Report on Summer Training Project Report On INVESTMENT IN THIRD PARTY PRODUCT (Mutual Fund) PROVIDED BY INDUSIND BANK

Submitted To Lovely Professional University (In partial fulfillment of the Requirements for the award of Degree of Master of Business Administration) Submitted By Arun Sharma MBA Roll No.2020070160 DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA 2008-09

CERTIFICATE

ACKNOWLEDGEMENTS

In working on a project of this magnitude, I am grateful to have received guidance, encouragement, and assistance from many individuals. I wish to express my deep sense of gratitude to my faculty guide Miss. Renuka Sharma for her continuous guidance and constructive comments in organizing this project. I also extend my heart-felt gratitude Mr. Bhupinder Singh Relationship Manager IndusInd Bank for his support during the project. Finally I would like to thank all the Teaching, Non Teaching staff and all our Friends for their assistance and encouragement given to me without which, I could not have completed this project.

ARUN SHARMA

TABLE OF CONTENTS

Particulars

Page no.

a. Title Page

1 b. Certificate 2 c. Acknowledgement 3 d. Table of Contents 4-5 e. Executive summery 6

CHAPTER 1 a. Introduction of Mutual Fund What is Mutual Fund? 7-10 History of the mutual Fund 11-13 Mutual Fund classification 14-17 Structure of Mutual fund 17-22 The offer Documents 22

b. Literature review

23 CHAPTER 2 a. Introduction to the IndusInd Bank and its mutual funds Overview of the IndusInd Bank 24-26 IndusInd Bank History 26-27 Business Profile 28

Particulars
Business Achievements and mission 29-33 Financial Status and Recent Developments 33-35 Challenges before the IndusInd Bank 35-36 Mutual Funds Provided By IndusInd Bank 36-41 Importance for Investors 42

Page no.

CHAPTER 3 Research Methodology & Objectives Collection of data, Sampling Technique & Methodology 43-44 Objectives of the Study 45 Limitations 46 CHAPTER 4 Data Interpretation and Analysis Comparison Analysis of investment Product 47-48 Factor Analysis 49-59 CHAPTER 5 Findings and Conclusion 60-65 Appendix Bibliography 66 Questionnaire 67-69

Executive Summary

The Indian Mutual Funds Industry has witnessed a sea change since UTI was first established in 1963. From a single player the number of players has increased to 29 and the number of schemes has spiraled to 477. The last decade has been a period of rapid Growth for the MF industry. The paper begins by analyzing the current scenario in the Industry characterized by problems with distribution, low investor awareness and Concentration of corporate investors. In the next section, a comparison of the MF industry With global standards reveals that the industry still compares unfavorably with developed Countries in terms of penetration, investor awareness, and diversity of products and the Extent of use of risk management techniques. Further comparison reveals that the attitude of regulator towards investor protection and the governance of mutual funds are at par with global standards. The paper then analyses the future expectations from the mutual Fund industry in terms of increased investor awareness, product diversity and Improvement in penetration and distribution .In the end I recommend certain steps that SEBI and the AMCs should take in order to build investor confidence and trust. These Steps focus on investor education, increased accountability of various players, and Development of AMFI as an SRO and regulation of corporate investments.

CHAPTER 1

Introduction of Mutual Fund
What is Mutual Fund?
Mutual Fund is a trust that pools the saving of a number of investors who share a common financial goal. The money thus collected is invested by the fund manager in different types of securities depending up on the objective of the scheme. Each mutual fund scheme has a defined investment objective and strategy. These could range from share to debenture to money market instruments. The income earning through these investment and the capital appreciation realized by the scheme are shared by the its unit holders in proportion to the number of the unit owned by them. Thus mutual fund is the most suitable investment fir the conman man as it offers an opportunity to investment in a diversified, professional managed portfolio at a relatively low cost. Any body with an invertible surplus of as little as a few thousands rupees can invest in mutual Fund. Each mutual fund scheme has a defined investment objective and strategy. A Mutual fund is the ideal investment vehicle for today’s complex and modern financial scenario. Market for the equity shares, bonds and other fixed income instrument, real estate , derivatives and other assets have become mature and information driven. Price changes in these assets are driven by the global events occurring in faraway places. An individual

also finds it difficult to keep track of ownership of his assts, investments, brokerage dues and bank transactions etc. More than 80 million people, or one out of every ten household in America, invest in mutual funds. Currently, over $6 trillion is invested in mutual funds. While funds have been around since the 1920’s their popularity over the past 20 years has soared. The reasons: mutual funds makes easy and less costly for investors like you to satisfy their need for capital growth, income and/ or income preservation.

Unit Holders

Sponsors Trustees The Mutual fund AMC Transfer Agent

Custodian

SEBI

Advantages of the Mutual Funds
The following are the major advantage offered by the mutual fund to its investor: •

Portfolio Diversification: Mutual funds normally invest in a well diversified
portfolio or securities. Each investor in a fund is a part owner of all of the fund’s assets. This enables him to hold a diversified investment portfolio even with a small amount of investment that would otherwise require big capital.

Professional Management: Even if an investor has big amount of capital
available to him, he benefits from the professional management skills brought in by the fund in the management of the investor’s portfolio. The investment management skills, along with the needed research into available investment options, ensure a much better return then what an investor can manage on his own.

Reduction/ Diversification of risk: Diversification reduces the risk of loss,
as compared to investment directly in one or two shares. Or debenture or other investment instruments. When an investor invests directly, all the risk of potential loss is his own.

Reduction of Transaction costs: A directly invests bear all the costs of
investing such as brokerage or custody of securities. When going through a fund, he has the benefit of economies of large scale.

Liquidity: Often investor hold shares or bonds they cannot directly, easily and
quickly sell Investment in mutual fund, on the other hand, is more liquid.

Convenience and Flexibility: Mutual fund management companies offer
many investors services that a direct market investor cannot get.

Disadvantage of Mutual Funds: While the benefit of investing in mutual funds far
outweigh the disadvantages, an investor and his advisor will do well to be aware of a few shortcomings of using the mutual funds as investment vehicles. •

No Control over costs: an investor in a mutual fund has any control over
the overall cost of investing. He pays investment management fees as long as he remains with the fund, albeit in return for the professional management and research. Fees are usually payable as a percentage of the value of his investments, whether the fund value is rising or declining.

No Tailor- made portfolios: Investors who invest in their own can build
their own portfolio of shares, bonds and other securities. Investing through funds means he delegated this decision to the fund managers.

Managing a portfolio of funds: Availability of large numbers of funds
can actually mean too much choice for an investor. He may need advice on how to select a fund to achieve his objective, quite similar to the situation when he has to select individual shares or bonds to invest in.

