funds may be considering alternatives to traditional high-yielding electric utility stocks. Although there is anecdotal evidence that utility funds may be tilting their focus away from electric utility

stocks, the findings are that utility mutual funds as a group are no more or less heavily invested in utility stocks today than they have been over the past 10 years.HISTORY

Massachusetts Investors Trust (now MFS Investment Management) was founded on March 21, 1924, and, after one year, it had 200 shareholders and $392,000 in assets. The entire industry, which included a few closed-end funds represented less than $10 million in 1924.

The stock market crash of 1929 hindered the growth of mutual funds. In response to the stock market crash, Congress passed the Securities Act of 1933 and the Securities

Exchange Act 1934 .These laws require that a fund be registered with the Securities and Exchange Commission (SEC) and provide prospective investors with a prospectus that contains required disclosures about the fund, the securities themselves, and fund manager. The SEC helped draft the Investment Company Act of 1940, which sets forth the guidelines with which all SEC-registered funds today must comply.

With renewed confidence in the stock market, mutual funds began to blossom. By the end of the 1960s, there were approximately 270 funds with $48 billion in assets. The first retail index fund, First Index Investment Trust, was formed in 1976 and headed by John Bogle,who conceptualized many of the key tenets of the industry in his 1951 senior thesis at Princeton University. It is now called the Vanguard 500 Index Fund and is one of the world's largest mutual Funds, with more than $100 billion in assets.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 1964-87

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)

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 Canara bank 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. 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 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

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. The graph indicates the growth of assets over the years.

GROWTH IN ASSETS UNDER MANAGEMENT

FREQUENTLY USED TERMS IN MUTUAL FUND

NET ASSEST VALUEThe net asset value, or NAV, is the current market value of a fund's holdings, usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. The public offering price, or POP, is the NAV plus a sales charge. Open-end funds sell shares at the POP and redeem shares at the NAV, and so process orders only after the NAV is determined. Closed-end funds (the shares of which are traded by investors) may trade at a higher or lower price than

their NAV; this is known as a premium or discount, respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by the different classes.

Some mutual funds own securities which are not regularly traded on any formal exchange. These may be shares in very small or bankrupt companies; they may be derivatives; or they may be private investments in unregistered financial instruments (such as stock in a non-public company). NAV Calculations

Net Assets = Assets - Liabilities

Assets

= Market value of Investments

+ Receivables + Accrued

income + Other Assets

Liabilities

= Accrued expenses

Payables Liabilities

NAV of a Unit = Net Assets of the Scheme

Number of units outstanding

DISCLOSING NET ASSEST VALUE OF A UNIT Date on which NAV is calculated is called Valuation Date.

Open ended Funds are required to compute and disclose NAV Daily.

Close ended Funds can compute NAVs every week but disclose Daily.

NAV Calculation has to consider up to date transactions.

All income, expenditure to be accounted upto date of valuation.

Non accrual of small amounts not affecting NAV by more than 1% permitted.

Non-recorded transactions should not affect NAV calculation by More than 2% .

FACTORS AFFECTING NET ASSEST VALUE OF A UNIT NAV is affected by 4 set of factors:

Purchase & sale of investment securities

Valuation of all investment securities held

Other assets and liabilities

Units sold or redeemedSale Price

Is the price you pay when you invest in a scheme. Also called Offer Price. It may include a sales load.

Repurchase PriceIs the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price.

Redemption PriceIs the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called, Front-end load. Schemes that do not charge a load are called No Load schemes.

Repurchase or Back-end LoadIs a charge collected by a scheme when it buys back the units from the unit holders.

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry.Organization of a mutual fund:

There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:

Source- AMFITYPES OF MUTUAL FUND SCHEMES1. Open-Ended Funds.

2. Close-Ended Funds.

3. Load Funds.

4. No Load Funds.

5. Tax Exempt.

6. Non Tax Exempt Funds.Open Ended Funds: The term mutual fund is the common name for an open-end investment company. Being open-ended means that, at the end of every day, the fund issues new shares to investors and buys back shares from investors wishing to leave the fund. Unit Variable Capital . Fresh subscription may be discounted i.e. if a new NFO (New Fund Offer) is offered Assest Management Companies may leave exit load.

Any time investors can redeemed there values, except when there is a lockin period.

2. Closed Ended Schemes: These schemes have a stipulated maturity period. Typically, you can invest in them for between 3 to 10 year. These schemes are open for subscription only during a specified period at the time of their lunch. In case of listed schemes, you can invest in the scheme at the time of the initial issue and thereafter units of the scheme can be bought or sold on the stock exchange where the scheme is listed. Traded on stock exchange at a discount / premium to NAV.

Redemption of units on expiry date.

Unit Capital constant.

These funds can allow buy back of units option.3. Load Funds: Load is one time fee payable by the investor when they enter / exit an open-ended scheme. Loads are charged to recover initial issue expenses including

marketing and selling expenses , brokerage .advertising

cost.

There can be Entry load, exit load or Both.

Entry load is also called Front end load.

Exit load is also called Back end load or deferred load.

4. No load Funds: In no load funds marketing and selling expenses

Are absorbed by the AMC and the investor buys and sell units at NAV price.

Return on investment to the investor is reduced because of the loads. Mutual Funds classified as per Class of Investments

1. Equity Funds.

2. Money Market Funds.

3. Bond Fund.4. Hybrid Funds.

5. Gilt funds.6. Balanced Funds.

7. Growth and Income Funds.

8. Real Estate funds.

9. Funds of Funds.

10. Commodity funds. 11. Exchange Traded funds.

Equity Funds: Equity funds consists mainly of stock investments, are the most common type of mutual funds. Equity funds hold more than 50 percent of all amount invested in mutual funds in India. High risk and aim at Capital appreciation

Types of Equity Funds

Aggressive Growth Funds

Growth Funds

Value Funds

Specialty Funds:

Sector Funds

Foreign Securities Funds

Mid-Cap or Small-Cap Equity Funds

Option Income Fund. Diversified Equity Funds

ELSS Funds

Equity Index Funds

Equity Income or Dividend Yield FundMoney Market Funds: Invest in securities that mature in one year or less, such as Treasury bills, commercial paper, and certificates of deposits. They are often referred to as short term funds. High liquidity and safety of principle amount.

