Religare Mutual Fund (4)

8/15/2019 Religare Mutual Fund (4)

1/86


2/86

CONTENTS

SerialNumber

Chapter Page Number

1). CHAPTER – 1: INTRODUCTION1.1 Overview of Industry as a whole.

1.2 Profile of the organization.1.3 Problems of the organization.

1.4 Competition Information.1. !.".O.#. $nalysis of the

Organization.

6-38

).CHAPTER – : O!"ECTI#E AND

$ETHODO%O&'2.1 !ignifi%an%e of the study

2.2 &anagerial usefulness of the study2.2 Ob'e%tives of the study

2.3 !%ope of the study2.4 &ethodology

3(-

3).CHAPTER – 3:

CONCEPTUA% DISCUSSION -6

). CHAPTER – :DATA ANA%'SIS

6*-+

*). CHAPTER – *:CONC%USION AND

RECO$$ENDATION

+3-+*

6). ANNE,URES +6-8


3/86

+). !I!%IO&RAPH' 83


4/86

INTRODUCTION

1.1 O#ER#IE O INDUSTR' AS A HO%E

1.1.1 $UTUA% UND:- #he !()I regulations* 1++3 defines a mutual fund as ,a fund in the form of a trust by a sponsor* to raise money by the trustees through the sale of units to the

publi%* under one or more s%hemes* for investing in se%urities in a%%ordan%e with theseregulations-$ mutual fund is a professionally managed firm of %olle%tive investments that poolsmoney from many investors and invests it in sto%/s* bonds * short term money mar/et instruments* and0or other se%urities. In a mutual fund* the fund manager * who is also/nown as the portfolio manager* trades the fund s underlying se%urities* realizing%apital gains or losses* and %olle%ts thedividend or interest in%ome. #he investment

pro%eeds are then passed along to the individual investors. #he value of a share of themutual fund* /nown as the net asset value per share $5* is %al%ulated daily basedon the total value of the fund divided by the number of shares %urrently issued andoutstanding.

1.1. HISTOR' O THE $UTUA% UND:-

In the beginning6 7istorians are un%ertain of the origins of investment funds8 some %itethe %losed end investment %ompanies laun%hed in the etherlands in 1922 by :ing"illiam I as the first mutual funds* while others point to a ;ut%h mer%hant named$drian van :etwi%h whose investment trust %reated in 1#* translates to ?unity %reates strength?.#he ne@t wave of near mutual funds in%luded an investment trust laun%hed in!witzerland in 194+* followed by similar vehi%les whi%h is followed by many /ind of%ompanies %reated in !%otland in the 199As.

#he idea of pooling resour%es and spreading ris/ using %losed end investments soontoo/ root in >reat )ritain and Bran%e* ma/ing its way to the nited !tates in the19+As. #he )oston Personal Property #rust* formed in 19+3* was the first %losed endfund in the .!. #he %reation of the $le@ander Bund in Philadelphia* Pennsylvania* in1+A< was an important step in the evolution toward what we /now as the modern

http://var/www/apps/conversion/tmp/scratch_4/Collective%20investment%20schemehttp://var/www/apps/conversion/tmp/scratch_4/Stockhttp://var/www/apps/conversion/tmp/scratch_4/Stockhttp://var/www/apps/conversion/tmp/scratch_4/Bond%20(finance)http://var/www/apps/conversion/tmp/scratch_4/Money%20markethttp://var/www/apps/conversion/tmp/scratch_4/Security%20(finance)http://var/www/apps/conversion/tmp/scratch_4/Fund%20managerhttp://var/www/apps/conversion/tmp/scratch_4/Capital%20gainhttp://var/www/apps/conversion/tmp/scratch_4/Dividendhttp://var/www/apps/conversion/tmp/scratch_4/Interesthttp://var/www/apps/conversion/tmp/scratch_4/Incomehttp://var/www/apps/conversion/tmp/scratch_4/Incomehttp://var/www/apps/conversion/tmp/scratch_4/Net%20asset%20valuehttp://www.investopedia.com/terms/c/closed-endinvestment.asphttp://www.investopedia.com/terms/c/closed-endinvestment.asphttp://www.investopedia.com/terms/c/closed-endinvestment.asphttp://var/www/apps/conversion/tmp/scratch_4/Stockhttp://var/www/apps/conversion/tmp/scratch_4/Bond%20(finance)http://var/www/apps/conversion/tmp/scratch_4/Money%20markethttp://var/www/apps/conversion/tmp/scratch_4/Security%20(finance)http://var/www/apps/conversion/tmp/scratch_4/Fund%20managerhttp://var/www/apps/conversion/tmp/scratch_4/Capital%20gainhttp://var/www/apps/conversion/tmp/scratch_4/Dividendhttp://var/www/apps/conversion/tmp/scratch_4/Interesthttp://var/www/apps/conversion/tmp/scratch_4/Incomehttp://var/www/apps/conversion/tmp/scratch_4/Net%20asset%20valuehttp://www.investopedia.com/terms/c/closed-endinvestment.asphttp://www.investopedia.com/terms/c/closed-endinvestment.asphttp://var/www/apps/conversion/tmp/scratch_4/Collective%20investment%20scheme


5/86

mutual fund. #he $le@ander Bund featured semi annual issues and allowed investors toma/e withdrawals on demand.

T/e Arri0al 2 /e $ 4er5 u54 :- #he %reation of the &assa%husetts Investors #rust in )oston* &assa%husetts*heralded the arrival of the modern mutual fund in 1+24. #he fund went publi% in 1+29*eventually spawning the mutual fund firm /nown today as &B! Investment&anagement. !tate !treet Investors #rust was the %ustodian of the &assa%husettsInvestors #rust. Dater* !tate !treet Investors started its own fund in 1+24 with =i%hardPaine* =i%hard !altonstall and Paul Cabot at the helm. !altonstall was also affiliatedwith !%udder* !tevens and Clar/* an outfit that would laun%h the first no load fund in1+29. $ momentous year in the history of the mutual fund* 1+29 also saw the laun%h of the "ellington Bund* whi%h was the first mutual fund to in%lude sto%/s and bonds* asopposed to dire%t mer%hant ban/ style of investments in business and trade.

Re ula i 5 a54 E7 a59i 5:-)y 1+2+* there were 1+ open end mutual funds %ompeting with nearly overnment regulators also began to ta/e noti%e of the fledgling mutual fundindustry. #he %reation of the !e%urities and (@%hange Commission !(C5* the passageof the !e%urities $%t of 1+33 and the ena%tment of the !e%urities (@%hange $%t of 1+34

put in pla%e safeguards to prote%t investors6 mutual funds were reEuired to registerwith the !(C and to provide dis%losure in the form of a prospe%tus. #he InvestmentCompany $%t of 1+4A put in pla%e additional regulations that reEuired moredis%losures and sought to minimize and minimize grievien%e of investor of different%ategories %onfli%ts of interest.

#he mutual fund industry %ontinued to e@pand. $t the beginning of the 1+ As* thenumber of open end funds topped 1AA. In 1+ 4* the finan%ial mar/ets over%ame their1+2+ pea/* and the mutual fund industry began to grow in earnest* adding some Anew funds over the %ourse of the de%ade.

http://www.investopedia.com/terms/n/no-loadfund.asphttp://www.investopedia.com/terms/o/open-endfund.asphttp://www.investopedia.com/terms/s/securitiesact1933.asphttp://www.investopedia.com/terms/s/securitiesact1933.asphttp://www.investopedia.com/terms/s/seact1934.asphttp://www.investopedia.com/terms/i/investmentcompanyact.asphttp://www.investopedia.com/terms/i/investmentcompanyact.asphttp://www.investopedia.com/terms/n/no-loadfund.asphttp://www.investopedia.com/terms/o/open-endfund.asphttp://www.investopedia.com/terms/s/securitiesact1933.asphttp://www.investopedia.com/terms/s/seact1934.asphttp://www.investopedia.com/terms/i/investmentcompanyact.asphttp://www.investopedia.com/terms/i/investmentcompanyact.asp


6/86

7undreds of new funds were laun%hed throughout the 1+FAs until the bear mar/et of1+F+ %ooled the publi% appetite for mutual funds. &oney flowed out of mutual funds

as Eui%/ly as investors %ould redeem their shares* but the industry s growth laterresumed.&assa%husetts Investors #rust now &B! Investment &anagement 5 was founded on&ar%h 21*1+24* and* after one year* had 2AAshareholders and G3+2*AAA in assets. #heentire industry* whi%h in%luded a few %losed end funds* represented less than G1Amillion in 1+24.#he sto%/ mar/et %rash of 1+2+ slowed the growth of mutual funds. In response to thesto%/ mar/et %rash* Congress passed the !e%urities $%t of 1+33 and the !e%urities(@%hange $%t of 1+34. #hese laws reEuire that a fund be registered with the !(C5.

1.1.3 SETUP O $UTUA% UNDS:-

$ mutual fund is set up in the form of a trust* whi%h has sponsor* trustees* $sset&anagement Company $&C5 and %ustodian. #he trust is established by a sponsor or more than one sponsor who is li/e promoter of a %ompany. #he trustees of the mutualfund hold its property for the benefit of the unit holders. $sset management %ompany$&C5 approved by !()I managers the fund by ma/ing investments in various

s%hemes of the in its %ustody. #he trustees are vested with the general power of superintenden%e and dire%tion over $&C. #hey monitor the performan%e and%omplian%e of !()I regulations by the mutual fund.

!()I regulations reEuire that at least two thirds of the dire%tors of trustee%ompany or board of trustees must be independent i.e.* they should not be asso%iatedwith the sponsors. $lso* AH of the dire%tors of $&C must be independent. $llmutual funds are reEuired to be registered with !()I before they laun%h any s%heme.#he performan%e of a parti%ular s%heme of a mutual fund is denoted by net value$ 5.