History of mutual Fund In India
The mutual fund industry I India started in 1963 with the formation of unit trust of India, at the initiative of the Reserve bank of India and the Government of India. The objective then was to attract the small investor and introduce them to market investments. Hence the history of mutual funds in India can be divided in the following phases.

First Phase-1964-87
Unit Trust of India was established on 1963 by an act of parliament .It was set up by the reserve bank of India and functioned under the regulatory and administration control of the reserve bank of India. In 1978 UTI was de linked with the RBI and the industrial Development bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit scheme1964.Unit linked insurance plan was launched in 1971. Six new schemes were launched between 1981 and 1984. During 1984-87 new schemes like children’s Gift Growth fund (1986). During 1990s, UTI catered to the demand for income oriented scheme by launching monthly income schemes, a somewhat unusual mutual fund product offering “assured return”.

Second Phase-1987-1993 (entry of public sector funds)
1987 market the entry of non- UTI, public sector mutual fund set up by public sector banks and Life Insurance corporation of India(LIC) and General Insurance Corporation

of India GIC bringing in Competition. SBI Mutual Fund from state bank of India was the first non-UTI Mutual Fund established in June 1987, followed by Can bank Mutual Fund (launched in December 1987), Punjab National Bank Mutual Fund (launched in August 1989), Bank of India launched in June 1990, Bank of Baroda mutual Fund (launched in October 1992).

• Third phase-1993-2003 )Entry of private sector funds)
With the entry of private sectors funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investor a wider choice of fund families. Also, 1993 was the year in which the first mutual fund regulation came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.The 1993 SEBI (mutual fund) regulations were substituted by a more comprehensive and revised mutual fund regulations in 1996. The industry now functions under the SEBI (mutual Fund)regulations 1996. as the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 Crores . The unit trust of India with Rs 44,541 crores of assets under management was way ahead of other mutual funds.

• Fourth Phase since Feb2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the specified undertaking of the Unit Trust of India with assets under management of Rs.29, 835 Crores at the end of January, 2003 representing broadly, the assets of US 64 Scheme, assured return with certain other scheme. The specified undertaking of Unit Trust of India, functioning under administrator and under the rules framed by government of India and does not come under the preview of the Mutual Fund regulations. The second is the UTI Mutual fund limited, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund regulations. With the bifurcation of the erstwhile UTI which had in March, 2000 more than Rs.76,000 Crores assets under management and the setting UTI mutual fund, confirming to the SEBI mutual fund regulations and with the recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of October 31st, 2003.There was 31 funds, which manage assets of Rs.126726 crores under 386 schemes.

Mutual Fund classification

Open-end vs. close-end fund:

An open end fund is one that units available for sale and repurchase at all times. An investor can buy or redeem units from funds itself at a price based on net asset value (NAV) per unit. A NAV per unit is obtained by dividing the amount of the market value of the funds assets (Plus accrued income minus the funds liabilities) by the number of units outstanding. The number of units outstanding goes up or down every time the fund issues new units or repurchases existing units. In other words the “UNIT CAPITAL” of an open end mutual fund is not fixed but variable. The fund size and its total investment amount go up if more new subscriptions coming from new investors than redemptions by existing investors, the fund shrinks with redemption of units exceed fresh subscriptions.

• Load and No-Load fund:
Marketing of new mutual fund scheme involves initial expenses. These expenses may be recovered from the investors in different ways at different times. Three usual ways in which fund’s sales expenses may be recovered from the investors are: 1. At the time of investor’s entry into the funds/scheme, by deducting a specific amount from his initial contributions. 2. By charging the funds/scheme with a fixed amount each year, during the stated number of years, or

3. At the time investor’s exit from funds/scheme, by deducting a specified amount from redemption proceeds payable to the investors.

• Tax-exempt vs. Non-Tax-exempt fund:
Generally, when a fund invests in tax-exempt securities, it is called a tax –exempt fund. In the USA for example, municipal bonds pay interest that is tax free, while interest on corporate or other bonds is taxable. In India, after the 1999 union government budget, all the dividend income receipts from any of the mutual funds is tax-free in hands of the investors. However, funds other than equity funds have to pay a distribution, before distributing the income to the investors. In other words, equity mutual funds are taxexempt investment avenues, while other funds are taxable for distributable income.

Mutual Fund Type
1. Broad fund Type By Nature Of Investments:
Mutual funds may invest inequities, bonds or other fixed income securities, or short term money market securities. So we have equity bond and money market funds. All of them invest in financial assets. But there are also funds which invest in physical assets. For example, we have gold or other precious mutual funds, or real estate funds.

2. Broad Fund Types by Investment Objectives:
Investors and hence the mutual funds pursue objectives while investing. Thus growth funds invest for medium to long term capital appreciations. Income funds invest to

generate regular income, and less for capital appreciation. Value funds invest in equities that are considered under value today, whose value will be unlocked in the future.

3. Road Fund Type By Risk Profile: The nature of a funds portfolio and its investment objective imply different levels of risk undertaken. Funds are therefore often grouped in order of risk. Thus, equity funds have greater risk of capital loss, then a debt fund that seeks to protect the capital while looking for income.

3.1.

Money Market funds

Often considered to be the lowest rung in order of risk level, money market funds invest in securities of short term nature, which generally means securities of less than one year maturity. The typical, short term interest bearing instruments these funds invest and include treasury bills issued by the government, certificates of deposit issued by bank and commercial papers issued by companies. In India, money markets mutual funds also invest in inter bank call money market.

3.2.

Gilt Funds

Gilts are government securities with medium to long term maturity, typically of over one year. (Fewer than one year instruments being the money market securities). In India, we have now seen the emergence of government securities of gilt funds that invest in government paper called dated securities (unlike treasury bills that mature in less than

one year). Since the issuer in the government of India or the states, these funds have little risk of default and hence of a better protection of principal.

3.3.

Debt fund (Income Fund)

Next in the order of risk level, we have general category debt fund. Debt funds invest in debt instruments issued not only by governments, but also by private companies, banks and financial institutions and other entities such as infrastructure companies/utilities. By investing in debt, these funds target low risk and stable income for their investors as a key objective. However, as compare to money market funds, they do have high price fluctuations risk, since they invest in long term securities. Similarly, as compared to gilt funds, general debt funds do have a higher risk of default by its borrowers. Debt funds are largely considered as income funds as they do not target capital appreciation, look for high current income, and therefore distribute a substantial part of there surplus to investors.

Fund Structure and its constituents
Mutual funds have a unique structure not shared with other entities such as companies or firms. It is important for employees and agent to be aware of the special nature of this structure, because it determines the rights and responsibilities of the fund’s constituents viz. Sponsors, trustee, custodians, transfer agent and of course, the fund and the assets management company (AMC). The legal structure also drives the inter-relationship between these constituents.

