INFORMATION ABOUT ORGANIZATION

INFORMATION ABOUT THE ORGANIZATION

Company Profile
About Reli are
Religare is a diversified financial services group of India offering a multitude of investment options The diverse bouquet of financial services which Religare offers can be broadly clubbed across three key verticals - Retail, Institutional and Wealth spectrums The services e!tend from asset management, "ife Insurance, wealth management to equity broking, commodity broking, investment banking, lending services, private equity and venture capital Religare has also ventured into the alternative investments sphere through its holistic arts initiative and #ilm fund With a view to e!pand, diversify and introduce offerings benchmarked against global best practices, Religare operates in the life insurance space under $%egon Religare "ife Insurance &ompany "imited' and wealth management under the brand name $Religare (acquarie )rivate Wealth$ Religare has a pan India presence, 1*+,- locations across ./*- cities and towns It also currently operates from nine international locations following its acquisition of "ondon$s brokerage 0 investment firm, 1ichens, 1arrison 0 &o plc 23ow Religare 1ichens, 1arrison )lc4 It! in"orporation #ate i! $%&%'&'()* an# it! publi" i!!ue #ate i! +(&'%&+%%,

-i!ion an# Mi!!ion

-i!ion - To build Religare as a globally trusted brand in the financial services domain and present it as the 5Investment 6ateway of India$

Mi!!ion - )roviding complete financial care driven by the core values of diligence and
transparency

Bran# E!!en"e - &ore brand essence is 8iligence and Religare is driven by ethical and
dynamic processes for wealth creation

Group Companie!
Religare believes in 8iversification as diversification is very necessary to hedge the risk Religare follow that basic concept that is presented in its group companies Religare is currently present in 1ealthcare, IT, 9roking, %viation and travel business, and film )roduction 9elow is the list of the group companies given #ortis 1ealthcare "imited :uper Religare "aboratories "imited 2formerly :R" Ranba!y4 Religare Wellness "imited 2formerly #ortis 1ealthworld4 Religare Technova "imited Religare ;oyages "imited %egon Religare "ife Insurance &ompany "imited Religare (acquarie )rivate Wealth Religare :ecurities limited

Global Pre!en"e
Religare is having international presence with the name of Religare 1ichens, 1arrison )lc it is a leading integrated financial services group out of India 1ichens, 1arrison 0 &o plc 2114, established in 1*<+, is "ondon$s oldest independent 9rokerage and Investment firm with a global footprint )ost its acquisition through R="$s indirect subsidiary-Religare &apital (arkets International 2>?4 "imited, 11 has been rechristened as Religare 1ichens 1arrison plc 2R114

Reli are .e"uritie! /imite#

Reli are .e"uritie! /imite# 0R./1, a 1<<@ subsidiary of Religare =nterprises "imited is a leading equity and securities firm in India The company currently handles siAeable volumes traded on 3:= and in the realm of online trading and investmentsB it currently holds a reasonable share of the market The maCor activities and offerings of the company today are =quity 9roking, 8epository )articipant :ervices, )ortfolio (anagement :ervices, International %dvisory #und (anagement :ervices, Institutional 9roking and Research :ervices, (utual #unds, Insurance and &ommodities To broaden the gamut of services offered to its investors, the company offers an online investment portal armed with a host of revolutionary features

R:" is a member of the 3ational :tock =!change of India, 9ombay :tock =!change of India, 8epository )articipant with 3ational :ecurities 8epository "imited and &entral 8epository :ervices 2I4 "imited, and is a :=9I approved )ortfolio (anager

Religare has been constantly innovating in terms of product and services and to offer such incisive services to specific user segments it has also started the 3RI, #II, 13I and &orporate :ervicing groups These groups take all the portfolio investment decisions depending upon a client's risk D return parameter Religare has a very credible Research and %nalysis division, which not only caters to the need of our Institutional clientele, but also gives their valuable inputs to investment dealers

The %R3 3o of the Religare :ecurities "td is ++,E. The %R3 3o is required by to be available with the broker who deals on behalf of investors or sell the mutual funds of the different companies present in the market

Pro#u"t! an# !er2i"e!

)ortfolio (anagement :ervices =quity and 8erivative (utual #unds &ommodity 8epository International equity 0 &ommodity Investment %dvisory Insurance

These are the maCor products and services offered by Religare :ecurities "imited

MUTUA/ FUN3.
(utual fund is defined as the fund managed by an investment company with the financial obCective of generating high Rate of Returns These asset management or investment management companies collects money from the investors and invests those money in different stocks, bonds, short-term money market instruments, andDor other securities in a diversified manner The term (utual #und is made up of two words if we break the word we will find that it refers to funds that are raised and invested mutually :o if you and your friend both pool your money and invest it Cointly, you have created your own mutual fund (utual fund is a trust that pools the savings of a number of investors who share a common financial goal The pool of money is than invested in accordance with a particular obCective 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 appreciations realiAed are shared by its unit holders in proportion the number of units owned by them Thus a (utual #und is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed collection of securities at a relatively low cost =ach shareholder participates in the gain or loss of the fund >nits are issued and can be redeemed as needed The funds 3et %sset value 23%;4 is determined each day

:ourceG httpwww appuonline comgifsconcept-of-mutual-funds gif gif When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his investment put up with the corpus 2the total amount of the fund4 (utual #und investor is also known as a mutual fund shareholder or a unit holder If there is any change in the investments made into capital market instruments 2such a shares, debentures, bonds etc4 is reflected in the 3et %sset ;alue 23%;4 of the scheme 3%; is defined as the market value of the (utual #und scheme$s assets net of its liabilities The 3%; is calculated by dividing the market value of scheme$s assets by the total number of units issued to the investors

#or e!ampleG 1 If the market value of the assets of a fund is Rs 1<,<<,<<< 7 The total number of units issued to the investors is equal to 1,<<,<<< + Then the 3%; of this scheme H 2%4D294, i e 1<,<<,<<<D1,<<,<<< or 1< << . 3ow if an investor $I$ owns F<<< units of this scheme F Then his total contribution to the fund is Rs F<<<<

A3-ANTAGE. OF MUTUA/ FUN3

1 )ortfolio 8iversification
(utual #unds invest in a well-diversified portfolio of securities which enables investor to hold a diversified investment portfolio 2whether the amount of investment is big or small4

7 )rofessional (anagement
#und manager undergoes through various research works and has better investment management skills which ensure higher returns to the investor than what he can manage on his own #und manager is basically indulge himself 7. hours in keeping a track over the stocks in the portfolio as he is paid for the same and his reputation and career is also very much related with that work which a person who is employed in some other work cannot do

+ ReductionD8iversification of Risk
Investors acquire a diversified portfolio of securities even with a small investment in a (utual #und %s it is the basic rule that more diversified is your portfolio less risk is there The risk in a diversified portfolio is lesser than investing in merely 7 or + securities When an investor invests directly, all the risk of potential loss is his own While investing in a pool of funds with other investors, any loss on one or two securities is also shared

. Reduction of Transaction &osts

With the large amount of the investment from different investors economies of scale 2benefits of larger volumes4 sets in, mutual funds pay lesser transaction costs because of large volumes % benefit passed on to the investors

F "iquidity
(utual fund is comparable to the average price of all the shares which an investor would have bought :o in case of a mutual fund its much easier to e!it as compare to equity %n investor may not be able to sell some of the shares held by him very easily and quickly, whereas units of a mutual fund are far more liquid

E &hoice of :chemes

(utual funds provide investors with various schemes with different investment obCectives Investors have the option of investing in a scheme having a correlation between its investment obCectives and their own financial goals These schemes further have different plansDoptions

, Transparency
#unds provide investors with updated information pertaining to the markets and the schemes %ll material facts are disclosed to investors as required by the regulator

* &onvenience and #le!ibility

%sset management companies offer many investor services that a direct market investor cannot get Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa Jption of systematic 2at regular intervals4 investment and withdrawal is also offered to the investors in most open-end schemes

/ :afety
(utual #und industry is part of a well-regulated investment environment where the interests of the investors are protected by the regulator %ll funds are registered with :=9I and complete transparency is forced

1<

3I.A3-ANTAGE. OF MUTUA/ FUN3

1 &osts &ontrol 3ot in the 1ands of an Investor Investor has to pay investment management fees and fund distribution costs as a percentage of the value of his investments 2as long as he holds the units4, irrespective of the performance of the fund 7 3o &ustomiAed )ortfolios The portfolio of securities in which a fund invests is a decision taken by the fund manager Investors have no right to interfere in the decision making process of a fund manager, which some investors find as a constraint in achieving their financial obCectives + 8ifficulty in :electing a :uitable #und :cheme (any investors find it difficult to select one option from the plethora of fundsDschemesDplans available #or this, they may have to take advice from financial planners in order to invest in the right fund to achieve their obCectives

11

BRIEF HI.TOR4 OF ORGANIZATION

17

BRIEF HI.TOR4 OF ORGANIZATION

Hi!tory of Mutual Fun#! in In#ia
The mutual fund industry in India started in 1/E+ with the formation of >nit Trust of India, at the initiative of the Reserve 9ank and the 6overnment of India The obCective then was to attract the small investors and introduce them to market investments :ince then, the history of mutual funds in India can be broadly divided into si! distinct phases

P5a!e '6 '(7*6),8 Gro9t5 of Unit Tru!t of In#ia

In 1/E+, >TI was established by an act of )arliament %s it was the only entity offering mutual funds in India, it was a monopoly Jperationally, >TI was set up by the Reserve 9ank of India, but was later de-linked from the R9I The first scheme, and for long one of the largest, launched by >TI was >nit :cheme 1/E. Jver the years, >:-E. attracted the largest number of investors in any single investment scheme It was also at least partially the first open- end scheme in the country "ater in 1/,<s and *<s, >TI started innovating and offering different schemes to suit the needs of different classes of investors >nit "inked Insurance )lan 2>"I)4 was launched in 1/,1 :i! new schemes were introduced between 1/*1 and 1/*. 8uring 1/*.-*,, new schemes such as &hildren's 6ift 6rowth #und 21/*E4 and (aster share 21/*,4 were launched (aster share could be termed as the first diversified equity investment scheme in India The first Indian offshore fund, India #und, was launched in %ugust 1/*E 8uring 1//<s, >TI catered to the demand for income- oriented schemes by launching (onthly Income :chemes, a somewhat unusual mutual fund offering Kassured returnsL In absolute terms, the investible funds corpus of >TI was about Rs E<< crores in 1/*. 9y 1/*,-**, assets under management of >TI had grown ten times to Rs E,,<< cr

P5a!e +6 '(),6'(($8 Entry of Publi" .e"tor Fun#!

1/*, marked the entry of other public sector mutual funds With the opening up of the economy, many public sector banks and financial institutions were allowed to establish mutual funds :tate 9ank of India established the first non- >TI mutual fund- :9I (utual 1+

#und- in 3ovember 1/*, This was followed by &an bank (utual #und, "I& (utual #und, Indian 9ank (utual #und, 9ank of India (utual #und, 6I& (utual #und and )39 (utual #und These funds helped in enlarging the investor community and the investible funds #rom 1/*,-** to 1//7-/+, the assets under management increased from Rs E,,<<cr to Rs .,,<<. cr , nearly seven times '((+6($ %mount (obiliAed 2Rs &rores4 %ssets >nder (anagement 2Rs &rores4 +*,7., *,,F, .,,<<. (obiliAation %s @ Jf 6ross 8omestic :avings F 7@ < /@ E 1@

>TI )ublic :ector Total

11,<F, 1,/E. 1+,<71

8uring this period, investors showed a marked interest in mutual funds, allocating a large part of their savings to investments in the funds >TI was still the largest segment of the industry, with amount *<@ market share

P5a!e $6 '(($6'((78 Emer en"e of Pri2ate Fun#!

