MUTUAL FUNDS INDUSTRIES

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A

PROJECT REPORT

ON

MUTUAL FUNDS INDUSTRIES IN

INDIA

(With Special Reference to ING Vysya Bank)

VysyaRudrapur, (Uttarakhand)

In partial fulfillment of requirement for MBA Degree

Submitted To Submitted By

Preeti Dixit Zulfikar Ali

Faculty (Mgt. Deptt.) Roll. No. 061579

Saraswati Institute of Management &Technology,

Rudrapur Gadarpur main road, Rudrapur (Uttrakhand)

(Affiliated to Kumaun University, Nainital


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A study on Mutual Funds Industry in India in the

competitive market of financial products inRudrapur city.

Subject

MUTUAL FUNDS INDUSTRY IN INDIA

Under Guidance of- Prepared by-

Mrs. Preeti Dixit Zulfokar AliFaculty (Mgt. Deptt.) (V- Semester)

Towards the partial Fulfillment of

BBA Program


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TABLE OF CONTENT

Acknowledgement

List of Tables

Abbreviations

Chapter-1 (Introduction)

Objective of Management Thesis

Research Design

Hypothesis Testing

Practical Utility of the Study

Limitations

Chapter-2 (Industry Profile)

Financial industry profile

Banks

Capital market

Insurance

Venture capital

Changing paradigm of financial services

Chapter-3 (Mutual fund industry)

Mutual funds industry in IndiaConcept of mutual funds

Chapter-4 Reliance mutual fund)

Chapter-5 (SBI mutual fund)


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Chapter-6 (Analysis & interpretation)

Awareness about mutual funds

Investment plans

Earning capacity of an individualObjective of investment

Features of mutual fund

Mutual fund companies

Why Reliance and SBI mutual fund?

Mutual funds are popular instrument for investment

Investment allocationFrequency in mutual fund investment

Government vs. private company

Chapter-7 (Findings)

Bibliography

Appendices (Questionnaire)

Glossary


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ACKNOWLEDGEMENT

It is essential to acknowledge the help received from the people from various

areas. I find myself at loss how to thank them.

These words are not a formality but a sincere voice of my heart and I owe

gratitude to them all. I express my deep feelings of gratitude, profound

respect to Mrs. Preeti Dixit for cooperating with me to complete my project

in proper manner, with adequate knowledge provided by them.

I feel great pleasure in rendering my deep sense of gratitude to my family

members and entire friend group for their helping attitude and cooperation

during course of this project.

(Zulfikar Ali)


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LIST OF TABLES

Table & Graph-1 Awareness about mutual funds

Table & Graph-2 Investment plans

Table & Graph-3 Earning capacity of an individual

Table & Graph-4 Objective of investment

Table & Graph-5 Features of mutual fund

Table & Graph-6 Mutual fund companies

Table & Graph-7 Why Reliance and SBI mutual fund?

Table & Graph-8 Mutual funds are popular instrument for investment

Table & Graph-9 Investment allocation

Table & Graph-10 Frequency in mutual fund investment

Table & Graph-11 Government vs. private company

Table & Graph-12 Market share of various financial instruments


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ABBREVIATION

AMC Assets Management Company

BOB Bank of Baroda

FDs Fixed deposits

MF Mutual funds

PPF Public provident fund

SBI State Bank of India

SEBI Security exchange board of India

UTI Unit Trust of India

VC Venture capital

VCF Venture capital funds


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CHAPTER-1

INTRODUCTION


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OBJECTIVE OF THE STUDY

The primary objective of this study is to identify the share of mutual funds inoverall basket of financial products and how mutual funds industry is trying to

increase its market share.

The secondary objective is to find out whether a mutual fund is a popular

investment instrument for an individual. Though there are number of mutual

funds are available in the market with distinct features so how each and everycompany is able to hold its position in the competitive market.


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RESEARCH METHODOLOGY

The term "research" literally means to search diligently, investigate orexperiment to discover facts, revise accepted theories on laws in light ofnew facts, or to discover a practical application of new facts, theories or laws.One uses research to get information to make decisions or implement aplan. Research gives you insight and eliminates risk.

Thus stated in a "simple language" a research design is a plan ofaction, for collecting and analyzing data in an economic, efficient andrelevant manner. A research design could be constructed either to test ahypothesis or to give cause and effect relation to a problem. The word researchis derived from a Latin word and is composed of two syllables, a prefix reand a verb search. Re means again. Search means to examine closely andcarefully, to test and to try, to probe.

DEFINITION

Research is an active, diligent, systematic, scientific and analytical process ofinquiry in order to discover, interpret, or revise facts, events, issues, concepts,behaviors or theories and to make practical applications with the help of suchfacts, laws, theories or concepts. Research is a systematic approach towards

purposeful investigation. This need-

1. Formulation of a hypothesis2. Collection of a data3. Analysis and interpretation of the data to find results.4. Conclusion in the form of a solution.

APPLIED RESEARCH

My research is an applied research. Because applied research is aresearch that is designed to find answers to questions that have arisen inmaking immediate practical decisions. Applied research basically relies ontheory.


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STEPS IN RESEARCH DESIGN

Selection of problem

The problem selected for study should be defined clearly in operationalterms so that the researcher knows - positively what factors she is looking forand what is relevant to the study. Since human behavior, as an interactionpattern, is the result of various forces it is best to delimit the scope of one'sstudy which reaps ample benefits during the actual course of datacollection.

The problem selectedA study on the market share and preferences of mutual fund in the competitivemarket of financial products in Gorakhpur city.

Source of data

Once the problem is selected it is the duty of the researcher to state clearlythe various sources of information such as library, personal documents,

field work, a particular residential group etc.

Sources of research

Survey, Personal Interviews, Books, magazines, internet.

Objective of the research

To find out the market share and preferences of mutual fund in competitivemarket of financial products.


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TECHNIQUE OF DATA COLLECTION

Relevant to the study suitable technique has to be adopted for the collection

of required data. The relative merits of observation, survey etc. whenstudied together will help in the choice of suitable technique. Once thecollection of data is complete, analysis, findings, suggestion and presentationof the report naturally follow:

Sample survey

In any discipline, when you need to search findings of fact, to representincidence and/distribution, you use a survey method. There are many

survey methods, but what they all share in common is that they do notdo more than collect data and applies to primary and secondary research.It is method in which the researchers takes a representative sample andtry to judge the attitude and opinion of those people. A survey can beconducted by two methods:

1. Census method

2. Sampling method

When the whole area of population of persons is contacted the method isknown as census method while when the small group is selected asrepresentative of the whole mass it is known as sampling method. Thegroup actually selected for study is known as sample.