Low risk of loosing principle amount.

Low returns.Hybrid Funds: They invest in long term securities, as such; it is known as long-term funds. . Hybrid funds invest in a combination of stocks, bonds, and other securities.

Gilt Funds: Invest in only government securities of over 1 year maturity.

Risk and return are low but higher than MMF Fund. No default risk but carry interest rate risk.

Fund value drops when interest rates goes up and rise when

Interest rates go down.

Balanced funds: Balanced Funds seek to provide Income and Capital Appreciation. Debt Funds: Invest in Corporate Bonds and Government securities.

Risk higher than that of Gilt Funds

Aims at regular income distribution and not at capital

Appreciation.

Types of Debt Funds:

Diversified Debt Funds

Focused Debt Funds

High yield Debt Funds

Assured return Debt Funds

Fixed Term Plan Series

Growth and Income funds: Seek to provide High Dividend and Capital Appreciation. Asset Allocation Funds: Flexible Assest location between debt Equity and MM. Commodity Funds: Invest in Commodity Stocks. Real State Funds: Invest in stocks of Real Estate companies in India or across the world.

Exchange traded Fund: A relatively recent innovation, the exchange traded fund (ETF), is often formulated as an open-Ended. Investment company. ETFs combine characteristics of both mutual funds and closed-end funds. Funds of Fund: Funds of funds (FOF) are mutual funds which Invests in other

underlying mutual funds i.e. they are funds comprised of other funds.

Mutual Funds classified as per Investment Objectives

1. Growth Schemes.

2. Income Schemes.

3. Balanced Schemes.

4. Liquid Schemes.1. Growth schemes: Growth schemes are designed to provide optimum returns though capital appreciation over medium to long term. A major part of their funds are invested in equities. So, though there could be a decline

in their value in the short-term these schemes deliver in the long run. It is an ideal option for those in their prime earning years.2. Income Schemes: If you are looking for regular and steady returns go for income schemes. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Their returns may not be as

attractive as growth schemes but they are steady and less risky as compared to equity schemes. If you have retired or need capital stability and income to supplement your current earnings opt for an income scheme.3. Balanced Schemes: Balanced funds give you the best of both and income schemes. A balanced fund invests both in equities and fixed income security. Their returns are less volatile as compared to pure equity funds.

4. Liquid Schemes: Liquid schemes are also known as money market schemes. These schemes generally invest in safer short-term instruments

such as treasury bills, certificates of deposits, commercial papers and government securities. It is a good idea to invest your surplus funds for short periods in liquid schemes.

TAXATION ON MUTUAL FUNDS AND INVESTORS Finance Act 1999 radically changed taxation of Dividends received by investors in Mutual Funds

Mutual Fund as an entity is not taxed since it is a Pass through Entity.

Finance Act 1999 made income (dividends) from UNITS totally EXEMPT from Tax u/s 10(33) in the hands of all investors. Income (dividends) distributed by a Debt Fund was made liable to Dividend Distribution Tax at applicable rate. Open Ended Funds with more than 50% invested in equity do not pay any DDT

Security Transaction Tax (STT) is charged as applicable

80 C benefit under ELSS upto Rs. 1 Lac

Restriction on dividend stripping

Within 3 months prior to record date of dividend distribution and within

9 months after record date for dividend distribution

Impact of Dividend Distribution Tax

Investor pays the tax indirectly, since NAV comes down to the extent of tax paid by the Fund.

DD Tax bears no relationship to the investors tax bracket.

Dividend reinvested is also subject to Dividend Distribution Tax.

In Growth Plans, Dividend Distribution Tax not applied, since no dividend is distributed.

Short / Long Term Capital Gains Tax

Short Term Capital Gain

If units held for less than 12 months

Long Term Capital Gain

If units held for more than 12 months

Short Term Capital Gains at normal tax rates as applicable to investor

Long Term Capital Gains taxed at 20% with indexation or at 10% without indexation of cost + Applicable Surcharge & Educational Cess.Capital Gains Tax

Option to pay 20% or 10% lies with investor for each and every security

2% surcharge also payable

Indexation Benefit on Unlisted Bonds not available

No Capital Gain tax payable if entire Capital gain invested in

Capital Gain Bonds of NABARD, NHAI, REC

Calculating Capital Gain Tax - An Example

Mr. H Invests Rs.2 lacs in MF units during FY 97-98

After 2 years, he sells units and gets Rs.2.4 lacs

His tax liability will be:

CII 99-00 : 389, CII 97-98 : 331 , Ratio : 389/331=1.18

Indexed Cost (2,00,000 x 1.18) = Rs.2,36,000

Capital Gains Rs.4,000

Long Term Capital Gain tax of Mr. H:

Rs.4,000* 20%=Rs.800 or 10% of Rs. 40,000/- i.e. Rs. 4,000/-

Obviously he will select the option of paying Rs. 800/-

LEGAL AND REGULATORY FRAMEWORKS SEBI is Capital Market Regulator with legal powers

SEBI regulates Mutual Funds.