1.1. $UTUA% UND #S OTHER IN#EST$ENT:-

&utual funds offer several advantages over investing in individual sto%/s. Bore@ample* the transa%tion %osts are divided among all the mutual fund shareholders*who also benefit by having a third party professional fund managers5 apply e@pertiseand dedi%ate time to manage and resear%h investment options. 7owever* despite the

http://var/www/apps/conversion/tmp/scratch_4/MFS%20Investment%20Managementhttp://var/www/apps/conversion/tmp/scratch_4/March%2021http://var/www/apps/conversion/tmp/scratch_4/1924http://var/www/apps/conversion/tmp/scratch_4/Shareholdershttp://var/www/apps/conversion/tmp/scratch_4/Closed-end%20fundhttp://var/www/apps/conversion/tmp/scratch_4/Wall%20Street%20Crash%20of%201929http://var/www/apps/conversion/tmp/scratch_4/Congress%20of%20the%20United%20Stateshttp://var/www/apps/conversion/tmp/scratch_4/Congress%20of%20the%20United%20Stateshttp://var/www/apps/conversion/tmp/scratch_4/Securities%20Act%20of%201933http://var/www/apps/conversion/tmp/scratch_4/Securities%20Exchange%20Act%20of%201934http://var/www/apps/conversion/tmp/scratch_4/Securities%20Exchange%20Act%20of%201934http://var/www/apps/conversion/tmp/scratch_4/MFS%20Investment%20Managementhttp://var/www/apps/conversion/tmp/scratch_4/March%2021http://var/www/apps/conversion/tmp/scratch_4/1924http://var/www/apps/conversion/tmp/scratch_4/Shareholdershttp://var/www/apps/conversion/tmp/scratch_4/Closed-end%20fundhttp://var/www/apps/conversion/tmp/scratch_4/Wall%20Street%20Crash%20of%201929http://var/www/apps/conversion/tmp/scratch_4/Congress%20of%20the%20United%20Stateshttp://var/www/apps/conversion/tmp/scratch_4/Securities%20Act%20of%201933http://var/www/apps/conversion/tmp/scratch_4/Securities%20Exchange%20Act%20of%201934http://var/www/apps/conversion/tmp/scratch_4/Securities%20Exchange%20Act%20of%201934


7/86

professional management* mutual funds are not immune to ris/s. #hey share the sameris/s asso%iated with the investments made. If the fund invests primarily in sto%/s* it isusually sub'e%t to the same ups and downs and ris/s as the sto%/ mar/et .

1.1.* SHARE C%ASES:-&any mutual funds offer more than one %lass of shares. Bor e@ample* you may haveseen a fund that offers ? Class $ ? and ?Class ) ? shares. (a%h %lass will invest in thesame pool or investment portfolio5 of se%urities and will have the same investmentob'e%tives and poli%ies. )ut ea%h %lass will have different shareholder servi%es and0ordistribution arrangements with different fees and e@penses

1.1.6 DISTRI!UTION CHANNE%S IN THE $UTUA% UNDINDUSTR':-In India* $&Cs wor/ with five distin%t distribution %hannels those are dire%t* ban/ing*retail* %orporate and individual finan%ial adviser.

T/e Dire C/a55el9:-In the dire%t %hannel* %ustomers invest in the s%hemes dire%tly through $&C.In most %ases* the %ompany does not provide any investment advi%e* so theseinvestors have to %arry out their own resear%h and sele%t s%hemes themselves.#he fund %ompanies provide several tools to investors who invest through this%hannel. #his in%ludes monthly a0% statement* pro%essing of transa%tion* and

maintenan%e of re%ords. $bout 1A 2AH of the total sales of an $&C %omethrough this dire%t %hannel.

T/e ba5;i5 /a55el: -#he large %ustomer base of ban/s* in developed %ountries* have played an

http://var/www/apps/conversion/tmp/scratch_4/Stock%20markethttp://var/www/apps/conversion/tmp/scratch_4/Class%20Ahttp://var/www/apps/conversion/tmp/scratch_4/Class%20Bhttp://var/www/apps/conversion/tmp/scratch_4/Stock%20markethttp://var/www/apps/conversion/tmp/scratch_4/Class%20Ahttp://var/www/apps/conversion/tmp/scratch_4/Class%20B


8/86

important role in the selling &Bs. In the re%ent years* this %hannel has alsoopened up in India. )an/s operating in India * in%luding publi% se%tor* privateand foreign ban/s have established tie up with various fund %ompanies for

providing distribution and servi%ing.

Customers remain invested in ban/s for long periods of time and therefore ban/s maintain a relationship of trust with their %ustomers. Customers are relyon advi%e provided to them by ban/ers as they are always on the loo/out for

better investment avenues. &anagers are guiding to %ustomers about variousfunds.

$n additional advantage that ban/s provide is that the %on%erned %ustomer be%omes a permanent %onta%t of the ban/s and therefore %an be rea%hed duringlaun%h of new fund offer5 BO or new s%hemes any time in the future.

T/e re ail /a55el:-$ %ustomer %an deal with dire%tly with a sub bro/er belonging to a distribution%ompany* instead of ta/ing trouble of dealing with several agents. ;istribution%ompanies sell the s%hemes of several fund houses simultaneously and

bro/erage is paid by the $&C whose funds they sell. #he retail %hannel offersthe benefits of spe%ialist /nowledge and established %lient %onta%t and*therefore private fund houses are generally prefer this %hannel. !ome of thema'or players in India in this in this %hannel are national players li/e :arvy*

)irla sun life ID B! and %holamandalam. #he /ey fa%tor for this %hannel tosell a %ompanyJs fund used to be the bro/erage paid. #he ban/ing and retail%hannel generally %ontribute to about A


9/86

Corporate e@hibit varying degrees Kof awareness of mutual fund produ%ts. &ostof the established %orporate* su%h as the # ! industries in 7yderabad* are wellversed with the performan%e and %omposition of various funds. #he smaller

%ompanies and start up firms* however* need to be edu%ating on several aspe%tsof mutual funds. In order to provide information to su%h %lients* fund%ompanies usually organize presentation for these %ompanies or set upmeetings with the finan%e managers.

I54i0i4ual i5a5 ial A40i9 r9


10/86

#he investment manager may invest in a s%heme from time to time. #he per%entageof su%h investments to the total net assets may vary from time to time and %an beupto1AAH of the net assets of the s%hemes.

$ s%heme shall not invest more than 1AH of its $ in the eEuity shares or eEuityrelated instruments of any one %ompany.$ s%heme may invest in $;=s0>;=s of Indian %ompanies listed on overseas sto%/ e@%hanges to the e@tent and in a manner approved by =)I.

$ s%heme shall not invest more than H of its $ in unlisted eEuity shares or eEuityrelated instruments in %ase of an open ended s%hemes and 1AH of its $ in %ase a of %losed ended s%heme.

1.1.8 TA, SA#IN& ON $UTUA% UND:-

$. #here are two types of ta@ saving funds* eEuity lin/ed savings s%hemes (D!!5 and pension funds. (D!! s%hemes are basi%ally diversified eEuity s%hemes* whi%h have athree year lo%/ in . I50e9 me5 9 hereLsub'e%t to a ma@imum of =s.1A* AAA re%eive a

http://var/www/apps/conversion/tmp/scratch_4/_tophttp://var/www/apps/conversion/tmp/scratch_4/_tophttp://var/www/apps/conversion/tmp/scratch_4/_top


11/86

ta@ rebate of A to 2A per %ent depending on the i5 me slab. $s these are eEuityinstruments they have the ma@imum ris/ return potential among all asset %lasses. "hatthis means is that return has a propensity to vary with great intensity. $lthough an

average ta@ saving mutual fund delivered 1F.3F per %ent in 2AA2* the range of returnswas e@treme. #hus* in that year* the best ta@ saving fund delivered 42.F1 per %ent andthe worst was down 3.1F per %ent. #he best way to over%ome the vagaries of sto%/mar/ets is to diversify. ;iversifi%ation %an be a%ross funds and* more importantly*a%ross time periods. )y investing regularly every year in these funds one %an set up along term systemati% investment plan.#he other route for saving a7e9 is pension funds* even though there are %urrently onlytwo su%h funds in operation* Bran/lin #empleton s #empleton India Pension Bund and#I s =etirement )enefit Plan. Introdu%ed for the first time in 1++


12/86

1.1.( RO%E O $UTUA% UND IN STOC> E,CHAN&E:-&utual funds are an ideal vehi%le for investment by retail investors in the sto%/ mar/etfor several reasons.

i. It pools investments of small investors together in%reasingly thereby the parti%ipation in the sto%/ mar/et.

ii. &utual funds being institutional investors* %an invest in mar/et analysis generallynot available or a%%essible to individual investors* providing therefore informedde%isions to small investors.

iii. &utual fund %an diversify the portfolio in better way as %ompared with individualinvestors due to the e@pertise and availability of funds.

&utual funds in India* be%ause of their mall size and slower growth in the re%ent past*have tended to play only a limited role in the sto%/ mar/et the share of mutual funds intotal turnover of the sto%/ mar/et )!( !(5* whi%h was 4.+H in anuary 2AAA*de%lined to 3.FH by anuary 2AA3.

1.1.1? $u ual u549 :-


13/86

A@9:-


14/86


15/86

et asset value 1 front end load5

Publi% offer pri%e

Det us assume* an investor invests =s.1A*AAA in a s%heme that %harges it 2H front endload at a $ per unit =s.1A using the formula publi% offer pri%e R 1A0 1 A.A25 is=s.1A*2A. !o only +9A units are allowed to the investor.

$mount invested

Publi% offer pri%e

umber of units allotted R

1A*AAA01A*2AR +9A units at a $ of =s.1A.

#his means units worth +9AA are allotted to him an initial investment =s.1A*AAA frontend loads tend to de%rease as initial investment amount in%rease.

!AC> END %OAD 6

&ay be fi@ed fee redemption or a %ontingent differed sales %harged a redemption soload %ontinues so long as the redeeming or selling of the units of a fund does not ta/e

pla%e in the event of a ba%/ end load is applied. #he redemption pri%e is arrive or using following formula.

et asset value 1 ba%/ end load5

=edemption pri%e R

Det us assume an investor redeems units valued at =s.1A*AAA in a s%heme that %hargesa 2H ba%/* end load at a $ per units of =s.1A using the formula =edemption pri%e1A0 1 A.A25R =s.+.9 s* what the investor gets in hand is +9AA +.9S1AAA5.


16/86

CONTIN&ENT DE ERRED SA%ES CHAR&ES


17/86


18/86

1.1.13 T/e 9 59 r9 2 A99 ia i 5 2 $u ual u549 i5 I54ia:-)an/ !ponsored 6!)I Bund &anagement Dtd.

)O) $sset &anagement Co. Dtd.Can ban/ Investment &anagement !ervi%es Dtd.

#I $sset &anagement Company Pvt. Dtd.

I59 i u i 59:->IC $sset &anagement Co. Dtd.

eevan )ima !ahayog $sset &anagement Co. Dtd.