Sampling method is becoming more and more popular in all types ofresearch. The method is quite reliable and valid in process and the resultsacquired are very accurate. I have taken the sample size of 200.


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ADVANTAGES OF SAMPLE SURVEY

Saving of time

In sampling method comparatively small numbers of units are studied andso generally it requires less time than census method.

Saving of money

Survey of smaller number of cases not only requires less time but alsorequires less money. By adopting sampling method, the study can befinanced with much less resources.

Detailed study

When the number of units is large detailed study is not possible. The smallernumber of cases in the sample permits more minute- observations anddetailed study.

Accuracy of results

The most important advantage of sampling method is that the results drawnby this method are more accurate and reliable than results yielded by censusmethod. The condition for getting accurate result is only that the sampleshould be properly selected.

Administrative control

In sampling methods the cases are generally small hence it is usually more

convenient from administrative point of view. Sampling method is usefulas it is easy to manage and control samples.


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TYPES OF SAMPLING

PROBABILITY SAMPLING TECHNIQUES

Random Sampling

It is the sampling technique which assures that every element is unique inthe universe will get an opportunity to be selected.

Stratified Random Sampling

Elements are selected from each strata (sub groups) sharing one or morecharacteristics. In this research I have adopted stratified randomsampling method.

Regarding collection of data I have decided to collect the data

of 200 investors. My project is mainly related to mutual fund.

Cluster Sampling

It is also called multi stage sampling. Generally used toselect samples from a very large area. Under this method the selectionof sample is made in different stages.

PROBABILITY

SAMPLING

SIMPLE

RANDOM

SAMPLING

STRATIFIED

RANDOM

SAMPLING

CLUSTER

SAMPLING


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NON - PROBABILITY SAMPLING TECHNIQUE

Accidental Sampling

In accidental sampling the researcher picks up cases from the populationthat happens to be accidentally available to the investigator (no criteria inselection, there is no guarantee).

Quota Sampling

In this sampling technique the universe is first divided into different strata.Then the number to be selected from each stratum is decided. This numberis known as quota.

Purposive Sampling

Units are selected from the universe purposively by the researcher. Thechoice of selection is supreme. Here you have a clear purpose.

NON-

PROBABILITY

SAMPLING

ACCIDENTAL

SAMPLING

PURPOSIVE

SAMPLING

QUOTA

SAMPLING


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QUESTIONNAIRE

Questionnaires are an inexpensive way to gather data from a potentially largenumber of respondents. Often they are the only feasible way to reach a

number of reviewers large enough to allow statistically analysis of the results.A well-designed questionnaire that is used effectively can gather informationon both the overall performance of the test system as well as information onspecific components of the system. If the questionnaire includes demographicquestions on the participants, they can be used to correlate performance andsatisfaction with the test system among different groups of users.

It is important to remember that a questionnaire should be viewed as a multi-stage process beginning with interpretation of the results. Every stepneeds to be designed carefully because the final results are only as good

as the weakest link in the questionnaire process. Although questionnairesmay be cheap to administer compared to other data collection methods, theyare every bit as expensive in terms of design time and interpretation.

The steps required to design and administer a questionnaire include:

1. Defining the Objectives of the survey2. Determining the Sampling Group3. Writing the Questionnaire4. Administering the Questionnaire5. Interpretation of the Results
http://www.cc.gatech.edu/classes/cs6751_97_winter/Topics/quest-design/paper.gif


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Two types of Questionnaire

Closed or restricted form

Calls for a "yes" or "no" answer, short response, or item checking; is fairlyeasy to interpret, tabulate, and summarize. For this study I have opted forclose ended question.

Open or unrestricted form

Calls for free response from the respondent; allows for greater depth ofresponse; is difficult to interpret, tabulate, and summarize.

INTERVIEWS

Interviews are a far more personal form of research than questionnaires. Inthe personal interview, the interviewer works directly with the respondent.Interviews are generally easier for the respondent, especially if what are


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sought are opinions or impressions. I have opted for personal interview.Personal interview can be classified into two categories:

Customer Interview-This interview is conducted in order to fill up thequestionnaire and to know their view on mutual fund.

Brokers Interview- This interview is conducted with the dealers of variousbroking houses of Gorakhpur city like-Angle Broking, Religaire, Asctt.Mehta and India Infoline in order to know the market share and customerpreferences in mutual fund.

Almost everyone is familiar with the telephone interview. Telephoneinterviews enable a researcher to gather information rapidly. Most of themajor public opinion polls that are reported were based on telephoneinterviews.

HYPOTHESIS


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A hypothesis consists either of a suggested explanation for a phenomena or of areasoned proposal suggesting a possible correlation between multiplephenomena.Following are the hypothesis created for the better positioning of the thesis:-

Mutual funds are not a popular instrument for investment as compared toother financial instruments.

In today competitive era, mutual funds are not facing tuff competition inthe financial market.

The Mutual funds market of Government sector is moreprominent/comprehensive.

LIMITATION

Each and every study has some or the other limitations so as this study is havingwhich is as following:-


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Time constraint is one of the major problem arises at the time of datacollection because the respondents were not having enough time to entertain.

Geographical constraint is the another limitation of this project as mytopic is required a detailed study so it is possible that being this projectconcentrated in Gorakhpur city, it cannot show true and fair picture.

It is necessary to have the right respondent for the proper study which isanother limitation I have found at the time of data collection.

Most of the time it happen that consumer are not aware about thecompany, its product and the services. Everybody heard the name of mutual

fund but what it is exactly nobody knows.

Lack of resources for data collection

Statistical error.

Rapid fluctuation in the financial status of an individual.


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PRACTICAL UTILITY OF THE STUDY

Theoretical concepts are easy to understand but its practical applicability in theright direction is a tuff task. Most of the time it is found that their is a differencebetween theoretical vs. practical. Following are the practical utility of the study:-

This study will be helpful in multiple areas but its striking feature is therole of mutual fund though having number of instruments available in themarket.

It is more about the opportunities available in the market along with the

threat present i.e. other financial products.

Companies dealing in mutual funds can better understand what thefeatures are which is attracting the investors the most.


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CHAPTER-2

INDUSTRY PROFILE


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FINANCIAL INDUSTRY PROFILE

The finance industry encompasses a broad range of organizations that deal

with the management of money. Among these organizations are banks, creditcard companies, insurance companies, consumer finance companies, stockbrokerages, and somegovernment sponsored enterprises.The financial sectoris in a process of rapid transformation. Reforms are continuing as part of theoverall structural reforms aimed at improving the productivity and efficiencyof the economy. The role of an integrated financial infrastructure is tostimulate and sustain economic growth.

