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Mutual Fund Marketing in India: IBMR, Bangalore
Mutual Fund Marketing in India: IBMR, Bangalore
IBMR, Bangalore.
A Project report submitted in partial fulfillment of the requirements of Internship Training of Master of Business Administration II Semester of Sikkim Manipal University
EXECUTIVE SUMMARY
IBMR, Bangalore.
This is to certify that the Project entitled Mutual Fund Marketing in India Submitted in partial fulfillment of the requirements for the Internship Training of Semester II of MASTERS OF BUSINESS ADMINISTRATION of Sikkim Manipal University of Health, Medical & Technological sciences Mohneesh Kumar Bajpai Has worked under my supervision and guidance and that no part of this report has been submitted for the award of any other degree, Diploma, Fellowship or other similar titles or prizes and that the work has not been published in any journal or Magazine. Reg. No: 520841765
Attested
Director / Principal Of the Institute
Certified
Faculty Guides Name & Qualification
IBMR, Bangalore.
Examiners Certification
Investment may be defined as an activity that commits funds in any financial/physical form in the present with an expectation of receiving
Mohneesh Kumar brings with it a probability that additional return in the future. The expectation Bajpai
the quantum of return may vary TITLE minimum to a maximum. The from a possibility of variation in the actual return is known as investment risk. Thus Mutual fund marketing in India every investment involves a return and risk. The investor can choose the investment Is approved and is acceptable in quality andthe investor an funds he wants to invest his money, providing form opportunity to have a direct stake in the performance of the financial markets. He can also benefit from attractive tax advantages. A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in stocks, bonds, short-term money market instruments, and/or other securities. The fund manager, also known as portfolio manager, trades the fund's underlying securities, realizing capital gains or losses and passing any proceeds to the individual investors. Today, the worldwide value of all mutual funds totals more than $26 trillion in assets. The principal paid are invested in fund/funds of the investors choice (depending on the allocation rate) & units are allocated depending on the price of units for the fund/funds.
Internal Examiner
External Examiner
IBMR, Bangalore.
STATEMENT OF PROBLEM:
The premiums that are collected are invested in different funds like equity fund, mid-cap fund, debt fund, balanced fund and cash fund. The funds must be allocated such that their performance is stable and improves so that the
Mohneesh Kumar Bajpai investor gets high returns. Due to the increasing competition it becomes
necessary that the companies fund TITLEbest performing fund with highest is the return. Among the different mutual funds this study is to find out the best fund
Mutual Fund Marketing in India which will yield high returns to the investor and minimize there risk.
Mutual Fund Marketing in India To analyze the competition among different sectors for investment. Based on the findings suitable suggestions are given.
Miss: Navneet
(MARKETING & RELATIONSHIP MANAGER) The study was conducted at Reliance Money 3rd block Jayangar Bangalore. Also some of the software companies were covered including Accenture, Oracle, HP, etc. Even bank ATMs of Axis Bank in Wilson garden and ICICI Bank in Jayangar were covered.
IBMR, Bangalore.
Student Declaration
I hereby declare that the project report titled Mutual fund Marketing in India
Submitted in partial fulfillment of the requirements for the Internship Training of II Semester of Masters of Business Administration of Sikkim Manipal University, India, is my original work and not submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes
Date: -07-09-08
IBMR, Bangalore.
IBMR, Bangalore.
IBMR, Bangalore.
DEFINITIONS:-
EQUTY DIVERSIFIED: Equity Fund This fund provides the scope of high appreciation over a long
term. The fund will primarily invest in equities & is expected to match returns given by NSE NIFTY. This fund will invest at least 90% in equities and maximum 10% in cash.
Equity Gain Fund - The investment objective of this Fund is to provide capital appreciation through investment in select equity stocks that have the potential for high capital appreciation. This fund will invest at least 85% in equities and maximum 15% in debt & cash instruments.
Equity MidCap Fund - The Investment objective of this Fund is to achieve capital appreciation by investing in a diversified basket of mid caps stocks and large cap stocks. The fund shall primarily invest in mid cap stocks (at least 50% of the investment shall be in mid cap stocks).Investment portfolio shall also include large cap stocks and cash with cash not exceeding 20% of the portfolio value.
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Cash Fund The cash fund will invest conservatively in money market & short-term investments to ensure that return on investments shall never be negative. 100% of this fund will be invested in money market instruments. The price of the units in this fund is guaranteed never to go down. (i.e:- gold, govt. Securities, etc)
Debt Fund - This fund provides the scope for steady returns at low risk through investment in high quality fixed income securities. This fund will be invested fully in debt instruments
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Types of Data:
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Sampling plan:
The sampling universe consisted of various funds and their returns.