Pri0a e Se r:-Indian6)en%h&ar/ $sset &anagement Co. Pvt. Dtd.

Cholamandalam $sset &anagement Co. Dtd.

Credit Capital $sset &anagement Co. Dtd.

(s%orts $sset &anagement Dtd.

& Binan%ial &utual Bund

:ota/ &ahindra $sset &anagement Co. Dtd.

=elian%e Capital $sset &anagement Dtd.

!ahara $sset &anagement Co. Pvt. Dtd

!undaram $sset &anagement Company Dtd.

#ata $sset &anagement Private Dtd.

Predominantly India oint entures6


19/86

)irla !un Dife $sset &anagement Co. Dtd.

;!P &errill Dyn%h Bund &anagers Dimited

7;BC $sset &anagement Company Dtd.

Pre4 mi5a5 l= rei 5 " i5 #e5 ure9:-

$) $&=O $sset &anagement I5 Dtd.

$llian%e Capital $sset &anagement India5 Pvt. Dtd.

;euts%he $sset &anagement India5 Pvt. Dtd.

Bidelity Bund &anagement Private Dimited

Bran/lin #empleton $sset &gmt. India5 Pvt. Dtd.

7!)C $sset &anagement India5 Private Dtd.

I > Investment &anagement India5 Pvt. Dtd.

&organ !tanley Investment &anagement Pvt. Dtd.

Prin%ipal $sset &anagement Co. Pvt. Dtd.

Prudential ICICI $sset &anagement Co. Dtd.

!tandard Chartered $sset &gmt Co. Pvt. Dtd.

1.1.14 Per2 rma5 e 2 $u ual u549 i5 I54ia 6Det us start the dis%ussion of the performan%e of mutual funds in India from theday the %on%ept of mutual fund too/ birth in India. #he year was 1+F3. nit#rust of India invited investors or rather to those who believed in savings* to

par/ their money in #I &utual Bund. Bor 3A years it goaled without a single

se%ond player. #hough the 1+99 year saw some new mutual fund %ompanies* but #I remained in a monopoly position.#he performan%e of mutual funds in India in the initial phase was not even%loser to satisfa%tory level. People rarely understood* and of %ourse investingwas out of Euestion. )ut yes* some 24 million shareholders was a%%ustomedwith guaranteed high returns by the beginning of liberalization of the industry


20/86


21/86

mutual funds has be%ome obvious. #he %oming few years will show that the traditionalsaving avenues are losing out in the %urrent s%enario. #he fund mobilization trend bymutual funds in the %urrent year indi%ates that money is going to mutual funds in a big

way. #he %olle%tion in the first half of the finan%ial year 1+++ 2AAA mat%hes the wholeof 1++9 ++.

India is at the first stage of a revolution that has already pea/ed in the .!. #he .!. boasts of an $sset base that is mu%h higher than its ban/ deposits. In India* mutualfund assets are not even 1AH of the ban/ deposits* but this trend is beginning to%hange. =e%ent figures indi%ate that in the first Euarter of the %urrent fis%al year mutualfund assets went up by 11 H whereas ban/ deposits rose by only 1ilts and some

other assets whi%h improves liEuidity and redu%es ris/. #he basi% fa%t lies that ban/s%annot be ignored and they will not %lose down %ompletely. #heir role asintermediaries %annot be ignored. It is 'ust that &utual Bunds are going to %hange theway ban/s do business in the future.

P$=#IC D$= )$ :! & # $D B ;= (# = DO" ) (##(=

= I!: 7 I>7 DO"

I (!#&( # OP#IO D(!! & O=(

(#"O=: 7 I>7 P( (#=$#IO DO" ) # I&P=O I >

DIT I;I#N $ # $ CO!# ) (##(=

T $DI#N OB $!!(#! O# #=$ !P$=( # # =$ !P$=( #

I #(=(!# C$DC D$#IO & I I& & )$D$ C( )(#"((1A#7 $ ; 3A#7 OB ( (=N&O #7 .

( (=N ;$N

$ ;&I I!#=$#IO (QP( !(! 7 I>7 DO"


22/86

> $=$ #(( &$Q . = ! 1D$C: O ;(PO!I# O (

Table 1.1

1.1.16 UTURE O $UTUA% UND:-

Indian mutual fund industry rea%hed =s.1* A* 3


23/86


24/86

with whom =!D is empanelled as approved )ro/er is a refle%tion of the high levels of servi%es maintained by the Company. =eligare was founded with the vision of

providing integrated finan%ial %are driven by the relationship of trust. #he bouEuet of

servi%es offered by =(DI>$=( in%ludes )ro/ing !to%/s and Commodities5*;epository Parti%ipant !ervi%e* $dvisory on &utual Bund Investments and Portfolio&anagement !ervi%es.

=(DI>$=( is a pioneer in the %on%ept of partnership to rea%h multiple lo%ations inorder to effe%tively servi%e its large base of individual %lients. )esides the rea%h of =(DI>$=(* the %lients of the %ompany greatly benefit by its strong resear%h%apability* whi%h en%ompasses fundamentals as well as te%hni%al /nowledge.

=eligare is driven by ethi%al and dynami% pro%ess for wealth %reation. )ased onthis* the %ompany started its endeavor in the finan%ial mar/et.=eligare (nterprises Dimited $ =anba@y Promoter >roup Company5 through =eligare!e%urities Dimited* =eligare Binevest Dimited* =eligare Commodities Dimited and=eligare Insuran%e )ro/ing Dimited provides integrated finan%ial solutions to its%orporate* retail and wealth management %lients. #oday* it provides various finan%ialservi%es* whi%h in%lude Investment )an/ing* Corporate Binan%e* Portfolio&anagement !ervi%es* (Euity Commodity )ro/ing* Insuran%e and &utual Bunds.Plus* thereJs a lot more to %ome your way.

=eligare is proud of being a truly professional finan%ial servi%e provider managed by ahighly s/illed team* who have proven tra%/ re%ord in their respe%tive domains.=eligare operations are managed by more than 3AAA highly s/illed professionals whosubs%ribe to =eligare philosophy and are spread a%ross its %ountrywide bran%hes.

#oday* it has a growing networ/ of more than 3AA bran%hes and more than 9A business partners spread a%ross more than 3AA %ities0towns in India and a fullyoperational international offi%e at Dondon. nli/e a traditional bro/ing firm* =eligaregroup wor/s on the philosophy of partnering for wealth %reation. "e not only e@e%utetrades for our %lients but also provide them %riti%al and timely investment advi%e. #hegrowing list of finan%ial institutions with whi%h =eligare is empanelled as an approved

bro/er is a refle%tion of the high level servi%e standard maintained by the %ompany.

&ROUP CO$PANIES:-


25/86

=eligare (nterprises Dimited group %omprises of =eligare !e%urities Dimited* =eligareCommodities Dimited* =eligare Binvest Dimited and =eligare Insuran%e )ro/ingDimited whi%h deal in eEuity* %ommodity and finan%ial servi%es business.

Reli are Se uri ie9 %imi e4:-=!D is one of the leading bro/ing houses of India and are dealing into (Euity )ro/ing*;epository !ervi%es* Portfolio &anagement !ervi%es* Internet #rading* Institutional(Euity )ro/erage =esear%h* Investment )an/ing* &er%hant )an/ing and CorporateBinan%e.#o fa%ilitate free and fare trading pro%ess =eligare is a member of ma'or finan%ialinstitutions li/e* ational !to%/ (@%hange of India* )ombay !to%/ (@%hange of India*;epository Parti%ipant with ational !e%urities ;epository Dimited and Central;epository !ervi%es I5 Dimited* and a !()I approved Portfolio &anager.=!D serves a platform to all segments of investors to avail the opportunities offered byinvesting in Indian eEuities either on their own or through managed funds in Portfolio&anagement.

Reli are C mm 4i ie9 %imi e4:-=eligare is a member of C;(Q and &CQ and provides platform for trading in%ommodities* whi%h is an online fa%ility also.=CD provides platform to both agro and non agro %ommodity traders to derive thea%tual pri%e of the %ommodity and also to trade and hedge a%tively in the growing

%ommodity trading mar/et in India."ith this realization* =eligare Commodities is %oming up with its bran%hes at mandilo%ations. It is a flagship effort from our team whi%h would be helpful in fa%ilitatingtrade and spe%ulating pri%e of %ommodities in future.


26/86

Reli are i5e0e9 :-

=eligare Binevest Dimited =BD5* a on )an/ing Binan%e Company )BC5 isaggressively ma/ing a name in theBinan%ial servi%es arena in India. In a fast pa%ed* %onstantly %hanging dynami%

business environment* =BD has delivered the most %ompetitive produ%ts and servi%es. =BD is primarily engaged in the business of providing finan%e against se%urities in these%ondary mar/et. It also provides finan%e for appli%ation in Initial Publi% Offers tonon retail %lients in the primary mar/et.=BD is also planning to initiate personal loan portfolio as fund based a%tivity andmutual fund distribution as fee based a%tivities.$long with this* the %ompany also underta/es non fund based advisory operations inthe field of Corporate Binan%ing in the nature of Credit !yndi%ation whi%h in%ludesinter alias* bills dis%ounting* inter %orporate deposit* wor/ing %apital loan syndi%ation*

pla%ement of private eEuity and other stru%tured produ%ts.

Reli are I59ura5 e !r ;i5 % 4.:-

=eligare has been ta/ing %are of finan%ial servi%es for long but there was a missinglin/. Binan%ial planning is in%omplete without prote%tive measure i.e. stru%tured

produ%ts to ta/e %are of event of things that may go wrong=eligare Insuran%e )ro/ing Dimited. $s %omposite insuran%e bro/er* deals in bothinsuran%e and reinsuran%e* providing our %lients ris/ transfer solutions on life and nonlife sides.#his servi%e will ta/e benefit of =eligare vast business empire spread throughout the%ountry providing our valued %lients insuran%e servi%es a%ross India. "e aim to havea wide rea%h with our servi%es U literallyV #hatJs why we are %atering the insuran%ereEuirements of both retail and %orporate segments with produ%ts of all the insuran%e

%ompanies on life and non life !till* there is more in store. "e also %ater individualswith a %omplete suite of insuran%e solutions* both life and general to mitigate ris/s tolife and assets through our e@isting networ/ side.Bor %orporate %lients* we will be offering value based %ustomized solutions to %over allris/s* whi%h their business is e@posed to. Our %lients will be supported by anoperations team eEuipped with the best of te%hnology support


27/86

=eligare Insuran%e )ro/ing aims to provide neutral* transparent and professional ris/transfer advi%e to be%ome the first %hoi%e of India.