All Mutual Funds to be registered with SEBI

RBI is Money Market Regulator

SEBI is regulator for Liquid Funds Investing in MM instruments

MOF supervisory body for RBI & SEBI

Security Appellate Tribunal setup in 2003 to hear appeal against SEBI decisions

Registrar of Companies(ROC) ensures compliance by AMC & by Trusteeship Company with Indian company act 1956. No promises in the future without resources backed guarantee

Standard measures to compare such as Annual Yield, CAGR. Annualised yields for at least one, three, five years & since Launch. For less than 1 year performance, Absolute Return without Annualisation. Appropriate benchmark to be chosen

Risk factors prominently stated.

Appropriate benchmark to be chosen.

Any ranking of fund to be explained.

OFFER DOCUMENTOffer Document of a MF scheme is like a Prospectus issued by inviting public to subscribe to units of MF scheme. It discloses adequate information for investors to take informed investment decisions. Offer Document

A Legal document.

Issued by AMC on behalf of Trustees.

Offer Document describes the Product/Scheme.

Very important document for prospective investor.

First time investors must read OD before deciding to

Invest.

For Close Ended Fund issued at the time of launching a

Scheme.

For Open Ended Fund revised every 2 year.

Contents of Offer Document

Summary information on Cover page:

Risk factors: Standard & Scheme Specific

Legal & Regulatory Compliance Certificate

Financial information on Schemes & Expenses for last 3 years.

Constitution of MF its Sponsors, Trustees, AMC & their functions.

Investment objectives & policies

Management of Funds: Names of Fund Manager

Offer related information: Minimum Subscription amount

Names of Trustees, AMC, Schemes, Period of Opening/closing, face value of unit, Disclaimer.

Financial Information in Offer Document

Expenses

Sales load, Redemption load

Contingent Deferred Sales Charge

Initial Issue Expenses for the scheme and for schemes

Launched during last one year.

Estimated annual recurring expenses

FUND DISTRIBUTION Residents

Resident Individuals / HUF

Indian companies

Partnership Firms

Indian Trusts / Charitable Institutions

Insurance Companies

Banks

Financial Institutions

NBFCs

Provident Funds

Mutual Funds

Non Residents

NRIs & Persons of Indian Origin

Overseas Corporate Bodies (OCBs)

Foreign Entities

FIIs registered with SEBI

Foreign nationals cannot invest in MF

AMFI CODE OF ETHICS Funds to be managed in the interest of unit holders

Unit holders to be treated equally & fairly

Ensure meaningful disclosures

Avoid conflict of interest

Ensure segregate accounting

Stick to ethical standards and fairness in dealings

High standards of care, diligence, services and disclosure announcements.CHARGES IN MUTUAL FUNDS Mutual Funds can recover two types of Expenses

a. Initial issue expenses

b. Recurring Expenses

Initial Issue Expenses

effective April 04 2006 allowed up to 6% for Close Ended

funds only

Close Ended Funds cannot charge Entry Loads

Open Ended Funds can recover initial expenses through entry LoadMAXIMUM RECURRING EXPENSEXRecurring Expenses cannot exceed the following

regulatory limits:

Average Weekly AssetsFor Equity FundsFor Bond Funds

For first Rs.100 crores2.50%2.25%

For next Rs.300 crores2.25%2.00%

For next Rs.300 crores2.0%1.75%

On the Balance Average Weekly Assets 1.75%1.50%

Sources-AMFI

ASSEST MANAGEMENT FEES AMC charges Asset Management Fees Limits on AMC Fees as per SEBI Regulations:

1.25% of the 1st Rs. 100 crores of weekly Average Net assets 1.00% of the weekly Average Net Assets in excess of Rs. 100 Crores. AMC may charge additional 1% of weekly Average Net Assets for No Load Funds

Asset Management Fees are not in addition to but a part of recurring Expenses

Asset Management fees are usually lower for Debt Funds as compared to Equity Funds and are disclosed in OD (Offer Document).Types of Equity Instruments

Equity Shares

Preference Shares

Equity Warrants

Convertible Debentures

Management of Equity Portfolios

Asset Allocation

Stock Selection

Market timing

Monitoring of performance

Portfolio re-balancing

Evaluation of performance

Risk assessment and Risk management

Equity Markets: Positive Features

Largest number of listed stocks (9400 companies listed on all stock exchanges as at 31/3/04 out of which 7200 listed at BSE with a market cap of over 13 Lac

Crores)

Industrial diversity (50 Industries / Sectors represents. Electronic Trading and Settlement System

Growing number of Institutional Players

Lower Transactions Cost

Lower Settlement Risks

Debt Securities: Types

Debt Securities

Central Government Securities

State Government Securities

Government Guaranteed Bonds

PSU Bonds ( Public saving units ) FI Bonds ( financial Institution ) Bank Bonds

Corporate DebenturesDebt Securities: Positive Features

Other Features

Fixed rate / Floating rate Debt Securities

Coupon Bonds / Cumulative Bonds

Listed / Un-listed Debt Securities

Rated / Un-rated Debt Securities Secured / Unsecured Bonds

Money Market Securities

All Debt Securities maturing within one year are called Money Market Securities

Money Market Securities (Instruments) are:

T-Bills ( Treasury Bills ) CDs ( Corporate Debentures) Call Money

ReposMarket Capitalization based Classification of Shares

Large cap companies

High Liquidity

Low Transaction costs

Mid cap companies

Moderate Liquidity

More transaction cost

Small cap companies

High Profit potential

High Transactions costs

High Volatility

Different Indices and Benchmarks for Large / Mid / Small Cap

Price/Earnings Ratios

Higher the P/E, greater the growth potential

Dividend yield

Lower the dividend yield, Higher the growth potential

Equity Portfolio Management Organization Structure

Fund Manager

Focuses on a certain location

Selects stocks

Fixes price range for purchase & sale

Analyst

researches companies

recommends buy & sell

Dealer

Collects market intelligence

Places buy and sell orders with brokers METHODS OF MEASSURING/EVALUATING MF PERFORMANCE Major sources of return to investors are Dividends and Capital