% new era in the mutual fund industry began in 1//+ with the permission granted for the entry of private sector funds This gave the Indian investors a broader choice of Kfund familiesL and increasing competition to the e!isting public sector funds Muite significantly, foreign fund management companies were also allowed to operate mutual funds, most of them coming into Indian through their Coint ventures with Indian promoters These private funds have brought in with them the latest product innovations, investment management techniques and investor-servicing technology that make the Indian mutual fund industry today a vibrant and growing financial intermediary 8uring the year 1//+-/., five private sector mutual funds launched their schemes followed by si! others in 1//.-/F Initially, mobiliAation of funds by the private mutual funds was slow 9ut, this segment of the fund industry began to witness much greater 1.

investor confidence in due course Jne influencing factor was the development of :=9I's regulatory framework for the Indian mutual fund industry Net important factor has been the steadily improving performance of several fund houses Investors in India now clearly saw the benefits of investing through mutual funds and became discerning and selective

P5a!e *6 '((76((8 Gro9t5 an# .EBI Re ulation

:ince 1//E, the mutual fund industry in India saw tighter regulation and higher growth It scaled new heights in terms of mobiliAation of funds and number of players 8eregulation and liberaliAation of the Indian economy had introduced competition and provided impetus to the growth of the industry #inally, most investors - small or large- started showing interest in mutual funds (easures were taken both by :=9I to protect the investor and by the 6overnment to enhance investors' returns through ta! benefits % comprehensive set of regulations for all mutual funds operating in India was introduced with :=9I 2(utual #und4 Regulations, 1//E These regulations set uniform standards for all funds The erstwhile >TI voluntarily adopted :=9I guidelines for its new schemes :imilarly, the budget of >nion 6overnment in 1/// took a big step in e!empting all mutual funds dividends from income ta! in the hands of investors 9oth the 1//E regulations and the 1/// 9udget must be considered of historic importance, given their far- reaching impact on the fund industry 8uring this phase, both :=9I and %(#I launched Investor %wareness )rogrammes aimed at educating the investors about investing through mutual funds %(#I published its booklet titled K(aking (utual #unds Work #or Nou- the Investors' 6uide L

P5a!e :6 '(((6+%%*8 Emer en"e of a lar e an# uniform in#u!try

The other maCor development in the fund industry has been the creation of a level playing field for all mutual funds operating in India This happened in #ebruary 7<<+, when the >TI act was repealed >nit Trust of India no longer has a special legal status as a trust established by an act of )arliament Instead, it has also adopted the same structure as any other fund in India- a Trust and an %sset (anagement &ompany >TI (utual #und is the present name of the erstwhile >nit Trust of India While >TI functioned under a separate 1F

law of Indian parliament earlier, >TI (utual #und is now under the :=9I's 2(utual #unds4 Regulations, 1//E like all other mutual funds in India >TI (utual #und is still the largest player in the Indian fund industry %ll :=9I compliant schemes of the erstwhile >TI are under its charge %ll new schemes offered by >TI (utual #und are :=9I approved Jther schemes of erstwhile >TI have been placed with a special undertaking administered by the 6overnment of India These schemes are being gradually wound up The emergence of a uniform industry with the same structure, operations and regulations makes it easier for distributors and investors to deal with any fund house in India 1/// marked the beginning of a new phase in the history of the mutual fund industry in India, a phase of significant growth in terms of both amounts mobiliAed from investors and assets under management &onsider the data belowG 6ross #und (obiliAation 2Rs &rores4 #rom <1-%pril-/* <1-%pril-// <1-%pril-<< <1-%pril-<1 <1-%pril-<7 <1-%pril-<+ <1-%pril-<+ <1-%pril-<. <1-%pril-<F To +1-(arch-// +1-(arch-<< +1-(arch-<1 +1-(arch-<7 +1-(arch-<+ +1-(arch-<+ +1-(arch-<. +1-(arch-<F +1-(arch-<E >TI 11,E,/ 1+,F+E 17,.1+ .,E.+ F,F<F )ublic :ector 1,,+7 .,<+/ E,1/7 1+,1E+ 77,/7+ ,,7F/ E*,FF* 1,<+,7.E 1,*+,..E )rivate :ector ,,/EE .7,1,+ ,7,+F7 1,.E,7E, 7,7<,FF1 F*,.+F F,71,E+7 ,,+E,.1E /,1.,,17 Total 71,+,, F/,,.* /7,/F, 1,E.,F7+ 7,.*,/,/ EF,E/. F,/<,1/< *,+/,EE7 1<,/*,1F*

%ssets >nder (anagement2Rs &rores4 %s Jn >TI )ublic :ector 1E )rivate :ector Total

+1-(arch-// +1-(arch-<< +1-(arch-<1 +1-(arch-<7 +1-(arch-<+ +1-(arch-<+ +1-(arch-<. +1-(arch-<F +1-(arch-<E

F+,+7< ,E,F., F*,<1, F1,.+. ..,F.1

*,7/7 11,.17 E,*.< *,7<. 17,77* 7+,/.7 +.,E7. +7,11+ F<,+.*

E,*E< 7F,<.E 7F,,+< .<,/FE EF,<+E FF,F77 1,<.,//7 1,1,,..1 1,*1,F1.

E*,.,7 1,1+,<<F /<,F*, 1,<<,F/. 1,71,*<F ,/,.E. 1,+/,E1E 1,./,FF. 7,+1,*E7

9etween 1/// and 7<<F, the siAe of the industry has doubled in terms of assets under management which have gone from about Rs E*,<<< crores to over Rs 1F<,<<< crores Within the growing industry, the relative market shares of different players in terms of amount mobiliAed and assets under management have also undergone changes The following chart portrays the relative shares of the different fund categories of the mutual fund industry in India during the phases discussed above

1,

I3&J(= :T%T=(=3T
Industry : Group : ISIN No :

#inance - 6eneral Religare I3=E711<1<1<

BSE Code : NSE Code : Market Lot :

F+7/1F R="I6%R= 1

Book Closure : Market Cap : Face Value :

7FD</D7<</ Rs F,<7+ F* &r Rs 1< <<

;uarterly Re!ult! +%%(6+%'% Annual Re!ult!& ;uarterly Re!ult! +%%)6+%%( ;uarterly Re!ult! Re!ult! ;uarter En#e# 3e"<%) ;uarter En#e# .ep<%) ;uarter En#e# =un<%) Annual Re!ult! Finan"ial! Pre!! Relea!e In2e!tor Pre!entation Annual Report Finan"ial! Pre!! Relea!e In2e!tor Pre!entation

Annual Re!ult! +%%,6+%%)

2Rs in &r 4 1*

Mar < %( In"ome 8 Jperating Income 17 FF

Mar < %)

Mar < %,

Mar < %7

Mar < %:

+1 *F

1F +*

. F/

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E>pen!e! (aterial &onsumed (anufacturing =!penses )ersonnel =!penses :elling =!penses %dminstrative =!penses =!penses &apitalised < << < << / ** < /< 17 .. -, 1. < << < << 1 ,, 1 </ . 1+ -7 .* < << < << < +1 < <, 1 7, -< ,+ < << < << < <1 < << < <E < << < << < << < << < << < <7 < <<

&ost Jf :ales

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Jperating )rofit

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1. */

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< <<

< <<

%dCusted )98IT

11 +,

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#inancial =!penses 8epreciation Jther Write offs

71 <. < +1 < <<

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%dCusted )%T 3on Recurring Items Jther 3on &ash adCustments

-1F /1 < << -< <F

7+ .. < << < <1

11 *< < << -< E<

. ., < << -< ,1

-< <* < << -< <E

Reported 3et )rofit

-1F /E

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11 *<

. .,

-< <*

=arnigs 9efore %ppropriation

-E F1

+< ,7

1F FF

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=quity 8ividend )reference 8ividend 8ividend Ta! Retained =arnings

< << < << < << -E F1

1, +/ < << 1 F+ 11 *<

E ,. < << < /F , *E

< << < << < << + F,

< << < << < << -< 1/

100% 90%

(utual 80% #und (obiliAation

70% 60% 50% 40% 30% 20% 10% 0% 1987-88 1992-93 1998-99 1999-00 2004-05 2005-06 UTI Private sector Public sector

7<

(utual #und %sset >nder (anagement

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1987-88 1992-93 1998-99 1999-00 2004-05 2005-06 UTI Private sector Public sector

The other maCor development in the fund industry has been the creation of a level playing field for all mutual funds operating in India This happened in #ebruary 7<<+, when the >TI %ct was repealed >nit Trust of India no longer has a special legal status as a trust established by an %ct of )arliament Instead, it has also adopted the same structure as any other fund in India- a Trust and an %sset (anagement &ompany >TI (utual fund is also now fully governed by :=9I with the same regulations as for all other mutual funds The emergence of a uniform industry with the same structure, operations and regulations makes it easier for the distributors and investors to deal with any fund house in India >TI (utual #und is still the largest player in the Indian fund industry %ll :=9I compliment schemes of the erstwhile >TI are under its charge Jther schemes of 71

erstwhile >TI have been placed with a special undertaking administered by the 6overnment of India These schemes are being gradually wound up

P5a!e 76 From +%%* on9ar#!8 Con!oli#ation an# Gro9t5

The industry has lately witnessed a spate of mergers and acquisitions, most recent ones being the acquisition of schemes of %lliance (utual #und by 9irla :un "ife, :un #0& (utual #und by )rincipal and )39 (utual #und by )rincipal %t the same time, more international players continue to enter India, including #idelity, one of the largest funds in the world The stage is set now for growth through consolidation and entry of new international and private sector players %s the end of (arch 7<<E, there were 7/ funds

77

.TRUCTURE PERFORMANCE PRO3UCT.

7+

.TRUCTURE PERFORMANCE PRO3UCT.

.tru"ture of Mutual Fun#! in In#ia

.our"e8httpwww hsbc co in1)%O1O1O:FcontentwebsiteimagesinvestmentsgraphO<7 gif The (utual #unds are structured in two formsG &ompany form and Trust form &ompany #ormG These forms of mutual funds are more popular in >: Trust #ormG In India, mutual funds are organiAed as Trusts The Trust is either managed by a 9oard of Trustees or by a Trustee &ompany There must be at least . members in the 9oard of Trustees and at least 7D+ of the members of the board must be independent Trustee of one mutual fund cannot be a trustee of another mutual fund

Tru!t ? Con!tituent!8
% (utual #und is set up in the form of a Trust which has the following constituentsG'@ #und :ponsor +@ (utual #und as Trust $@ %sset (anagement &ompany *@ Jther #und &onstituents &ustodian and 8epositors 9rokers Transfer %gent

7.

8istributor

FUN3 .PON.OR
K:ponsorL is defined under :=9I regulation as any person who %cting alone or in combination with another body corporate, establishes a mutual fund The sponsor of a fund is akin to the promoter of a company as he gets the fund registered with :=9I The sponsor will form a trust and appoint a 9oard of Trustees The sponsor will also generally appoint %sset (anagement &ompany as fund (anger The :ponsor, either directly or acting through the Trustees, will also appoint a &ustodian to hold the fund assets %ll these appointments are made in accordance with :=9I regulations

Mutual Fun# a! Tru!t!

% mutual fund is constituted in the form of a )ublic Trust &reated under the Indian Trusts %ct, 1**7 The #und sponsor acts as the settler of the trust, contributing to its initial capital, and appoints a Trustee to hold the assets of the trust for the benefit of unitholders, who are the beneficiaries of the trust The fund Then invites investor to contribute their (oney in the common pool, by subscribing to KunitsL issued by various schemes established by the trust units being the evidence of their beneficial intrest in the fund

Tru!tee!
The Trust P the mutual fund P may be managed by 9oard of Trustees P a body of individuals, or a trust &ompany - a corporate body (ost of the funds in India are managed by 9oard of Trustees While the 9oard of Trustees is governed by the provision of the Indian trust %ct, where the trustees are a corporate body, it would also be required to comply with the provision of companies %ct1, 1/FE The 9oard of Trustees, as an independent body acts as protector of the unit holders' interest The trustees do not directly manage the portfolio of securities #or this function they %ppoint %sset management &ompany 2%(&4 They ensure that the fund is managed by %(& as per the defined obCective and in accordance with the trust deed and :=9I regulations 7F

Ri 5t! of t5e Tru!tee!8

Trustees appoint the %(& in consultation with the sponsor and according to the :=9I Regulations %ll (utual #und :chemes floated by the %(& have to be approved by the Trustees Trustees can seek information from the %(& regarding the operations and compliance of the mutual fund Trustees can seek remedial actions from %(&, and in cases can %(& Trustees review and ensure that the net worth of the %(& is according to the stipulated norms, every quarter dismiss the

Obli ation! of t5e Tru!tee!8

Trustees must ensure that the transactions of the mutual fund are in accordance with the trust deed Trustees must ensure that the %(& has systems and procedures in place Trustees must ensure due diligence on the part of %(& in the appointment of constituents and business associates Trustees must furnish to the :=9I, on half yearly basis a report on the activities of the %(& Trustees must ensure compliance with :=9I Regulations

A..ET MANAGEMENT COMPAN4 0AMC1

The role of an %(& is to act as the Investment manager of the trust The sponsor, or the trustees, if so authoriAed by the Trust 8eed, appoints 9y %(& The %(& so appointed is required to be approved by the :=9I %(& function under the supervision of its own 9oard of 8irectors, and also under the direction of the trustees and :=9I

7E

Re ulatory reAuirement! for t5e AMC8

Jnly :=9I registered %(& can be appointed as investment managers of mutual funds %(& must have a minimum net worth of Rs 1< crores at all times %n %(& cannot be an %(& or Trustee of another (utual #und %(&s cannot indulge in any other business, other than that of asset management %t least half of the members of the 9oard of an %(& have to be independent The .th schedule of :=9I Regulations spells out rights and obligations of both trustees and %(&s The %(& must always act in the interest of the asset management company, :=9I mandates that a minimum of F<@ of the directors of the board of the assets management company should be independent directors

CU.TO3IAN
% custodian handles the investment back office of a mutual fund Its responsibilities include receipt and delivery of securities, collection of income, distribution of dividends and segregation of assets between the schemes It also track corporate actions like bonus issues, right offers, offer for sale, buy back and open offers for acquisition The sponsor of a mutual fund cannot act as a custodian to the fund This condition, formulated in the interest of investors, ensures that the assets of a mutual fund are not in the hands of its sponsor #or e!ample, 8eutsche 9ank is a custodian, but it cannot service 8eutsche (utual #und, its mutual fund arm

7,

BROBER. Role of BroCer! in a Mutual Fun#8

They enable the investment managers to buy and sell securities 9rokers are the registered members of the stock e!change They charge a commission for their services In some cases, provide investment managers with research reports %ct as an important source of market information

REGI.TRAR OR TRAN.FER AGENT.