Fund Structure
• The Fund sponsor
“Sponsor” is defined under SEBI regulations as any persons who, acting alone or in a combination with another buddy corporate, establishes a mutual fund.

• Mutual fund as trust
A mutual fund in India is constituted in the form of a public trust created under the Indian trust Acts 1882. The funds sponsor acts as the settler of the trust.

• Trustee
The trust – the mutual fund – maybe managed by board of trustees – a body of individuals or a trust company – a corporate body. Most of the funds in India are managed by board of trustees.

• Rights of the trustees
1. The trustee appoint the AMC with the prior approval of SEBI. 2. They also approve each of the schemes floated by AMC.

• Obligation of trustees
The trustee must enter into investment management agreement with the AMC. The agreement must be in the accordance with the fourth schedule of SEBI (MF) regulations, 1996.

• Independent directors and trustees

SEBI places certain obligations on independent directors on boards of the trust and the AMC. They must pay specific attention to the investment management agreement and the compensation paid under it, any service contracts with affiliates to ensure higher than market level fees have not been charged by the AMC to the fund.

• Custodian and Depositories
Mutual funds are in the business of buying and selling of securities in large volumes. Handling these securities in terms of physical delivery and eventful safe keepings is therefore is a specialized activities.

• Bankers
A Fund’s activities involve dealing with money on a continuous basis primarily with respect to buying and selling units, paying for investment made, receiving the proceeds on sale of investments and discharging its obligations towards operating expense.

• Transfer agent
Transfer agents are responsible for issuing and redeeming units of the mutual funds and provide other related services such as preparation of transfer documents and updating investor records.

• Distributors
Mutual funds operates as collective investment vehicles, on the principle of accumulating funds from a large number of investors and then investing on a big scale. For a fund to sell units across a wide retail base of individual investors and established network of distribution agents is essential. Investors

Constituents of Mutual Funds

Sponsor

Mutual Trustee fund

Asset Management Company

Custodia n

Registrar

SEBI Fund Distribution

• Types of distribution Channel 1. Individual Agent
An agent is essential broker between a fund and the investor. Mutual funds agents are not exclusive but usually sell other financial products as well. The system has the advantage that the distributor has a broader knowledge of financial services available.

2. Distribution companies
Availing of the services of established distribution companies is a practice accepted by mutual funds internationally. The practice evolve with a view to circumvent the huge administrative mechanism require to support a large agent force.

3. Banks of NBFCs
Banks are important marketing vehicle for the mutual funds, given that banks themselves have a large depositor/client base of their own. Several banks, particularly private and foreign banks are involved in fund distribution by providing services similar to that distribution company’s basis. Some NBFCs are also providing such services.

4. Direct marketing

Direct marketing means that the mutual funds sell their own products; without the use of any intermediaries. Usually, this takes the form of sales officers and employees of the AMC who approach the investors and accept their contribution directly. However, in India, independent agents may really be treated as a direct marketing channel, in the sense that they do not form a well-knit independent and organized single entity and act more like fund employees.

The offer Document
When an asset management company or a fund sponsor wishes to launch a new scheme of a mutual fund, they are required to formulate details of the scheme and register it with SEBI before announcing the scheme and investing the investor to subscribe to the fund. The document containing the detail of new scheme that the AMC or sponsor prefer for and circulate to the prospective investor is called the prospectus or offer document.

Literature Review Research Note
Predicting mutual fund performance using artificial neural networks D. C. Indroa, *, C. X. Jianga, B. E. Patuwob and G. P. Zhangc

a

Department of Finance, Kent State University, Kent, OH 44242, USA b Department of Administrative Sciences, Kent State University, Kent, OH 44242, USA c Department of Decision Sciences, Georgia State University, Atlanta, GA 30303, USA Received 1 June 1997; accepted 1 August 1998. Available online 24 March 1999.

Abstract
This study utilizes an artificial neural network (ANN) approach to predict the performance of equity mutual funds that follow value, blend and growth investment styles. Using a multi-layer perceptron model and GRG2 nonlinear optimizer, fundspecific historical operating characteristics were used to forecast mutual funds' riskadjusted return. Results show that ANN generates better forecasting results than linear models for funds of all styles. In addition, our model outperforms that of Chiang et al. [Chiang WC, Urban TL, Baldridge GW. A neural network approach to mutual fund net asset value forecasting. Omega Int J Manage Sci 1996:24;205–215.] in predicting the performance of growth funds. We also employed a heuristic approach of variable selection via neural networks and compared it with the stepwise selection method of linear regression. Results are encouraging in that the reduced ANN models still outperform the linear models for growth and blend funds and yield similar results for value funds. Author Keywords: Forecasting; GRG2; Mutual fund performance; Neural networks

Article Outline
1. Introduction 2. Artificial neural networks for nonlinear function mappings 3. Mutual fund data and predictive model 4. Conclusion, Acknowledgements, References CHAPTER 2

Introduction of IndusInd Bank

Indusind Bank Ltd - Company Profile Snapshot

Company Profile: Ticker: Exchanges: 2008 Sales: Major Industry: Sub Industry: Country: Employees:

Indusind Bank Ltd IBK BOM 21,782,000,000 Financial Commercial Banks INDIA 2613

Business Description Indusind Bank Ltd. The Company's principal activity is to provide banking services. It operates in accepting deposits, providing loans, financing and other related services in treasury to consumers and industries. As at 31-Mar-2007, the Company operated through 170 branches spread across 141geographical locations and 99 Offsite ATMs with the opening 30 new branches. Genesis IndusInd Bank derives its name and inspiration from the Indus Valley civilization - a culture described by National Geographic as 'one of the greatest of the ancient world' combining a spirit of innovation with sound business and trade practices. Mr. Srichand P. Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja Group, conceived the vision of IndusInd Bank - the first of the new-generation private banks in India - and through collective contributions from the NRI community towards India's economic and social development, brought our Bank into being. The Bank, formally inaugurated in April 1994 by Dr. Manmohan Singh, Honorable Prime Minister of India who was then the country’s Finance Minister, started with a capital base of Rs.1,000 million (USD 32 million at the prevailing exchange rate), of which Rs.600 million was raised through private placement from Indian Residents while the balance Rs.400 million (USD 13 million) was contributed by Non-Resident Indians.