The US$ 28 billion Indian financial sector has grown at around 15 per centand has displayed stability for the last several years, even when other markets

in the Asian region were facing a crisis. This stability was ensured throughthe resilience that has been built into the system over time. The financialsector has kept pace with the growing needs of corporate and otherborrowers. Banks, capital market participants and insurers have developed awide range of products and services to suit varied customer requirements.The Reserve Bank of India (RBI) has successfully introduced a regime whereinterest rates are more in line with market forces. Financial institutions havecombated the reduction in interest rates and pressure on their margins byconstantly innovating and targeting attractive consumer segments. Banks and

trade financiers have also played an important role in promoting foreign tradeof the country.
http://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Government_sponsored_enterprisehttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Government_sponsored_enterprise


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Banks

The Indian banking system has a large geographic and functional coverage.Presently the total asset size of the Indian banking sector is US$ 270 billion

while the total deposits amount to US$ 220 billion with a branch networkexceeding 66,000 branches across the country. Revenues of the bankingsector have grown at 6 per cent CAGR over the past few years to reach a sizeof US$ 15 billion. While commercial banks cater to short and medium termfinancing requirements, national level and state level financial institutionsmeet longer-term requirements. This distinction is getting blurred withcommercial banks extending project finance. The total disbursements of thefinancial institutions in 2001 were US$ 14 billion.

Banking today has transformed into a technology intensive and customerfriendly model with a focus on convenience. The sector is set to witness theemergence of financial supermarkets in the form of universal banks providinga suite of services from retail to corporate banking and industrial lending toinvestment banking. While corporate banking is clearly the largest segment,personal financial services is the highest growth segment.

The recent favorable government policies for enhancing limits of foreigninvestments to 49 per cent among other key initiatives have encouraged suchactivity. Larger banks will be able to mobilize sufficient capital to financeasset expansion and fund investments in technology.


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Capital Market

The Indian capital markets have witnessed a transformation over the lastdecade. India is now placed among the mature markets of the world. Key

progressive initiatives in recent years include:

The depository and share dematerialization systems that haveenhanced the efficiency of the transaction cycle

Replacing the flexible, but often exploited, forward tradingmechanism with rolling settlement, to bring about transparency

The InfoTech-driven National Stock Exchange (NSE) with a nationalpresence (for the benefit of investors across locations) and otherinitiatives to enhance the quality of financial disclosures.

Corporatisation of stock exchanges.

The Securities and Exchange Board of India (SEBI) has effectivelybeen functioning as an independent regulator with statutory powers.

Indian capital markets have rewarded Foreign Institutional Investors(FIIs) with attractive valuations and increasing returns.

The Mumbai Stock Exchange continues to be the premier exchangein the country with an increase in market capitalization from US$ 40billion in 1990-1991 to US$ 203 billion in 1999-2000. The stockexchange has about 6,000 listed companies and an average dailyvolume of about a billion dollars

Many new instruments have been introduced in the markets,including index futures, index options, derivatives and options andfutures in select stocks.


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Insurance

With the opening of the market, foreign and private Indian players are keento convert untapped market potential into opportunities by providing tailor-

made products:

The presence of a host of new players in the sector has resulted in ashift in approach and the launch of innovative products, services andvalue-added benefits. Foreign majors have entered the country andannounced joint ventures in both life and non-life areas. Major foreignplayers include New York Life, Aviva, Tokio Marine, Allianz,Standard Life, Lombard General, AIG, AMP and Sun Life amongothers.

With competition, the erstwhile state sector companies have becomeaggressive in terms of product offerings, marketing and distribution.

The Insurance Regulatory and Development Authority (IRDA) hasplayed a proactive role as a regulator and a facilitator in the sectorsdevelopment.

The size of the market presents immense opportunities to new playerswith only 20 per cent of the countrys insurable population currently

insured.

The state sector Life Insurance Corporation (LIC), the largest lifeinsurer in 2000, sold close to 20 million new policies with a turnoverof US$ 5 billion.

The gross premia for the insurance sector was US$ 13 billion for2001-02.

There are four public sector and nine private sector insurancecompanies operating in general/non-life insurance business with apremium income of over US$ 2.58 billion.


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Venture Capital

Technology and knowledge have been and continue to drive the globaleconomy. Given the inherent strength by way of its human capital, technical

skills, cost competitive workforce, research and entrepreneurship, India ispositioned for rapid economic growth in a sustainable manner. To realize thepotential, there is a need for risk finance and venture capital (VC) funding toleverage innovation, promote technology and harness knowledge based ideas.

The Indian venture capital sector has been active despite facing achallenging external environment in 2001 and a competitive marketscenario.

There were 34 VCFs and 2 Foreign VCFs registered with SEBI inMarch 2002.

According to a survey conducted by Thomson Financial and PrimeDatabase, India ranked as the third most active venture capital marketin Asia Pacific (excluding Japan). It recorded 115 deals in 2001 withaverage investment per deal amounting to US$ 7.9 million. 57 VCFsinvested US$ 908 million in 101 Indian companies during 2001.

Disbursements for 2002 are expected to be US$ 2 billion and are

estimated to reach US$ 10 billion by 2007.

There is an increased interest in India: 70 VC funds operate in Indiawith the total assets under management worth about US$ 6 billion.

The amount has grown nearly twenty fold in the past five years. MostVCs believe that 2002-03 will be driven by a relatively stable economyand new initiatives that will boost the e-commerce sector, particularlyon-line trading and e-banking sectors.


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Changing paradigms of the financial services

Traditional business models, when businesses were clearly differentiated

(Banks conducted banking, insurance companies offered risk covers andsecurities companies offered investment opportunities), have become thefootnotes of the finance literature. Today, insurance companies are exploringvalues in the banking and investment products and vice versa. It is no more abank competing with another bank and insurance company competing withanother insurance company, but an insurance company competing with banksand what not. Hence, to my mind, the most precious word today is theconvergence of the opportunity zones in financial markets from concept toculmination.

It may be observed that the competitive dynamics of market has changed

phenomenally. Today, players in the market compete in one segment and co-

operate in other segment. Strategic alliances of the competing banks on the

ATM infrastructure are a live example of this. Today, Mutual Funds compete

with the Banks on deposits, as they too provide the cheque facility with

certain limitations. Revolutionary waves have gone to the extent of providing

the ATM facility to the Mutual Funds investors. It is very interesting to

observe the competition mounting across the opportunity zones because that

encourages people to improve and deliver better values to the market leadingto growth of overall productivity of the nation.