$i99i 5:-#o be India s first &ultinational providing %omplete finan%ial servi%es solution a%rossthe globe.

#i9i 5:-Providing integrated finan%ial %are driven by the relationship of trust and %onfiden%e.


28/86

/= u9 mer ra4e i / Reli areG

Per9 5al A99i9 a5 e:-

;edi%ated dealers for fa%ilitating trading and post trade needs.;edi%ated =elationship &anagers for assisting multiple investmentsneeds.

Re9ear / A40i9 r=:-

=egular news and updates on mar/et.=esear%h servi%e over !&! to /eep you abreast.

;aily and wee/ly te%hni%al reports.$ %omplete information report on results and performan%e individual%ompanies. Complete reports on various e%onomi% se%tors and their

performan%e along with analysis of few ma'or %ompanies in that se%tor.#rading %alls in Butures Options.;aily %apsule of &ar/et indi%es and inde@ movement* national andinternational %orporate news* and their performan%e along with forth%oming IPO tra%/er.

.A44-O59:-

$%%ess to all your a%%ounts through your Customer =elationship umberC= 5.$%%ess your ledger balan%es and a%%ount information over internet* bran%hand %all %enter.

PRODUCT SER#ICES:-

(Euity ;erivativesCommodity;epositoryPortfolio &anagement !ervi%esInternational (Euity Commodity

=I !ervi%es


29/86

Investment )an/ingCorporate $dvisory >roup&utual Bund

1.3 PRO!%E$S O THE OR&ANIFATION:-

!in%e =eligare !e%urities is a private player in the insuran%e industry* it has not yetrea%hed brea/ even. 7en%e* it has high %ost due to whi%h its premiums are high as%ompared to other mar/et players.

It has to %reate %redibility in the publi%.

It has to %ompete with the wide range of produ%ts that its %ompetitors offer.

It has to fo%us towards rural segment also whi%h has a great s%ope of growth.

It has to de%ide on the strategies to be adopted whi%h will help to %ounter %ompetition.

It has to in%rease its no. of bran%hes and also enhan%e its networ/ of agents so that

it %an %ompete with other mar/et players.It has to fo%us on providing effe%tive training to its agents so that the %ustomer

base %an be in%reased and moreover %ustomer satisfa%tion %an be ensured.


30/86


31/86

!undaram $sset &anagement Company Dtd.

#ata $sset &anagement Private Dtd.

Pre4 mi5a5 l= I54ia " i5 #e5 ure9:-

)irla !un Dife $sset &anagement Co. Dtd.

;!P &errill Dyn%h Bund &anagers Dimited

7;BC $sset &anagement Company Dtd.

Pre4 mi5a5 l= rei 5 " i5 #e5 ure9:-

$) $&=O $sset &anagement I5 Dtd.

$llian%e Capital $sset &anagement India5 Pvt. Dtd.

;euts%he $sset &anagement India5 Pvt. Dtd.

Bidelity Bund &anagement Private Dimited

Bran/lin #empleton $sset &gmt. India5 Pvt. Dtd.

7!)C $sset &anagement India5 Private Dtd.I > Investment &anagement India5 Pvt. Dtd.

&organ !tanley Investment &anagement Pvt. Dtd.

Prin%ipal $sset &anagement Co. Pvt. Dtd.

Prudential ICICI $sset &anagement Co. Dtd.

!tandard Chartered $sset &gmt. Co. Pvt. Dtd.


32/86

1.* S. .O.T. ANA%'SIS O THE OR&ANIFATION

STREN&THS:-

Di0er9e !ra5 / Ne r; !in%e Company in%eption in BN 1++2 Company and its subsidiaries have grown froma single lo%ation to a nationwide networ/ spread over +AA offi%es in 32A %ities. #heyhave a pan India distribution networ/s for the purpose of distribution of finan%ial

produ%ts and servi%es. !u%h a diverse and integrated networ/ provides a %entralized

platform to their %lients.

! u ue 2 2i5a5 ial r 4u 9 a54 9er0i e9:-Company and its subsidiaries offer various finan%ial servi%es and produ%ts rangingfrom eEuity* B O and wholesale debt* mutual fund an distribution* eEuity resear%hanalysis* depository servi%es to %ater to the spe%ifi% needs of the retail and institutionalinvestors thus providing all these servi%es in single platform.

A40a5 e4 Te /5 l = eam /a 4eli0er9 mar;e lea4i5 r 4ui55 0a i 5:-#heir ongoing investment in te%hnology is a /ey element in e@panding their produ%tand servi%e offerings* enhan%ing their delivery systems* providing fast and %onsistent%lient servi%e* redu%ing pro%essing %osts* and fa%ilitating their ability to handlesignifi%ant in%reases in %lient a%tivity without a %orresponding rise in ris/ and staff.Company and its subsidiaries have an in house te%hnology team of 2< people%omprising of several engineers. #he in house te%hnology team has been responsiblefor developing the te%hnology produ%ts for operating at a large s%ale with effi%ient

ba%/ offi%e systems. #he appli%ation of te%hnology allows Company and itssubsidiaries.

#o build s%alable produ%t and servi%e offerings. #he in house te%hnology teamdeveloped one of the first Internet trading platforms in India* one of the first in housereal time C#CD lin/ with !(. Company and its subsidiaries introdu%ed integrateda%%ounts with automated gateways with %lient ban/ a%%ounts so that they %an transfer


33/86

funds to and from their ban/ a%%ount to their bro/erage a%%ount with the Company.#his has enhan%ed %ustomer ability to a%%ess their funds for mar/et related a%tivities.#he in house te%hnology team has good e@pertise to %reate mission %riti%al

appli%ations and in the maintenan%e and up/eep of high transa%tion pro%essing of thereweb site.

S r 5 Sale9 a54 $ar;e i5 Team9 i / 5 i5u u9 rei50e9 me5 a54rai5i5 :-

CompanyJs relationship manager %hannel through a team of 1A A =elationship&anagers as on $pril 3A* 2AA45 offers a single point %onta%t to retail %ustomerswhereby their high net worth %lients have separate relationship managers %atering tothem. #hese managers offer personalized servi%es to the %ustomers helping buildstrong and %ontinuing relationships with them. $lso* our mar/eting asso%iate %hannelhelps Company and its subsidiaries in %lient a%Euisitions at minimal %osts with %lientloyalty. #he mar/eting asso%iateJs %hannel also helps Company and its subsidiaries inin%reasing their penetration in smaller town and %ities.


34/86

ea;5e99

Cu9 mer Sa i92a i 5:- $s far as %ustomer satisfa%tion goes =eligare has totighten their so%/s. &any bro/ing houses %atering to heavy investors or small segmentof the mar/et %an afford to and does provide relationship managers for their %ustomers*who %an understand the trading needs of individual %ustomers* and advise a%%ordingly.7owever* a bro/ing house li/e =eligare that %aters to the mass segment will find

diffi%ult to provide relationship managers for individual %ustomers.

!ra54i5 6 Net to obtain approval of #rademar/ for developing into brand thoughthe %ompany has a effi%ient produ%ts but large part of investment interested populationdoes not /now the %ompany. #he most basi% e@pe%tation for a trader or investor whenone begins trading is that one must get timely delivery of shares and pro%eeds fromsale of shares. $lso ones %ash balan%es with the bro/er must be safe and se%ure.#hough this %onfiden%e in the bro/er %omes with time and e@perien%e* good andtransparent pra%ti%es also play a ma'or role in imbibing %onfiden%e in traders.

C m e i i 5 2r m ba5;9:- &ost of the ban/s due to good branding have thefaith of the %ustomers of their ban/ing database. !o they en'oy the liberty of hugedatabase and %ustomers find it more reliable to trade there rather than with a un/nown

bro/er. $lso ban/s li/e 7;BC )an/ and ICICI )an/ have the advantage of lin/ing thetrading a%%ounts of their %ustomers to saving a%%ounts. #his ma/es trading easier* and


35/86

at the same time a trader withdraws e@a%tly as mu%h money from his a%%ount as isneeded to %omplete the trade. !imilarly sales pro%eeds are %redited dire%tly to savinga%%ount.

Do%alized presen%e due to insuffi%ient investments for %ountrywide [email protected]%/ of awareness among %ustomers be%ause of non aggressive promotionalstrategies print media* newspapers* et%5.Desser emphasis on %ustomer retention.Bo%uses more on 7 Is than retail investors whi%h results in meager mar/et shareas %ompared to %lose %ompetitors.

O r u5i ie9

"ith the booming %apital mar/et it %an su%%essfully laun%h new servi%es and raise

its %lientJs base.It %an easily tap the retail investors with small saving through promotional%hannels li/e print media* ele%troni% media* et%.$s interest on fi@ed deposits with post offi%e and ban/s are all time low* more andmore small investors are entering into sto%/ mar/et.$bolition of long term %apital gain ta@ on shares and redu%tion in short term%apital gain is ma/ing sto%/ mar/et as hot destination for investment among smallinvestors.In%reasing usage of Internet through broadband %onne%tivity may boost a wholenew breed of investors for trading in se%urities.$dditional %enters will in%rease the %lientele base and in turn will in%rease revenue=etail se%tor is e@pe%ted to grow due to redu%tion in interest rate and opting fornew opportunities in eEuity and related instruments=apid penetration of Internet and %omputers will be instrumental in in%reasing e

bro/ing business


36/86

E0er-i5 rea9i5 mar;e :- $fter the !( brought the s%reen based tradingsystem sto%/ mar/ets are now more se%ured whi%h has attra%ted lot of retail investorsand the demand is in%reasing day by day. #his has resulted in improved liEuidity and

heavy volumes on transa%tions. =eligare is one of the early entrants here. $s to howmu%h it will roar and how swift it %an swoop on the mar/et* the future alone %ananswer su%h Eueries. =eligare has been a mega player and is /nown for being a moverof sto%/s. It is also /nown for putting big deals through and en'oys good networ/ingwith the BIIs. It has been dynami% enough to move with the times and %apture theopportunities that the mar/et throws up from time to time.