Gains. Investor should track the value of his investments in terms of

Return on such investments

Decide whether he needs to switch to another fund. Absolute Return Method

Simple Annual Return Method

Total Return Method

Total Return Method when Dividend is Reinvested

Compounded Annual Average Rate Method (CAGR)

Expense Ratio Method

Income Ratio Method

Portfolio Turn over Ratio Method

Transaction Cost Method

Fund Size

Cash Holding Percentage

Fund Evaluation against Benchmarks

Funds Performance can be evaluated against some

Performance Indicators called Benchmarks

Mutual Funds are required by regulations to state the

benchmark in the OD against which scheme

performance will be compared

Investors expect Fund Performance better than the

Benchmark

3 Types of Benchmarks :

Relative to Market as a whole.

Relative to other Mutual Funds

Relative to other comparable financial products.

Benchmarks for Equity Funds

Type of Equity FundName of Benchmark

Index FundsBSE Sensex Index or S&P CNX Nifty Index

Diversified Equity FundsBSE 200 Index

Sector FundsSector Specific Index

Benchmarks for Debt Funds & Money Market Funds

Type of Debt FundName of Benchmark

Gilt FundGovernment Security Index

Debt FundCorporate Bond Index

Money Market FundMibor reflecting inter bank call money market interest rates.

There are various Indices for benchmarking of Debt Funds

I-Bex Index of I-SEC is used for tracking Govt. Security performance

CRISIL has 8 Debt Indices for tracking performance of mutual funds. Corporate Bond Market & Money Market

NSE has Govt. Security Index & Treasury Bill Index

Source- AMFISOURCES OF TRACKING MF PERFORMANCEFollowing sources of information can be used to track performance of Mutual Fund Schemes

Mutual Funds Annual periodic Reports.

Mutual Funds website.

AMFI website

Daily Financial News Papers.

Fund Tracking Agencies Credence, Value Research & Lipper

India

Newsletters from brokers.

Offer Document of the Fund

Analytical Articles

MUTUAL FUND COMPANIES PRESENT IN INDIA1. ABN AMRO MUTAL FUND2. AIG GLOBAL INVESTMENT3. BOB (BANK OF BARODA)4. BENCHMARK

5. CANARA ROBOECCO6. DBS CHOLAMANDALAM7. DSP MERILL LYNCH8. DEUTSCHE INVESTMENT9. ESCORTS MUTUAL FUND10. FIDELITY INVESTMENTS11. FRANKLIN TEMPLETON INVESTMENTS12. HDFC MUTUAL FUNDS13. HSBC MUTUAL FUNDS14. PRUDENTIAL ICICI MUTUAL FUNDS15. ING MUTUAL FUNDS16. JM MUTUAL FUNDS

17. JP MORGAN INVESTMENTS18. LIC MUTUAL FUNDS

19. LOTUS INDIA MUTUAL FUND20. MIRAE ASSEST INVESTMENTS21. MORGAN STANLEY INVESTMENTS22. OPTIMIX INVESTMENTS23. PRINCIPAL MUTUAL FUNDS24. QUANTUM INVESTMENTS

25. RELIANCE MUTUAL FUNDS26. SBI MAGNUM MUTUAL FUNDS27. SAHARA MUTUAL FUNDS28. SUNDARAM BNP PARIBAS MUTUAL FUND29. TATA MUTUAL FUND30. TAURAS INVESTMENTSTOP MUTUAL FUND COMPANIESHSBC Mutual FundsIncorporated7/2/2002

OwnershipPrivate

SponsorHSBC Securities and Capital management private ltd.

Total Assest17,625.70 as on 6/30/2008

Equity Funds (open ended)6

Debt funds (Open ended)12

Short term Debt(Open Ended)15

Hybrid Funds(Open End)1

Chief ExecutiveSanjay Prakash

Chief Executive OfferGordon Rodriguez, Mihir Vora

Investors Relation officerK. Sriram

Address314, D.N Road, FortMumbai 400001

Telephone022) 66145000

URLwww.hsbcinvestments.co.in

Source- Value research online.comHDFC Mutual Fund

Incorporated30/6/2000

OwnershipPrivate

SponsorHousing Development Finance Corporation Ltd, Standard Life Investments Ltd

Total Assest52,581.40as on 6/30/2008





Closed Ended Funds73

Chief ExecutiveMilind Barve

Chief Executive OfferPrashant Jain

Investors Relation officerYezdi Khariwala

AddressRamon House, 3rd Floor, H.T.Parekh Marg, 169, Backbay Reclamation, ChurchgateMumbai 400020

Telephone022) 22029111/ 66316333

URLwww.hdfcfund.com

Prudential ICICI Mutual Funds


OwnershipPrivate

SponsorPrudential plc, ICICI Bank







Chief ExecutiveNimesh Shah

Chief Executive OfferNilesh Shah

Investors Relation officerRanganath Athreya

AddressPeninsula Tower,8th Floor,503 Peninsula Corporate Park,Ganpatrao Kadam Marg, Off.Senapati Bapat Marg,Lower ParelMumbai 400013

Telephone(022) 24997000

URLwww.icicipruamc.com

LIC Mutual FundIncorporated19/6/1989

OwnershipPublic

SponsorLife Insurance Corporation Of India.