Another example here is that of the insurance products. You would observe

that the buyer of the insurance products also looks at them as the investment

products. This is an issue of conditioning over the period of time and

therefore, the customers of the insurance products are both the customers of

the risk protection and the investment products. That leads to the insurance

sector competing with the other avenues of the investment including banks,

financial institutions and investment companies. The structure of the players

in different opportunity zones is also changing on continuous basis.Corporate marriages, exchanges mergers, clearing corporations alliances,

regulators integration, globally, bear testimony to it. Convergence of the

financial products is also apparent, everywhere.

As an example, let us look at the securities brokers. They are no more

securities brokers; they are the brokers exploring opportunities across


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different dimensions of the economy. Similarly, enterprises in the finance are

talking about one stop shop offering all the products ranging from

commodities to securities to currencies under one roof. This change in

business models are necessitated by the values buried in the interlinkages of

the opportunity zones, emerging from economies of scale and economies ofscope.

On exchanges side, more and more products are migrating to the exchanges

for trading. Globally, availability of all sorts of financial products (both

money market and capital market) on the exchanges is driven by the benefits

like transparency, better price discovery,wider dissemination of information

and large investing community.

Imperatives for success

In this era of fierce competition, it has become extremely imperative for all ofus to weave clear cut strategy to deal with these changing dimensions of thebusiness landscape in financial services. We need to strengthen each link inthe value chain and move with a clear cut vision to deliver values in themarket. Therefore, I would feel we need to be competitive at all the levels -

individual, corporate, economy and regulatory.

Competitiveness at the individual level:

It may be apparent that nothing but the change is stable in the world. It offersboth the opportunities and the challenges to the individuals. It is for theindividuals to choose what do they look at. According to me, change isnothing but an exciting opportunity to reposition oneself. Understand that thedriving force behind any repositioning is change. This repositioning may be

because of the survival crisis created by the unanticipated change or theexcitement offered by the change in terms of the unlimited opportunities notvisible with the naked eyes.

We all need to appreciate that future is never the extrapolation of the past. Itis absolutely unpredictable, discontinuous and non-linear. That is where theexcitement lies to the leading professionals in the market. They understandthat the future is what they shape up now. That is why they dont talk aboutpredicting future, they talk about imagining future and having imagined,

creating it. They create future in the literal sense. Leaders also appreciate thatthere is nothing called sustainable leadership in this ever changing world and


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they have got to be extraordinarily competitive to sustain and lead therevolution on the persistent basis.

In this increasingly competitive and complicated business environment, it is

imperative for individuals to primarily focus on value creation through thecontinuous improvement in their own competence levels. They also need tocultivate and nurture leadership and ethical practices. Only an appropriatemix of the competence, leadership and ethical practices would ensure thelong term growth of individuals, add value to their contribution, keep themrelevant to emerging ethos and save them from getting buried in the debris ofobsolescence.

Competitiveness at the corporate level:

I would convey to the corporate to do fewer things but do them better thanthe best, globally. Corporate need to appreciate that no one can internalize theversatility of competencies. Hence, it would be imperative for them toleverage, outsource, network and create strategic alliances with others.Further, they need to think without precedents as precedents create risk oftraditional thinking and withhold the imagination from running radical anddevelopment of fundamentally great and different products and services.

They need to be different faster than being better and be better faster thanbeing smaller. They need to go beyond known paradigms to be the path-breakers and secure a place at the international platform.

Today, businesses are no more businesses, these are battles of competencies.Indeed, there is a competition for the competence in the market. Fortunatelyor unfortunately, success or failure of a market player in this battle forcompetence determines his potential for growth and the competitivedifferentiation. Hence, companies need to strategize and re-strategize almoston the continuous basis. They need to persistently strengthen their existingknowledge and acquire/create new knowledge, compatible with the existingone, as quickly and as inexpensively as possible, to continue leading in theopportunity zones.

Tomorrow, their competitive position in market place would depend on thespeed with which they run on the learning curve, discover the new frontiersof the knowledge in all dimensions of their operations and then thinkcreatively and imaginatively on the strategic ways to transform thisaccumulated knowledge into the value delivering proposition. It should be

understood that the existence of knowledge does not ensure success;


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corporations must also possess the capabilities to leverage on that knowledgeto create values.

Competitiveness at the regulators level:

In this changed business ethos, regulations too demand an in-jaundicedperspective. Regulators can not deal with the complexities of the 21st centurybusiness environment with the 20th century rules, regulations and therudimentary perspective. We can not shoot a moving target with a static gunposition. Therefore, in this era of revolution across the globe, regulationsshould be enterprising, forward looking and evolutionary in nature.Regulators focus should shift from the regulations to the development of themarkets. In my view, regulations just happen to be incidental to the

development. This change in the regulators focus would bring in theparadigm shift in their approach, which would facilitate their transition frombeing enforcement oriented, reactive, adversarial, incident driven and hard tocompliance, partnership oriented, preventive, problem solving and soft.

What I am suggesting is that the regulations should define the broadframework/ parameters for the game and within that framework, marketparticipants should be allowed to operate without any intervention. Thisapproach is all about having the confidence in the market and systems. Now,

the challenge is to ensure that the people dont play foul with the game.Protection of the systems integrity through architecting proper riskmanagement system is another challenge before the regulators. This demandsregulators to make tactical choices with regard to the tools, best timeintervention and regulatory style to fit the audience.

Further, the convergences of the financial activities and the emergence ofnew age one stop financial institutions have resulted in a titanic challenge tothe regulators, internationally. They need to co-operate at a level more thanever before. They need to strike an intelligent balance between the safety ofthe markets under their regulatory jurisdiction and the creative initiatives ofthe market participants. No matter what, market should be given a fairopportunity to explore the avenues for the expansion and growth because thatwould result in the competition in various opportunity domains and thusemergence of better values to the ultimate customers. The capabilities of theregulatory infrastructure and competencies of the human resources havenecessarily to keep pace with the regulates.


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Competitiveness at the economy level:

We all need to strategize to position India Incorporation at the Global level.According to me, we need to come out of the thinking of being a developingcountry because developing is a mindset. There are areas where India isglobally competitive. Our biggest strength is the educated, trained and skilledmanpower, the scientific minds. We have proved that by exhibition ofresilience of Indian economy even in the midst of global meltdown stemmingout of collapse of far eastern economies and troubled Latin Americaneconomies. We need to focus on our strengths and identify the weak links in

the economy chain and dent them with determination. We haveentrepreneurial acumen to make India a giant figure at the global canvas. Istrongly believe, we have potential to do so. A perception is steadily growingabout India being a dynamic market among the emerging economies.