Im r 0i5 Te/5 l = 6 In %ountry li/e India te%hnology is always improvingwhi%h gives the %ompany a %han%e to /eep on improving their produ%t with timewhereas for the small players li/e lo%al bro/ers it will be diffi%ult to /eep the same

pa%e as the %hanging te%hnology. $lso with !()I lying down some stri%t guidelinessmall bro/ers are finding it harder to retain the %ustomers with no resear%h departmentand small %apital. #he traditional business model is highly dependent on a largenetwor/ of sub bro/ers* and many established players may not have systemste%hnology* %ustomer servi%e* et%.5 %apable of dire%tly servi%ing so many retail%ustomers.

U52ul2ille4 5ee49 2 /e u9 mer9: - "ith so many %ompetitors offering their produ%ts in the mar/et but no one is able to %ompletely satisfy the %ustomers. !omehave the problem of la%/ of information or some were s%ared of volatility of the sto%/mar/ets. !hare /han has the opportunity to tap this unsatisfied set of %ustomers and toma/e hold in the mar/et. #he Internet serves to brea/ all barriers to information* as itoffers an e@tremely hassle free investing platform. $nd* !hare /han hopes to fullyutilize and %apitalize on this platform. #his original idea by !hare /han itself was bornout of the %onsumer s need for a more transparent* easy to understand and %onvenientoption of investing in sto%/s.

E4u a i 5 %e0el:- #he edu%ation level in the %ountry is improving year after yearas far as te%hnology goes. "ith that the understanding of the sto%/ mar/et is also


37/86

in%reasing and a lot of retail investors are steeping in the mar/ets whi%h are beingshown by in%reasing volumes* transa%tions and indi%es.

T/rea :-

$ggressive promotional strategies by %lose %ompetitors may hamper =eligare

a%%eptan%e by new %lients.

Da%/ of suffi%ient bran%h offi%es for speedy delivery of servi%es.

&ore and more players are venturing into this domain* whi%h %an further redu%ethe earnings of =eligare.


38/86

;ownturn or volatility of se%urities and %ommodities mar/et.

!lowdown of Indian and global e%onomy

Change in government and e%onomi% poli%ies in%luding personal ta@ation mayaffe%t our volume and fund mobilization.

Ne C m e i r9:- $ lot of new %ompetitors are trying to enter the mar/et in this bullish run to taste the flavor of this %herry. #his is %reating a lot of %ompetition forlarge players li/e =eligare and it is %reating little %onfusion in the minds of the%ustomers about the servi%es provided by the bro/er. $lso many ban/ing firms areentering into the mar/et with huge investment. Competitors li/e ICICI* :ota/* 7;BC*paisa et%. are posing a lot of threats to the %ompany.

Te /5 l = ba9e4 bu9i5e99:-

Online trading is totally based on the te%hnology whi%h is Euite %omple@. #ypi%ally*the te%hnology solution has to start from the Internet front end or the s%reen that yousee when you begin trading5. #hen it needs to get into the middle tier of ris/management systems that assess data from ban/s and depository parti%ipants ;P5*%al%ulate %lient ris/ at that point in time* and give the >o0 o go advi%e to the trade.

!o te%hnology is a /ind of threat be%ause unless until it is wor/ing properly it is good but internet is not that safe. #hough a lot of %yber laws are being made but not yete@e%uted.


39/86

O!"ECTI#E AND $ETHODO%&'

.1 Si 5i2i a5 e:-

1. It helps in %reating the investorsJ %onfiden%e.

2. It helps to find out prospe%t investors of &utual Bunds and also to provide /eyinformation about the investorJs per%eption and preferen%es by &utual Bundindustry.

3. It helps in getting information about their performan%e at distributors as well as attheir own investment %enter or why people go for &utual Bund for investments.

4. It helps in finding out the problems related to distribution.. $a5a erial u9e2ul5e99 2 /e 9 u4=:-

helps to have sale e@perien%e.helps to deal with different %ustomers.helps to over%ome the ob'e%tions of the %ustomers.helps to understand the problems of agents in a broader prospe%t.It provides a platform where managerial role %an be played effe%tively andeffi%iently.

.3 Ob e i0e9:-#o studying the various mutual fund s%hemes offered by =eligare !e%urities Dtd.and then %omparing it with the other s%hemes available in the %urrent mar/et.#o study various needs and e@pe%tations of small investors from different types of mutual funds#o studying and analyzing the mutual fund industry of the %ountry.

#o study the Indian mar/et and identify the ris/ return per%eption with the pur%hase of mutual funds.#o study the $%%ounting and aluation methods of &utual Bunds.#o study in brief various &utual funds promoted by =eligare.#o study the investors Preferen%e regarding Investment in &utual Bunds.

. S e 2 /e 9 u4=:-

In %urrent s%enario* the ban/ rates have been %ut down rapidly due to severe%ompetition* so people are not going for %ontemporary deposits be%ause that


40/86

%annot provide them the better returns or the desired interest rates. !o* they %anloo/ for some other investment options li/e &utual Bunds* whi%h %an provide themhigher returns in medium to long term and %an easily meet their finan%ial goals.

#o loo/ out for new prospe%tive %ustomers who are willing to invest in &utualBunds.

$e / 4 l =1. @UESTIONNAIRE:-

#he study is based on a survey of 1AA respondents through a Euestionnaire %overingdifferent groups of investors

Sam le SiJeK N 1??"ith the help of this pro'e%t* I have attempted to study various needs and e@pe%tationsof small investors from different types of mutual funds available in Indian mar/et andidentify the ris/ return per%eption with the pur%hase of mutual funds.

arious sophisti%ated multivariate te%hniEues li/e Ba%tor $nalysis* Chi !Euare #est et%.will then be applied to identify important %hara%teristi%s being %onsidered by theIndian investors in the pur%hase de%ision.

#he Euestionnaire has been developed on the basis of five ma'or %omponents. #heseare6

1. ;emographi% $ttributes li/e age* In%ome* o. of years until retirement*e@pe%tations from future earning* Bamily !ize and /nowledge of finan%ial

produ%ts the finan%ial mar/et.

2. =is/ $ttitude of the %ustomers

3. Datest Investment in &utual Bund (.g. $mount invested in the mutual fundre%ently* type of mutual fund* priority while investing in mutual fund and whymutual funds.

4. #ime 7orizon6 #his %omponent has been in%luded in order to identify the time period in whi%h the %ustomer withdraws his money from the investment made by him.

. Investment ob'e%tive6 #his will help in identifying the investment ob'e%tive of the %ustomer i.e. for travel* for his %hildren* for further investment or for availing retirement benefit.


41/86

Dem ra /i A ribu e9:-

#he various demographi% attributes li/e $ge* In%ome* and o. Of years till retirement*Bamily size* /nowledge of finan%e influen%e the de%isions being made by the investorswhile investing in &utual Bunds.

Ri9; A i u4e 2 Cu9 mer9:-

#his %omponent has been in%luded in order to identify the pro@imity of a person tota/e ris/ while investing. $n analysis of this se%tion would help in identifying theneeds and e@pe%tations of small investors /eeping in mind their ris/ attitude.

T/e 9e i 5 ul4 /el i5 a59 eri5 /e 2 ll i5 9e i 5:-

Choi%es made while investing big amounts W =s. AAAA5!ustainability of a %ustomer to invest in share mar/et when the mar/et is not

performing very well

%a e9 I50e9 me5 I5 $u ual u549:-

#his se%tion would help in identifying the latest investment done by a parti%ular %ustomer in the last one year.

#his se%tion would help in identifying the following6

$mount invested in &utual Bunds* !hares* Bi@ed ;eposits* >ovt. se%urities et%.

#he mutual funds the %ustomers have invested in %urrently available in themar/et

Priority while investing in &utual Bunds. (.g. for some investors the %urrent $ must be a %riteria. Bor some liEuidity and lo%/ in period must be a %riteria

"hat are the ma'or benefits that the %ustomers get while investing in a mutualfund

Time H riJ 5 I50e9 me5 Ob e i0e:-

#his se%tion would help in identifying the following6#he time period of the investment

#heir e@pe%tation of the money after 1A years

#he future use of their investment


42/86

$fter how many years will they start using their money

#hus* data %olle%tion from the various %ustomers has been done with the help of Euestionnaires.

. TE%EPHONIC INTER#IE S:-

#he summer pro'e%t also helped me in gaining an e@perien%e to sell the various mutualfund s%hemes over the telephone. It only helped me improve my %ommuni%ation s/ills

but also gave me an in depth /nowledge about the various s%hemes offered by =eligare!e%urities Dtd.* ICICI* 7;BC* 7!)C* Bidelity* et%.

#his would further help me in doing a sophisti%ated and detailed %omparison betweenthe various s%hemes.


43/86

3. APPOIN$ENTS ITH CO$PANIES:-#he pro'e%t also gave me an opportunity to fi@ appointments with %orporateorganization and allowed me to e@plain the various produ%ts to the %ompany offi%ials.

#he various organizations %overed were6

OXO ( P7$=&$C( #IC$D!* $&)I:$ PIDD$IJs )eauty !aloon* $PODDOClini% et%Y

#he data from su%h organization has also been %olle%ted.

. NE SPAPER ARTIC%ES:-

#he preparation of the pro'e%t report also reEuired data from various 'ournals*newspapers et%Y

;ata from the various newspapers li/e #he (%onomi% #imes* #he #imes Of Indiaet%..5 and 'ournals has been done.

*. CO%%ECTION O DATA RO$ OTHER A$C9

#he preparation of the pro'e%t report reEuired me to visit the various other %ompaniesli/e 7;BC* DIC* and !tandard Chartered et%. in order to %olle%t data.

CONCEPTUA% DISCUSSION


44/86

INTRODUCTION O $UTUA% UND:-

O0er0ie :-$ &utual Bund is a trust that pools the savings of a number of investors who share a%ommon finan%ial goal. #he money thus %olle%ted is then invested in %apital mar/etinstruments su%h as shares* debentures and other se%urities. #he in%ome earnedthrough these investments and the %apital appre%iation realized is then shared by itsunit holders in proportion to the number of units owned by them. #hus a &utual Bundis the most suitable investment for the %ommon man as it offers an opportunity toinvest in a diversified* professionally managed bas/et of se%urities at a relatively low%ost. #he flow %hart below des%ribes broadly the wor/ing of a mutual fund6

$UTUA% UND OPERATION %O CHART


45/86

C 59 i ue5 9 2 $u ual u54:-

#here are many entities involved and the diagram below illustrates the organizationalset up of a mutual fund.