Chief ExecutiveSushobhan Sarker

Chief Executive OfferS.K Das

Investors Relation officerNeeraj Verma

AddressIndustrial Assurance Building 4th Floor, Opp. Churchgate Station Mumbai 400020

Telephone(022) 22885971/ 55719750/9324543832

URLwww.licmutual.com

Reliance Mutual FundIncorporated30/6/95

OwnershipPrivate

SponsorReliance Capital Ltd







Chief ExecutiveVikrant Gugnani

Chief Executive OfferMadhusudan Kela, Amitabh Mohanty

Investors Relation officerMadhusudan Kela, Amitabh Mohanty

AddressExpress Building, 4th & 6th Floor, 14 - 'E' - Road, Above Satkar Hotel, Opposite Churchgate Station ChurchgateMumbai 400020

Telephone(022) 30414900

URLwww.reliancemutual.com

SBI Mutual Fund


OwnershipPublic

SponsorState Bank of India, Societe Generale Asset Management







Chief ExecutiveSyed Shahabuddin

Chief Executive OfferSanjay Sinha

Investors Relation officerG Kandasubramanian

Address191, Maker Tower 'E' 19th Floor,Cuffe Parade Mumbai 400005

Telephone(022) 22180221/ 27

URLwww.sbimf.com

SUNDARAM BNP PARIBAS Mutual Fund


OwnershipForeign JV

SponsorSundaram Finance Ltd., BNP Paribas Asset Management







Chief ExecutiveT. P Raman

Chief Executive Offer

Investors Relation officerP Sundararajan

Address2nd Floor, 46, Whites Road, Chennai 600014

Telephone(044) 28583362/ 28583367/ 28569900

URLwww.sundarambnpparibas.in

TATA Mutual Fund


OwnershipForeign JV

SponsorTata Investment Corporation Ltd, Tata Sons LTD.







Chief ExecutiveVed Prakash Chaturvedi

Chief Executive Offer

Investors Relation officerLatha Rajaraman

AddressMulla House, Ground Floor 51, M.G.Road Near Flora FountainMumbai 400001

Telephone(022) 66315191/92/93

URLwww.tatamutualfund.com

BIRLA SUN LIFE Mutual Fund


OwnershipForeign JV

Sponsor37,316.31as on 6/30/2008

Total AssestSun Life (India) AMC Investments Inc., Birla Global Finance Ltd






Chief ExecutiveAnil Kumar

Chief Executive OfferA Balasubramanian

Investors Relation officerRajiv Joshi

AddressAhura Centre, 2nd Floor, Tower A, 96A-D, Mahakali Caves Road, Andheri (East)Mumbai 400093

Telephone(022) 66928000

URLwww.birlasunlife.com

ING Mutual Fund


OwnershipPrivate

SponsorNational Nederlanden Interfinance B.V (ING Group)







Chief ExecutiveVineet K. Vohra

Chief Executive OfferParas Adenwala, Ramanathan K

Investors Relation officerJyothi Krishnan

Address601-602, 6th Floor, "Windsor" Off. C.S.T.Road, Vidyanagari Marg, Kalina, Santacruz-(East)Mumbai 400098

Telephone(022) 39827999

URLwww.ingim.co.in

Classification of Funds Based on Risk Levels

Low Risk Funds :

Money Market Fund

Government Securities Fund

Moderate Risk Funds :

Income Fund

Balanced Fund

Growth & Income Fund

Growth Fund

Short Term Bond Fund

Intermediate Bond Fund

Index Fund

High Risk Funds : Aggressive Growth Fund

International Fund

Sector Fund

Specialized Fund

Risks in Mutual Fund Investing

Risk in a generic sense means the possibility of financial loss

In the investment world possibility of financial loss arises from variability of earnings from time to time.

A fund with stable, positive earnings is less risky than a fund with fluctuating total return.

Risk is thus equated with volatility of earnings - a statistically measurable concept.

COMPANY PROFILE

INTRODUCTION

ING Group is a global financial institution of Dutch origin with 120,000 employees. ING offers banking, insurance and asset management to more than 60 million clients in over 50 countries. The clients are individuals, families, small businesses, large

corporations, institutions and governments. ING comprises a broad spectrum of prominent businesses that increasingly serve their clients under the ING brand.

Key to ING's retail business is its distribution philosophy of 'click-call-face'. This is a flexible mix of internet, call centers, intermediaries and branches that enables ING to deliver what today's clients expect: unlimited access, maximum convenience, immediate and accurate execution, personal advice, tailor-made solutions and competitive rates. ING's wholesale product offering focuses strongly on its strengths in employee benefits/pensions, financial markets, corporate banking and asset management.

IN INDIA

In India, ING is present in all three fields of banking, insurance and asset management in the form of ING Vysya Bank, ING Vysya Life Insurance and ING Investment Management respectively. The presence in all three fields signifies the importance that the group attaches to the Indian markets and the group's operations here, as well as its bullish future outlook on the country.ING Vysya Bank and ING Vysya Life Insurance are headquartered at Bangalore, while the corporate office of ING Investment Management is situated at Mumbai. The synergies arising out of the three distinct

but complimentary businesses are bound to be an asset to the group in the changing market dynamics of the future. The first such signs are already visible on the horizon with combined products being successfully launched by the different entities of the group in conjunction with each other.

I

ING INVESTMENT MANAGEMANT

PROFILE

In India ING Investment Management (I) Pvt Ltd has an investor base of over 1,92,677 with Rs.9795.73 crores as of June 30th, 08 (Source: www.amfiindia.com). With a presence in 40 locations, currently manage 21 schemes.

ING Investment Management (I) Pvt Ltd has been associated with innovation and responsive adaptability with sharp minds at work. ING Investment Management has sealed a position of strength and is considered as one of the top contenders to challenge the market leaders. ING Investment Management has enjoyed many firsts and has always maintained a pioneering outlook.

A few achievements are highlighted below:

1. First Investment Manager to launch a packaged concept in Asset Management 2. Industry.3. ING Dynamic Asset Allocation Fund was awarded Most Innovative Product by Asia Asset Monitor.