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CHPATER-3

MUTUAL FUND INDUSTRY


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Mutual fund industry in India

The mutual fund industry in India started in 1963 with the formation of UnitTrust of India, at the initiative of the Government of India and Reserve Bankthe. The history of mutual funds in India can be broadly divided into fourdistinct 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 Regulatoryand 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 firstscheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI hadRs.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 bypublic sector banks and Life Insurance Corporation of India (LIC) andGeneral Insurance Corporation of India (GIC). SBI Mutual Fund was the firstnon- UTI Mutual Fund established in June 1987 followed by CanbankMutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), IndianBank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda MutualFund (Oct 92). LIC established its mutual fund in June 1989 while GIC hadset 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 Indianmutual fund industry, giving the Indian investors a wider choice of fundfamilies. Also, 1993 was the year in which the first Mutual Fund Regulationscame into being, under which all mutual funds, except UTI were to beregistered and governed. The erstwhile Kothari Pioneer (now merged withFranklin Templeton) was the first private sector mutual fund registered inJuly 1993.The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industrynow functions under the SEBI (Mutual Fund) Regulations 1996. The numberof mutual fund houses went on increasing, with many foreign mutual fundssetting up funds in India and also the industry has witnessed several mergersand acquisitions. As at the end of January 2003, there were 33 mutual fundswith total assets of Rs. 1,21,805 crores. The Unit Trust of India withRs.44,541 crores of assets under management was way ahead of other mutualfunds.

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963UTI was bifurcated into two separate entities. One is the SpecifiedUndertaking of the Unit Trust of India with assets under management ofRs.29,835 crores as at the end of January 2003, representing broadly, theassets of US 64 scheme, assured return and certain other schemes. TheSpecified Undertaking of Unit Trust of India, functioning under anadministrator and under the rules framed by Government of India and doesnot come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB andLIC. It is registered with SEBI and functions under the Mutual FundRegulations. With the bifurcation of the erstwhile UTI which had in March2000 more than Rs.76,000 crores of assets under management and with thesetting up of a UTI Mutual Fund, conforming to the SEBI Mutual FundRegulations, and with recent mergers taking place among different privatesector funds, the mutual fund industry has entered its current phase ofconsolidation and growth. As at the end of September, 2004, there were 29funds, which manage assets of Rs.153108 crores under 421 schemes.


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ROWTH IN ASSETS UNDER MANAGEMENT


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Tax benefitsWell regulated

Types of mutual fund schemes

Wide variety of Mutual Fund Schemes exists to cater to the needs such asfinancial position, risk tolerance and return expectations etc. The table belowgives an overview into the existing types of schemes in the Industry.

By Structure- Open ended- Close ended

By investment objective

- Growth Scheme- Income Scheme- Balanced Scheme- Money market Scheme

Other Schemes- Tax saving Scheme- Special Scheme- Index Scheme- Sector specific Scheme

Major Players

Reliance Mutual Fund SBI Mutual Fund ABN AMRO Mutual Fund Franklin Templeton Investments HDFC Mutual Fund

HSBC Mutual Fund ING Vysya Mutual Fund JM Financial Mutual Fund Kotak Mahindra Mutual Fund LIC Mutual Fund Prudential ICICI Mutual Fund Standard Chartered Mutual Fund Sundaram Mutual Fund Tata Mutual Fund.


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Numbers of players are available in mutual fund industry. For my study I havechosen Reliance Mutual Fund and SBI Mutual Fund.

CHAPTER-4

RELIANCE MUTUAL FUND


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RELIANCE MUTAL FUND

Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, withAssets Under Management (AUM) of Rs. 80,779 crores (AUM as on Dec31st 2007) and an investor base of over 43.67 Lakhs Reliance Mutual Fund, apart of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastestgrowing mutual funds in the country. RMF offers investors a well-roundedportfolio of products to meet varying investor requirements and has presencein 115 cities across the country.

Reliance Mutual Fund constantly endeavors to launch innovative productsand customer service initiatives to increase value to investors. RelianceMutual Fund schemes are managed by Reliance Capital Asset ManagementLtd., a wholly owned subsidiary of Reliance Capital Ltd. Reliance CapitalLtd. is one of Indias leading and fastest growing private sector financialservices companies, and ranks among the top 3 private sector financialservices and banking companies, in terms of net worth.

Reliance Capital Ltd. has interests in asset management, life and general

insurance, private equity and proprietary investments, stock broking andother financial services. Reliance Capital Asset Management Ltd. has avision of being a leading player in the Mutual Fund business and hasachieved significant success and visibility in the market.

However, an imperative part of growth and visibility is adherence to GoodConduct in the marketplace. At Reliance Capital Asset Management Ltd., theimplementation and observance of ethical processes and policies has helpedus in standing up to the scrutiny of our domestic and international investors.


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Management:

The management at Reliance Capital Asset Management Ltd. is committed togood Corporate Governance, which includes transparency and timely

dissemination of information to its investors and unit holders. The Board ofDirectors of RCAM is a professional body, including well-experienced andknowledgeable Independent Members. Regular Audit Committee meetingsare conducted to review the operations and performance of the company.

Employees:

Reliance Capital Asset Management Ltd. has at present, a code of conduct for

all its officers. It has a clearly defined prohibition on insider trading policyand regulations. The management believes in the principles of propriety andutmost care is taken while handling public money, making proper andadequate disclosures.

All personnel at Reliance Capital Asset Management Ltd are made aware oftheir rights, obligations and duties as part of the Dealing Policy laid down interms of SEBI guidelines. They are taken through a well-designed HRprogram, conducted to impart work ethics, the Code of Conduct, information

security, Internet and e-mail usage and a host of other issues.One of the core objectives of Reliance Capital Asset Management Ltd. is toidentify issues considered sensitive by global corporate standards, andimplement policies/guidelines in conformity with the best practices as anongoing process. Reliance Capital Asset Management Ltd. gives top priorityto compliance in true letter and spirit, fully understanding its fiduciaryresponsibilities.

Our Schemes

Equity/Growth


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The aim of growth funds is to provide capital appreciation over the medium tolong- term. Such schemes normally invest a major part of their corpus inequities. Such funds have comparatively high risks. These schemes provide

different options to the investors like dividend option, capital appreciation, etc.and the investors may choose an option depending on their preferences. Theinvestors must indicate the option in the application form. The mutual funds alsoallow the investors to change the options at a later date. Growth schemes aregood for investors having a long-term outlook seeking appreciation over a periodof time.