#he !e%urities and (@%hange )oard of India &utual Bunds5 =egulations 1++3 definea mutual fund &B5 as a fund established in the form of a trust by a sponsor to raisemoney by the trustees through the sale of units to the publi% under one or mores%hemes for investing in se%urities in a%%ordan%e with these regulations.

#hese regulations have sin%e been repla%ed by the !()I &utual Bunds5 =egulations*1++F. #he stru%ture indi%ated by the new regulations is indi%ated as under.

$ mutual fund %omprises four separate entities. #hese are6 !ponsor* &utual Bund#rust* $&C and Custodian.

#he sponsor establishes the mutual fund and gets it registered with !()I. #he mutualfund needs to be %onstituted in the form of a trust and the instrument of the trust should

be in the form of a deed registered under the provisions of the Indian =egistration $%t*1+A9. #he sponsor is reEuired to %ontribute at least 4AH of the minimum net worth=s. 1A %rores5 of the asset management %ompany. #he board of trustees manages the&B and the sponsor e@e%utes the trust deeds in favor of the trustees. It is the 'ob of the&B trustees to see that s%hemes floated and managed by the $&C appointed by thetrustees are in a%%ordan%e with the trust deed and !()I guidelines.


46/86


47/86

#he mutual fund industry %an be broadly put into four phases a%%ording to thedevelopment of the se%tor. (a%h phase is briefly des%ribed as under.

ir9 P/a9e – 1(6 -8+:-

#he nit #rust of India #I5 was established in 1+F3 by an $%t of Parliament. It wasset up by the =eserve )an/ of India and fun%tioned under the =egulatory andadministrative %ontrol of the =eserve )an/ of India. In 1+


48/86


49/86


50/86

a5 $ny time e@it option

b5 #a@ advantage

%5 $ny time entry optionCl 9e E54e4 S /eme9:-

!%hemes that have a stipulated maturity period* limited %apitalization and the units arelisted on the sto%/ e@%hange are %alled %lose ended s%hemes. #hese s%hemes havehistori%ally seen a lot of subs%ription. #his popularity is estimated to be on a%%ount of firstly* publi% se%tor &Bs having floated a lot of %lose ended in%ome s%hemes withguaranteed returns and se%ondly easy liEuidity on a%%ount of listing on the sto%/ e@%hanges.

&r / u549:-

#hese funds see/ to provide growth of %apital with se%ondary emphasis on dividend.#hey invest in shares with a potential for growth and %apital appre%iation. )e%ausethey invest in well established %ompanies where the %ompany itself and the industry inwhi%h it operates are thought to have good long term growth potential* growth funds

provide low %urrent in%ome.

&r / a54 I5 me u549:-

>rowth and in%ome funds see/ long term growth of %apital as well as %urrent in%ome.#he investment strategies used to rea%h these goals vary among funds. !ome invest ina dual portfolio %onsisting of growth sto%/s and in%ome sto%/s* or a %ombination of growth sto%/s* sto%/s paying high dividends* preferred sto%/s* %onvertible se%urities or fi@ed in%ome se%urities su%h as %orporate bonds and money mar/et instruments.

i7e4-I5 me u549:-

#he goal of fi@ed in%ome funds is to provide %urrent in%ome %onsistent with the preservation of %apital. #hese funds invest in %orporate bonds or government ba%/edmortgage se%urities that have a fi@ed rate of return.

!ala5 e4:-

#he )alan%ed fund aims to provide both growth and in%ome. #hese funds invest in both shares and fi@ed in%ome se%urities in the proportion indi%ated in their offer


51/86

do%uments.

#hese are ideal for investors who are loo/ing for a %ombination of in%ome andmoderate growth.

$ 5e= $ar;e u549L%i ui4 u549:-

#hese invest in highly liEuid* virtually ris/ free* short term debt se%urities of agen%iesof the Indian >overnment* ban/s and %orporations and #reasury

S e ial =LSe r u549:-

#hese funds invest in se%urities of a spe%ifi% industry or se%tor of the e%onomy su%h ashealth %are* te%hnology* leisure* utilities or pre%ious metals. #he funds enable investorsto diversify holdings among many %ompanies within an industry* a more %onservativeapproa%h than investing dire%tly in one parti%ular %ompany.

$ summary is presented in the table below of the various funds and their investmentob'e%tives6

!C7(&( #NP( #I&(7O=IXO

=I!: P=OBID(

#NPIC$D I (!#&( # P$##(=

O) (C#I ( OP( CDO!( (T I#N

H5

;()#

H5

&O (N&$=:(

I !#0 O#7(=H5

&O (N

&$=:(#

N(! O !hort term Dow A A 2A 9A 1AA


52/86

I CO&( N(! N(! &ediumDong #erm

Dow to&edium

A 9A 1AA A 2A

>=O"#7 N(! N(! Dong #erm 7igh 9A 1AA A 2A A 2A

)$D$ C(; N(! N(! Dong #erm &edium to7igh

A FA A U 4A A 2A

#$Q !$I > N(! N(! Dong #erm 7igh 9A 1AA 9A 1AA A 2A

CURRENT SCENARIO O $UTUA% UND:-#he mutual funds industry in India has grown at a strong pa%e of 1F.4 per %ent for thelast 9 years whi%h is better %ompared to the growth rate of the mutual fund industryworldwide* whi%h was about 13 per %ent for the same period. #he Indian mutual fundsindustry has =s 2A4* 1+ %rore worth of assets under management as on ovember 3A*


53/86


54/86

impetus has %ome after the %hanges in the mutual fund regulations in early 1+9As.Private and foreign mutual funds are operating in the Indian mar/et and %onstitute asubstantial portion of the mutual fund industry.

#oday the industry %onsists of nit #rust of India* mutual funds sponsored by publi%se%tor ban/s and insuran%e %orporations* private and foreign mutual funds.

Investors are %onstantly being bombarded by Euestions %on%erning their ris/ profile.!u%h investors often invest their money in a guilt fund or money mar/et fund. )an/sli/e Citiban/* $ X >rind lays* ;euts%he ban/* 7ong :ong ban/* Commer%e ban/*)anEue nationale de Paris* =eligare !e%urities Dtd. is not only aggressively mar/etingfunds but have also laun%hed their own mutual funds.

#he mutual fund produ%t designers have identified a strategi% gap in the produ%toffering in the %apital mar/et and now are fighting a losing battle with governmentsavings plans* ban/ deposits and provident funds. #hey are providing %heEue fa%ilityon money mar/et mutual funds to ma/e them more enti%ing and guilt funds for the ris/ averse. Produ%t innovations and new produ%t %ombinations have started rolling in tothe Indian mar/et. (.g. >IC mutual fund in the year 2AAA had laun%hed an open endeds%heme named as >IC ;J&$# in whi%h arvin 1+945[. #hese additions of features

also offer advantages to others in the value %hain. Bor the mutual fund agents newfeatures provide new sales arguments in seller buyer intera%tion. ew features do notonly infuse single produ%ts but also entire produ%t %ategories periodi%ally with newlease of life.

DISAD#ANTA&ES O $UTUA% UNDS


55/86

#he following are important disadvantages of investing through mutual funds6

NO CONTRO% O#ER COSTS 6

!in%e investors do not dire%tly monitor the funds operations they %annot %ontrol the%osts effe%tively. =egulations therefore usually limit the e@penses of mutual funds.

NO TAI%OR $ADE PORT O%IOS 6

&utual fund portfolios are %reated and mar/ed by $&Cs* into whi%h investor invest.#hey %annot %reate tailor made portfolios.

$ANA&IN& A PORT O%IO O UNDS 6

$s the number of mutual funds in%reases in order to tailor a portfolio for him* aninvestor may be holding a portfolio of funds with the %ost of monitoring them andusing them* being in%urred by him.

RIS> ACTORS O IN#EST$ENTS IN $UTUA% UNDS:-

&utual funds li/e se%urities investments are sub'e%t to mar/et and other ris/s and there%an be no assuran%e that the ob'e%tives of any of the s%hemes of the Bund will bea%hieved.

#he $ of units issued under the !%hemes %an go up or down depending onthe fa%tors and for%es affe%ting %apital mar/ets and may also be affe%ted by%hanges in the general level of interest rates.

#he past performan%e of the mutual funds managed by the !ponsors and their affiliates0 asso%iates is not ne%essarily indi%ative of the future performan%e of the s%hemes.

#he !ponsors are not responsible or liable for any loss resulting from theoperation of the s%hemes beyond the initial %ontribution of an amount of =s.1la/h made by the !ponsors towards setting up the Bund or su%h other a%%retionsand additions that may be made to the initial %orpus set up by the !ponsors.

#he liEuidity of the !%heme s investments may be restri%ted by trading volumessettlement periods and transfer pro%edures. In the event of an inordinately largenumber of redemption reEuests or of a restru%turing of any of the !%hemes

portfolios* the time ta/en by the Bund for redemption of units may be%omesignifi%ant. Investors are also reEuested to peruse the =is/ Ba%tors and !pe%ialConsiderations. =ight to Dimit =edemptions in the Offer ;o%uments of the


56/86

respe%tive s%hemes of the Bund.

T/e Ri9;-Re ur5 Tra4e- 22:-

#he most important relationship to understand is the ris/ return trade off. 7igher theris/ greater the returns0loss and lower the ris/ lesser the returns0loss.

7en%e it is up to you* the investor to de%ide how mu%h ris/ you are willing to ta/e. Inorder to do this you must first be aware of the different types of ris/s involved withyour investment de%ision.

$ar;e Ri9;:-

!ometimes pri%es and yields of all se%urities rise and fall. )road outside influen%esaffe%ting the mar/et in general lead to this. #his is true* may it be big %orporations or smaller mid sized %ompanies. #his is /nown as &ar/et =is/. $ !ystemati% InvestmentPlan ,!IP-5 that wor/s on the %on%ept of =upee Cost $veraging ,=C$-5 might helpmitigate this ris/.

Cre4i Ri9;:-

#he debt servi%ing ability may it be interest payments or repayment of prin%ipal5 of a%ompany through its %ash flows determines the Credit =is/ fa%ed by you. #his %redit


57/86

ris/ is measured by independent rating agen%ies li/e C=I!ID who rate %ompanies andtheir paper. $ K$$$J rating is %onsidered the safest whereas a K;J rating is %onsidered

poor %redit Euality. $ well diversified portfolio might help mitigate this ris/.