4. First company to launch Daily Transfer Plan called as Zoom Investment Plan.

BUSINESS PRINCIPLE

As a global provider of financial products and services, ING plays an important role in society. In order to fulfill this role it needs to maintain the confidence of its customers, shareholders, employees, and other stakeholders by acting with professionalism and integrity.

ING Group attaches paramount importance to upholding its reputation, and the ING Business Principles play an important role in this respect. ING expects the highest levels of integrity from its employees, regardless of their position in the organization.

THE ING BUSINESS PRINCIPLES ARE:

1. Commitment to their integrity.2. Aim for above average return.

3. Respect each other.

4. To promote sustainable development and respect human rights.

5. Involved in the communities they operate.MISSION

Setting the standard in helping their customers manage their financial future.

STRATEGYTo remain focus on creating values for shareholders and rewarding them with better total returns on investment than the average of our peers in the financial sector over a long time.

INTEGRATED RISK MANAGEMENT

IN recent years ING has systematically invested in improving their risk management capabilities, building a strong rirk management function fully integrated to the daily

management of business and daily planning. It also works with businesses to identify and execute business opportunities, lower funding costs and strategic planning.

THE AMC is managing 20 open ended funds and 2 closed ended funds

Open Ended

1. ING Select Debt Fund

2. ING ATM Fund

3. ING Balanced Fund

4. ING Dividend Yield Fund

5. ING Domestic Opportunity Fund

6. ING Equity Fund

7. ING Floating rate fund

8. ING Gilt Fund

9. ING GILT Provident Fund

10. ING Income Fund

11. ING Income Fund-Short Term Plan

12. ING L.I.O.N Plan

13. ING Liquid Fund

14. ING Midcap Fund

15. ING MIP Fund Plan A

16. ING MIP Fund Plan B

17. ING Nifty Plus Fiund

18. ING Select Stock Fund

19. ING Tax Saving Fund

20. ING Latin America FundClosed Ended

1. ING C.U.B Fund

2. ING Dynamic Assest Allocation Fund

COMPARING ING FUNDS WITH OTHER MUTUAL FUNDS

EQUITY

ICICI PRUDENTIAL INFRASTRUTURE FUND

DATEPERIODNAV

INFRASTRUTURE FUNDBENCHMARK RETURN

30-apr 0829.13

30-apr-08Last 1 year19.1951.6226.29

31-aug-05Since inception10.0049.3433.64

Source- ICICI FACTSHEETBIRLA MIDCAP FUNDRETURNS1 year3 year5 yearSince inception

Madcap fund32.5134.8352.1545.88

Cnx midcal28.5026.6847.4142.25

Source- BIRLA FACTSHEETSBI MAGNUM COMMA FUNDCompound Annualized returnsComma fund returnBse 200 Index return

Return for the last 1 year52.3748.50

Return since Inception38.7440.46

Source SBI FACTSHEETHSBC EQUITY FUND

Compound Annualised returnHSBC Equity fundBSE 200

1 year30.2424.13

3 year34.6430.56

5 year54.2739.96

Since inception50.7435.52

Source - HSBC FACTSHEETHDFC GROWTH FUND

DatePeriodNAVReturnsBSE 200

Dec,28 2007185 days167.888-31.25-37.53

June.30 2005Last 3 years57.34326.2321.20

June,30 2003Last 5 years23.35837.6029.43

Since inceptionOct,11 961025.3015.18

SOURCE- HDFC FACTSHEETING CORE EQUITY FUNDAnnualised return% change in NAVBSE 100

1 year26.6430.71

3 year38.7140.46

5 year42.8944.24

Since inception14.8121.46

Sources-ING FACTSHEET

COMPARISION BETWEEN EQUITY FUNDSEQUITY FUNDSINCE INCEPTION

ING21.46

HDFC15.18

HSBC35.52

SBI40.46

BIRLA42.25

ICICI49.34

BEBT FUNDSING LIQUID FUND

Returns for the period% change in NAV% change in Benchmark

1 year7.607.17

3 year6.706.37

5 year5.965.49

Since inception6.73N/A

HDFC LIQUID FUND

DateNAVReturnsBenchmark

June,23 200816.394.17.09

Dec,28 200715.7524.253.60

June,30 200513.3317.196.46

Since inception10.006.65N/A

RELIANCE LIQUID FUNDPeriodReturns Benchmark Return

Last 1 year6.636.39

Last 3 year5.435.13

Last 5 year5.685.51


ICICI PRUDENTIAL LIQUID PLANDate Liquid planBenchmark

Apr,30 20078.878.86

Apr,29 20057.316.26

Apr,30 20036.625.43


BIRLA SUNLIFE LIQUID PLAUS FUNDReturnsLiquid PlusBenchmark

1 year8.598.78

3 year6.916.09

5 year6.275.41


COMPARISION BETWEEN DEBT FUNDS

DEBT FUNDSSince Inception

ING6.73

HDFC6.65

RELIANCE6.75

ICICI7.08

BIRLA6.06

PROJECT PROFILEDuring our 8-10 weeks training program, we were assigned a specific Project Work as summer project which involved project design, designing of questionnaires, sampling techniques, administering the survey, data tabulation, and analysis and drawing inferences.

The details of the projects are given below:

PROJECT TITLE

INVESTORS AWARENESS ABOUT ASSEST MANAGEMENT COMPANIES OBJECTIVES

1. To understand the mutual fund companies.

2. To understand the competition among competitors.

3. To know investors knowledge about mutual fund.4. To do customer survey for noticing the trend of investment of their income.