A NEW ERA
The merger with the Bank in June 2004 of Ashok Leyland Finance Ltd., among the largest leasing finance and hire purchase companies in India, set in motion a process of consolidation through the combined customer base of the merged entity and its increased

geographical penetration. IndusInd Bank has become one of the fastest-growing banks in the Indian banking sector today with its branch network expanding from 61 as on March 31, 2004 to 137 as on March 31, 2006 – reflecting an increase in excess of 125% in 24 months. The Bank has approximately 150 ATMs of its own, and has concluded multilateral arrangements with other banks with a total network of 15,000 ATM outlets. All the outlets of the Bank, including its branches and ATMs, are connected via satellite to its central database that operates on the latest version of IBM’s AS400-720 series hardware and Midas Kapiti (now, Misys) software. IndusInd Bank’s broad lines of business include Corporate Banking, Retail Banking, Treasury and Foreign Exchange, Investment Banking, Capital Markets, Non-Resident Indian (NRI) / High Net worth Individual (HNI) Banking, and (through a subsidiary) Information Technology. IndusInd Bank provides multi-channel facilities including ATMs, Net Banking, Mobile Banking, Phone Banking, Multi-city Banking and International Debit Cards. It was one of the first banks to become a part of RBI’s Real Time Gross Settlement (RTGS) system. It has implemented an enterprise-wide risk management system encompassing global best practices in the area of Risk Management, with help from KPMG. This has enabled the Bank to remain in the forefront in complying with the requirements of Basel II. It is the first bank in India to receive ISO 9001:2000 certification for its Corporate Office and its entire network of branches. With its roots in Indian tradition and emphasis on customer care, IndusInd Bank’s service philosophy is well reflected in the communication tagline “We Care… Dil Se”.

Milestone of IndusInd Bank To emerge as an international bank with traditional roots To acquire global capabilities

To provide world-class services To maintain the highest standards of professionalism and integrity IndusInd Bank NRI Services

IndusInd Bank History
IndusInd Bank came into existence in 1994 and is an outcome of the vision of Mr. Srichand P. Hinduja, the head of the Hinduja Group. The Bank derives its name and inspiration from the Indus Valley Civilization. IndusInd Bank has carved a niche for itself in technology-supported, cost-efficient, and customer-friendly banking. Starting with Corporate and Wholesale Banking the Bank has now forayed aggressively Into Retail Banking as well. IndusInd Bank launched Internet Banking in 1996 and Mobile Banking in 1997, well in advance of other Indian banks. In 2002-03, the Bank became one of the first banks to implement the RBI - Electronic Funds Transfer scheme. In 2003-04, the Bank became the first Indian Commercial Bank to achieve certification for its "Entire Network of Branches" under the ISO 9001:2000 Quality Management System.

ABOUT INDUSIND BANK
IndusInd Bank Ltd., a new-generation private-sector bank, commenced operations in 1994 and has a net worth of Rs. 829 crores as of March 31, 2005. Driven by technology, it has taken steps to establish and upgrade its support systems for the introduction of retail banking products and alternative delivery channels, while continuing to expand its network of branches. In its eleven years of existence, the Bank has displayed its commitment to global benchmarks in retail banking by proactively adopting the requirements of ISO 9001:2000 quality certification for its entire network of branches. It was one of the first banks to go live on the RTGS platform and enjoys clearing bank

status for BSE, NSE, MCX and NCDEX. It also offers DP facilities for the stock and commodity segments. Since the merger of Ashok Leyland Finance in June 2004, the Bank has expanded its retail portfolio. It is a large player in the financing of commercial vehicles, utility vehicles, 2/3-wheelers and construction equipment. The Bank has been given the highest P1+ rating for its FDs by CRISIL, who have also assigned the highest safety ratings to the Bank’s Pass Through Certificates. It has also been given the highest rating of F1+ for its Certificates of Deposit by Fitch Ratings India. The Bank’s Tier-II Bonds have been rated as LA+ by ICRA and as A+ (ind) by Fitch. With its roots in Indian tradition and emphasis on customer care, IndusInd Bank’s service philosophy is well reflected in the communication tagline “We Care… Dil Se”.

Bhaskar Ghose, MD, IndusInd Bank, ...

16-Nov-2007 Business Profile IndusInd Bank (INDUSINDBK), a part of the Hinduja Group, was incorporated in 1994. It was set up particularly to mobilize funds of the NRI community. As on March 31, 2007, the bank had a network of 170 branches and 99 offsite ATMs spread over 141 geographical locations in 24 states and union territories.

Internationally, the bank has a representative office each in Dubai and London. The bank also enjoys strategic alliances with Union National Bank, Abu Dhabi in the UAE and Doha Bank in Qatar. These strategic alliances encompass a wide range of banking services, including deposit accounts, remittance business, loans, wealth management advisory, distribution of third party products, trade finance, global banking, and investment banking including corporate finance. IndusInd Bank’s broad lines of business include Corporate Banking, Retail Banking, Treasury and Foreign Exchange, Investment Banking, Capital Markets, Non-Resident Indian (NRI)/High Net worth Individual (HNI) Banking, and (through a subsidiary) Information Technology. The Bank provides multi-channel facilities including ATMs, net banking, mobile banking, phone banking, multi-city banking and international debit cards. It was one of the first banks to become a part of RBI`s real time gross settlement (RTGS) system. It has implemented an enterprise-wide risk management system encompassing global best practices in the area of risk management with help from KPMG. This has enabled the bank to remain in the forefront in complying with the requirements of Basel II. It is the first bank in India to receive ISO 9001:2000 certification for its corporate office and its entire network of branches.

Business Achievements Year
2006-07 Net worth crossed a milestone figure of Rs. 1000 crores at Rs. 1056 crores Successful completion of GDR issue of Rs. 145.96 crores

Business Turnover touched a figure of Rs 28.700 crores registering a growth of 18.14% over the previous year. Network of Branches increased to 170 along with 99 off-site ATMS, thus having presence in over 141 geographical locations spread over 27 States including Union Territories. Highest A1+ rating for its Certificates of Deposits by ICRA and Highest P1+ rating for its FDs by CRISIL. Bestowed with the prestigious IBA Award for technology implementation (STP). Added a number of new business and product lines, viz the launch of Indus GOLD and Indus Gift Card, E-Remittance facility, tie-up with number of Banks for ATM usage, tieup with Religare Securities to extend Portfolio Management services and Banc assurance tie-up with Aviva Life Insurance

2005-06 Ranked among the top ten banks in the country in the ET500 list of leading companies in India. Rated as “The best among the top 10 private-sector banks” in a survey covering 79 banks conducted by Business Standard in its November 2005 issue. Ranked sixth in the overall list, the Bank was also identified he “Most Efficient Bank” among all banks in India. Bestowed “India’s Most Productive Bank” status by a Business Today- KPMG Survey Presented “Outstanding Achiever of the Year 2005- Corporate” (Runner up- Banking Technology Award) by IBA, Finacle (from Infosys) and TFCI (Trade Fair and Conference International). Honored with the "Award for Corporate social Responsibility (CSR)" at the India Brand summit 2005, Mumbai 2004-05