I52la i 5 Ri9;:-

Inflation is the loss of pur%hasing power over time. $ lot of times people ma/e%onservative investment de%isions to prote%t their %apital but end up with a sum of money that %an buy less than what the prin%ipal %ould at the time of the investment.#his happens when inflation grows faster than the return on your investment. $ welldiversified portfolio with some investment in eEuities might help mitigate this ris/.

I5 ere9 Ra e Ri9;:-

In a free mar/et e%onomy interest rates are diffi%ult if not impossible to predi%t.

Changes in interest rates affe%t the pri%es of bonds as well as eEuities. If interest ratesrise the pri%es of bonds fall and vi%e versa. (Euity might be negatively affe%ted as wellin a rising interest rate environment. $ well diversified portfolio might help mitigatethis ris/.

P li i alL& 0er5me5 P li = Ri9;:-

Changes in government poli%y and politi%al de%ision %an %hange the investmentenvironment. #hey %an %reate a favorable environment for investment or vi%e versa.

%i ui4i = Ri9;:-

DiEuidity ris/ arises when it be%omes diffi%ult to sell the se%urities that one has pur%hased. DiEuidity =is/ %an be partly mitigated by diversifi%ation* staggering of maturities as well as internal ris/ %ontrols that lean towards pur%hase of liEuidse%urities.

Nou have been reading about diversifi%ation above* but what is itM


58/86

T'PES O $UTUA% UND SCHE$ES :-

"ide variety of &utual Bund !%hemes e@ists to %ater to the needs su%h as finan%ial position* ris/ toleran%e and return e@pe%tations et%. #he table below gives an overviewinto the e@isting types of s%hemes in the Industry.


59/86

RE@UENT%' USED TER$S:-

Ne A99e #alue


60/86


61/86

investment. nits of the funds are allotted on et $sset alue $ 5 of the fund at the point of time. nli/e other investments* the mutual fund itself is not traded nor does itoffer guaranteed returns li/e a deposit. #he mutual fund s et $sset alue $ 5

determines the value of the investment. Investors redeem their investments in themutual fund on the basis of the $ from the mutual fund itself this is repur%hase of units by $&C5.


62/86

S me /er rela e4 ermi5 l ie9:-

Cu9 4ia59:-#he ban/ or trust %ompany that maintains a mutual fundJs assets* in%luding its

portfolio of se%urities or some re%ord of them. Provides safe /eeping of se%urities but has no role in portfolio management.

Di9 ribu r9 a54 a e5 9:- !ell units on behalf of funds and are generally appointed by the $&C.

C r u9:-

#he total amount of money invested in a s%heme by all the investors.

E5 r=LE7i l a4:-

(ntry load is the load on pur%hase or swit%h out of units

(@it load is load on redemptions ;ividend swit%h out of units.

Ne A99e #alue:-

et $sset alue $5 is the a%tual value of one unit of a given s%heme on anygiven business day. #he $ refle%ts the liEuidation value of the fund sinvestments on that parti%ular day after a%%ounting for all e@penses. It is %al%ulated

by dedu%ting all liabilities e@%ept unit %apital5 of the fund from the realizable

value of all assets and dividing it by number of units outstanding.

S=9 ema i I50e9 me5 Pla5


63/86

7elps investor to invest disposable funds ea%h month. >ives investor the benefits of rupee %ost averaging =elieves investor of trying to time the mar/et

%e al a54 re ula r= 2rame r;

Re ula r9 i5 I54ia

SE!I – /e Ca i al $ar;e 9 Re ula r:-It reEuires all mutual funds to be registered with themIssues guidelines for all mutual fund operations in%luding where they %aninvest* what investment limits and restri%tions are to be implied with.$%ts in the interest of the investor.

R!I – $ 5e= $ar;e 9 Re ula r:-

Su er0i9 r 2 ba5; 5e4 2u549)an/s %ome under the 'oint regulatory 'urisdi%tion of =)I and !()I .

Su er0i9 r 2 m 5e= mar;e mu ual 2u549:-

&oney mar/et mutual funds were regulated by =)I guidelines dated2301101++ spe%ially issued for the purpose.=e%ently it has been de%ided that &oney &ar/et &utual Bunds will beregulated by !()I through the same guidelines issued for other mutual funds.

$i5i9 r= 2 i5a5 e:-It is %harged with implementing the government poli%ies* supervises both the =)Iand !()I.

S ; E7 /a5 e:-!to%/ e@%hanges are self regulatory organizations supervised by !()IClose ended s%hemes are listed on one or more sto%/ e@%hanges through a listingagreement between the fund and the sto%/ e@%hange.


64/86

A99 ia i 5 2 $u ual u549 i5 I54ia overnment of India and =eserve )an/ the. #he history of mutual funds in India %an be broadly divided into four distin%t phases.

ir9 P/a9e – 1(6 -8+:-

nit #rust of India #I5 was established on 1+F3 by an $%t of Parliament* setup by the =eserve )an/ of India.#he first s%heme laun%hed by #I was nit !%heme 1+F4.$t the end of 1+99 #I had =s.F*


65/86

Se 54 P/a9e – 1(8+-1((3 IC5.DIC established its mutual fund in une 1+9+ while >IC had set up its mutualfund in ;e%ember 1++A.$t the end of 1++3* the mutual fund industry had assetsunder management of =s.4


66/86

;uring the %urrent year* while initially there had been a de%line in the $ &until $pril 2AA4* the situation reversed as* riding on a positive mar/etsentiment* a !lew of new offerings from mutual fund houses swelled the $ &*

whi%h stands at =s. 2*31*9F2 %r as on &ar%h 2AAF. #his is remar/able in%reasefor the industry whi%h a%%ording to $&BI was =s. 1* 2*29A %r as on anuary2AA


67/86

DATA ANA%'SIS AND INTERPRETATIONll i5 ra / 9/ 9 /e 2a r9 i52lue5 i5 /e 4e i9i 5 2 a

er9 5 i50e9 i5 mu ual 2u549.

INTERPRETATION:-

$bove fa%tors have been evaluated on a s%ale of 1A. umber K1J means least aware andnumber K1AJ means most aware.

It is observed from the survey that people generally %ome to /now about theinvestment options through news papers and magazines. &ass media options li/etelevision and radio options are also %oming up but still a lot of promotional %ampaignis to be done to ma/e this %hannel an effe%tive one.

#hese options are mainly present in front of any finan%ial institution li/e ban/ et% for instant appeal.


68/86

ll i5 ra / 9/ 9 /e rela i 59/i be ee5 a55ual i5 me a54/e = e 2 i50e9 me5 ma4e

0

10000

20000

30000

40000

50000

60000

70000

8000090000

MutualFunds

Shares FixedDeposits

Insurance

Under !"s100000 10

"s#100000 ! 200000 26

"s#200001!500000 46

"s#500001!1000000 12

$%er"s#1000000 6

I5 me r u bel 1 la;/ 6#his %ategory invest ma'or amount into ban/Js B; or post offi%e s%hemes. #hey do notgo for eEuity related investments be%ause of fund shortage. $lthough insuran%e isgiven some weight age but it is generally life insuran%e without investment options.

ow it is observed that this segment has also started investing into mutual fundsalthough it is a small investment.

I5 me r u be ee5 1 - la;/:-#his %ategory invest ma'or amount into ban/Js B; or bonds. #hey also donJt go for

eEuity related investments be%ause of fund shortage. $lthough insuran%e* shares andmutual funds are given some weight age but it is generally life insuran%e withoutinvestment options.

I5 me r u be ee5 – * la;/9:#his %ategoryJs ma'or area of investment is in mutual funds and insuran%e. !in%e theyhave enough disposable in%ome so %onsiderable amount is invested into eEuity relatedfunds. $n investment in ban/ B;s is made automati%ally sin%e the salary %omes in the

a%%ount otherwise no spe%ifi% dire%t investment is made into su%h options. )yin%reasing the awareness about &B they %an be potential %ustomers.

I5 me r u be ee5 * – 1? la;/9:#hey have enough disposable in%ome so ma'or investment is made into both eEuityand mutual funds. Insuran%e is also given due weight age but with the eEuity related


69/86

options for better returns. #hey are updated with the features so thorough /nowledge isneeded before advising them any fund.

I5 me r u ab 0e 1? la;/:- #hey too have enough disposable in%ome so ma'or investment is made into botheEuity and mutual funds. #his %ategory also demands for portfolio fa%ility. #hey areimportant %ustomers so spe%ifi% relationship e@e%utives are assigned to them. #hey are%ontinuously updated about new fund s%hemes.

0

5

10

15

20

25

Under 30

31!40 41!50 51!60 $%er 60

&ax 'ene(it 26

)ro(essionalMana*e+ent 9

,ess &i+e -onsu+in*16Di%ersi(ication .nd &hus,ess "is/ 7

.ll &he . o%e 42

0

5

10

15

20

25

Under 30

31!40 41!50 51!60 $%er 60

&ax 'ene(it 26

)ro(essionalMana*e+ent 9

,ess &i+e -onsu+in*16

Di%ersi(ication .nd &hus,ess "is/ 7

.ll &he . o%e 42

ll i5 ra / 4e9 ribe9 /e rela i 59/i be ee5 /e a e a54


70/86

/e i 59


71/86

U54er a e r u 3?:-In this age group it was observed that %ustomers give importan%e to all fa%tors butmu%h importan%e is given to Professional &anagement. It is also per%eived that themoney invested is diversified so it less ris/y

U54er a e r u 31- ? =ear9 6

#his age group people lay stress on both Professional &anagement and time savingoption.

U54er a e r u 1-*? =ear9:-

People under this %ategory people start planning for retirement so they loo/ for timesaving option to be a better one. &oreover they also start see/ing for #a@ benefit.

U54er a e r u *1-6? =ear9:-#he in%lination of people is more on #a@ )enefit as ris/ ta/ing %apa%ity is low andmost of the /nowledge a%Euired by them is through newspapers and 'ournals et%. timesaving option is also %onsidered.

U54er a e r u 6?:-

$s this %ategory people donJt have their regular in%ome so they go for #a@ benefit only.7owever they want returns early so time saving is also ta/en into %onsideration.&oreover people are averse to ta/e ris/ so they feel li/e investing in >overnment

!e%urities also.


