Mutual Fund Analysis

A PROJECT REPORT ON
ANALYSIS OF MUTUAL FUND SCHEMES OF
RELIANCE MONEY. FOR RELIANCE MONEY
Submitted to University of Pune

In the partial fulfillment of
MASTERS IN BUSINESS ADMINISTRATION
Submitted By
MOHAMMED SARFRAZ MOHAMMED SIDDIQUE
ALLANA INSTITUTE OF MANAGEMENT SCIENCES.

(2007-2009)
ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.
DECLARATION
I, the undersigned hereby declare that project report entitled ANALYSIS OF MUTUAL FUND SCHEMES OF RELIANCE MONEY has been submitted under the guidance of Prof. Pradnya P.M. This is the original work done by me.
Date: Place:
MOHAMMED SARFRAZ
CERTIFICATE
This is to certify that the project report on Analysis of mutual fund schemes of Reliance Money completed by Mr. Mohammed Sarfraz student of the MBA course of the University Of Pune, conducted by our Institute. The report is submitted in partial fulfillment of the MBA course curriculum as per the rules of the University of Pune.
INTERNAL GUIDE Mrs.PRADNYA P.M.
DIRECTOR Dr. K.K. SINGH
ACKNOWLEDGEMENT
A successful project work is a result of the organized and well coordinated teamwork. So at the completion of the project .
I take this opportunity to thank Mr. Abdullah Centre Manager of Reliance Money, for his valuable advice and direction which he provided to me during the course of my project. I am grateful to Dr. K.K.Singh and to all the members & the faculty of AIMS, PUNE for their constant support and inspiration throughout the lifespan of the project.
I express my deep sense of gratitude and sincere thanks to my project guide Prof. Pradnya for her constant guidance, co operation and advice which helped me in completing the project successfully.
Last but not the least, I would like to thank all my family members and friends for their constant co operation and inspiration and direct or indirect help without which this project could not be completed.
MOHAMMED SARFRAZ
CONTENTS
Chapter No. Executive summary 1. Introduction to the study 2. Objective of the study 3. Scope of the study 4. Company Profile 5. 6. 7. 8. 9. 10. 11. 10. 11. Theoretical Background Mutual Fund Schemes Of Reliance Money. Limitation of the study Findings Suggestions Research Methodology Conclusion Bibliography 17 23 34 47 49 51 53 55 57 15 13 09
INDEX
Page No.
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EXECUTIVE SUMMARY
I had undertaken a project titled Analysis of Mutual Fund Schemes For Reliance Money
This project work consists of the analytical and different schemes of mutual funds which Reliance Money which provides to give the concept of what is the difference in their schemes.
The methodology that was adopted for framing the project was primary and secondary data. This project is restricted to Pune area only.
In my project, I have shown the different products and utility of it to the customer. This project highlights on the peculiarities of the product since they are traded in the market.
The project was studied with the help of brochure, magazine and net. Even a dialogue was carried with the top executive so that it can help me to shape my project and get the exact idea where the position of product lies and its status.
Customers are the king. They were interviewed and their opinion was taken into consideration so that I can correlate my information with the theory part. Since customers were rigid they didnt reveal the exact information about the product .Even keeping in mind the duration of the project there were certain limitations for it. As people were not ready to spare some time and discuss the product or answer to the query raised by me. So, I have to drawn some of the conclusion on the basis of the brochures and material of the company being provided.
INTRODUCTION TO THE STUDY
INTRODUCTION TO MUTUAL FUNDS:

A mutual fund is an investment vehicle where a person or group of persons, called mutual fund managers, choose a group of stocks and sell them in one package. Mutual Funds are generally lower risk investment for a beginner or intermediate investor because;
The managers are experts. Having a large number and variety of stocks is less risky than owning one stock If the prices per share of some stocks go down, others ASSET VALUE), of the mutual
can go up, possibly keeping the price (NET fund stable or going up.
Mutual funds are also recommended for those who do not have the time, energy or desire to research their own stocks. Every mutual fund and fund family comes with a prospectus read the prospectus before investing. The prospectus not only helps you to understand what you are investing in, but it helps you to understand mutual funds and stocks in general.
Development of the Global Mutual Funds Industry
Structural changes in the global economic environment have, over the year, led to the emerged of a strong market economy and facilitated the growth of the mutual fund industry, particularly since the 1980s. A market economy depends more on growth led by the stock market than by bank finance. Since the mutual fund industry is a strong pillar of the stock market system, it got a boost with the emergence of a strong market economy. Mutual funds found increasing acceptance also because they have the capacity to absorb the instability and uncertainties that characterize the stock market system. The rise in inflation, reduction in real interest and growing complexities in the market provide tremendous opportunities to mutual funds. For these reasons, mutual fund industry began to thrive well particularly during the 1990s in not only the developed countries, but the newly industrialized and developing countries as well.
The immediate boos to mutual fund, however, was provided by the prolonged economic boom in the US, which fuelled dynamic growth in the stock market, and consequently in the mutual fund industry. In India too, the growth of the stock market in the early 1990s, gave rise to unprecedented growth in the mutual fund industry. Growth was unprecedented in the 1990s, with the total increasing from US$4156451 million in 1993 to US$7651618 million in 1998. While the assets of the U.S. and non-U.S. mutual funds were 49.8% and 51.2%, respectively, in 1993 they amounted to 63.9% and 36.1% respectively. During the same period, the assets of open ended mutual funds worldwide grew by 17% p.a. The growth of asset of non US mutual funds, however was much lower.
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In terms of the open ended mutual fund investment companies worldwide, with an unprecedented rise from 24474 in 1993 to 35424 in 1996. However the number decline marginally to 31570 in 1998.
The rising trend continued in the US though, with the number increasing from 4537 in 1993 to 6254 in 1996 and to 7248 in 1998. commensurately, the share of US increased from 18.5% to 77%.
The top five countries in terms of the open ended mutual funds in 1998 US, France, Japan, Spain, and UK.
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OBJECTIVE OF THE STUDY
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Objectives:1. To study the various offers of the company, services ranging from equities, commodities, portfolio management etc.
2. The objective of the study was to collect information on the various securities revolving in the market & thus providing customer service to clients to help them invest capital in profitable plans.
3. To know about returns of the fund which one is beneficial.
4.
To know their portfolio management.
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SCOPE OF THE STUDY
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Scope of the study:The study covers various aspects of mutual fund like basic concept, types, future of mutual fund in India & the schemes etc. But it does not cover these aspects in detail relating with the legal aspects and the provisions made in different acts.
The time horizon selected for the study is from April 2007 to March 2008. All the schemes have been analyzed with the consideration of this time frame.
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COMPANY PROFILE
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COMPANY PROFILE:
Reliance Capital Ltd is a part of the Reliance - Anil Dhirubhai Ambani Group, and is ranked among the 25 most valuable private companies in India. Reliance Capital is one of India's leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking groups, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking, depository services, distribution of financial products, consumer finance and other activities in financial services. The Reliance Anil Dhirubhai Ambani Group is one of India's top 2 business houses, and has a market capitalization of over Rs.2,90,000 crore (US$ 75 billion), net worth in excess of Rs.55,000 crore (US$ 14 billion), cash flows of Rs. 11,000 crore (US$ 2.8 billion) and net profit of Rs. 7,700 crore (US$ 1.9 billion). Reliance Capital Ltd. is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. RCL was incorporated as a public limited company in 1986 and is now listed on the Bombay Stock Exchange and the National Stock Exchange (India). With a net worth of over Rs 3,300 crore and over 165,000 shareholders, Reliance Capital has established its presence as a leading player in the financial services sector in the country. On conversion of outstanding equity instruments, the net worth of the company will increase to about Rs 4,100 crore. Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services. It is headed by Anil Ambani.
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Reliance Capital is one of Indias leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking and other activities in financial services.
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I have done my project in Reliance Money and the study of mutual funds of Reliance products or schemes.
About Reliance Money:

Reliance Money is a group company of Reliance Capital; one of India's leading and fastest growing private sector financial services companies, ranking among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital is a part of the Reliance Anil Dhirubhai Ambani Group. Reliance Money which commenced commercial operations in April 2007 has over 300,000 customers and 4,300 outlets in more than 3,500 locations across India. Reliance Money is a comprehensive electronic transaction platform offering a wide range of asset classes. Its Endeavour is to change the way India transacts in financial markets and avails financial services. Reliance Money is a single window, enabling you to access, amongst others in Equities, Equity & Commodities Derivatives, Mutual Funds, IPOs, Life & General Insurance products, Off share Investments, Money Transfer, Money Changing and Credit Cards. Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Average Assets Under Management (AAUM) of Rs. 84563.92 Crs (AAUM for June 30th 08 ) and an investor base of over 68.38 Lakhs.
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country.
RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and has presence in 118 cities across the country.
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Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors.
"Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders." Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth.
Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.
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ABOUT RELIANCE MUTUAL FUND:

Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Average Assets Under Management (AAUM) of Rs. 84563.92 Crs (AAUM for June 30th 08 ) and an investor base of over 68.38 Lakhs.
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and has presence in 118 cities across the country.
Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors.
"Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders." Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth.
Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.
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THEORETICAL BACKGROUND
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ORIGIN OF MUTUAL FUND INVESTING:When three Boston Securities executives pooled their money together in 1924 to create the first mutual fund, they have no idea how popular mutual funds would become. The idea of pooling money for investing purposes started in Europe in mid 1800s. The first pooled in the US was created in 1893 for the faculty and staff of Harvard University. On March 21st, 1924 the first official mutual fund was born. It was called the Massachusetts Investors Trust. After one year the Massachusetts Investor Trust grew from $ 50000 in assets to 3, 92,000 in assets (with around 200 share holders). In contrast there are more than 10000 mutual funds in US today totaling around $7 trillion (with approximately 83 million individual investors) according to the Investment Company Institute.
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Concept of Mutual Funds:

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:
Mutual Fund Operation Flow Chart
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Organization of Mutual Funds in India:-
There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:
Organization of a Mutual Fund
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Mutual Funds Industry in India:The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry.
In the past decade, Indian mutual fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of 1,540 bn.
Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry.
The main reason of its poor growth is that the mutual fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling.
The mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under.
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Types of mutual fund schemes
By structure
o o o
open - ended schemes close - ended schemes interval schemes
By investment objective
o o o o
growth schemes income schemes balanced schemes money market schemes
Other schemes
o o
tax saving schemes special schemes index schemes sector specific schemes
Balanced fund --- has three objectives moderate long term growth of capital, moderate income, and moderate stability.
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Advantages of Mutual Funds:

The advantages of investing in a Mutual Fund are:
Diversification: The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value.
Professional Management: Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell.
Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud.
Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and you've got the cash.
Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet.
Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index
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Phases of mutual funds
First Phase - 1964-87:-
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under management.
Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
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The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds.
Fourth Phase - since February 2003
This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
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Performance of Mutual Funds in India:Let us start the discussion of the performance of mutual funds in India from the day the concept of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or rather to those who believed in savings, to park their money in UTI Mutual Fund.
For 30 years it goaled without a single second player. Though the 1988 year saw some new mutual fund companies, but UTI remained in a monopoly position.
The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. People rarely understood, and of course investing was out of question. But yes, some 24 million shareholders were accustomed with guaranteed high returns by the beginning of liberalization of the industry in 1992. This good record of UTI became marketing tool for new entrants. The expectations of investors touched the sky in profitability factor. However, people were miles away from the preparedness of risks factor after the liberalization.
The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.
The net asset value (NAV) of mutual funds in India declined when stock prices started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There was rather no choice apart from holding the cash or to further continue investing in shares. One more thing to be noted, since only closed-end funds were floated in the market, the investors disinvested by selling at a loss in the secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the losses by disinvestments and of course the lack of transparent rules in the
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whereabouts rocked confidence among the investors. Partly owing to a relatively weak stock market performance, mutual funds have not yet recovered, with funds trading at an average discount of 1020 percent of their net asset value.
The supervisory authority adopted a set of measures to create a transparent and competitive environment in mutual funds. Some of them were like relaxing investment restrictions into the market, introduction of open-ended funds, and paving the gateway for mutual funds to launch pension schemes.
The measure was taken to make mutual funds the key instrument for long-term saving. The more the variety offered, the quantitative will be investors.
At last to mention, as long as mutual fund companies are performing with lower risks and higher profitability within a short span of time, more and more people will be inclined to invest until and unless they are fully educated with the dos and donts of mutual funds.
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SCHEMES OF MUTUAL FUND IN RELIANCE MONEY
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SCHEMES OF RELIANCE MONEY:-
1. Equity/Growth Schemes:
The aim of growth funds is to provide capital appreciation over the medium to longterm. Such schemes normally invest a major part of their corpus in equities. 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. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.
Reliance Natural Resources Fund :

(An Open Ended Equity Scheme) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in companies principally engaged in the discovery, development, production, or distribution of natural resources and the secondary objective is to generate consistent returns by investing in debt and money market securities.
Reliance Equity Fund:(An open-ended diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities.
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Reliance Tax Saver (ELSS) Fund :(An Open-ended Equity Linked Savings Scheme.) The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments.
Reliance Equity Opportunities Fund :(An Open-Ended Diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity securities & equity related securities and the secondary objective is to generate consistent returns by investing in debt and money market securities.
Reliance Vision Fund:

(An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.
Reliance Growth Fund:

(An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.
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Reliance Index Fund :(An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Plan is to replicate the composition of the Nifty, with a view to endeavor to generate returns, which could approximately be the same as that of Nifty. The Investment Objective under the Sensex plan is to replicate the composition of the Sensex, with a view to endeavor to generate returns, which could approximately be the same as that of Sensex.
Reliance NRI Equity Fund :(An open-ended Diversified Equity Scheme.) The Primary investment objective of the scheme is to generate optimal returns by investing in equity or equity related instruments primarily drawn from the Companies in the BSE 200 Index.
Reliance Regular Savings Fund:(An Open-ended Scheme.) Equity Option: The primary investment objective of this option is to seek capital appreciation and/or to generate consistent returns by actively investing in Equity &Equity-related Securities.
Balanced Option:
The primary investment objective of this option is to generate consistent returns and appreciation of capital by investing in mix of securities comprising of equity, equity related instruments & fixed income instruments.
Reliance Long Term Equity Fund:

(An close-ended Diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate long term capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities
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and Derivatives and the secondary objective is to generate consistent returns by investing in debt and money market securities.
Reliance Equity Advantage Fund:

(An open-ended Diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio predominantly of equity & equity related instruments with investments generally in S & P CNX Nifty stocks and the secondary objective is to generate consistent returns by investing in debt and money market securities
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2. Debt/Income Schemes
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 not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, 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.
Reliance Monthly Income Plan :

(An Open Ended Fund. Monthly Income is not assured & is subject to the availability of distributable surplus ) The Primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unit holders and the secondary objective is growth of capital.
Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan :
Open-ended Government Securities Scheme) The primary objective of the Scheme is to generate Optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the central Government and State Government
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Reliance Income Fund:

(An Open-ended Income Scheme) The primary objective of the scheme is to generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt & Money market instruments.
Reliance Medium Term Fund:

(An Open End Income Scheme with no assured returns.) The primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unit holders and the secondary objective is growth of capital
Reliance Short Term Fund :

(An Open End Income Scheme) The primary investment objective of the scheme is to generate stable returns for investors with a short investment horizon by investing in Fixed Income Securities of short term maturity.
Reliance Liquid Fund :

(Open-ended Liquid Scheme). The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.
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Reliance Floating Rate Fund:

(An Open End Liquid Scheme) The primary objective of the scheme is to generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitized debt and Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns). The scheme shall also invest in fixed rate debt Securities (including fixed rate securitized debt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixed returns
Reliance NRI Income Fund:

(An Open-ended Income scheme) The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risks. This income may be complimented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in debt Instruments.
Reliance Liquidity Fund:

(An Open - ended Liquid Scheme) The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.
Reliance Interval Fund:

(A Debt Oriented Interval Scheme) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio
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Reliance Liquid plus Fund:

(An Open-ended Income Scheme.) The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities.
Reliance Fixed Horizon Fund I:

(A closed ended Scheme) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.
Reliance Fixed Horizon Fund II:

(An closed ended Scheme.) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.
Reliance Fixed Horizon Fund III:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio
Reliance Fixed Tenor Fund:

(An Close-ended Scheme.) The primary investment objective of the Plan is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.
Reliance Fixed Horizon Fund -Plan C:

(An closed ended Scheme.) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.
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Reliance Fixed Horizon Fund - IV:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio
Reliance Fixed Horizon Fund - V:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of: Central and State Government securities and Other fixed income/ debt securities normally maturing in line with the time profile of the scheme with the objective of limiting interest rate volatility
Reliance Fixed Horizon Fund - VI:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of: Central and State Government securities and Other fixed income/ debt securities normally maturing in line with the time profile of the series with the objective of limiting interest rate volatility
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Reliance Fixed Horizon Fund - VII:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of: Central and State Government securities and Other fixed income/ debt securities normally maturing in line with the time profile of the series with the objective of limiting interest rate volatility.
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3. Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.
Reliance Banking Fund

Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the primary investment objective to generate continuous returns by actively investing in equity / equity related or fixed income securities of banks.
Reliance Diversified Power Sector Fund:

Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme. The primary investment objective of the Scheme is to seek to generate consistent returns by actively investing in equity / equity related or fixed income securities of Power and other associated companies.
Reliance Pharma Fund:

Reliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of Pharma and other associated companies.
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Reliance Media & Entertainment Fund:

Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme. The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of media & entertainment and other associated companies.
4. Exchange Traded Fund
Reliance Gold Exchange Traded Fund:

(An open-ended Gold Exchange Traded Fund) the investment objective is to seek to provide returns that closely correspond to returns provided by price of gold through investment in physical Gold (and Gold related securities as permitted by Regulators from time to time). However, the performance of the scheme may differ from that of the domestic prices of Gold due to expenses and or other related factors.
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LIMITATION OF THE STUDY
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Limitation of the Study: 1.