Registrars, also known as the transfer agents, are responsible for the investor servicing functions This includes issuing and redeeming units, sending fact sheets and annual reports :ome fund houses handle such functions in-house Jthers outsource it to the RegistrarsB ?arvy and &%(: are the more popular ones It doesn't really matter which model your mutual fund opt for, as long as it is prompt and efficient in servicing you (ost mutual funds, in addition to registrars, also have investor service centers of their own in some cities :ome of the investor P related services areG )rocessing investor applications Recording details of the investors :ending information to the investors )rocessing dividend payout Incorporating changes in the investor information

3I.TRIBUTOR.
Role of .ellin an# 3i!tribution A ent!8 :elling agents bring investor's funds for a commission 8istributors appoint agents and other mechanisms to mobiliAe funds from the investors 9anks and post offices also act as distributors 7*

The commission received by the distributors is split into initial commission which is paid on mobiliAation of funds and trail commission which is paid depending on the time the investor stays with the fund

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Type! of Mutual Fun#!

.our"e8 5ttp999@Car2ymf!@"omima e!type!Dmutual6fun#!@Ep @ if Open6en# Fun#!

#unds that can sell and repurchase units at anytime are classified as Jpen-end #unds The fund siAe 2corpus4 of an open-end fund is variable 2keeps changing4 because of continuous selling 2to investors4 and repurchases 2from the investors4 by the fund %n open-end fund is not required to keep selling new units to the investors at all times but is required to always repurchase, when an investor wants to sell his units The 3%; of an open-end fund is calculated every day

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Clo!e#6en# Fun#!
#unds that can sell a fi!ed number of units only during the 3ew #und Jffer 23#J4 period are known as &losed-end #unds The corpus of a &losed-end #und remains unchanged at all times %fter the closure of the offer, buying and redemption of units by the investors directly from the #unds is not allowed 1owever, to protect the interests of the investors, :=9I provides investors with two avenues to liquidate their positionsG 1 &losed-end #unds are listed on the stock e!changes where investors can buyDsell units fromDto each other similar to that of buying of selling of shares computed on a weekly basis 7 :ometimes closed ended funds do offer K9uy back of funds sharesDunitsL, thus offering another avenue for liquidity The trading is generally done at a discount to the 3%; of the scheme The 3%; of a closed-end fund is

/oa# Fun#!
(utual #unds incur various e!penses on marketing, distribution, advertising, portfolio churning, fund manager$s salary etc (any funds recover these e!penses from the investors in the form of load These funds are known as "oad #unds % load fund may impose following types of loads on the investorsG - =ntry "oad - %lso known as #ront-end load, it refers to the load charged to an investor at the time of his entry into a scheme =ntry load is deducted from the investor$s contribution amount to the fund - =!it "oad - %lso known as 9ack-end load, these charges are imposed on an investor when he redeems his units 2e!its from the scheme4 =!it load is deducted from the redemption proceeds to an outgoing investor - 8eferred "oad - 8eferred load is charged to the scheme over a period of time - &ontingent 8eferred :ales &harge 2&8::4 - In some schemes, the percentage of e!it load reduces as the investor stays longer with the fund This type of load is known as &ontingent 8eferred :ales &harge

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No6loa# Fun#!
%ll those funds that do not charge any of the above mentioned loads are known as 3oload #unds

Ta>6e>empt Fun#!
#unds that invest in securities free from ta! are known as Ta!-e!empt #unds %ll openend equity oriented funds are e!empt from distribution ta! 2ta! for distributing income to investors4 "ong term capital gains and dividend income in the hands of investors are ta!free

Non6Ta>6e>empt Fun#!
#unds that invest in ta!able securities are known as 3on-Ta!-e!empt #unds In India, all funds, e!cept open-end equity oriented funds are liable to pay ta! on distribution income )rofits arising out of sale of units by an investor within 17 months of purchase are categoriAed as short-term capital gains, which are ta!able :ale of units of an equity oriented fund is subCect to :ecurities Transaction Ta! 2:TT4 :TT is deducted from the redemption proceeds to an investor

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.our"e8 T5e Time! of In#ia 0Time! Bu!ine!!1 ++

:ourceG httpwww appuonline comgifsmutual-fund-types gif gif

'@ EAuity Fun#!

=quity funds are considered to be the more risky funds as compared to other fund types, but in terms of returns equity funds also provide higher returns than other funds It is advisable that an investor looking to invest in an equity fund should invest for long term i e for + years or more There are different types of equity funds each falling into different risk category In the order of decreasing risk level, there are following types of equity fundsG

+.

'@'@ A re!!i2e Gro9t5 Fun#! - There are many types of stocksDshares available
in the market 9lue chips that are recogniAed market leaders, less researched stocks that are considered to have future growth potential, and even some speculative stocks of somewhat known or unproven issuers In %ggressive 6rowth #unds, fund managers aspire for ma!imum capital appreciation and invest in less researched shares of speculative nature 9ecause of these speculative investments &onsequently they tend to be more volatile and riskier than other funds

'@+@ Gro9t5 Fun#! - 6rowth #unds also invest for capital appreciation 2with time
horiAon of + to F years4 but they are different from %ggressive 6rowth #unds in the sense that they invest in companies that are e!pected to outperform the market in the future Without entirely adopting speculative strategies, 6rowth #unds invest in those companies that are e!pected to post above average earnings in the future Thus these funds are less volatile than aggressive growth

1 + EAuity In"ome or 3i2i#en# 4iel# Fun#! - The obCective of =quity Income

or 8ividend Nield =quity #unds is to generate high recurring income and steady capital appreciation for investors by investing in those companies which issue high dividends 2such as )ower or >tility companies whose share prices fluctuate comparatively lesser than other companies$ share prices4 =quity Income or 8ividend Nield =quity #unds are generally e!posed to the lowest risk level as compared to other equity funds %s an e!ample, an =quity Income #und would invest largely in )owerD>tility companies' shares of established companies that pay higher dividends

1 .@ 3i2er!ifie# EAuity Fun#! - % fund that seeks to invest only in equities, e!pect
for a very small portion in liquid money market securities, but is not focused on any one or few sectors or shares, may be termed a diversified equity fund =!cept for a small portion of investment in liquid money market, diversified equity funds invest mainly in equities without any concentration on a particular sector2s4 These funds are well diversified and reduce sector-specific or company-specific risk 1owever, like all other +F

funds diversified equity funds too are e!posed to equity market risk Jne prominent type of diversified equity fund in India is =quity "inked :avings :chemes 2="::4 %s per the mandate, a minimum of /<@ of investments by =":: should be in equities at all times =":: investors are eligible to claim deduction from ta!able income 2up to Rs 1 lakh4 at the time of filing the income ta! return =":: usually has a lock-in period and in case of any redemption by the investor before the e!piry of the lock-in period makes him liable to pay income ta! on such income2s4 for which he may have received any ta! e!emption2s4 in the past

1 F@ EAuity In#e> Fun#! - =quity Inde! #unds have the obCective to match the
performance of a specific stock market inde! The portfolio of these funds consists of the same companies that form the inde! and is e!actly in the same proportion as the inde! =quity inde! funds that follow broad indices 2like :0) &3I 3ifty, :ense!4 are less risky than equity inde! funds that follow narrow sectoral indices 2like 9:=9%3?=I or &3I 9ank Inde! etc4 3arrow indices are less diversified and therefore, are more risky

1 E -alue Fun#! - ;alue #unds invest in those companies that have sound
fundamentals and whose share prices are currently under-valued The portfolio of these funds comprises of shares that are trading at a low )rice to =arning Ratio 2(arket )rice per :hare D =arning per :hare4 and a low (arket to 9ook ;alue 2#undamental ;alue4 Ratio ;alue #unds try to seek out fundamentally sound companies whose shares are currently under- priced in the market ;alue #unds will add only those shares to their portfolios that are selling at low price- earnings ratios, low market to book value ratios and are believed to be undervalued compared to their true potential ;alue #unds may select companies from diversified sectors and are e!posed to lower risk level as compared to growth funds or specialty funds ;alue stocks are generally from cyclical industries 2such as cement, steel, sugar etc 4 which make them volatile in the short-term Therefore, it is advisable to invest in ;alue funds with a long-term time horiAon as risk in the long term, to a large e!tent, is reduced It is advisable to invest for a long term in a value fund

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The one e!ample of a ;alue #und in India is Templeton #und, which has in its portfolio shares of &ementD%luminium and other cyclical industries )rices of such shares may fluctuate more than the overall market in both bull and bear markets, making such value funds more risky than diversified funds in the short- term

'@,@ .pe"ialty Fun#! - :pecialty #unds have stated criteria for investments and their
portfolio comprises of only those companies that meet their criteria &riteria for some specialty funds could be to investDnot to invest in particular regionsDcompanies :pecialty funds are concentrated and thus, are comparatively riskier than diversified funds These funds have a narrow portfolio orientation and invest in only companies that meet predefined criteria 1owever, most specialty funds tend to be concentrated funds, since diversification is limited to one type of investment &learly, concentrated specialty funds tend to be more volatile than diversified funds There are following types of specialty funds G

1 , 1 .e"tor Fun#!G :ector funds are those equity funds whose portfolio
consists of investments in a particular sectorDindustry of the market The e!posure of these funds is limited to a particular sector 2say Information Technology, %uto, 9anking, )harmaceuticals or #ast (oving &onsumer 6oods4 that is why they are more risky than equity funds as these funds carry sector as well as company specific risk than a diversified equity fund

1 , 7@ Forei n .e"uritie! Fun#!G These funds invest in equities in one or

more foreign countries thereby achieving diversification across the country's border 1owever theyalso have additional risks such as foreign e!change rate risk- and their performance depends on the economic conditions of the countries they invest in #oreign :ecurities =quity #unds may invest in a single country or many countries #oreign :ecurities =quity #unds have the option to invest in one or more foreign companies #oreign securities funds achieve international diversification and hence they are less risky than sector funds 1owever, foreign securities funds are e!posed to foreign e!change rate risk and country risk 1 , + Mi#6Cap or .mall6Cap Fun#!G #unds that invest in companies having lower market capitaliAation than big blue chip companies are called (id-&ap or +,

:mall-&ap #unds (arket capitaliAation of (id-&ap companies is less than that of big, blue chip companies 2less than Rs 7F<< crores but more than Rs F<< crores4 and :mall-&ap companies have market capitaliAation of less than Rs F<< crores (arket &apitaliAation of a company can be calculated by multiplying the market price of the company$s share by the total number of its outstanding shares in the market The shares of (id-&ap or :mall-&ap &ompanies are not as liquid as of "arge-&ap &ompanies which gives rise to volatility in share prices of these companies and consequently, investment gets risky They may thus be more volatile than other funds, as mid-siAe or smaller companies' shares are not very liquid in the markets In terms of risk characteristics, small company funds may be aggressive- growth or Cust growth type In terms of investment style, some of these funds may also be Kvalue investorsL

1 , .@ Option In"ome Fun#!-G While not yet available in India, Jption

Income #unds write options on a large fraction of their portfolio )roper use of options can help to reduce volatility, which is otherwise considered as a risky instrument These funds invest in big, high dividend yielding companies, and then sell options against their stock positions, which generate stable income for investors

+@ Money MarCet & /iAui# Fun#!