Business Turnover crossed Rs. 22000 crores Network grew to 115 branches, 9 extension counters and 195 ATMs, spread over 95 geographical locations Bestowed with highest ratings for deposits from reputed rating agencies Highest rating “P1+” - on Fixed Deposits from CRISIL Highest rating “P1+” - on Certificate of Deposits from CRISIL Highest rating “F1+” - on Certificate of Deposits from Fitch Ratings India Pvt. Ltd. Bank's second International Representative office opened in London. 100th Branch opened at Dadar, Mumbai. Signed an Agreement with NCDEX as clearing banker. Launched International Mahila Card. 2003-04 Total business volume touches Rs. 19,000 crores. Completes 10 years of banking excellence. Ashok Leyland Finance merges with the Bank. The first Indian Commercial Bank to achieve certification for its “Entire Network of Branches” under the ISO 9001:2000 Quality Management System. Launch of Debit Card- International Power Card. Bank’s first International Representative Office in Dubai. One of the first banks to go live on RTGS platform. 2002-03

One of the first banks to implement the RBI- Electronic Funds Transfer scheme. 2001-02 Total business volume touches Rs. 14,000 crores. Highest productivity in the Indian banking sector with Rs. 16 crores of business per employee. 2000-01 Total business volume crosses Rs. 10,000 crores

Mission
To emerge as an international bank with traditional roots To acquire global capabilities

To provide world-class services To maintain the highest standards of professionalism and integrity

Brand

LOGOS & IMAGES Trust, Clarity of vision, Calmness, Communication, Truth, Stability, Harmony, Modernity Creativity, Imagination, Expression, Energy, Expansiveness, Innovation, Warmth, Friendly, Approachability Strength, Power, Passion, Authority, Reliability, Dependability, Efficiency

IndusInd Bank Ltd., a fast-growing new-generation private-sector bank in India, commenced operations in 1994 and has a net worth of Rs.866 crore as at March 31, 2006. Driven by technology, it has taken steps to establish and upgrade its support systems for the introduction of retail banking products and alternative delivery channels, while continuing to expand its network of branches. In its twelve-year existence, the Bank has displayed its commitment to global benchmarks in retail banking by proactively adopting the requirements of ISO 9001:2000 quality certification for its entire network of branches. It was one of the first banks to go live on the RTGS platform and enjoys clearing bank status for both major stock exchanges - BSE and NSE and both major commodity exchanges in the country – MCX and NCDEX. It also offers DP facilities for stock and commodity segments. Since the merger of Ashok Leyland Finance in June 2004, the Bank has expanded its retail portfolio. It is a large player in the financing of commercial vehicles, utility vehicles, 2/3-wheelers and construction equipment. The Bank has been given the highest P1+ rating for its Fixed Deposits and Certificate of Deposits by CRISIL, who have also assigned the highest safety ratings to the Bank’s Pass Through Certificates. It has also been given the highest rating of F1+ for its Certificates of Deposit by Fitch Ratings India Pvt. Ltd. The Bank’s Tier-II Bonds have been rated LA+ by ICRA and A+ (ind) by Fitch.

Financial Status of IndusInd Bank

Indusind Bank registered a 30.03% growth in net profits to Rs 223.40 million for the quarter ended in September 2007 from a profit of Rs 171.80 million for the quarter ended in September 2006 Interest earned rose 27.70% to Rs 4604.80 million for the quarter ended September 2007 from Rs 3606.00 million for the quarter ended September 2006. Total income rose 22.48% to Rs 5254.7 million for the quarter ended September 2007, from Rs 4290.1 million for the quarter ended September 2006. Kochi, April 21, 2006: IndusInd Bank (IBL), a fast-growing new-generation privatesector bank shared its business growth plans for the future, including its focus on the development of partnerships for global reach. On the international front, IBL recently announced a strategic alliance with Union National Bank (UNB), Abu Dhabi. The strategic alliance will encompass a wide range of banking services, including deposit accounts, remittance business, loans, wealth management advisory, distribution of third party products, trade finance, global banking, and investment banking including corporate finance. Through this alliance, both banks will focus primarily on the business opportunities generated by Non-Resident Indians in the UAE. IBL and UNB will treat each other as preferred partners with reciprocity of business flows and promotion of each other’s banking services. Apart from this initiative, seventeen exchange houses from the UAE, Kuwait and Oman have entered into arrangements with IBL to provide convenient, cost-effective, and quick funds transfer facilities to NRIs. IBL also caters to the other banking and financial needs of expatriate Indians through NRE and FCNR deposits, e-broking, direct investment in Mutual Funds, and other related third party distribution products and services. The Bank has increased its retail network to 137 branches and has plans to expand significantly in the financial year 2006-2007 with growth in under-banked districts, as identified by Reserve Bank of India (RBI). The Bank has also increased its NRE Deposit rate for a period of one to two years from 6.04% to 6.29% p.a., following the recent announcement of RBI’s Credit Policy for 2006-07. Mr. Bhaskar Ghose, Managing Director, IndusInd Bank, added “Kochi constitutes a significant centre for us for local business from SMEs and the agriculture sector, and also for focus on foreign trade. We expect increased growth in the financial year 2006-2007, triggered by our retail expansion in under-banked centres and by our international tie-ups. We expect to capitalize on our ties with our international stakeholders through exclusive alliances with foreign banks, thereby generating local business for our partners and Indiabound business for ourselves.”

IndusInd Bank has been named ‘India’s Most Productive Bank’ for 2004-05 in the recently released survey of banks in India, undertaken annually by Business Today and KPMG. It has also won the Banking Technology Award ‘Outstanding Achiever of the Year 2005 – Corporate’ (Runner Up), an award instituted jointly by Indian Banks Association (IBA), Finacle (Infosys) and TFCI (Trade Fair and Conference International) to honor outstanding achievements in banking technology. IndusInd Bank Ltd., a fast growing new-generation private-sector bank in India, commenced operations in 1994 and has a net worth of Rs 829 crore as at March 31, 2005. Driven by technology, it has taken steps to establish and upgrade its support systems for the introduction of retail banking products and alternative delivery channels, while continuing to expand its network of branches. In its twelve-year existence, the Bank has displayed its commitment to global benchmarks in retail banking by proactively adopting the requirements of ISO 9001:2000 quality certification for its entire network of branches. It was one of the first banks to go live on the RTGS platform and enjoys clearing bank status for both major stock exchanges and both major commodity exchanges in the country – i. e. BSE, NSE, MCX and NCDEX. It also offers DP facilities for stock and commodity segments. Since the merger of Ashok Leyland Finance in June 2004, the Bank has expanded its retail portfolio. It is a large player in the financing of commercial vehicles, utility vehicles, 2/3-wheelers and construction equipment. The Bank has been given the highest P1+ rating for its FDs by CRISIL, who have also assigned the highest safety ratings to the Bank’s Pass Through Certificates. It has also been given the highest rating of F1+ for its Certificates of Deposit by Fitch Ratings India Pvt. Ltd. The Bank’s Tier-II Bonds have been rated LA+ by ICRA and A+ (ind) by Fitch. Visit us at www.indusind.com