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24 24-25
25 25-26 26-27 27 28-39 40- 41
44 44 44
13
Chapter-4- ANALYSIS AND INTERPRETATION OF DATA 60-73 4.1- Segmentation Targeting, positioning 4.2- Comparison of ULIPS vs. MFS (India) 4.3- Advantage ulips 4.4- Advantage of mfs 4.4- Data analysis and interpretation 4.5 findings 60-63 63-65 66 66 66-73 74
75-79
QUESTIONNAIRE
80-85
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realized is shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow
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REGULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA The regulation of mutual funds in India is governed by the SEBI vide the SEBI (Mutual Fund) Regulation, Act 1996 (here in after referred to as SEBI Regulations). These regulations make it mandatory for mutual funds to have a three-tier structure of sponsor Trustee Asset Management Company (AMC). The sponsor is the promoter of the IBMR, Bangalore.
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these entities. These agreements provide for the rights, duties and obligations of these three entities. The UTI is also structured as a trust. The important difference through is that UTI does not have sponsors or a separate AMC. Financial intuitions and banks that contributed to the initial capital of the UTI have their representatives on UTIs Board of Trustees, which oversees the operation of UTI Mutual Fund. The Association of Mutual Funds in India (AMFI) is a self-regulatory body formed by the various MF Companies to address the practices and policies of various aspects like new scheme launches, payments to intermediaries comparisons and other ethical systems. Likewise, different companies have their own Compliance and Audit offices, which are mandated to control and report adherence to and deviations if any on the regulations and policies issued by SEBI. ADVANTAGES OF MUTUAL FUNDS
Low Costs Liquidity Transparency Flexibility Choice of schemes Tax benefits well regulated
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and has presence in 118 cities across the country. Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors. "Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of
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Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders."
Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.
Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors.
"Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders."
Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth.
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Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.
Statutory Details:
Sponsor: Trustee:
Reliance Reliance
Investment Manager: Reliance Capital Asset Management Limited. The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956.
General Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond
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Reliance Mutual Fund has won the "Most Trusted Mutual Fund
Brand" for the second year, in succession by Economic Times - AC Nielsen ORG-MARG survey.
CNBC TV18 - CRISIL Mutual Fund of the Year Award for 2007 Reliance Growth Fund - Most Consistent CPR Performer - Equity Fund Category
Reliance Growth Fund was the only scheme that won the CNBC TV18
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limit imposed on subscription in Reliance Equity and Reliance Growth schemes with effect from August 18. Fresh and additional subscriptions including systematic investment plans will henceforth be accepted without any limit, subject to the minimum subscription amount for each scheme.
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Sponsor Company
Hold unit holders funds in mutual fund. Enters into an agreement with SEBI.
Custodian
Registrar
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Distributors
1.4.
Product of company:
1.4.1. Equity Shares: Equity shares represent ownership capital. As an equity shareholder, you have an ownership stake in the company. This essentially means that you have a residual interest in income and wealth. Perhaps, the most romantic among various investment avenues, equity shares are classified into the following broad categories by stock market analysts: Blue chip shares Growth shares Income shares Cyclical shares Speculative shares
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Government agency securities PSU bonds Debentures of private sector companies Preference shares 1.4.3 Mutual Funds - Instead of directly buying equity shares and/or fixed income instruments, you can participate in various schemes floated by mutual funds which, in turn, invest in equity shares and fixed income securities. There are three broad types of mutual fund schemes: Equity schemes Debt schemes Balanced schemes
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Whole life policy Term assurance policy 1.4.5 Real Estate - For the bulk of the investors the most important asset in their portfolio is a residential house. In addition to a residential house, the more affluent investors are likely to be interested in the following types of real estate: Agricultural land Semi-urban land Time share in a holiday resort Financial Derivatives A financial derivative is an
instrument whose value is derived from the value of an underlying asset. It may be viewed as a side bet on the asset. The most important financial derivatives from the point of view of investors are:
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invest, which instrument will give me higher returns, etc. Even now nuclear families are in and so are longer life spans. Even inflation is increasing and so do the standard of life, medical costs, and other things. In such a scenario, one need to think as to how he will take care of all his future needs and build up a corpus that will not only take care of routine expenses but also provide for extra costs, especially of health care. One need to have a corpus of funds, post-retirement, which will give him close to 100% of the salary to preserve the lifestyle he has grown to enjoy.
: The advantages of investing in a Mutual Fund are: Professional Management Diversification Convenient Administration Return Potential 27
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There are different types of mutual funds are available in the investment market. An investor who wants to invest his money in mutual funds must have the knowledge about different kinds of mutual funds.
Only companies that meet certain criteria will be included in the fund. For example, a growth fund looks for companies with significant, untapped growth potential, whereas a value fund will look for companies that are undervalued by the market as a way to increase investor returns. Both of these types of funds are designed for long-term capital appreciation.