(oney market D liquid funds invest in short-term 2maturing within one year4 interest bearing debt instruments These securities are highly liquid and provide safety of investment, thus making money market D liquid funds the safest investment option when compared with other mutual fund types 1owever, even money market D liquid funds are e!posed to the interest rate risk The typical investment options for liquid funds include Treasury 9ills 2issued by governments4, &ommercial papers 2issued by companies4 and &ertificates of 8eposit 2issued by banks4

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+ Hybri# Fun#!
%s the name suggests, hybrid funds are those funds whose portfolio includes a blend of equities, debts and money market securities 1ybrid funds have an equal proportion of debt and equity in their portfolio There are following types of hybrid funds in IndiaG

+ 1@ Balan"e# Fun#! - The portfolio of balanced funds include assets like debt
securities, convertible securities, and equity and preference shares held in a relatively equal proportion The obCectives of balanced funds are to reward investors with a regular income, moderate capital appreciation and at the same time minimiAing the risk of capital erosion 9alanced funds are appropriate for conservative investors having a long term investment horiAon

+ 7 Gro9t56an#6In"ome Fun#! - #unds that combine features of growth funds

and income funds are known as 6rowth-and-Income #unds These funds invest in companies having potential for capital appreciation and those known for issuing high dividends The level of risks involved in these funds is lower than growth funds and higher than income funds

+ + A!!et Allo"ation Fun#! - (utual funds may invest in financial assets like
equity, debt, money market or non-financial 2physical4 assets like real estate, commodities etc %sset allocation funds adopt a variable asset allocation strategy that allows fund managers to switch over from one asset class to another at any time depending upon their outlook for specific markets In other words, fund managers may switch over to equity if they e!pect equity market to provide good returns and switch over to debt if they e!pect debt market to provide better returns It should be noted that switching over from one asset class to another is a decision taken by the fund manager on the basis of his own Cudgment and understanding of specific markets, and therefore, the success of these funds depends upon the skill of a fund manager in anticipating market trends

*@ 3ebt & In"ome Fun#!

#unds that invest in medium to long-term debt instruments issued not only by government but also by private companies banks and other entities belonging to various sectors 2like +/

infrastructure companies etc 4 are known as 8ebt D Income #unds 8ebt funds are low risk profile funds that seek to generate fi!ed current income 2and not capital appreciation4 to investors In order to ensure regular income to investors, debt 2or income4 funds distribute large fraction of their surplus to investors %lthough debt securities are generally less risky than equities, they are subCect to credit risk 2risk of default4 by the issuer at the time of interest or principal payment To minimiAe the risk of default, debt funds usually invest in securities from issuers who are rated by credit rating agencies and are considered to be of QInvestment 6radeQ 8ebt funds that target high returns are more risky 1owever, as compared to the money marketDliquid funds, they do have a higher price fluctuation risk, since they invest in longer- term securities :imilarly, as compared to 6ilt #unds, general debt funds do have a higher risk of default by their borrowers Income funds that target high returns can face more risks 9ased on different investment obCectives, there can be following types of debt fundsG

. 1@ 3i2er!ifie# 3ebt Fun#! - 8ebt funds that invest in all debt securities issued by
entities across all industries and sectors of the market are known as diversified debt funds The best feature of diversified debt funds is that investments are properly diversified into all sectors which results in risk reduction %ny loss incurred, on account of default by a debt issuer, is shared by all investors which further reduces risk for an individual investor While debt funds offer high income and less risk than equity funds, investors need to recogniAe that debt securities are subCect to risk of default by the issuer on payment of interest or principal

. 7@ Fo"u!e# 3ebt Fun#! - >nlike diversified debt funds, focused debt funds are
narrow focus funds that are confined to investments in selective debt securities, issued by companies of a specific sector or industry or origin :ome e!amples of focused debt funds are sector, specialiAed and offshore debt funds, funds that invest only in Ta! #ree Infrastructure or (unicipal 9onds %lthough not yet available in India, these funds are conceivable and may be offered to investors very soon They have a substantial part of their portfolio invested in debt instruments and are therefore more income oriented and inherently less risky than equity funds The central point to note is that all these narrowfocus funds have greater risk than diversified debt funds .<

. + Hi 5 4iel# 3ebt fun#! -

9ut, 1igh Nield 8ebt #unds adopt a different

strategy and prefer securities issued by those issuers who are considered to be of Qbelow investment gradeQ The motive behind adopting this sort of risky strategy is to earn higher interest returns from these issuers These funds are more volatile and bear higher default risk, although they may earn at times higher returns for investors >sually, 8ebt #unds control the default risk by investing in securities issued by borrowers who are rated by credit rating agencies and are considered to be of Kinvestment gradeL

. .@ A!!ure# Return Fun#! - %lthough it is not necessary that a fund will meet its
obCectives or provide assured returns to investors, but there can be funds that come with a lock-in period and offer assurance of annual returns to investors during the lock-in period %ny shortfall in returns is suffered by the sponsors or the %sset (anagement &ompanies 2%(&s4 These funds are generally debt funds and provide investors with a low-risk investment opportunity 1owever, the security of investments depends upon the net worth of the guarantor 2whose name is specified in advance on the offer document4 To safeguard the interests of investors, :=9I permits only those funds to offer assured return schemes whose sponsors have adequate net-worth to guarantee returns in the future In the past, >TI had offered assured return schemes 2i e (onthly Income )lans of >TI4 that assured specified returns to investors in the future >TI was not able to fulfill its promises and faced large shortfalls in returns =ventually, government had to intervene and took over >TI$s payment obligations on itself &urrently, no %(& in India offers assured return schemes to investors, though possible

. F Fi>e# Term Plan .erie! - #i!ed Term )lan :eries usually are closed-end
schemes having short term maturity period 2of less than one year4 that offer a series of plans and issue units to investors at regular intervals >nlike closed-end funds, fi!ed term plans are not listed on the e!changes #i!ed term plan series usually invest in debt D income schemes and target short-term investors The obCective of fi!ed term plan schemes is to gratify investors by generating some e!pected returns in a short period

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F Gilt Fun#!
6ilt are also known as 6overnment :ecurities, 6ilt #unds invest in government papers 2named dated securities4 having medium to long term maturity period Issued by the 6overnment of India, these investments have little credit risk 2risk of default4 and provide safety of principal to the investors 1owever, like all debt funds, gilt funds too are e!posed to interest rate risk Interest rates and prices of debt securities are inversely related and any change in the interest rates results in a change in the 3%; of debtDgilt funds in an opposite direction 6ilt securities, like all debt securities, face interest rate risk 8ebt securities' prices fall when interest rate levels increase Investors have to understand the potential changes in 3%;s of gilt funds on account of changes in interest rates in the economy

E@ Commo#ity Fun#!
Those funds that focus on investing in different commodities 2like metals, food grains, crude oil etc 4 or commodity companies or commodity futures contracts are termed as &ommodity #unds % commodity fund that invests in a single commodity or a group of commodities is a specialiAed commodity fund and a commodity fund that invests in all available commodities is a diversified commodity fund and bears less risk than a specialiAed commodity fund Q)recious (etals #undQ and 6old #unds 2that invest in gold, gold futures or shares of gold mines4 are common e!amples of commodity funds

, Real E!tate Fun#!

#unds that invest directly in real estate or lend to real estate developers or invest in sharesDsecuritiAed assets of housing finance companies, are known as :pecialiAed Real =state #unds The obCective of these funds may be to generate regular income for investors or capital appreciation

* E>"5an e Tra#e# Fun#! 0ETF1

=!change Traded #unds provide investors with combined benefits of a closed-end and an open-end mutual fund =!change Traded #unds follow stock market indices and are traded on stock e!changes like a single stock at inde! linked prices The biggest advantage offered .7

by these funds is that they offer diversification, fle!ibility of holding a single share 2tradable at inde! linked prices4 at the same time Recently introduced in India, these funds are quite popular abroad

/ Fun# of Fun#!
(utual funds that do not invest in financial or physical assets, but do invest in other mutual fund schemes offered by different %(&s, are known as #und of #unds #und of #unds maintain a portfolio comprising of units of other mutual fund schemes, Cust like conventional mutual funds maintain a portfolio comprising of equityDdebtDmoney market instruments or non financial assets #und of #unds provide investors with an added advantage of diversifying into different mutual fund schemes with even a small amount of investment, which further helps in diversification of risks 1owever, the e!penses of #und of #unds are quite high on account of compounding e!penses of investments into different mutual fund schemes

.+

.nap!5ot of Mutual Fun# !"5eme!

The following table summariAes different types of mutual fund schemes, their obCective, where do they invest and their suitabilityG Mutual Fun# Type ObEe"ti2e Ri!C In2e!tment Portfolio Treasury "iquidity Money MarCet (oderate Income &apital R Reservation of R 9ills, &ertificate of 3egligible 8eposits, &ommercial )apers, (oney &all .5ort6term Fun#! (oney, Those :hort-short-term funds with + weeks + months &ommercial "iquidity R )apers, "ittle Treasury 9ills,surplus term 6overnment securities )redominantl Bon# Fun#! 0Floatin /on 6term1 Regular 6Income &redit Risk 0 Interest Rate Risk y 8ebentures, 6overnment securities, &orporate 9onds Gilt Fun#! :ecurity Income 0 Interest Rate Risk :alaried 6overnment conservative securities .. investors 0 1 year and more :alaried conservative investors 0 (ore than / P 17 months &all F5o in2e!t Those in accounts deposits !5oul# In2e!tment 5oriGon who current or

park their funds 7 days - + weeks

short-term bank

(oderate 0Floatin 6 Income !5ort6term1

Interest Rate &8s,

EAuity Fun#!

"ong-term &apital %ppreciation To are generate that 3%; varies inde! )ortfolio indices etc 1igh Risk :tocks

%ggressive investors long outlook with term S + years

returns In#e> Fun#!

commensurate with respective indices

like %ggressive

with returns ofperformance

9:=, 3I#TNinvestors

S + years

9alanced ratio Balan"e# Fun#! 6rowth Regular Income 0 &apital of equity and 0 igher%ggressive at S 7 years (arket Riskdebt funds to (oderate and Interestensure Rate Risk returns lower risk

.our"e8 %rihant &apital (arket "tdO(utual #und 9asics htm

Ri!C6Return Matri>

.F

:ourceG %rihant &apital (arket "tdO(utual #und 9asics htm Jn the y a!is of the matri! is the returns from different types of mutual fund plans and on the ! a!is is the risk associated with different plans %s it is clear from the matri! that debt funds are the one bearing least risk and giving least returns out of the different plans than comes balanced funds with moderate risk and returns It is a very common saying that 1igh Risk 1igh Returns that goes perfectly with =quity #unds these funds are the most aggressive funds giveng highest returns with highest amount of risk associated with them

.E

.our"e8 mfba!i"D"lipDim +@Ep

Jn the ! a!is of the matri! is the returns from different investment options and on y a!is is the risk associated with that option #rom the neutral point if you go towards right the returns increases and if you go towards left returns decreases :imilarly as you go up the risk increases and as you go down the risk decreases The matri! shows that equities are the one which are associated with high risk and high returns as there is no fi! amount of returns one can e!pect out of equity Jn the other hand there is one innovative kind of investment option known as (utual #unds Which also invest your money in shares and different debt instruments depending on the plan you opt for These are also giving good returns and the risk associated with them is much lesser than the =quities Jn the other hand there are two more instruments 9ank #8 and )ostal :avings here the returns are pre specified i e a fi! percentage of return you get and the risk associated is also very negligible

.,

INTRO3UCTION TO THE TOPIC

.*

INTRO3UCTION TO THE TOPIC

Ho9 to "5oo!e t5e ri 5t Mutual Fun#
&hoosing the right mutual fund scheme out of thousands of schemes available can be daunting 9ut it is much easier than it looks To make it an easier one should follow the following steps

.tep '8 I#entify your in2e!tment obEe"ti2e

8ifferent people have different needs :ome invest for capital appreciation some for retirement and some for regular income Therefore your choice of mutual fund scheme will vary with your investment obCective, age, lifestyle, risk profile, investment horiAon, and family commitments among many other factors Nou should ask yourself the following questions before investingG

'@ F5y #o I 9ant to in2e!tH

I need regular income I need sufficient funds for my daughter's wedding I want to buy a house I need to raise fund for my children's education I need e!tra cash I need cash for my son's education

+@ Ho9 mu"5 ri!C "an I ab!orbH

9ased on your risk taking capacity you can be categoriAed asG

;ery conservativeG "iquid and money market funds are best for you &onservativeG (oney market and debt funds are best for you (oderateG 9alanced funds or a mi!ture of equity and debt funds is the right solution %ggressiveG )redominantly equity funds will suit you ;ery aggressiveG =quity diversified, international equity and sectoral funds are best for you

./

In other words you can also ask that in percentage termsG TF@-1<@ T 1<@-1F@ T 1F@-7<@ T 7<@-7F@

T 7F@and above of your investment

F<

$@ F5at i! my in2e!tment 5oriGonH

I want to invest my idle funds for two monthsG (oney market funds is the right solution I need cash to pay off my load in one yearG 8ebt funds will be more suitable for you I want to invest for my child's education in eight yearsG =quity #unds will be the right solution

Jnce you have done a self-analysis you need to select a scheme category that matches your investment obCectivesG

For Capital Appre"iation go for equity sectoral funds, equity diversified funds or balanced funds either with growth or dividend2)ayout or Reinvestment4 For Re ular In"ome an# .tability go for income fundsD(I)s or 8ebt funds For .5ort6Term ParCin of Fun#! go for liquid funds, floating rate funds, shortterm funds For Gro9t5 an# Ta> .a2in ! go for =quity-"inked :avings :chemes