Debt/Income

The aim of income funds is to provide regular and steady income to investors.Such schemes generally invest in fixed income securities such as bonds,corporate debentures, Government securities and money market instruments.Such funds are less risky compared to equity schemes. These funds are notaffected because of fluctuations in equity markets. However, opportunities ofcapital appreciation are also limited in such funds. The NAVs of such funds areaffected because of change in interest rates in the country. If the interest ratesfall, NAVs of such funds are likely to increase in the short run and vice versa.However, long term investors may not bother about these fluctuations.

Sector Specific

These are the funds/schemes which invest in the securities of only those sectorsor industries as specified in the offer documents. e.g. Pharmaceuticals, Software,Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns inthese funds are dependent on the performance of the respectivesectors/industries. While these funds may give higher returns, they are morerisky compared to diversified funds. Investors need to keep a watch on theperformance of those sectors/industries and must exit at an appropriate time.

They may also seek advice of an expert.


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CHAPTER-5

SBI MUTUAL FUND

SBI MUTUAL FUND

SBI Mutual Fund is Indias largest bank sponsored mutual fund and has

an enviable track record in judicious investments and consistent wealthcreation. The fund traces its lineage to SBI - Indias largest banking


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enterprise. The institution has grown immensely since its inception andtoday it is India's largest bank, patronized by over 80% of the topcorporate houses of the country.

SBI Mutual Fund is a joint venture between the State Bank of India andSociety General Asset Management, one of the worlds leadingfund management companies that manages over

US$ 330 Billion worldwide.In eighteen years of operation, the fund haslaunched thirty-two schemes and successfully redeemed fifteen of them.In the process it has rewarded its investors handsomely withconsistently high returns. A total of over 3.8 million investors havereposed their faith in the wealth generation expertise of the MutualFund. Schemes of the Mutual fund have consistently outperformedbenchmark indices and have emerged as the preferred investment formillions of investors and HNIs.

Today, the fund manages over Rs. 20000 crores of assets and has adiverse profile of investors actively parking their investments across 40active schemes. The fund serves this vast family of investors byreaching out to them through network of over 100 points of acceptance,26 investor service centers, 33 investor service desks and 52 districtorganizers. SBI Mutual is the first bank-sponsored fund to launch anoffshore fund Resurgent India Opportunities Fund. Growth through

innovation and stable investment policies is the SBI MF credo.

Our schemes

Equity scheme

The investments of these schemes will predominantly be in the stockmarkets and endeavor will be to provide investors the opportunity to


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benefit from the higher returns which stock markets can provide.However they are also exposed to the volatility and attendant risks ofstock markets and hence should be chosen only by such investors whohave high risk taking capacities and are willing to think long term.

Equity Funds include diversified Equity Funds, Sectoral Funds andIndex Funds. Diversified Equity Funds invest in various stocks acrossdifferent sectors while Sectoral funds which are specialized EquityFunds restrict their investments only to shares of a particular sector andhence, are riskier than Diversified Equity Funds. Index Funds investpassively only in the stocks of a particular index and the performance ofsuch funds move with the movements of the index.

Debt Scheme

Debt Funds invest only in debt instruments such as Corporate Bonds,Government Securities and Money Market instruments eithercompletely avoiding any investments in the stock markets as in IncomeFunds or Gilt Funds or having a small exposure to equities as inMonthly Income Plans or Children's Plan. Hence they are safer thanequity funds. At the same time the expected returns from debt fundswould be lower. Such investments are advisable for the risk-averseinvestor and as a part of the investment portfolio for other investors.

Balanced Scheme

Magnum Balanced Fund invests in a mix of equity and debtinvestments. Hence they are less risky than equity funds, but at thesame time provide commensurately lower returns. They provide a goodinvestment opportunity to investors who do not wish to be completelyexposed to equity markets, but is looking for higher returns than thoseprovided by debt funds.


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CHAPTER-6

ANALYSIS & INTERPRETATION

AWARENESS ABOUT MFS

(Table & Graph-1)

Criteria No. of People

Yes 200No 0


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0

20

40

60

80

100

120

140

160

180

200

YES

NO

Interpretation-On the basis of above graph it can be seen that people are 100% aware aboutmutual funds.

INVESTMENT PLANS

(Table & Graph-2)


Assets 55Financial instrument 145


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0

20

40

60

80

100

120

140

160

Assets

FinancialInstruments

Interpretation-An asset consists of land, building and bullion whereas financial instrumentsconsists of FDs, PPF, Insurance, Mutual funds, Shares. Financialinstruments are more prefered by the people for investment purpose.

EARNING CAPACITY OF AN INDIVIDUAL

(Table & Graph -3)

Criteria No. of People1-3 Lac 803-5 Lac 955-7 Lac 507 above 5


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0

10

20

30

40

50

60

7080

90

100

1-3 lac

3-5 lac

5-7 lac

7 above

Interpretation-The average investors fall in the category having earning capacity of Rs. 3-5Lakh whereas next position is holded by the investors having earningbetween 2-3 Lakh. These all investors can be termed as small investors.

OBJECTIVE OF INVESTMENTS

(Table & Graph -4)


Increment of wealth 55Tax saving 115

Security of money 20Future needs 10


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0

20

40

60

80

100

120

Increment ofwealth

Tax saving

Secuirty ofmoney

Future use

Interpretation-On the basis of above graph it can be seen that most of the people are havingtax saving as an investment objective where the second preference is toincrement in wealth.

FEATURES OF MUTUAL FUNDS

(Table & Graph -5)


Tax benefits 95Diversification 20

Liquidity 30

Return potential 55


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0

10

20

30

40

50

60

7080

90

100

Tax benefits

Diversification

Liquidity

Return Potential

Interpretation-On the basis of above graph it can be seen that the features which attract theinvestors to invest in mutual fund is tax benefits. Secondly the returnpotential which attract the customer to invest in MFs.

MUTUAL FUND COMPANY

(Table & Graph -6)


Reliance MFs 90SBI MFs 60

Franklin MFs 35Others 15


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0

10

20

30

40

50

6070

80

90

Reliance

SBI

Franklin

Others

Interpretation-Investors are having lots of investment in Reliance MFs. The companywhich is giving the close competition to Reliance is SBI which is followed byFranklin and many more.

WHY RELIANCE & SBI MFS?

(Table & Graph -7)


Brand image 60Company Performance 45

Features 70Market condition 45


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0

10

20

30

40

50

60

70

Brand image

Company

performance

Features

Market

Condition

Interpretation-On the basis of above graph it can be seen that for opting for any companypeople give the preference to the features of the products in comparison tobrand image, company performance and market condition.