Recent Developments
14-NOV-07 IndusInd Bank announced that Cholamandalam MS, General Insurance Co., (Chola MS), a joint venture between Murugappa Group and Mitsui Sumitomo Insurance of Japan, announced a banc assurance tie-up with IndusInd Bank. Through this alliance, Cholamandalam MS will get the support of a bank which has strong goodwill in the retail markets with a sizeable clientele base and in turn IndusInd Bank will complete its array

of products required for its wealth management services to its customers. This partnership is expected to generate significant returns targeting the first premium income of Rs 1 billion after one year of the launch of operations. 16-JUL-07 On July 16, 2007, the bank inaugurated its 11th branch in Nasirabad, Rajasthan. 13-JUL-07 1. On July 13, 2007, the bank inaugurated its first branch in Silvassa. 2. On July 13, 2007 the bank inaugurated its 15th branch in Amalsad, Gujarat. 3. On July 13, 2007, the bank inaugurated its first offsite ATM at Wali Complex, Koppikar Road in the city of Hubli.

Challenges before IndusInd Bank
Since the beginning of its operations, the primary focus of IndusInd Bank was on corporates, NRI's (non-resident Indians) and high net worth individuals. The Bank started focusing on the retail market since the year 2001. With renewed focus on retail banking, IndusInd anticipated that the customer demands for service and response would increase significantly. In order to increase customer acquisition rapidly, the Bank decided to launch innovative retail banking products such as, multi-city banking, mobile banking, doorstep banking, phone banking and Internet banking services. In doing so, IndusInd Bank was aware that they had to be ready for an increase in business transactions. This required significant changes in their IT Infrastructure. They had to build a resilient and scalable infrastructure to run proven banking solutions that met the demands of the business and the marketplace. IndusInd Bank chose to implement Core Banking based on the Midas Kapiti suite of applications. The Bank planned to go live with the full suite of applications this year and expected significant growth in customers, transactions and workload. They have been running the banking applications on IBM AS400 Model 730. Considering the anticipated growth, the Bank had to upgrade to larger systems and also ensure that these systems are continuously available. They needed reliable systems, which could scale flexibly and ensure maximum availability.

MUTUAL FUNDS PROVIDED BY INDUSIND BANK

IndusInd Bank (IBL) has tied up with one of India’s leading financial service providersReligare, to offer Portfolio Management Services (PMS). IBL customers can now avail of PMS to get the best out of equity markets.

Religare is a decade old company, promoted, controlled and managed by the promoters of Ranbaxy Ltd. The Portfolio Management team at Religare has 52 man years of experience in the equity market. The process-driven approach to wealth management aims to safeguard your interests, while leveraging risk to your advantage. You can choose among different portfolios according to your investment objectives and your riskreturn profile.

Mutual Funds Distributed By IndusInd IndusInd bank has tied up with almost all the mutual funds in the country for distribution Pan India. We are currently distributing schemes of the following Mutual Funds ABN AMRO AIG Global BENCHMARK BIRLA BOB CHOLAMANDALAM LOTUS INDIA LIC KOTAK OPTIMIX PRINCIPAL PRUICICI

CANBANK DSP DEUTSCHE FIDELITY HSBC HDFC INGVYSYA JM JP MORGAN

RELIANCE STANDARD CHARTERED SAHARA SBI SUNDARAM TEMPLETON TATA TAURUS UTI

Indian Financial Markets have been in an evolving phase in the last decade. Lots of new financial instruments have been tested and introduced. Investors now have a plethora of choices available to them. Earlier select few instruments were available to them like Fixed Deposits, NSCs, shares, etc. to invest their surpluses. Now, Investors can choose from a wide range of instruments starting from Fixed Deposits at one end to Mutual Funds, Derivatives and Commodities at the other end. Mutual Funds: A Smart way of Growing Wealth Mutual Funds, as an investment vehicle, has found acceptance from all cross-sections of investors. Mutual Funds offer a wide range of choices to Investors. From the most Conservative to most Aggressive – Mutual Funds have a solution for every investor. The range of choices offered and transparent structure of Mutual Funds have helped the industry to grow rapidly in the last decade. Mutual Funds today manage more than Rs. 3 lac crores of investor’s money. Mutual Funds A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned, reflected by higher prices (NAV) of the fund, through these investments are shared by its unit holders in proportion to the number of units owned by them.

Mutual Fund Advantages

•Professional Management •Diversification •Low Costs •Liquidity •Transparency •Flexibility & Convenience •Choice of schemes •Tax benefits •Well regulated

Categories of Mutual Funds Mutual Funds can broadly be classified into three categories: · Equity Funds · Balanced Funds and · Debt Funds

Equity Funds - An equity mutual fund identifies and invests in shares of high quality companies whose businesses are sound and have good, steady growth. These funds seek to provide good returns in long-term.

This is an ideal category for those who want to participate in stock market but do not have sufficient time or expertise required for an active tracking. This category of funds would help in growing investor’s money with the help of Fund Managers expertise. Balanced Funds - A balanced fund seeks a mix of the two classes, debt and equity, to achieve a higher return than debt without forsaking completely its safety and stability. The offer document of the fund would specify the percentage range that would be allocated to equity and to debt. Usually, the range is between 50 per cent and 75 per cent in equity, and the rest in debt. Debt Funds - This one would aim to achieve steady income at low risk to the invested principal. To achieve this mutual fund would invest in what are called fixed-income instruments. These are similar to the fixed deposits of banks, but are usually issued by private and public sector companies as well as by the Indian government as a means to borrow money. Although the actual returns cannot be guaranteed, debt funds usually are a very safe way to invest money and achieve superior returns to conventional bank deposits. Portfolio Management Services (PMS) INDUSIND Bank through Religare offers PMS to address varying investment preferences. As a focused service, PMS pays attention to details, and portfolios are customized to suit the unique requirements of investors.