In2e!tment

In2e!tment 5oriGon I#eal In!trument! ObEe"ti2e :hort-term Investment 1- E months "iquidD:hort-term plans &apital %ppreciation Jver + years 8iversified =quityD 9alanced #unds Regular Income #le!ible (onthly Income )lans D Income #unds Ta! :aving + yrs lock-in =quity-"inked :aving :chemes 2="::4 3ow that you have idea about the category of mutual fund that best suits your needs, the right scheme is Cust on your way 3ow immediately Cump to step 7

.tep +8 3o your 5ome9orC

9efore investing your hard earned money it is very important to take care of the following points about the fund you choose

Fun# Performan"e

F1

Investors often feel that a simple way to invest in a mutual fund is to keep investing in the best performing funds 9ut they often forget that today's best performing scheme may not give you a consistent performance It may be by sheer luck or any other factor like the particular sector is performing well that the scheme is currently rated well in performance Therefore it is important that you choose the (utual #und &ompany, scheme and fund manager with a solid track record of investing in both buoyant and sluggish markets Jr in other words 9ullish and in bearish market When evaluating a scheme consider its long-term track record rather than short-term performance It is important because long-term track record moderates the effects which unusually good or bad short-term performance can have on a fund$s track record 9esides, longer-term track record compensates for the effects of a fund manager$s particular investment style The obCective is to differentiate investment skill of the fund manager from luck and to choose those funds which are performing well and have a bright future 9ut remember not to compare apples to orangesG

When measuring past performance, always compare similar funds This means asset class, fund obCective and financial market % fund that invests in services sector for instance, should not be compared to a diversified equity fund

F7

Fun# Mana er
#ind out the fund manager of the fund you want to invest and find his track record and compare it with his competitor "evels of e!cellence vary :ome portfolio managers are better than others %nother factor considered important is consistent portfolio management style 9asically consistency in performance is very important This quality is the discipline by the fund$s managers to establish specific investment criteria and stick with them rather than trying out whatever is in vogue % checklist for choosing a fund managerG

The fund$s performance track record Independent ratings of the fund The fund manager's strategy 8iscipline %wards and industry recognition that have been awarded to the fund

Ot5er fa"tor! to "on!i#er

When choosing the right mutual fund scheme also consider the schemesG

.to"C allo"ation8 % good diversified fund should have less than .<@ of net
assets spread evenly across the top 1< stocks in its portfolio and no e!ceptional concentration in any of these This helps the fund navigate safely during volatile periods :tock picks must be consistent with no frequent churning of stocks by the fund manager over the past few months

.e"toral allo"ation8 Nour chosen fund must be well diversified across sectors
apart from stocks :ectoral concentration can be harmful unless the fund has a top-down investment approach %s diversification hedges your risk so a well diversified fund is preferred over a sector specific fund Nou must combine similar sectors, such as auto and ancillaries, when considering sectoral allocation 8ifferent funds may categoriAe same companies across different sectors due to lack of standardiAation "ook for this anomaly when analyAing sectors

F+

A!!et allo"ation8 8on't overlook asset allocation This tells you about the
spread of assets across stocks, current assets, and cash &ash reserves of an equity fund can tell a lot % high cash level may indicate a fund manager's discomfort in staying fully invested in the market &onsistently high cash levels over a few months may probably indicate lack of good stock-picking opportunities 1igh cash reserves are a good sign in a crashing market, minimiAing loss, but the fund must be fully invested in a rising market, ma!imiAing returns

Turno2er ratio8 This shows you the stock churning in a fund's portfolio It's
measured by considering the number of stocks bought and sold over a certain assessment period % higher or lower )ortfolio Turnover Ratio doesn't matter as long as it5s aligned with the fund's investment philosophy % high turnover ratio can be good for equity funds, though high trading costs can lower your returns % high turnover ratio fund will be suitable for you if you are an aggressive investor 9ut value funds must have low churning, as investments are usually long term

E>pen!e ratio an# loa#!8 % high e!pense ratio indicates that your fund is
e!pensive compared to its peers &urrently the e!pense ratio has a regulatory ceiling of 7 F<@ for equity and debt funds Nou must check the entry and e!it loads charged by the fund at the time of entry into and e!it from the fund, respectively 3%;s are declared by funds after factoring in the e!penses and loads

But rememberI a fun# 9it5 an e>"ellent tra"C re"or# but 5i 5 e>pen!e! i! a better in2e!tment t5an a fun# 9it5 lo9er e>pen!e! but an a2era e tra"C re"or#@ One of t5e mo!t important Aue!tion! t5at in2e!tor! !5oul# "on!i#er i! t5at8

F.

I! a fun# 9it5 lo9 NA- betterH

Investors often get confused with 3%; and try to Cudge it like a share price They often make the 3%; of a fund as a deciding criterion for investment It is a common myth that a low 3%; is cheap and a good buy, but that is not the case Nou cannot view a mutual fund unit like a share % company's share price may get overvalued if its price shoots up, but that is not the case with a mutual fund It is irrelevant how high or low the 3%; of a fund is "et's take an e!ample, say you want to invest Rs 1<,<<< Irrespective of which fund you invest in, this amount stays constant 3ow let$s say that your choice is restricted between two funds with identical portfolios :ince they both have identical portfolios, their value will increase in the same proportion Nou may buy the units of one fund at a higher price than the other 9ut, the percentage increase would be the same 1ence, your investment of Rs 1<,<<< will increase by the same percentage, irrespective of the fund you invest in :o the number of units you get as well as a high or low 3%; are irrelevant Thus, it is the stocks in a portfolio that determine the returns from a fund, the value of the 3%; being immaterial The only instance where a higher 3%; will get you fewer units that may affect you is where a dividend has to be received 8ividend is given per unit :o the fewer the units you get, the lesser the dividend 9ut even here, total returns will remain the same :o from whichever angle you see it, the 3%; makes no difference to returns (utual fund schemes have to be Cudged on their performance, risk and other such factors

FF

Ho9 to Rate a Mutual Fun#

C5e"C -olatility u!in Beta Co6effi"ient
9eta &oefficient is used as a measure to check the relative sensitivity of a mutual fund to the market The higher value of the beta means that the more volatile the fund It is then considered to very sensitive relatively to the market as a whole The benchmark for this is 9:= sense! which is assigned a beta of 1 It has been widely used by many investors and analysts to determine Cust how volatile a mutual fund is as compared to a standard inde! In India the standard of comparison is provided by :=3:=I inde! Its usual time frame is three years back % stock fund that is 7<@ more volatile than the stocks of that constitute the :=3:=I would have a beta value of 1 7 Those stock funds that are 1F@ less volatile than the :=3:=I would have a beta of < *F 9eta is not a totally indicative depiction of a stock fund's situation If a fund is Kthinly traded,L or in other words there are not too many shares outstanding, large price swings are possible whenever shares are sold In general, beta values are a good 0 reliable way of determining how a stock fund has done, and in a way, how well it may do in the future 9eta values for many Indian mutual funds can be found in many financial magaAines, financial websites or special investing periodicals #or =!ample 9eta of I8#& Imperial =quity fund is *F that means every 1<<@ increase in sense! will give *F@ increase in the fund

Fin# out t5e Ri!C 2!@ Re9ar# u!in Alp5a

Risk and Reward is directly proportional It totally depends on how much of a risk you can take that is directly proportional to how much you make gain or lose Risk vs Reward is a concept that almost all investors struggle with and are aware of %lpha is the relationship between a fund's beta value and its actual performance 1igher alpha values are considered better %nything above Aero is desirable

FE

It also tells us about managers performance :o manager always try to get the value of %lpha as large as possible

Net A!!et -alue

3et asset value or generally known as 3%; of a mutual fund is the price per shareDunit The 3%; of a mutual fund is calculated by taking the value of the securities that the fund is managing and dividing that by the number of shares outstanding #or e!ample a mutual fund with net assets of Rs F crore and 1< lakh shares outstanding has a 3%; of Rs F<

Important point! to note on t5e Pro!pe"tu!

When you get a prospectus along with the application of a mutual fund, please note the following most important aspectsG 8ate of issuance, minimum investment, obCective, record of performance, degree of risk and fees 8o check about any kind of hidden e!penses %nd most important is the portfolio 8isclosure

F,

F*

U/IP 2&! Mutual Fun#

>nit "inks Insurance )lan 2>"I)4 and (utual #und 2(#4 are the two most preferred options for investment 9ut how does the investor decide which one should heDshe go for Though it is very simple and easy to decide, people tend to confuse themselves most of the time (utual #unds are pure investments >"I)'s are combination of Insurance and (utual #und 3ow let us compare >"I) and (# based on certain well known factsG

'1
>"I)s provide you

In!uran"e
with insurance cover

(#s don't provide you with insurance cover % point in favor of >"I)s 9ut let me clear you that you don't get this insurance cover for free (ortality charges 2i e the price you pay for the insurance cover4 get deducted from your investment and ultimately you left with very small amount for investment

+1

Entry

/oa#

>"I)s generally come with a huge entry load #or different schemes, this can vary between F to .<@ of the first year's premium That charges reduce from year after year (#s have a small entry load of a ma!imum of 7 F@ which can also be waved off if you apply directly 2i e not through an agent4 this waver depends upon scheme to scheme 1ere (#s have a huge advantage If we consider a conservative market return of about 1<-1F@ you may get a Aero percent return in the first year

$1
most of it will be locked-in till the

Maturity
maturity

>"I)s generally come with a maturity of F to 7< years That what ever money you put in,

F/

Ta! saving (# 2)opularly called as =quity "inked :aving :cheme or ="::4 comes with a lock-in period of + years Jther (#s may or may not have a lock-in period %gain (#s have advantage over >"I)s >"I)s do allow you to take money out prematurely but they also put penalties on you for doing that In some of the mutual funds there is some e!it load as well but that is very nominal about 1@

*1
>"I)s would

Compul!ion
generally make you pay at

of
least first three

In2e!tin
premiums

(#s don't have any compulsion on future investments If you have invested in a (# this year, and in the ne!t year you don't have enough income or money to do investments you can decide not to make any investments %lso if you notice that the (# that you invested in is not giving good returns as compared to some other #unds scheme, you can decide to invest in some other (# 9asically (# is more fle!ible than >"I)

:1Ta>
of investments are ta! free

.a2in

9oth the =":: and >"I) come under *<& and can save you ta! Returns in the both form

71MarCet
8ebt and "iquid (# let invest with low risk, but don't give you ta! benefit

e>po!ure

>"I)s give you both moderate and aggressive e!posure to equity market

>"I)s need not be aggressive in equity e!posure That is >"I)s need not keep more that E<@ of their funds in equity market >"I): also allow to change your equity market e!posure Thus it can help you time the market and still give you ta! savings If a (# has a less than E<@ e!posure to equity market the returns from it are not ta! free Thus you don't get to take a conservative stand on returns

,4
penalty

Fle>ibility

of

time

of

re#emption

>"I) will get redeemed on maturing )remature redemption is allowed with some

E<

In a closed ended (# premature redemption is not allowed one can redeem only after the maCority 9ut for an open ended scheme one can redeem the (# anytime This is mainly useful if the market is down at the maturity time of the investment In case of =":: you can wait till the market comes up again and then redeem them >"I) scheme won't allow you to wait Thus, according to my opinion 14 If you wish to take an aggressive e!posure to equity market, go ahead any buy (# >"I) won't be able to give you similar returns 74 If you think you are not disciplined enough to make regular investments and need a whip to make you invest, invest in >"I) +4 If you want to take a low e!posure to equity market and still get ta! free returns, invest in >"I) but make sure that fund you are invested is conservative fund .4 If you want Insurance cover and also good return on investment I would suggest that you invest in (#s and take a term plan

E1

E7

E+

METHO3O/OG4

E.