MFS ARE POPULAR INSTRUMENT

(Table & Graph -8)

Criteria No. of people

Yes 160No 40


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0

20

40

60

80

100

120

140

160

YES

NO

Interpretation-On the basis of above graph it can be seen that people are having theperception that MFs are the popular instrument for investment. Though thereis population which believes that MFs are not better option for investment ascompare to other government securities.

HYPOTHESIS TESTING

Mutual funds are not a popular instrument for investment as compared to otherfinancial instruments.This is the hypothesis for which I have chosen the method for testing is NullHypothesis testing.

Null Hypothesis Ho= 50%

Possibility of +ive outcome po= 160/200x100


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= 80%

Possibility of ive outcome qo= 40/200x100= 20%

Standard error SE= poxqo/n= ..5x.5/200

= .034

Z= Observe outcome-Expected outcome/SE= .80-.50/.034= 8.82

This Hypothesis has been rejected because it is far from the acceptanceregion. So it is proved that mutual fund are the popular instrument froinvestment as compared to other financial instruments.

INVESTMENT ALLOCATION

(Table & Graph -9)


Mutual funds 60Share 45

Fixed deposit 40PPF 55


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0

10

20

30

40

50

60

Mutual fund

Share

Fixed Deposit

PPF

Interpretation-On the basis of above graph it can be seen that maximum people allocatetheir investment in mutual funds along with PPF, FDs and share.

HYPOTHESIS TESTING

In today competitive era, mutual funds are not facing tuff competition in thefinancial market.This is the hypothesis for which I have chosen the method for testing is NullHypothesis testing.


Possibility of +ive outcome po= 140/200x100= 70%

Possibility of ive outcome qo= 60/200x100


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= 30%


= .034


This Hypothesis has been rejected because it is far from the acceptanceregion. So it is proved that in todays competitive era mutual funds are facingtuff competition in the financial market.

FREQUENCY IN MFs INVESTMENT

(Table & Graph -10)


One time investment 105Periodic investment 95


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90

92

94

96

98

100

102

104

106

One time

Investment

Periodic

Investment

Interpretation-On the basis of above graph it can be seen that most of the investors arehaving one time investment in MFs. They believe in long term investment.

GOVERNMENT VS. PRIVATE COMPANY

(Table & Graph -11)


Government Co. 95Private Co. 105


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90

92

94

96

98

100

102

104

106

Government

Company

Private

Company

Interpretation-On the basis of above graph it can be seen that investors prefer privatecompany in comparison to Government Company for investment purpose.

HYPOTHESIS TESTING

The Mutual funds market of Government sector is moreprominent/comprehensive.This is the hypothesis for which I have chosen the method for testing is NullHypothesis testing.



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Possibility of +ive outcome po= 105/200x100= 52.5%

Possibility of ive outcome qo= 95/200x100

= 47.5%


= .034


This Hypothesis has been accepted because it falls in the acceptance region.So it is proved that the mutual funds market of government sector is moreprominent/comprehensive.

MARKET SHARE OF VARIOUS

INSTRUMENTS

(Table & Graph -12)


Mutual funds 20

Shares 40Life insurance 30


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Other fixed income instruments 10

0

5

10

15

20

25

3035

40 Mutual funds

Shares

Life insurance

Other fixed

income

instruments

Interpretation-On the basis of above graph it can be seen that mutual funds are holdingmarket share of 20% only which is less if compared to shares and lifeinsurance.


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CHAPTER-7

FINDINGS

At the finalization of the thesis, I have arrived at the following findings:

Now a days, people know how to earn along with it they all know

where the investment will be better. Earlier people only invest in FDs,PPF and bonds it dos not mean that other financial instrument was notavailable. It was available but people were having the perception thatonly government securities can be the safer investment option. But intodays scenario is completely changed, people are willing to take riskfor getting more and more return. In their investment option sensitiveinstrument like mutual funds and shares are taking more space.

According to the market research I have found that most of the people

are aware about MFs, their features, their benefits as well asmaximum people were having MFs in their investment portfolio.


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Most of the people are having financial instrument as their investmenttool but the proportion of investment in assets are less in numbers. Asmaximum average investors were having the earning capacity between

3-5 Lakh. They can be said as small investors whereas investors havingannual income between 5-7 Lakh are less in numbers.

According to the research I have found that the main objective of theinvestment is tax saving. Second preference is given to the incrementin wealth.

The features which attract the investors to invest in mutual funds aretax benefits; return potential and liquidity whereas less preference is

given to diversification.

Most of the people prefer private company for investment ascomparison to government one. Now they are not giving importance tosecurity but investors are now conscious about the return and other sortof benefits. Recently among private players Reliance mutual funds areprefered by the customer due to feature of the products they offer. SBImutual funds are giving close competition to Reliance mutual funds.

People are opting for Reliance mutual funds because of the productsfeatures they offer. Second preference they give to brand image for thepurpose of making investment. Whereas equal preference is given tothe company performance and market condition.

On the basis of research and hypothesis testing it is proved that mutualfunds are the popular instrument for investment as compared to otherfinancial instruments. People allocate their most of the fund in MFs ascompared to shares, FD and PPF. .As it involves minimum risk and

maximum return, with a very low cost.

As per the survey it is found that most of the people are having onetime investment as compare to periodic investment. These investors dothe investment for the long term. Active investors are less in numberswho believe in periodic investment.

People like to invest in private companies as compared to governmentcompanies it is proven by the research and hypothesis testing. Now

people do not want to stick to the government company for stable


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return and minimum risk but investors are looking for more risk with amaximum return.

As per the survey it is found that in Gorakhpur city MFs are holding

market share of 20% which is less in proportion if we compare it toother investment instruments. Like share are having market share of40%, Life insurance 30% and other fixed income instruments areholding the market share of 10%.

The investors who are buying the MFs fall in the earning capacity of

3-5 Lakh. It does not mean that people who fall in other category donot consider MFs as their investment portfolio. All the categories areconsidering it but differentiation arises on the basis of amount investedin MFs. Like an investor having earning capacity between 1-3 Lakhwill invests in MFs but the amount of investment will be lesser ascompared to the investor having earning capacity above 7 lacs.

As per the interview with dealers it is found that all the four options(MFs, share, life insurance, fixed income instruments) are consideredby the investors in their investment portfolio. Just the proportion ofinvestment varies and this variation takes place on the basis of theirearning capacity. Like people who are having the income between 7-10Lakh will investment more in shares and MFs as compare to otheroption because their risk taking capacity is more but if we consider theaverage income group all investment option are available in lesserproportion if compared to high income group. If consider the smallinvestors having very low income their investment option would befixed income instrument , MFs and life insurance but off course not

the shares.