Religare PMS currently extends five portfolio management schemes, viz Panther, Tortoise, Elephant, Caterpillar and Leo. Each scheme is designed keeping in mind the varying tastes, objectives and risk tolerance of our investors Religare Securities Limited (RSL) is a leading equity and securities firm in India. The company currently handles sizeable volumes traded on NSE and in the realm of online trading and investments it currently holds a reasonable share of the market. The major activities and offerings of the company today are Equity broking, Depository Participant

Services, Portfolio Management Services, Institutional Brokerage & Research, Investment Banking and Corporate Finance. To broaden the gamut of services offered to its investors, the company has also recently unveiled a new avatar of it's online investment portal armed with a host of revolutionary features RSL is a member of the National Stock Exchange of India, Bombay Stock Exchange of India, Depository Participant with National Securities Depository Limited and Central Depository Services (I) Limited, and SEBI approved Portfolio Manager 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 NRI, FII, HNI and Corporate Servicing groups. These groups take all the portfolio investment decisions depending upon a client’s risk / return parameter. Religare has a very credible Research and Analysis division, which not only caters to the need of our Institutional clientele, but also gives their valuable inputs to investment dealers. Religare is also providing in-house Depository services to its clientele and is one of the leading depository service providers in the country. Investment Philosophy We believe that our investors are better served by a disciplined investment approach, which combines an understanding of the goals and objectives of the investor with a fine tuned strategy backed by research. Stock specific selection procedure based on fundamental research for making sound investment decisions. Focus on minimizing investment risk by following rigorous valuation disciplines. Capital preservation, Selling discipline and use of Derivatives to control volatility. Overall to enhance absolute return for investors

Importance for investor
The offer document is one of the most important sources of information from the perspective of the prospective investor considering investment in a new mutual fund. Apart from the scheme details, the offer document also gives much valuable information that is relevant for the investor’s decision making on whether he should consider subscribing to the new scheme being proposed. In particular investor should understand the fundamentals attributes of the schemes, before he makes his investment decision. Fundamental attributes are the essence of the scheme and includes key information such as objectives and the term of the scheme.

The contents
Broadly, the offer document issued by mutual fund in India is required by the SEBI to include the following information:

• • • • •

Details of the sponsor and the AMC Description of the scheme and the investment objectives strategy. Term of issue Historical statistics. Investor‘s Right and services.

CHAPTER 3

Direct investment vs. mutual Fund Investment

RESEARCH METHODOLOGY RESEARCH METHOD
(A) It is an exploratory type of research design. We have chosen exploratory type of research design because problems for which we are going to research are not so much known in the population in details, which needs a detail exploration. (B) The data which is used for this research design is primary and

secondary data.
Data from the previous research done in this context in the Indian market as the various research firms are prevailing which are doing the research of the Indian market for the Indian companies.

Secondary data can be collected from the different securities company itself as they had launched in different markets, and another major source is government records.

(a) Primary Data:Population from where the primary data can be collected from i.e. the customers which comprises of the: 1. Youths from the age group 30-40 yrs. 2. People within the age of 41-50 yrs. 3. People within the age 51-60 yrs. 4. People above the 60 yrs.

Here the population is mainly on demographic basis. We mainly consider the different age group of people with pre-determined geographic area.

(D) It will be a Non-probability sampling plan.
For this particular research, we have approached that population which was known to invest their money on the basis of judgment and quota.

(E) Primary data will be collected from questionnaire and personal interview.
The main reason for going with questionnaire and personal interview for collecting primary information are less time consumption, economical, easy to tabulate and analyze the data.

For the questionnaire, a pilot testing which, gives a pre-information about the validity of the questionnaire was done. Then after the final questionnaire was developed with small modification for the factors.

OBJECTIVE OF THE SUMMER TRAINING

2. To gain depth knowledge about the actual working of the company. 3. I was very keen to know the actual MUTUAL FUND MARKET, and I got this opportunity here in INDUDIND BANK. 4. Future of MUTUAL FUNDS in India. 5. To gain knowledge about the mutual fund investment trend in India.

6. I want to learn market position and market trend. 7. The main objective of the study is my attitude because I am always hunger to learn new things.

Limitation

Some of the key limitations are as follows: • The survey & research has been done only in Khanna (Pb.), therefore the result show the market position of Khanna but result cannot be considered as representation of whole of India. • • Convenience sampling was used as the mode of conducting the research. The sample size of the khanna region taken was small therefore it can not be said that the chosen sample is not the accurate representatives of the population. • • Respondents were reluctant to answer the questions. They took some question to their personal ego and status, hence increasing the possibility of error. • Financial data regarding incomes turnover expenses etc.was not revealed by certain respondents. • Much information has been extracted from websites of financial institution and their accuracy may be subject to error.

CHAPTER 4

DATA INTERPRETATION AND ANALYSIS

A. Comparison Analysis of investment product
• Equity • FI bonds • Fixed deposits • Real estate • Gold • Life insurance • PPF • Corporate debentures • Mutual Fund

Securities Equity

Return High

Convenience Safety Moderate Low

Volatility High

Liquidity Moderate or low

FI Bonds Corporate debentures

Moderate Moderate

High Low

High Moderate

Moderate Moderate

Moderate Low

Company fixed Deposits Mutual Fund PPF

Moderate

Moderate

Low

Low

Low

High Moderate

High High Moderate Low

High High High High

Moderate Low Low Moderate

High Moderate Low Moderate

Life insurance Low Gold Moderate

Real Estate

Low

Low

Moderate

High

Low

B. FACTOR ANALYSIS

Pie Chart

1. Approximately half of the people like 42.2% people give emphasis on tax saving.

2. 56.9 percent of the people some how give importance on services that means that they are not very much concern on the services.

3. If yield is not a major factors then most of the people are not interested. That means they are concern on the yield on the investment. The percentage is 56.9.

4. If security is not given much importance then most of the people are unable to answer like 53.9 %.

5. Risk is another aspect of the investment in mutual fund. Most of the people are agree some how on the risk like 38.2.

6. The legitimate statement is another factor that in which approximately half of the percentage are agree some how like 44.1%.

7. Most of the people are agree on the entry and exit load. Which is another good factor like 38.2%.

8. On transparency most of the people are confused .majority of the people cant answer on the transparency like 62.7.

9. Switching is another factor in which most of the people agree some how 46.1%.

10. Most of the people can’t answer on the matter of the liquidity like 57.8%.

11. Feed back by agents is important as most of the people are agree somehow on this matter like 61.8%.

12. Pricing policy is another factor comes out with distributive kind of answers.

13. Most of the people are agree somehow on the availability of alternative like 56.9%.

14. Most of the people like are agree some how on the growth of the capital markets like 56.9%.

15. In system regulation most of the people are agree somehow like 55.9%.

16. Most of the people are agree on the product diversification like 32.7%.

17. In this part most of the people are strongly disagree like 62.7%.

18. In trend in asset allocation most of the people are agree somehow like 43.2%.

19. Administrative expense is another part in which most of the people are strongly disagree. But some are also cant answer like 65%.