5. Customer perspective in terms of affordability, awareness, acceptance, etc.

6. Comparison of the products and services of ING AMC with its competitors.

LEARNINGS

1. Learnt about the functioning of stock market and the basis of share trading.

2. Investors perception about mutual funds companies.3. Comparison of all the mutual funds.

4. Comparison between funds offered by different asset management companies.

STRATEGY

To go for project work, first I understood the company, its products and services and the industry. Then I studied the products and services of its competitors so that I can understand the competition in the market. After collecting information of competitors, I fabricated a questionnaire and conducted investors survey to find investments trend of people in various financial products and to understand the interests of people towards companies.RESEARCH METHODOLOGYA systematic Research reduces the uncertainty in the decision-making process management. Properly conducted marketing research is an indispensable tool for top management in marketing decision. Marketing Research is defined as systematic design, collection analysis and reporting of data and findings relevant to a specific marketing situation facing the company.

DATA COLLECTION

Data has been collected through primary as well as from secondary sources:-

Primary Data:-In the present study primary data has been collected on the basis of face to face interaction and questionnaires.

Secondary Data:-The secondary data is being structured from various websites, books, magazines and journals.

OBJECTIVE OF THE STUDYThe objective of the project is to find the following points:

1. Products and services provided by the competitors to their customers.

2. Investment trend of people.

3. Returns derived in last 3 to 5 years.

4. Risk appetite of people and their consideration behind investments.

5. Awareness of people about Assets management companies.6. Interest of interest in mutual funds.

SCOPE OF THE STUDY1. ING and other players in the market..

2. Investors of NCR region interest in Asset Management company.RESEARCH DESIGNMethodology for Customer Survey

Target Population: All customers of ING VYSYA Bank

Survey Frame: All Atm Machines of ING and data of investors of ING VYSYA bank for my survey.

Sampling Element: Individuals.

Sample Size: 2oo customers.

Sample Area: Customers of bank in the NCR regionType of data used: Primary data.

Tools Used: Questionnaire

Gender: Males and Females

Age: 25 years to 70 years.

DATA ANALYSIS AND INTERPRETATION1. What is your age?

Out of total sample of 200 investors, 34 are in the category of 20-30, 54 falls in the

category of 30-40, 62 investors are in the age group of 40-50 years, 50 falls in the

category of above 50 years of age.

2. What is your annual income?

48% respondents are having an annual income between Rs. 2.5 Lacs and Rs. 5 Lacs,

35% respondents are having an annual income between Rs. 1 Lac and Rs. 2.5 Lacs,

10% respondents are earning above Rs. 5 Lacs and only 7% are in the category of

below 1 Lac.

3. What kind of investment do you make?This question was asked to know investors pattern of investment in mutual funds..

In the above diagram maximum investors i.e 150 out of 200 are investing in equity. The reason behind it is that they want maximum profit from their investments. the other reason is the past performance of equity funds. In liquid funds 40 out of 200 investors are investing . This is due to the fear of loosing money in Equity market and they want to play the safe game and 10 out of 200 are investing in Debt market as their capital will be safe.4. From last how many years you are doing investments?

This question was asked to find out investors knowledge about mutual funds.

The above diagram shows that 40 % or 80 investors out of 200 are investing from less than 2 years another 40 % are investing in mutual funds from last 5 years.Investors who are investing in mutual funds from 10 years are only 15 % and who are investing in mutual funds from above 10 years are only 5 % i.e only 10 out of 200.5. Which mutual fund company have you invested in?

This question was asked to find out in which company investors have invested their money.

From the questionnaire the findings is that 28 % have invested in Reliance mutual fund, 18 % of investors have invested in ICICI mutual funds, 8 % or 16 out of 200 investors have invested in ING mutual funds and other mutual fund company 46 % of investors have invested i.e. 96 out of 200. =6. In which ING plan you have done investments?

This question was asked to find out in which ING scheme investors have invested.

The above diagram shows that in DOF (Domestic Opportunity Fund) 27 % of investors have invested. In RLF (Real Estate Fund) 38 % of investors have invested. In Liquid Plus fund 20 % of investors have invested and in other fund only 15 % of investors have invested.7. What is your main investment objective? This question was asked to find investors criteria of investment.

From the figure it can be see that out of sample size of 200 investors, 53% of the respondents have returns as their main investment consideration because everybody wants good income on their investments, 22% respondents save their money for the purpose of tax saving so that they can pay less tax to the government ,22 % look safety perspective as their main objective is to save some amount of money and only 4 % of investors are their who dont know .8. For what time period you do investments? This question was asked to find out their investment policy.

The above figures shows that majority of people i.e. 41 % invest between 1-3 years so that they can earn maximum appreciation in their capital , 33 % of investors invest for more than 3 years for security reasons and only 26 % of investors do investments for 1 years as they dont want to take risk .9. In which plan you have invested?This question was asked to know investment detail .

From the above figure we get to know that 53 % of investors invest in SIP ( Systematic Investment Plan) , the reason behind is the fluctuation of share market as they want to get better returns and they are basically service class people as they cant afford to pay money at a single time.. 47 % of investors invest in lumpsum amount as they believe that they can get maximum appreciation in their capital if they invest at a single time.10. Why have you chosen SIP for doing investments?

In the above diagram, we find that majority of the investors (42% i.e. 84 out of 200 investors) go for the option of monthly saving, 41% people i.e. 82 of them want to reduce the risk of fluctuating market and rest 17% of investors do it for other purpose.

11. Why have you opted lump sum for doing investments?

In the above diagram it is shown the preference of the investors regarding investment in lump sum plan and it is found that majority of the investors (60% i.e. 120 out of 200 investors) invest for the purpose of getting higher returns, they give first preference of investing in lump sum plan to getting higher returns and they give preference to the fluctuating market or arbitrage i.e. buying in lower market and selling in higher market (30% i.e. 60 out of 200) and lastly they want to invest for short period (only 20 out of 200 investors). As they earn \

profit or get returns maximum returns they sell the fund.OBSERVATIONS

1. Some investors see it as a Gambling and some see it as the best way to increase their capital.

2. Investors still dont have proper knowledge about mutual funds.3. Investors usually watch past performance of funds before investing.