Most of the investors opting for MFs fall into the age group of 30-40.They are having the capacity to make investment on MFs as well asability to take more risk. They do not have much effect on theirfinancial health if any loss occurs because they are having number ofsources of income.


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BIBLIOGRAPHY

Mutual Funds book of ICFAI National College. Security Analysis book of ICFAI National College. Book of Financial Management by Ravi M. Kishore. Article by David Logan Scott Investment in MFs. Article by Jordan Goodman everyone money books. Another Puzzle: The Growth in Actively Managed MutualFunds. Martin J. Gruber. The Persistence of Risk-Adjusted Mutual Fund Performance.Edwin J. Elton. Martin Fact sheet of Reliance Mutual Fund Fact sheet of SBI Mutual Fund


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Wall street journal. India at the cross road by Tim Callen. Mutual fund in India by Amitabh Gupta. www.amfi.com www.mutualfund.com www.taxmann.com www.mutualfundsindia.com www.moneycontrol.com www.nytimes.com www.magportal.com

www.financialexpress.com www.finmin.nic.ins www.fundsavvy.com www.principalindia.com www.livemint.com http://www.mf-tech.com http://www.sebi.gov.in www.reliancefund.com www.sbimf.com www.wikipedia .com www.valueresearchonline.com

APPENDICES

Questionnaire for Customers

Name.AgeOccupationAddress..Phone No.

Q1. Are you aware about mutual funds?a) Yes b) No

Q2. What are your investment plans?a) Assets b) Financial Instruments

Q3. What is your earning capacity?
http://www.amfi.com/http://www.amfi.com/http://www.mutualfund.com/http://www.mutualfund.com/http://www.taxmann.com/http://www.taxmann.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.nytimes.com/http://www.nytimes.com/http://www.financialexpress.com/http://www.financialexpress.com/http://www.finmin.nic.ins/http://www.finmin.nic.ins/http://www.fundsavvy.com/http://www.fundsavvy.com/http://www.fundsavvy.com/http://www.fundsavvy.com/http://www.principalindia.com/http://www.principalindia.com/http://www.mf-tech.com/http://www.mf-tech.com/http://www.sebi.gov.in/http://www.sebi.gov.in/http://www.reliancefund.com/http://www.reliancefund.com/http://www.sbimf.com/http://www.sbimf.com/http://www.wikipedia/http://www.wikipedia/http://www.amfi.com/http://www.mutualfund.com/http://www.taxmann.com/http://www.moneycontrol.com/http://www.nytimes.com/http://www.financialexpress.com/http://www.finmin.nic.ins/http://www.fundsavvy.com/http://www.principalindia.com/http://www.mf-tech.com/http://www.sebi.gov.in/http://www.reliancefund.com/http://www.sbimf.com/http://www.wikipedia/


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a) 1-3 lac b) 3-5 lacc) 5-7 lac d) 7-10 above

Q4. What is the objective of your investment?

a) Increase Wealth b) Tax Savingc) Security of Fund d) Future needs

Q5. What features of mutual fund do you prefer?a) Tax Benefit b) Liquidityc) Diversification d) Return Potential

Q6. Which mutual fund company do you prefer?a) Reliance mutual fund b) SBI mutual fund

c) Franklin Templeton d) OthersQ7. If Reliance or SBI mutual fund, then why?

a) Brand Image b) Company Performancec) Features d) Market Condition

Q8. Do you think mutual funds are the popular instrument for investments?a) Yes b) No

Q9. What is the percentage allocation of your investment?a) Mutual fund b) Sharec) Fixed deposit d) PPF

Q10. What is the frequency of investment in mutual funds?a) One Time b) Periodic

Q11. Which sector is prefered for mutual funds investment?

a) Government b) Private

Q12. Name four mutual funds company in order of priority, available in themarket?a) b).c) d).

Questionnaire for Dealers


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Q1. Who are the customers who are buying MFs as per earning capacity?a) 1-3 lac b) 3-5 lacc) 5-7 lac d) 7-10 above

Q2. What is the prefered investment portfolio by your customers?a) Mutual funds b) Sharec) Life insurance d) Other fixed income instruments

Q3. Investors opting for mutual fund fall into the following age groups?a) 20-30 b) 30-40c) 40-50 d) 50-60

GLOSSARY

Asset AllocationDeploying of funds for diversifying portfolio among different types ofassets, such as stocks, bonds, debentures

Asset Management CompanyAn MAC means a company formed and registered under the companiesact, 1956 and approved by the SEBI, to manage the funds various schemesof mutual funds. The AMC plays a key role in running the mutual fundsand it operates under the supervision and guidance of the trustee.


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Capital GrowthAn increase in the market value of securities.

Diversification

A strategy followed by fund manager to reduce risk by investing insecurities, common stock, debentures or bonds of several companies.

Fund ManagerAn individual or an organization which makes the investment decision onbehalf of the fund.

Mutual FundMFs is a financial intermediary that is established in the form of a trust. It

pools the savings the numerous individuals and invests the money thusraised in a diversified portfolio of securities.

Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus itsliabilities. The per unit NAV is the net asset value of the scheme divided by thenumber of units outstanding on the Valuation Date.

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

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

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

NAV related.

Sales LoadIs 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 LoadSchemes.

Sale PriceIs the price you pay when you invest in a scheme. Also called Offer Price. It

may include a sales load.


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STUDENTS DECLARATION

I Rajpreet Kaur, student of MBA 4th semester, of Saraswati Institute of

Management & Technology, Rudrapur hereby declare that dissertation report

intitled Currency risk management A case study of Superfos is the outcome of

my own work and the same as not on nbeen submitted to any

University/Institution for the award of any degree or professional diploma.


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SUPERVISORS SIGN

RAJPREET KAUR

MBA 4th

SEM

HOD SIGNATURE

PREFACE

The process of financial sector reforms, economic liberalization and

globalization of Indian business, it generated the interest and income of

the peoples. But on account of inadequate knowledge of the currency


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risk and lack of expertise, the common people still hesitant to invest their

hard earned money in the corporate securities.

The study of currency risk management helped in utilizing the fund in a

significant way and provided securities. This report provides the

conceptual knowledge of currency risk and its management. It gives the

vivid picture of the currency risk management .I am greatly thankful to

Miss.Gunjan Shrivastava (faculty of management deptt.) for her co-

operation and guidance.

Documents

MUTUAL FUNDS INDUSTRIES