72/86

ll i5 ra / 4e9 ribe9 /e rela i 59/i be ee5 /e a e a54 /e;i54 2 i50e9 me5 9 e le ma;e:

0123456789

10

Under 30

31!40 41!50 51!60 $%er 60

Age

I n v e s t m e n t s

'an/ Deposits and'onds 15

Mutual Funds 15

Shares 13

-o+ ination o( 'an/s FDs 'onds 25

-o+ ination o( MutualFunds and Shares 32

-o+ ination o( MutualFunds and Shares 32

A e r u u54er 3?:

Dargely investment is made into mutual funds and shares. #his age group has largedisposable in%ome and is therefore ready to ta/e the ris/. It is also observed that still

ban/ fi@ed deposits are made by this age group* be%ause they have salary a%%ount soB;Js are %reated. Company bonds are also a preferred option.

A e r u 31 – ? =ear9 6

#his age group lay stress on both the returns and ta@ planning. Bor ta@ purpose it isobserved that ,unit lin/ed investment plans are preferred as they also provide theinsuran%e %over. #heir investment into mutual funds and shares is less in %omparison t

previous age group.


73/86

A e r u 1 – *? =ear9: In this age group in%lination towards )an/ B;s*)onds and mutual fund has in%reased. #he reason observed is in this age group* peoplestart planning for their retirement.

A e r u *1 - 6? =ear9: - In this age group in%lination towards )an/ B;s* )onds has in%reased and &utual Bunds has de%reased. #he reasonobserved is in this age group* people are almost near to retirement and plan tospend their money on travel and leisure

A e r u u54er 6? =ear9: In this age group people start investing in)an/s B;s * as it is believed to be the safer options with fi@ returns. It was alsofound that almost none were interested for investment in shares be%ause of

per%eption of ris/y mar/et trend

ll i5 ra / 9/ 9 /e re2ere5 e9 2 /e u9 mer /ile9ele i5 2 r i50e9 me5 i5 a5= $u ual u54 m a5=:-

0

10

20

30

40

50

60U&I Mutual Fund

S'I

Standard -harted MutualFund

Fran/lin &e+pleton

S'- Mutual Fund

Fidelit uit Fund

)rudentil I-I-I MutualFund

.' .+ro

It is observed from the survey that people generally give mu%h preferen%e to invest in=eligare !e%urities Dtd. &utual Bund. It is observed that =eligare !e%urities Dtd. hasoutperformed every other fund with annual return of 1AA.42H for the past 1 year and#I is least performing fund with return of A.12H for past 3 years. =eligare!e%urities Dtd. &utual Bund invest in 22 se%tors and #I invest in 14 se%tors still it isgiving higher returns whi%h attra%ts the %ustomers to invest more in it.Bran/lin #empleton is %onsidered to be the se%ond best %ompany for investment


74/86

purpose. !trong BII flows along with inflows from domesti% investors helped theIndian eEuity mar/ets %lose the Euarter and the finan%ial year on a strong note. It isdrasti%ally in%reasing its portfolio. #he main additions to the portfolio have been #C!*

7industan Dever* et $irways* ;r.=eddyJs* nion )an/ of India. #he e@posure to the%ompany in se%tors li/e metals* auto and %ement has gone up. #he %ompany is%ontinuously earning profit and giving good returns. !tandard Charted &utual Bundand 7!)C &utual Bund are also giving good returns so people are highly satisfiedwith both of the %ompanyJs.

ll i5 ra / 9/ 9 /a / e le 2 4i22ere5 a e r uu9e /eir m 5e= 2r m i50e9 me5 .

0

2

4

6

8

10

12

14

Under

30

31!40 41!50 51!60 $%er 60

&ra%el or ,eis ure 16

-hild 7education or +arria*e8 30

Further in%est+ents 34

"etire+ent 'ene(it 20

U54er a e r u 3?:-

#his age group of people generally does have large disposable in%ome and they are

willing to ta/e higher ris/ as su%h they /eep themselves updated with the prevailingmar/et trends so they use their money for further investments. It was also found thatthey spend in #ravel or Deisure.

U54er a e r u 31 - ?:-


75/86


76/86

CONC%USION

CONC%USION:-

#hrough the study I finally rea%hed to the %on%lusion that Investment is the bestutilization of the earnings and leads to the improvement in the living standard of the

people.

It was found that people of different age groups have different per%eption s regardinginvestments in &utual Bund s%hemes.

7igh ris/ ta/ers are generally interested in investing in &utual Bund and shares. #hey

basi%ally go for (Euity !hares. "hereas those who %an ta/e %al%ulated ris/ aregenerally interested in investing in )alan%ed !%hemes. #hese s%hemes invest their funds in eEuity shares and debt in apportion of FA64A ratio. $nd those who are notwilling to ta/e ris/ at all go for a ;ebt !%heme or &oney &ar/et !%heme.

It is observed that &utual Bund gives better returns in %omparison to ban/s. &utualBund provides better liEuidity and moderate ris/. &utual Bunds offer their investors anumber of fa%ilities su%h as inter fund transfers* online %he%/ing of holding status* et%&utual Bund offers investors a valuable tool for $sset $DDOC$#IO . Competitionhas made mutual funds improve their servi%es towards the investors. &ost mutual

funds have now speeded up their redemptions giving the investors the satisfa%tion of re%eiving his money on time.


77/86

RECO$$ENDATION AND SU&&ETIONS

RECO$$ENDATION AND SU&&ETIONS:-

15 Investors should always /eep a photo%opy of the appli%ation form. whi%h %an be filed to /now the manner in whi%h appli%ation was made single* 'ointownership and order of ownership. Investors will also be able to see how theyhave signed the forms * many investors %hange their signatures over time8 somehave a different signatures for ban/ing and investment transa%tions8 someinvestors use both 7indi and (nglish signatures5. Investors will also /now the%hoi%e they have e@er%ised dividend and redemption options5.

25 Investors should preserve the %ounterfoil a%/nowledgement issued by the%olle%ting agen%y. #his a%/nowledgement usually also has the appli%ationnumber. If a%%ount statement or %ertifi%ate is not re%eived* thea%/nowledgement is the proof of pur%hase* with whi%h investors %an approa%hthe registrar and transfer agent.

35 It is preferable to have 'oint ownership* so that investments will pass on to the 'oint owner in the event of death of the first holder.

45 It is important to fill up nomination details in the appli%ation. #his will enablelegal heirs to %laim the holdings without pro%edural delays. ominations that

do not indi%ate the guardian of a minor are not valid. >uardian indi%ated willhave to be a person other than the holders of the investment.

5 CheEues should be %rossed and appli%ation number and name should be writtenon the ba%/ of the %heEue. &ost mutual funds do not a%%ept outstation %heEues*

post dated %heEues with the e@%eption of spe%ifi% investment plans5 or postalorders.

F5 (@isting investors %an Euote their uniEue a%%ount or folio numbers so that their holdings will be %onsolidated. #his is helpful in ta@ matters and in /eeping

investment information in a %onsolidated manner.


78/86


79/86


80/86

It would not be able to /eep pa%e with inflation

. Nou are finan%ially responsible forMOnly yourself

1 person beside yourself

2 to 3 persons beside yourself

4 to persons beside yourself

&ore than persons beside yourself

F. "ho influen%es your de%ision to invest in &BMBriends0Bamily0=elatives

ewspaper0&agazines

# 0=adio advertising

)anners0)ill )oard07oarding.

ATTITUDE:-

9. 7ow would you des%ribe yourself as a ris/ ta/erM

Careless

"illing to ta/e ris/ for higher returns

Can ta/e %al%ulated ris/

Dow ris/ ta/ing %apability

(@tremely averse to ris/


81/86

+. Nour feelings about the ris/s %an be summed up as follows6

I want the highest long term growth and I am %omfortable with largevariations in the $ in the short term

I %an a%%ept minor variations in the $ in the short term if it means I%an potentially earn more over the long run.

I had rather a%%ept lower long term return than worry about losing my%apital in the short term

1A. If you had =. AAAA to invest* whi%h of the following %hoi%es would you

ma/eM put the money in )an/ Bi@ed ;eposits and )onds

Invest in &utual Bunds

Invest in !hares

Invest in a %ombination of the above with a higher proportion of )an/ B;s and )onds

Invest in a %ombination of the above with a higher portion of &utual Bundsand !hares.

11. #he sto%/ mar/et has dropped 2 H and the &utual Bund you investedalso dropped 2 H* but the mar/et e@pe%ts the &utual Bund to go up again."hat do you doM


82/86

!ell &utual Bund

)uy more of it

:eep it as it is* as you e@pe%t it to rise later :eep it you are afraid of boo/ing a loss

$UTUA% UNDS:-

12. Nour latest investment involves6

&utual Bunds Only

!hares Only

)an/ Bi@ed ;eposits OnlyCombination Of $ll the above

13. $mount invested in6

&utual Bunds =s.5 !hares =s.5 )an/ Bi@ed ;eposits =s.5

.

14. If you have invested in the &utual Bunds then whi%h of the followingPls ti%/ all those in whi%h you have invested5


83/86

#I &utual Bund Bidelity (Euity Bund

!)I &utual Bund =eligare !e%urities Dtd.

&utual Bund!tandard Chartered &utual Bund )irla !un Dife &utual Bund

;!P &errill Dyn%h &utual Bund Prin%ipal &utual Bund P )

7!)C &utual Bund Bran/lin #empleton

1 . "hile investing in a &utual Bund* what is your priorityM Please ran/ the following in the order of preferen%e5

Current $ \\\\\\\\\\\\\

Company Image \\\\\\\\\\\\\

Past =eturns \\\\\\\\\\\\\

Bund &anager \\\\\\\\\\\\\

&inimum amount in the Bund \\\\\\\\\\\\\ =is/ Profile \\\\\\\\\\\\\

DiEuidity \\\\\\\\\\\\\

Do%/ In Period \\\\\\\\\\\\\

(ntry Doad0 (@it Doad \\\\\\\\\\\\\

;ividend Poli%y \\\\\\\\\\\\\

$sset $llo%ation \\\\\\\\\\\\\

1F. "hy do you invest in a &utual BundM

#a@ )enefit


84/86

Professional &anagement

Dess #ime Consuming

;iversifi%ation and thus less ris/ $ll the above

TI$E HORIFON:-

1


85/86

Bor availing retirement benefit


86/86

!I!%IO&RAPH'! ;9

1. ".). "erther and :eith ;avis* 7uman =esour%es and Personnel&anagement* &%>raw 7ill* ew Nor/* 1++F

2. P.B.;ru%/er* the Pra%ti%e of &anagement* $llied* ew ;elhi 1+

Documents

Religare Mutual Fund (4)