This study is limited to only schemes of mutual fund.
2. This study is restricted to Pune city only.
3. The study is limited up to the mutual funds operating in India.
4. The returns of mutual fund are related to the share market conditions and hence it is difficult to measure them accurately.
47
FINDINGS
48
FINDINGS:
Most of the investors want guaranteed returns from the investment.
Every fund has some what percentage in debt product to avoid high risk of market. The investors are aware of mutual funds they do not invest in proportionate. Midcap fund has high risk but potential of high returns. Most of the investors are interested in banks that too in saving deposit and it is very popular tool of investment.
49
SUGGESTIONS
50
If investor wants to diversify their allocation to reduce risk then they should select Reliance Money as their allocation in equity and debt is in proportion.
Investor should be made aware of the schemes existing in market according to their portfolio.
Reliance Money should attract investors to invest in mutual funds by introducing new schemes.
While investing, investors should not only take in to consideration their past performance asset allocation and the returns given during their inception.
51
RESEARCH METHODOLOGY
52
The research methodology helps to build the project on the basis of data collected. I have collected the data which has helped me to frame the project through primary and secondary data.
PRIMARY DATA:
In this case, I had discussion with the company guide and senior colleagues to gather the information related to my project work and then I approached the customers of Reliance Money. During my project not only the primary data helped me but I have to take help of the secondary data.
Secondary Data:
In this case, I have referred to various books, magazines, company brochure, net etc.to extract the information that was needed for my project.
53
CONCLUSION
54
CONCLUSION:
From the analysis it is found that most of the customers go with bank deposits because of current needs. They should divert their investors mind from bank saving deposit and make them aware of the high returns gained by investing in mutual fund.
Guidance is an important criterion for the investors to make them aware about mutual fund schemes and their returns. Hence asset management companies should start promotional campaigns for exploring the knowledge and information about the mutual fund.
Hence by analyzing the schemes of Reliance mutual fund it can be stated that most of the investors invest in ELLS. The representatives of Reliance Money are able to satisfy all the queries offered by the clients. In turn, helping them to serve in a better way.
55
BIBLIOGRAPHY
56
BIBLIOGRAPHY:
THE INDIAN FINANCIAL SYSTEM BY VASANT DESAI. FINANCIAL INSTITUTIONS & MARKETS BY MUKUND MAHAJAN. FINANCIAL SERVICES MARKETS BY ANIL AGASHA.
MARKETING & FINANCIAL SERVICES BY V.A. AVDHANI. BROACHURE of THE COMPANY.
WEBSITES:www.reliancemoney.com www.googlesearch.com
57

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A PROJECT REPORT ON

ANALYSIS OF MUTUAL FUND SCHEMES OF

RELIANCE MONEY. FOR RELIANCE MONEY

Submitted to University of Pune

MASTERS IN BUSINESS ADMINISTRATION

MOHAMMED SARFRAZ MOHAMMED SIDDIQUE

ALLANA INSTITUTE OF MANAGEMENT SCIENCES.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

INTERNAL GUIDE Mrs.PRADNYA P.M.

DIRECTOR Dr. K.K. SINGH

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

INTRODUCTION TO THE STUDY

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

INTRODUCTION TO MUTUAL FUNDS:

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

Development of the Global Mutual Funds Industry

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

OBJECTIVE OF THE STUDY

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

3. To know about returns of the fund which one is beneficial.

To know their portfolio management.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

SCOPE OF THE STUDY

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

About Reliance Money:

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ABOUT RELIANCE MUTUAL FUND:

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

Concept of Mutual Funds:

Mutual Fund Operation Flow Chart

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

Organization of Mutual Funds in India:-

Organization of a Mutual Fund

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

Types of mutual fund schemes

open - ended schemes close - ended schemes interval schemes

growth schemes income schemes balanced schemes money market schemes

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

Advantages of Mutual Funds:

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

Phases of mutual funds

First Phase - 1964-87:-

Second Phase - 1987-1993 (Entry of Public Sector Funds)

Third Phase - 1993-2003 (Entry of Private Sector Funds)

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

Fourth Phase - since February 2003

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE.

SCHEMES OF MUTUAL FUND IN RELIANCE MONEY