4. Investors still belief that if they invest in SBI and Reliance their capital will be safe.5. Business class people doesnt want to invest as they believe that they can earn more if they

invest same amount in their business.

LIMITATIONSWherever study is conducted involving human behavior, it suffers from certain drawbacks because there is possibility of deviation between what is recorded and what truth is. So there are few drawbacks in this study that are under mentioned.

1. Sample size is very small and the obtained frequencies may do not have good fit expected frequencies, so there might be some discrepancies in options.

2. The sample, which was selected, may not represent the true characteristics of all the questions. So there may be variations in the results found from the reality.

3. Respondents were hesitant to give information to some questions.

4. Some investors didnt entertain me.

5. They didnt give us information easily.

6. It was difficult to collect the correct information.

CONCLUSIONUnder this project, I had the opportunity to get in-depth understanding about mutual funds and different terms related with the financial market. This project enabled me to know the awareness level of the investors about the various mutual fund companies.This project also helped me gain an insight into various aspects like the different products and services offered by the competitors and the investment trend of the people.With the help of this project, I have been able to broaden my knowledge about the financial markets especially in terms of mutual funds.

REFERENCES ING ORANGE BOOK

JAGDEESH, N. and S. TITMAN ( Returns of buying Winners and Selling Loosers: Implications of stock market efficiency) page no. 65-91. M. USEEM: Investors Capitalism. page no. 104-107

Mutual Funds Insight Magazine.

Value Research Magazine

Factsheet Of Various Mutual Fund Companies.

WWW..

www.investmarketbusiness.com www.ingim.com www.valueresearchonline.com www.investopedia.com1. Switzer, N, Lorne, Huang, Yanfen, INTELLECTUAL CAPITAL How does human capital affect the performance of small and mid-cap mutual funds . Year 2007 issue 4, page no. 666-881, Emerald group publisher2. Johnson, T, Don MANAGERIAL FINANCE Real estate investing.

Year 2006 issue 6, page no. 953-954, Emerald group publisher3. Shank, Todd, Hill Ron, MANAGERIAL FINANCE A Study of Socially

Responsible Firms' Short-Term versus Long-term Performance. Year 2005 issue 8, page no. 33-46, Emerald group publisher.4. Baris, G,Jay, Warshall ,A INVESTMENT COMPLIANCE Investment Company Governance. Year 2004, issue 2, page no. 16-22.Emerald Publisher.5. Ramasamy, Bala, Yeung, H, C INTERNATIONAL JOURNAL OF BANKING MARKETING Evaluating mutual funds in an emerging market: factors that matter to financial advisors. Year 2003, issue 3, page no. 122- 136.Emerald publisher.

QUESTIONNAIRE

Investors Awareness about Asset Management Company .NAME:

OCCUPATION:

CONTACT NO:

1. What is your age?

(a) 20-25 (b) 25-30 (c) 30-35 (d) 35-40

(e) Above 40

2. What is your annual income?

(a) Less than Rs.100000

(b) Between Rs.100000- Rs.250000

(c) Between Rs.250000- Rs.500000

(d) Above Rs.500000

3. From last how many years are you doing investment?

(a) Less than 2 years

(b) 3-5 years

(c) 5-10 years

(d) More than 10 years

4. What kind of investment do you make? (You can tick more than one)

(a) EQUITY

(b) DEBT

(c) LIQUID

5. Which mutual fund company you have invested in.

(a) ING

(b) RELIANCE

(c) ICICI PRUDENTIAL

(d) OTHERS

SPECIFY:

6. In which plan of ING you have done investment?

(i) DOMESTIC OPPORTUNITY FUND

(ii) REAL ESTATE FUND (iii) Any other (b) Debt

(c) Liquid Fund

7. What is your main investment objective?

(You can tick more than one)

(a) Savings

(b) Tax saving

(c) Capital appreciation

8. For what time period you do investment?

(a) Short term (Up to 1 year)

(b) Middle term (1-3 years)

(c) Long term (Above 3 years)

9. In which plan have you opted?

(a) SIP (Systematic Investment Plan)

(b) Lump sum

10. Why have you chosen SIP for doing investment?

(a) Monthly saving

(b) To reduce risk of fluctuating market

(c) Any other

11. Why have you opted lump sum for doing investment?

(a) Short period investment

(b) Greater returns

(c) To take the advantage of arbitrage (buying in

lower market and selling in higher market)

High return

Low return

Sector Funds

Diversified Equity Funds

Index Funds

Balanced Funds

Debt Funds

Gilt Funds

MMMF

Risk Low

Risk High

Amity Business SchoolPage 5

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0.6Greater returnsGreater returns

To take the advantage of arbitrage0.3To take the advantage of arbitrage

Short period investmentShort period investment0.1

Greater returns

To take the advantage of arbitrage

Short period investment

Sheet1

Greater returnsTo take the advantage of arbitrageShort period investment

Greater returns60%

To take the advantage of arbitrage30%

Short period investment10%

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0.07Less than Rs.100000Less than Rs.100000

0.35Rs.100000- Rs.250000Rs.100000- Rs.250000

0.48Rs.250000- Rs.500000Rs.250000- Rs.500000

0.1Above Rs.500000Above Rs.500000

Sheet1

Less than Rs.100000Rs.100000- Rs.250000Rs.250000- Rs.500000Above Rs.500000

7%35%48%10%

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Documents

Mutual Funds and Investors’ Awareness About Mutual Fund Companies