METHO3O/OG4
MARBETING RE.EARCH ."ope of t5e !tu#y8 The research was carried on in the 3orthern Region of India It is restricted to 8elhi23&R4 region I have interviewed investors from the branch, banks, and some personal contacts that I know are investors are also used in the research RE.EARCH OB=ECTI-E8 ;uantitati2e re!ear"5 The type of research used for our purpose is quantitative This is because the quantitative research seeks to quantify the data and it applies some form of statistical analysis The purpose of our study is to find out how an investor diversify its portfolio to get higher returns and to find that which option2(utual #unds, =quity 2:hares4, &ommodities, Real =state, )ost Jffice 23sc etc4, 9ank 8eposit 26ovt 9onds4,etc4 is most preffered by investors to invest %nalysis through quantitative research helped us build a hypothesis and test the same through structured statistical techniques Recommending a final course of action would become possible while using the quantitative research Jn the other hand, the use of qualitative research techniques would have given us only an initial understanding in the study, which is generated through the literature review To !tu#y t5e In2e!tment pattern of t5e in2e!tor! to9ar#! #ifferent in2e!tment option!@

Type of re!ear"5 #e!i n I have adopted both descriptive as well as e!ploratory research design The e!ploratory approach is useful in this case because I need to get the thorough understanding and knowledge about the (utual funds so that I can take the proCect forward to know how investors actually invest and weather they prefer (utual funds over the other investment options #or this purpose I analyAed through secondary data that was available through the internet and certain news papers This was followed by descriptive research 8escriptive research studies are those studies which are concerned with describing the investment pattern of the investors, and the relationship between the age, income and the investment option the choose for their portfolio :ince this study is focused on gathering EF

information about the customer's preferences, future liabilities and diversification of portfolio , I have used the descriptive research

Tip! of Re!ear"5 3e!i n

3e!"ripti2e 3ata "olle"tion 3ata !our"e!8
9oth primary as well as secondary data is used for the proCect Research is totally based on primary data :econdary data used only for the literature purpose Research has been done by primary data collection, and primary data has been collected by interviewing with various investors The secondary data has been collected through various websites, newspapers, fact sheets etc

Secondary dataG :econdary data was collected from internet, magaAines, news papers and Cournals %lso I studied about the views of investors about the (utual #unds in the present scenario

Primary dataG - #or understanding the investment patterns and investors

attitude their thinking about the mutual funds at a large #or this purpose I took a sample that consists of .< Investors it was a focused group that consist of investors age group ranging from 7F to *< and income from +<<<< to 17<<<< and above this sample is representative of whole population Thus I have undertaken primary data collection technique This is because the secondary data alone could not be relied upon for the purpose of making Cudgment about the population The sample was taken from 8elhi

EE

Type! of Aue!tion a!Ce#

9oth unstructured and structured type of questions in the questionnaire

Un!tru"ture# Aue!tion!
These are open ended questions that the respondents have to answer in their own words

.tru"ture# Aue!tion!
These are questions that pre-specify the set of response alternatives and the response format They can take the following formsG

Multiple choice questionsG The respondent needs to select one or more of the
responses available to choose from

Dichotomous questionsG :uch questions have only two responses, Nes or 3o

.amplin 8 .amplin pro"e#ure8

% focused group is selected for the research purpose as my research is for those who are investors and invested their money in various investment options The data was collected through interviewing or by formal and informal talks and through filling up the questionnaire prepared %fter the data collection the data was entered in :):: and various statistical measures like &orrelation, t-test etc are used

E,

 .ample !iGe8
The sample siAe of my proCect is limited to .< only %s it was a focused group survey the ma!imum limit of sample could not be more than .< Jut of which +* are investors and 7 was daily traders in stock market (ost of the investors attempted all the questions

.ample #e!i n8
8ata has been presented with the help of bar graph, pie charts, etc

/imitation8
Research has been done only in 8elhi23&R4 region :ome of the persons were not so responsive )ossibility of error in data collection )ossibility of error in analysis of data due to small sample siAe :ome respondents were reluctant to disclose personal information which can affect the validity of all responses

E*

OB=ECTI-E.

E/

OB=ECTI-E.

Primary ObEe"ti2e8 To :tudy the investment option in market

.e"on#ary ObEe"ti2eG To study various financial products like =quity, (utual #unds, insurance 0 banks :ervices To :tudy the various services provided by mutual fund houses to there investor To study the %wareness level of investor about various investment option

,<

3ATA ANA/I.I. J INTERPRETATION

,1

3ATA ANA/I.I. J INTERPRETATION

;'@6ender
The following pie chart shows the results have which been obtained from the questionnaire that out of .<, +. 2*F@4 were males who took the important investment decisions in their family and only E 21F@4 were females and this has to be noticed that all these E females are working none of them is a home maker

Gen#er
(ale #emale Total

Number of In2e!tor!
+. E .<

e!ale, 6, 15%

Male e!ale

Male, 34, 85%

,7

;+@ What is your current occupationU

The following bar graph shows the occupation of the different respondents and out of .< 71 are those who are working in a )vt &ompany followed by 11 involved in some business then + are 6ovt servants and F others they include persons retired form their Cobs or are Cobbers

O""upation
6ovt :ervice )vt :ervice 9usiness Jthers Total

No@ of In2e!tor!
+ 71 11 F .<

25 21 20

15 11 10 5 3

$eries1

,+
Pvt# $ervice %usi&ess 't(ers

0 "ovt# $ervice

E#u"ational ;ualifi"ation
)ost 6raduate 6raduate Total

Number of In2e!tor!
1/ 71 .<

;$@ What is your highest level of qualificationU

The following bar graph shows the education Mualification of the different respondents and out of .<, 71 are graduate in different :treams and 1/ are post graduate

19, 48% 21, 52%

"ra)uate Post "ra)uate

,.

,F

;* What is monthly family income 2appro!imately4U

In the Income 6roup of the investors, out of .< investors, 71 2F7@4 investors belongs to the monthly family income group of +<<<1 to E<<<< :econd one i e 1F 2+*@4 investors are in the monthly family income group of less than +<<<< and out of the remaining ., 7 2F@4 belongs to the income group of E<<<1 to /<<<< and 72F@4 belongs to 17<<<< and above

25 21 20 15 10 5 0 less t(a& 30000 30001 to 60000 60001 to 90000 15 $eries1

2 0 90001 to 1,20,000

1,20,000 a&) above

,E

;:@ 8o you invest your savingsU

1ere savings are considered the money that is left out after paying all the e!penses of the family and the money which a person put in savings account would not be considered as investment Investment is that for which a person has to wait for at least + to . days to get money and in savings account that condition is not fulfilled :o according to the responses the following pie chart is prepared Which shows that out of .< +*2/F@4 invest there money in different investment options and 72F@4 do not invest their money they are basically the daily Cobbers who square off there position on daily basis and do not let their position open

In2e!t .a2in !
Nes 3o Total

Number of In2e!tor!
+* 7 .<

+o, 2, 5%

*es +o

,,
*es, 38, 95%

;7 In which of the following investment options do you investU ?ind of Investments Jptions
(utual #unds =quity 2:hares4 &ommodities Real =state )ost Jffice 23sc etc 4 9ank 8eposit 26ovt 9onds4

3o of Respondents
7,2E, F@4 +12,, F@4 E21F@4 1<27F@4 ,21, F@4 1+2+7 F@4

#rom the graph given below it can be inferred that out of .< investors, +12,, F@4 investors have invested in equity 2shares4, #ollowed by7, 2E, F@4 in (utual #unds, 1+2+7 F@4 in 9ank 8eposits, 1<27F@4 in Real =state, ,21, F@4 in )ost Jffice, E21F@4 in &ommodities
35 :o from the bar diagram 31 it is clear that people most prefer equity than comes mutual 30 27 funds in the hierarchy of the choice of their investment 25 20 15 10 5 0 Mutual u&)s ,-uit. /$(ares0

With the same question there is an open ended question attach in the questionnaire the question was W1NU The following investment option
10 6 7 13 $eries1

,*
1o!!o)ities 2eal ,state Post '33ice %a&4 5e6osit /+sc etc#0 /"ovt# %o&)s0

,/

;, 1ow much percentage of your savings do you investU )ercentage of savings to invest
<@-1<@ 1<@-7<@ 7<@-+<@ +<@-.<@ (ore than .<@

3umber of Investors
1 1. 1, * < .<

#rom the given sample siAe it has been seen that most of the investors 1,2.7@4 invest 7<@-+<@ of their savings in different options followed by 1.2+F@4 who invest 1<@-7<@ of their savings and the range in which most of the investors invest remains between 1<@ to +<@
18 16 14 12 10 8 6 4 2 0 0%-10% 10%-20% 20%-30% 30%-40% More t(a& 40% 1 8 $eries1 14 17

*<

;)@What is the time period for which you investU Time )eriod #or Investment
>p to E (onths >p to 1 year >p to 7 years >p to + years >p to . years

3umber of Investors

* 11 F * < * .< It is clear from the above table that about +72,F@4 of investors invest with a long term horiAon in their mind generally people invest for a period of 1 year but if you see the combined figure about 712FF@4 out of .< invest with a horiAon of 7 to F years There are people who invest for very short period even days they basically are the Vobbers who want to square off their position in a single day and they are the one who are the highest risk takers their time horiAon can go up to E months if they stuck in any stock It has been seen that they are the investors who invest most of their money in :hares and their inclination towards (utual #unds are negligible
12 10 8 6 4 2 0 U6 to 6 Mo&t(s 0 U6 to 1 .ear U6 to 2 .ears U6 to 3 .ears U6 to 4 .ears U6 to 5 .ears 8 8 8 11

$eries1

*1

;(@ To what e!tent are you ready to bear the risk in your investmentsU Risk on the investment
F@-1<@ 1<@-1F@ 1F@-7<@ 7<@-7F@ 7F@and above

3umber of Investors
E 1< E 1< * .<

#rom the above questionnaire it has been analyAed that the risk appetite of most of the investors 7E out of .< lies between 1<@ to 7F@ and the persons who can take risk more than 7F@ are those who age generally the day traders and book their losses of profits on daily basis It has been seen that from the past trends that daily traders face huge losses as compare to that of those who invest for long term as because of the fluctuating nature of markets prices generally goes up and down on a cyclic basis and the person having holding power on their investment generally remain in profits

12 10 8 6 4 2 0 5%-10% 10%-15% 15%-20% 20%-25% 25%a&) above 6 6 10 10 8

$eries1

*7

;'%@ If you invest in (utual #und than in which planU (utual #unds )lans
Regular income 8ebt fund 8iversified =quity :ector #und ="::

3umber of Investors
7 < 7< 7 * < * .<

%s (utual #unds are considered to be the safer variant of equity because of the various advantages which has been discussed above about 7<2EF@4 of the investors who invest in mutual funds invest in 8iversified =quity plan of (utual #unds as investors want to take

25 advantage of equity they generally prefer to invest through a (utual #und 20 %part from that *27F@4 of the investors invest in =":: 2=quity "inked :avings :cheme4 20 they are generally those who are employed and they invest so as to take advantage of ta! 15 benefit which is offered by this plan 10 5 0 2e7ular i&co!e 2 2 $ector u&) /2eal estate, *+ Po8er, e&er7. etc#0 ,9$$ /,-uit. li&4e) savi&7 sc(e!e0 8 8

$eries1

0 5ebt 3u&) 5iversi3ie) ,-uit.

0 't(ers 5o &ot i&vest

;''@What is your investment (ediumU Investment (edium

9roker 9ank &onsultant Total

3umber of Investors
1E 1. 1< .<

#rom the chart given below it can be inferred that the 9roker is the most important investment medium Jut of .<Respondents, 1E2.<@4invest through a broker, 1.2+F@4 through 9ank and 1<27F@4 through consultants 18 16 16
14 12 10 8 6 4 2 0 %ro4er %a&4 1o&sulta&t

14

10 $eries1

*.

Ca!e /et
The second last question in the questionnaire is a type of a case study which is a deliberate effort to actually know how an investor invest if a certain sum of money is given to 1imD1er to invest The question is given below

;'+@ =!ample
If you are given with a sum of 1, <<,<<< Rs than how much do you want to invest in the #ollowing optionsU T (utual #und WW@ T6oldD :ilverW @ TReal =stateW @ T#i!ed depositsWW@ T)ost Jffice-3:&, etc @ T Insurance @ T:haresD8ebenturesW @

#ollowing are the responses of that Muestion Investment Jptions

(utual #und #i!ed deposits Insurance 6oldD :ilver *F

3umber of Investors
7, 77 1, 11

)ost Jffice-3:&, etc

E +1 1.
+u!ber o3 i&vestors

35 30 25 20 15 10 5 0

27 22 17 11 6

31

14

u& )

$i lve r

$( ar es ;5 eb e& tu re

33i ce -+ $1 ,e tc

2e al ,s ta te

I& su ra &c e

5e 6o sit s

ut ua l

ol );

i:e )

#rom the above graph it can be inferred that out of .< investors, +1 2,, F@4 will invest in Insurance,1.2+F@4 in Real =state, 1127, F@4 in 6oldD:ilver, E21F@4 in )ost Jffice It can be inferred from the above data that investors prefer :hares the most for their investment followed by (utual #unds, #i!ed 8eposits, Insurance and so on below there are some bar given that tells how much percentage of money investors want to put in different options
Po st

"

+u!ber o3 i&vestors

sharesD8ebentures, 7,2E, F@4in (utual funds, 772FF@4 in #i!ed 8eposits, 1,2.7 F@4in

In2e!tor of !5are!&#ebenture! .5are!&3ebenture!

<-7<@ 7<@-.<@ .<@-E<@ E<@-*<@ *<@ and above

'

Number of In2e!tor!
, / 11 + 1 +1

*E

:hares are the most preferred investment option chosen by the investors 3ot only in numbers but also in percentage of amount invested shares are most preferred #rom a total of +1 investors who invest in shares 7<2E. F@4 investors invest around 7<@-E<@ of the money they are given
+u!ber o3 i&vestors

12 10 8 6 4 2 0 7 9

11

+u!ber o3 i&vestors 3 1

In2e!tor! of Mutual Fun#!