20. Global trends are influencing very much like most of the people agree somehow like 56.9%.

21. Most of the people are agree on the performance like 58.2%.

CHAPTER 5

FINDINGS
MAJOR FINDINGS
1. Risk is the most important determinant of mutual fund investment in India. so as the risk is less the investment in mutual fund increases. People generally pays a lot of eye on risk while investing. 2. Tax saving is another most important determinant of mutual fund investment in India. Because in India people generally now a days very much aware of tax saving 3. Flexibility in Entry load and exit load is is one of the most important determinants of mutual fund investment in India. Entry and exit load need to be carefully examined before investing. 4. Easy liquidity is one of the most important determinants of mutual fund investment in India. 5. Security is another most important determinant of mutual fund investment in India

Common mistakes in mutual investing
Appropriate assets allocation, effective diversification, suitable fund selection. These are some of the fundamental goals that every investor should desire in a mutual fund portfolio. Whether an investor is in various stages of assts accumulation or distribution,

these goals are necessary for mutual fund portfolio to be successful. However, an investor can encounter many road blocks or pitfalls, in the quest to attain these goals. The remainders of this article examine three of the most common obstacles and offer suggestion on how to avoid them.

No strategy
This is probably the most frequent mistakes in mutual fund investing .I never cease to be surprised by the vast number of individuals who select specific mutual funds without giving any thought to an asset allocation strategy. Many investors may actually define and identify their investment objective, but then skip the next vital step establishing a successful mutual fund portfolio. Creating a detailed asset allocation strategy, without a well defined, appropriate asset allocation strategy that accurately reflects individual investment objective and preference. Stabilizing a successful mutual fund portfolio is a three steps process: Identifying investment objectives and preferences including portfolio amount, return objectives, time horizon and risk tolerance. Formulating a detail assts allocation strategy by fund type category to reflect chosen objectives. Suitable fund selection to match every category.

Overweighting in high risk, on diversified funds
This mistake is a specific example of portfolio imbalance, a very large percentage of total portfolio assets are concentrated in funds with very high risk or reward characteristic, even though the fund types may actually reflect the chosen investment objective. The result is very volatility in price movement of these funds which, in many instances, can cause disappointing portfolio performance because the very large percentage of risk does not justify the potential reward.

Duplication of fund categories
This is type of mistake is an example of inefficient diversification and occurs when an investor has two funds with identical objectives. For instance, owning two small capital growth funds, two capital growths funds, and one corporate bond fund in five fund portfolio, is inefficient diversification due to the duplication of fund objectives in the small and large capital growth categories.

CONCLUSION
10 Principal of investing
When building a long term investing plan, it’s important to have ea few guidelines. That’s why our philosophy on investing is reflected in 10 easy principles-:

• Start with the basics for long term investing
Begin by setting aside in cash at least two to six mont5hs living expenses an emergency fund that will be available in the event of illness or a period of unemployment.

• Get started now
Every year put off investing makes accomplishing your ultimate retirement goals even more difficult. As a rule of thumb, for every five year you wait, you may need to double your monthly investing amount to achieve the same retirement income. Social security and pension plan alone are not enough for a comfortable retirement.

• Know yourself
Understand your self as investor your emotions, your fears, and your tolerance for risk. Make sure you choose investments that you are some investors, particularly those with large or complex portfolios who want ongoing investment management. The services of a fee compensated financial advisor may be appropriate.

• Invest for growth
Invest in stocks, either individually or in mutual funds, for long term growth. While in any given year stocks can be more volatile then other investments, over time stocks have typically outperformed all other type of investments while staying ahead of inflation.

• Take a long term view
Patience is a virtue .Maintain the discipline to hold onto or add to appropriate investments through down markets as well as up markets.

• Build a diversified portfolio
In deciding how to allocate your assets, be sure to diversify, both among asset classes and within each class. Choose an appropriate asst allocation model.

• Consider bond and cash for diversification and income
Bonds and cash play an important role in an investor’s portfolio, providing solution for income and diversification needs.

• Minimize your expanses
Over the long run, sales charges, loads and high expanses can drag down the performance of even a well- diversified portfolio. Reduce your investment expenses by using no-load funds, low cost stock and bond trading services and tax-efficient mutual funds.

• Stay on track
Review your portfolio at least once a year, and certainly whenever personal circumstances changes. You’ll need to evaluate the performance of your investments against relevant risk-adjusted benchmarks, and when necessary, re balance your portfolio to stay on track.

• Become a lifelong investor
Investing for growth should not stop when you retire. To make your money work for you through out your retirement years, keep investing a portion of your portfolio for the growth.

Bibliography
• Reference to the books
Murty.Krishna, S (2006), Mutual fund in India, Krishna Publications Ltd., Mumbai. Waghmara, Tushar (2007),”The future of found management in India”, Pearson Publications Ltd., New Delhi. Fischer’s, Jordan (2005), Security analysis’s and portfolio management, The Macmillan Company Ltd., New York. Kothari,C R (2005),"Research Methodology: Methods & Techniques", Vishwa publication., New Delhi. Iqbal, Naila "Investment in Mutual Funds." Investment in Mutual Funds. 19 Jun. 2008. EzineArticles.com. 8 Aug 2008

Reference to Web page:
1. http://ezinearticles.com/?Investment-in-Mutual-Funds&id6

2. http:// www.reliance mutual fund.com.
3. http:// www.khgt indusind.com/docs/introd./plans/achiev/products/ias. 4. http:// www.sebi.org.in 5. http:// www.religare.in/docs/mutual fund/ias 6. http:// www.indiainfoline.com 7. http:// www.amfiindia.com.

APPENDIX QUESTIONNAIRE General Information:
Name of the Respondent: ………………………………………………… Address: …………………………………………………………………… Occupation: ……………………………………………………………….. Age: ………………………………………………………………………...

Please rank in 5 point scale in the bracket your option.
1. Is Tax savings a determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 2 Is service determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( (E) Cant answer( ) 3. Is yield determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( (E) Cant answer( ) 4. Is security determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 5. Is risk determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( )

)

)

(C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 6. Is lagititimate statement determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 7. Is flexibility in entry and exit load determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 8. Is transparency determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 9. Is switching determinant of your investment in mutual fund? (A) Strongly agree ( ) (B) Agree ( ) (C) Agree somehow ( ) (D) strongly disagree ( ) (E) Cant answer ( ) 10. Is liquidity determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 11. Is feedback by agents determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 12. Is pricing policy determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 13. Is availability determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( )

(E) Cant answer( ) 14. Is growth in capital markets determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 15. Is system regulation determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 16. Is product diversification determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 17. Is increase in the need of financial analysis determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 18. Is trend in asset allocation determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 19. Is administrative expense determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 20. Is global trends determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( ) (E) Cant answer( ) 21. Is awareness determinant of your investment in mutual fund? (A) Strongly agree( ) (B) Agree( ) (C) Agree somehow( ) (D) Strongly disagree( )

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