40%-60%

Mutual Fun#! 20%-40% 0-20%

<-7<@ 7<@-.<@ .<@-E<@ E<@-*<@ *<@ and above

Number 80%-100% of In2e!tor! 60%-80%

1F / + < < 7,

*,

#rom the above results it can be inferred that 1F2FF F@4 investors who invest in (utual #unds want to put to the ma!imum of 7<@ of the money they have for investment #ollowed by /2++@4 who put up to .<@ it can be said that investors do want to keep (utual #unds in their )ortfolio but amount of investment is not so high

+u!ber o3 i&vestors 16 14 12 10 8 6 4 2 0 0-20% 20%-40% 40%-60% 60%-80% 80%-100% 3 9 +u!ber o3 i&vestors 15

**

In2e!tor! of Fi>e# 3epo!it! Fi>e# 3epo!it!

<-7<@ 7<@-.<@ .<@-E<@ E<@-*<@ *<@ and above

Number of In2e!tor!
/ , F < 1 77

"ike (utual #unds investors do want to put their money in fi!ed deposits due to the safe investment option and known returns the amount of money they want to invest also ranges from <@ to .<@ Jut of 77 1E2,7 F@4 investors want to invest in the given range

+u!ber o3 i&vestors 10 9 8 7 6 5 4 3 2 1 0 0-20% 20%-40% 9 7 5

+u!ber o3 i&vestors

40%-60%

*/

60%-80%

80%-100%

In2e!tor! of In!uran"e In!uran"e

<-7<@ 7<@-.<@ .<@-E<@ E<@-*<@ *<@ and above

Number of In2e!tor!
17 . 1 < < 1,

In the order of investment insurance stood at . th position Investors understand that insurance is one of the important option but want to put only a small amount in that +u!ber o3 they i&vestors The reasons which I got from them is low returns from the >"I) plans Jut of the total of
14 12 10 8 6 4 2 0 0-20% 20%-40% 40%-60% 60%-80% 80%-100% 4 1 +u!ber o3 i&vestors

1, 172,<@4 of the investors invest to a ma!imum of 7<@ of the money they are given 12

/<

In2e!tor! Of Real E!tate Real E!tate

<-7<@ 7<@-.<@ .<@-E<@ E<@-*<@ *<@ and above

Number of In2e!tor!
+ * 7 1 < 1.

Real =state is one of the investment option which needs huge inflows of money in the initial stage of investment If you compare it with shares any one can start hisDher

/1

investment even with a small investment of 1<<<< Rs but if you talk about real estate lacks of rupees in required #ollowing responses are obtained from the questionnaire that out of 1. *2F,@4 of investors want to invest 7<@ to .<@ of their investment

+u!ber o3 i&vestors 9 8 7 6 5 4 3 2 1 0 0-20% 20%-40% 40%-60% 60%-80% 80%-100% 3 2 1 +u!ber o3 i&vestors 8

In2e!tor! of Gol#&.il2er

Gol#&.il2er
<-7<@ 7<@-.<@ .<@-E<@ E<@-*<@ *<@ and above

Number of In2e!tor!
* + < < < 11

/7

With the falling of the stock market world wide 6oldD:ilver comes out to be one of the safest investment option It has been seen from decades that year on year gold sees net positive returns and becomes a safe option %ccording to the questionnaire out of 11 investors who invest in 6oldD:ilver * want to invest in the range of <@ to 7<@

+u!ber o3 i&vestors

9 8 7 6 5 4 3 2 1 0

+u!ber o3 i&vestors 3

0-20%

20%-40%

40%-60%

60%-80%

80%-100%

In2e!tor! of Po!t Offi"e

/+

Po!t Offi"e
<-7<@ 7<@-.<@ .<@-E<@ E<@-*<@ *<@ and above

Number of In2e!tor!
. 1 1 < < E

=arlier investors has few investment options like #d's, )ost office 2for ta! savings4 etc but today with the coming of =":: plans investors prefer those more as compare to the traditional investment style It can be clearly seen from the bar graph given below out of the total sample siAe of .< only E want to invest in post office and maCority of them want to invest up to 7<@

+u!ber o3 i&vestors 4#5 4 3#5 3 2#5 2 1#5 1 0#5 0 0-20% 20%-40% 40%-60% 60%-80% 80%-100% 1 1 +u!ber o3 i&vestors 4

/.

Mutual Fun#! 3 ;alid (issing .< < 1 +7F< 1 <<<< 1 << .,.+. 77F ,,, +,. -1 .,+ ,++

(ean (edian (ode :td 8eviation ;ariance :kewness :td =rror of :kewness ?urtosis :td =rror of ?urtosis (utual #unds #requenc y ;alid Nes 7, Histogra 3o 1+ Total .<
40

)ercent E, F +7 F 1<< <

;alid )ercent E, F +7 F 1<< <

&umulative )ercent E, F 1<< <

30

20

10

#rom the graph it can be deduced that the data is negatively skewed as the difference from the median is positive having a value of ,,, this clearly shows that 7, of the respondents want to invest in (utual #unds as their choice of investment
Mea& < 1#325 /F $t)# 5ev# < 0#47434 + < 40 1#00 1#50 2#00 2#50

y c n u q e r F
0 0#50

MutualFunds

EAuity 0.5are!1 3 ;alid (issing .< < 1 77F< 1 <<<< 1 << .77/< 1,/ 1 +E/ +,. - 1+F ,++

(ean (edian (ode :td 8eviation ;ariance :kewness :td =rror of :kewness ?urtosis :td =rror of ?urtosis =quity 2:hares4 #requenc y ;alid Nes +1 3o / Total .< Histogra )ercent ,, F 77 F 1<< <

;alid )ercent ,, F 77 F 1<< <

&umulative )ercent ,, F 1<< <

40

30

20

#rom the graph it can be said that the data is negatively skewed as the difference from the median is positive having a value of 1 +E/ this clearly shows that +1 of the respondents want to invest in =quity2shares4 as their choice of investment

y c n u q e r F
10

0 0#50 1#00 1#50 2#00 2#50

Mea& < 1#225 /E $t)# 5ev# < 0#4229 + < 40

Equitys!ares

Commo#itie! 3 ;alid (issing .< < 1 *F<< 7 <<<< 7 << +E1E7 1+1 -7 <+* +,. 7 7E+ ,++

(ean (edian (ode :td 8eviation ;ariance :kewness :td =rror of :kewness ?urtosis :td =rror of ?urtosis &ommodities #requenc y E +. .< )ercent 1F < *F < 1<< <

;alid Nes 3o Total

;alid )ercent 1F < *F < 1<< <

&umulative )ercent 1F < 1<< <

Histogra

50

40

#rom the graph it can be deduced that the data is positively skewed as the difference from the median is negative having a value of -7 <+* this clearly shows that E of the respondents want

30

y c n u q e r F

20

to invest in commodities as their choice of investment

10

Mea& < 1#85 /, $t)# 5ev# < 0#36162 0 0#50 1#00 1#50 2#00 2#50 + < 40

Co

odities

Real E!tate 3 ;alid (issing .< < 1 ,F<< 7 <<<< 7 << .+*F+ 1/7 -1 7<< +,. - F/7 ,++

(ean (edian (ode :td 8eviation ;ariance :kewness :td =rror of :kewness ?urtosis :td =rror of ?urtosis Real =state #requenc y 1< +< .< )ercent 7F < ,F < 1<< <

;alid yes no Total

;alid )ercent 7F < ,F < 1<< <

&umulative )ercent 7F < 1<< <

Histogra

40

30

#rom the graph it can be deduced that the data is positively skewed as the difference from the median is negative having a value of -1 7<< this clearly shows that 1< of the respondents want to invest in Real =state as their choice of investment

20

y c n u q e r F
10

Mea& < 1#75 /* $t)# 5ev# < 0#43853 0 0#50 1#00 1#50 2#00 2#50 + < 40

"ealestate

Po!t Offi"e 0N!" et"@1 3 ;alid (issing .< < 1 *7F< 7 <<<< 7 << +*.*1 1.* -1 ,,* +,. 1 77< ,++

(ean (edian (ode :td 8eviation ;ariance :kewness :td =rror of :kewness ?urtosis :td =rror of ?urtosis )ost Jffice 23sc etc 4 #requenc y )ercent ;alid yes , 1, F no ++ *7 F Total .< 1<< < Histogra

;alid )ercent 1, F *7 F 1<< <

&umulative )ercent 1, F 1<< <

50

40

30

#rom the graph it can be deduced that the data is positively skewed as the difference from the median is

y c n u q e r F

20

negative having a value of 1 ,,* this clearly shows that , of the

10

0 0#50 1#00 1#50 2#00 2#50

Mea& < 1#825 // $t)# 5ev# < 0#38481 + < 40

#osto$$ice

Respondents want to invest in )ost Jffice as their choice of investment

BanC 3epo!it 0Go2t@ Bon#!1 3 ;alid (issing .< < 1 E,F< 7 <<<< 7 << .,.+. 77F - ,,, +,. -1 .,+ ,++

(ean (edian (ode :td 8eviation ;ariance :kewness :td =rror of :kewness ?urtosis :td =rror of ?urtosis

9ank 8eposit 26ovt 9onds4 #requenc y 1+ 7, .< )ercent +7 F E, F 1<< < ;alid )ercent +7 F E, F 1<< < &umulative )ercent +7 F 1<< <

;alid Nes 3o Total

Histogra

40

30

20

#rom the graph it can be deduced that the data is positively skewed as the difference from the median is negative having a value of - ,,, this clearly shows that 1+ of the respondents want to invest in 9ank 8eposits as their choice of investment

y c n u q e r F
10

Mea& < 1#675 1<< $t)# 5ev# < 0#47434 0 0#50 1#00 1#50 2#00 2#50 + < 40

Bankdeposits

In2e!t !a2in ! 3 ;alid (issing .< < 1 <F<< 1 <<<< 1 << 77<,7 <./ . 7/7 +,. 1, 7*F ,++

(ean (edian (ode :td 8eviation ;ariance :kewness :td =rror of :kewness ?urtosis :td =rror of ?urtosis Invest savings #requenc y +* 7 .< )ercent /F < F< 1<< <

;alid Nes 3o Total

;alid )ercent /F < F< 1<< <

&umulative )ercent /F < 1<< <

Histogra

80

60

40

20

#rom the graph it can be deduced that the data is negatively skewed as the difference from the median is positive having a value of . 7/7 this clearly shows that +* of the respondents want to invest their savings in different investment options
Mea& < 1#05 $t)# 5ev# < 0#22072 + < 40 1<1 1#00 1#50 2#00 2#50

y c n u q e r F
0 0#50

in%estsa%ings

Correlation!

Income Income )earson 1 &orrelation :ig 27-tailed4 3 .< )earson <1E &orrelation :ig 27-tailed4 /77 3 .<

(utual #unds <1E /77 .< 1 .<

(utual #unds

The data given above shows that if you change 1@ of your income than <1E@ change will occur in mutual funds investment Correlation! Income )earson 1 &orrelation :ig 27-tailed4 3 .< )earson <+, &orrelation :ig 27-tailed4 *1* 3 .< =quity 2:hares4 <+, *1* .< 1 .<

Income

=quity 2:hares4

The data given above shows that if you change 1@ of your income than <+,@ change will occur in mutual funds investment Correlation! Income Income )earson 1 &orrelation :ig 27-tailed4 3 .< )earson - <<. &orrelation :ig 27-tailed4 /*1 &ommodi ties - <<. /*1 .< 1

&ommodities

1<7

.<

.<

The data given above shows that if you change 1@ of your income than - <<.@ change will occur in mutual funds investment

1<+

Correlation! Income Income )earson 1 &orrelation :ig 27-tailed4 3 .< )earson <1E &orrelation :ig 27-tailed4 /7+ 3 .< Real =state <1E /7+ .< 1 .<

Real =state

The data given above shows that if you change 1@ of your income than <1E@ change will occur in mutual funds investment Correlation! Income Income )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< - <1E /71 .< )ost Jffice - <1E /71 .< 1 .<

)ost Jffice

The data given above shows that if you change 1@ of your income than - <1E@ change will occur in mutual funds investment Correlation! Income Income )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< - 1/< 7.< .< 9ank 8eposits - 1/< 7.< .< 1 .<

9ank 8eposits

The data given above shows that if you change 1@ of your income than - 1/<@ change will occur in mutual funds investment Correlation!

1<.

Time )eriod Time )eriod )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< - 7/. <EE .<

(utual #unds - 7/. <EE .< 1 .<

(utual #unds

The data given above shows that if you change 1@ of the time period for which you invest than - 7/.@ change will occur in mutual funds investment Correlation! Time )eriod Time )eriod )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< </* F.E .< =quity 2:hares4 </* F.E .< 1 .<

=quity 2:hares4

The data given above shows that if you change 1@ of the time period for which you invest than </*@ change will occur in mutual funds investment Correlation! Time )eriod Time )eriod )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< <,< EE* .< &ommodi ties <,< EE* .< 1 .<

&ommodities

The data given above shows that if you change 1@ of the time period for which you invest than <,<@ change will occur in mutual funds investment

Correlation!

1<F

Time )eriod Time period )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< - 7*/ <,1 .<

Real =state - 7*/ <,1 .< 1 .<

Real =state

The data given above shows that if you change 1@ of the time period for which you invest than - 7*/@ change will occur in mutual funds investment

Correlation! Time )eriod Time )eriod )ost Jffice

)earson 1 - 7+< &orrelation :ig 27-tailed4 1F+ 3 .< .< )ost Jffice )earson - 7+< 1 &orrelation :ig 27-tailed4 1F+ 3 .< .< The data given above shows that if you change 1@ of the time period for which you invest than - 7+<@ change will occur in mutual funds investment Correlation! Time )eriod Time )eriod )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< - 7*E <,. .< 9ank 8eposits - 7*E <,. .< 1 .<

9ank 8eposits

The data given above shows that if you change 1@ of the time period for which you invest than - 7*E@ change will occur in mutual funds investment Correlation!

1<E

Time )eriod Time )eriod )earson &orrelation :ig 27-tailed4 3 )earson &orrelation :ig 27-tailed4 3 1 .< 1,, 7,+ .<

Risk 1,, 7,+ .< 1 .<

Risk

The data given above shows that if you change 1@ of the time period for which you invest than 1,,@ change will occur in Risk of you are able to bear

.ummary of re!ult! of 3e!"ripti2e .tati!ti"!

?ind of Investments Jptions (utual #unds =quity 2:hares4 &ommodities Real =state )ost Jffice 23sc etc 4 9ank 8eposit 26ovt 9onds4 </* <,< - 7*/ - 7+< - 7*E &orrelation )eriod - 7/. with Time

In terms of time period also equity 2:hares4 are having the highest value of correlation as compare to other investment options

?ind of Investments Jptions (utual #unds =quity 2:hares4 1<,

:kewness ,,, 1 +E/

&ommodities Real =state )ost Jffice 23sc etc 4 9ank 8eposit 26ovt 9onds4

-7 <+* -1 7<< -1 ,,* - ,,,

Therefore with the help of descriptive statistics it is proved that investors are most inclined towards equities for the purpose of investment than comes (utual #unds in the preference followed by 9ank deposits than Real estate, )ost office and finally commodities

?ind of Investments Jptions (utual #unds =quity 2:hares4 &ommodities Real =state )ost Jffice 23sc etc 4 9ank 8eposit 26ovt 9onds4

&orrelation With Income <1E@ <+,@ - <<.@ <1E@ - <1E@ - 1/<@

The above data proves that equity 2shares4 is having the ma!imum degree of correlation as compare to other investment options

1<*

FIN3ING.

1</

FIN3ING.
Fin#in !
'@ Jut of the total :ample siAe of .< ma!imum number i e *F@ were males and only 1F@ were females (ost of the investors were males + In occupation group most of the investors were from the private service followed by those who are having their own business $@In terms of education level nearly half of the investors are 6raduate and half are )ost 6raduate *@ %bout FF@ of the total investors lies in the income bracket of +<<<1 to E<<<< followed by those who have income less than +<<<< and only F@ investors have monthly family income more than 17<<<< :@Jut of the total sample +* invest their savings and only 7 were the day traders 7@When investors were asked that where they want to invest then in terms of preference =quity2:hares4 being the most preferred2,, F@4 investment option followed by (utual #unds2E, F@4 , #rom the given sample siAe it has been seen that most of the investors 1,2.7@4 invest 7<@-+<@ of their savings in different options followed by 1.2+F@4 who invest 1<@-7<@ of their savings )@(ost of the investors want to invest their money to a time period of upto 1 year

11<

(@when it comes to risk bearing capacity there are two classes in which investors responded the most these were 1<@-1F@ and 7<@-7F@ In both these options 7F@ of investors are ready to bear the risk '%@ Those who invest in (utual #unds they prefer to invest in 8iversified =quity plan 2F<@4 followed by ="::27<@4schemes ''@#rom the given responses it has been found that 9rokers are the medium of most of the investors2.<@4 for investment followed by 9ank2+F@4 and than &onsultants27F@4

111

CONC/U.ION

117

CONC/U.ION
Con"lu!ion
Investment in a (utual #und is a very smart decision taken by any investor in early stage of hisDher life Today if you hire a professional to manage your fund you need to pay a heavy amount of fees to that particular professional (utual #und is offering all that services which a professional is offering at a very nominal cost as that cost is being shared between the numbers of investors of that fund in the ratio of their investment #rom the research it is concluded that =quity 2:hares4 are the most preferred investment option by the investors because of the high volatility and good returns in a short duration but most of the investors have a bad e!perience of investing their money in shares as this investment requires lots of patience and generally investors don't want to stay invested for so long and ultimately they have to book losses :econd most important reason for getting losses in =quities is because of making money quickly Investors do not want to wait for longer time and it is proved that most of the investors have a time horiAon of less than E months for investing in equities who suffered losses Jn the other hand (utual #und comes in second of preference of the investors It has been seen that investors have a long time horiAon for investment in (utual #und generally investors invest for more than1 year period of time in mutual fund These investors have a much better e!perience than those investing in =quities as the funds are very much diversified in a mutual fund as compare to the =quity Trust is very much important in the financial marketing that's why it has been seen that most of the investors want to invest through a broker as there is a sense of trust comes with a broker as if that relationship breaks than it is very difficult to make up as the hard earned money of investors are involved so suggestion from a financial advisor is very important to maintain that trust

11+

Investors have become very much aware of innovative investment options today as most of the investors want to invest in =quities and (utual #unds rather than fi!ed returns )ost Jffice schemes and 9ank 8eposits %ge plays a very important role in investment decision the investor in the age group of 7F to .< want to invest in equities as the risk taking capability is more as the investor in the age group of F< to ,< %t the end I would like to conclude by sayingG (>T>%" #>38 I3;=:T(=3T %R= :>9V=&T TJ (%R?=T RI:? )"=%:= R=%8 T1= J##=R 8J&>(=3T &%R=#>""N 9=#JR= I3;=:TI36

11.

/EARNING. T5e Ba!i" Con"ept! In the beginning of my training I learn the basic concepts of the stock market the basic reason of the stock prices going up and down is taken from the very basic concept of economics 28emand and :upply4 There are many other reasons for the rise or fall of the prices like some news about the stock 2positive of negative4 its financial results etc %fter learning the basics of equity market I was put under commodity section to learn the basics of that market as well commodity market consists of various metals2precious as well as non precious4, crude oil, natural gas, and basic eatables2wheat, Ceera, sugar etc 4 9oth these sections are backed by back office after learning the basics of these markets it is very important to understand the working of back office as well 9asic work of back office is to receive and payment of the money to and from the clients, account opening, risk management cell is also an important part of 9ack office I learned a lot many things like to check the balance, short margin clients, stocks held in the pool account as well as in the demat account %fter the closing of the market back office all give confirmation to the clients whose dealing took place on that particular trading session Religare securities limited also deals in mutual funds and insurance for that purpose I was sent to I8#& mutual funds office for the training purpose and icici mutual funds training was arranged in the office these two trainings helps me a lot in the completion of my proCect I asked my queries with them regarding the mutual fund industry and able to complete my proCect Training of ?otak life insurance was also arranged in the office #rom this training I learned the importance of insurance in and after the life of a person Tra#in .e!!ion! When I was through with the basics the another step is to understand the buying and selling of shares on the live software to know the various keys and shortcut in that software %fter learning that I was made to sit on the terminal to buy and sell shares on the instructions of the clients 11F

:imilar goes with the commodity market as well Cu!tomer #ealin 8 The most important part of my training is to handling the customer's queries The key to success for a marketing e!ecutive is customer satisfaction and that satisfaction comes from handling the queries well #or that your basics should be clear so my learning was that be prepared and do your homework well before going to the customers :econd most important thing was that in my training I need to make the customers for that the concept of Targeting is applied and after that if any problem arise than handling that and making the customer satisfied is most important there are many incidences where I learned that skill of handling customers Corporate culture: We were e!posed to the corporate culture in a brokerage firm We had to daily report to our industry guide who helped us throughout our internship and he also guided us in our proCect

11E

RECOMMEN3ATION.

11,

RECOMMEN3ATION.
Re"ommen#ation!
1 Religare is using one of the best software for trading 2Jdin and fast trade4 but the best and the fastest of all in 3=%T offered by 3:= instead of using #ast Trade Religare should switch to 3=%T which is much better than #ast Trade #or giving online trading Jdin is good for the customers 7 Instead of charging Rs F<< for account opening that should be reduced to Rs 7F< because many other competitors like 2:hear khan, India bulls etc 4 are not charging any amount and customers are reluctant to pay To recover that account opening charges the %(&2account maintenance charges4 should be increased to Rs +<< as currently it is at Rs 7F< and customers do not take into considerations about %(& but they highly obCect on %ccount Jpening &harges + Religare as a brokerage firm is one of the best in the industry This is the industry where speed matters a lot While trading Religare is maintaining that speed but sometimes it takes too much time in activation of new accounts which arouse a sense of dissatisfaction in the minds of customers so Religare should work on this problem and make their account opening more fle!ible . There should be separate desk for mutual funds in some of the important branches of Religare as it is one of the most untapped markets and has a great potential of growth F 9efore making any investment #inancial %dvisors should first enquire about the risk tolerance of the investorsDcustomers, their need and time 2how long they want to invest4 9y considering these three things they can take the customers into consideration E (utual funds offer a lot of benefit which no other single option could offer 9ut most of the investors are not aware of what actually a mutual fund isU They only see it as Cust another investment option :o the advisors should try to change their mindsets

11*

The advisors should target for more and more young investors Noung investors as well as persons at the height of their career would like to go for advisors due to lack of e!pertise and time

one of the most important way of investing in (utual #unds are through :ystematic Investment )lan 2:I)4 Religare need to segregate their customers on the basis of their occupation and target those whose occupation is service and tell them the benefits of investing through :I) mode over the other investment option like Recurring 8eposit where the returns are known

11/

9I9"IJ6R%)1N

17<

9I9"IJ6R%)1N
.ite! 2i!ite#
1 7 + . F E www religare in www mutualfundsindia com www amfiindia com www sebi gov in www moneycontrol com www arhiantcapital com

BooC! Referre#
, %(#I (utual #und

Ne9! Paper! Referre#

* The Times Jf India

Fa"t .5eet! Referre#

/ I8#& (utual #unds

171

Appen#i>
;ue!tionnaire .tu#y of In2e!tment Pattern
;'@ )ersonal 8etails T 3ameWWWWWWWWWWWWWWWWWWWWWWWW T 6enderG T (ale T #emale T %geGWWWWWWWWWWWW T &ontact 3umberG WWWWWWWWWW T =mail IdG WWWWWWWWWWWWW ;+ What is your current occupationU T 6ovt :ervice ;$@ T )vt :ervice T 9usiness T Jthers

What is your highest level of qualificationU T 6raduate T )ost 6raduate T JthersWWWWWWWWWWWWWWWW

;*@

What is monthly family income 2appro!imately4U T less than +<<<< T1,7<,<<< and above T +<<<1 to E<<<< TE<<<1 to /<<<< T/<<<1 to 1,7<,<<<

;:@

8o you invest your savingsU T Nes T 3o

;7

If yes then in which of the following you investU T (utual #unds T )ost Jffice 23sc etc 4 FH4H W WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW T=quity 2:hares4 T &ommodities T Real =state T9ank 8eposit 26ovt 9onds4

;, 1ow much percentage of your savings do you investU T <@-1<@ T 1<@-7<@ T 7<@-+<@ T +<@-.<@ T (ore than .<@

;)@ What is your e!perience regarding your various investment optionsU

177

WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW ;(@What is the time period for which you investU T>p to E (onths T>p to . years T>p to 1 year T>p to F years T>p to 7 years T>p to + years

;'%@ To what e!tent are you ready to bear the risk in your investmentsU TF@-1<@ T 1<@-1F@ T 1F@-7<@ T 8ebt fund T 7<@-7F@ T 8iversified =quity T=":: 2=quity linked saving scheme4 T 7F@and above

;''@ If you invest in (utual #und than in which planU T Regular income T :ector #und 2Real estate, )ower, energy etc 4 ;'+@ What is your investment (ediumU T 9roker ;'$@ =!ample If you are given with a sum of 1,<<,<<< Rs than how much do you want to invest in the following optionsU T (utual #und WW@ T)ost Jffice-3:&, etc ;'*@ %ny Recommendations WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW @ T#i!ed depositsWW@ T Insurance @ T6oldD :ilverW @ T:haresD8ebenturesW @ TReal =stateW @ T 9ank T &onsultant )lease specify the name of the mediumWWWWWWWWWWWWWWWWWWWWWWWW

TJthersWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW

17+