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GROWTH FUNDS:
Is the type of funds where the collected money is invested in different stocks in order to capital appreciation over a long term? Value of these mutual funds increase with the upward in stock market and decrease with a downfall in the stock market. The collected money is invested in common stocks of the companies that have a solid growth rates, as well as a history of consistent dividend payout.
Bond funds typically invest in bonds issued by governments and large companies. Bond fund returns are based on a combination of interest payments and price changes of the bonds in the fund. The market value of bonds is affected by prevailing interest rates. When interest rates fall, existing bonds will generally rise in value; when interest
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Balanced funds invest in a mix of stocks, bonds, and cash investments. The mix will change as market conditions change, but it usually stays within pre-
determined ranges. (For example, stocks 40-60%, bonds 30-50%, cash 030%). The benefit of a balanced fund is that it provides automatic diversification by investing in a variety of asset classes and thereby reduces the risk of one asset class performing poorly. Balanced funds tend to be more risky than bond funds and less risky than equity funds. The main objective is to earn a high rate of return on the invested money.
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Money market funds invest primarily in short-term (less than one year) government Treasury Bills (also called T-Bills) and corporate notes which pay a fixed rate of interest. The rate of return of money market funds tends to be lower than that of funds that are managed for long-term gains, but they are a very low-risk investment. Money market funds are ideal for parking your cash while you decide where to invest for the long haul, or for money you will need in the near future.
Asset allocation funds are similar to balanced funds in that they invest in all of the asset classes.
Asset allocation funds differ from balanced funds because the fund manager isn't restricted to the percentage of the money they can put in a specific type of investment (stocks, bonds, and so on). A tactical asset allocation fund is one where the manager frequently makes decisions about the best asset allocation, sometimes every few months. The manager of a strategic asset allocation fund will generally revise the fund's asset allocation once a year. Asset allocation funds provide a "one stops shopping" approach to asset allocation.
INDEX FUND:
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EQUITY FUNDS:
Equity funds invest primarily in stocks. Because stocks have traditionally risen in value more than other types of investments, they offer the greatest potential for long-term growth. Investing in stocks is also riskier than other investments as stock prices can fluctuate more than other types of investments. The market price of a stock will vary with the company's financial performance, general economic conditions in the country in which it operates, as well as investor perceptions.
ALSO, PERHAPS MOST COMMONLY FUNDS ARE DIVIDED BY THEIR GEOGRAPHIC MARKETS, COMPANY SIZE AND INDUSTRY.
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International: These funds can generally invest in any country around the
world except for Canada. Most international funds invest in the U.S., Europe, Australia and the Far East, sometimes referred to as the EAFE countries.
Global funds: These funds invest in any country around the globe,
including Canada. Foreign equity funds provide an opportunity to diversify across many markets and reduce the risks associated with the health of any one economy and its stock market. These funds do have risks associated with political and market conditions in other countries. In addition, foreign funds are exposed to currency risk. If the Value of the Canadian dollar rises, or the currencies of the countries the fund invests in fall, your return calculated in Canadian dollars will be lower. Different accounting practices and securities regulations around the world may affect the fund managers' ability to value and trade in some securities. Portfolio managers seek to reduce these risks by investing in different countries and industries.
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on its market cap. However, if you can take the ups and downs, there can be greater rewards for investors in small cap funds.
INDUSTRY:
Some funds concentrate all their investments in a specific sector or industry of the economy. For example, biotechnology, communications, natural
resources, etc. Industry specific funds provide an opportunity to capitalize on the strength of a particular sector of the economy. Investing a significant portion of your portfolio in one industry can be risky, especially if that industry falls on hard times. However, the upside can be equally as good if the industry performs well. (We have seen this in the technology sector.) However, if you have a diversified portfolio you may be able to reap some incremental returns by investing in an industry-specific fund.
RATE OF RETURN:
Investments are made with the primary objective of deriving a return. The expectation of a return may be from income (yield) as well as through capital appreciation. The dividend or interest from the investment is the yield. Different types of investments promise different rates of return. The expectation of return from an investment depends upon the nature of investment, maturity period, market demand, and so on.
RISK:
Risk is inherent in any investment. Risk may relate to loss of capital, delay in repayment of capital, nonpayment of interest, or variability of returns. While some investments such as government securities and bank deposits are almost without risk, others are more risky. The risk of an investment is determined by the investments maturity period, repayment capacity, nature of return commitment, and so on.
SAFETY:
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through the reputation established by the borrower of funds. A highly reputed and successful corporate entity assures the investors of their initial capital.
MARKETABILITY/LIQUIDITY:
An investment that is easily saleable or marketable without loss of money and without loss of time is said to possess the characteristic of liquidity. Some investments such as deposits in unknown corporate entities, bank deposits, post office deposits, national savings certificates, and so on are not marketable. Investment instruments such as preference shares and debentures listed on a stock exchange are marketable. The extent of trading however depends on the demand and supply of such instruments in the market for the investors. Equity shares of companies listed on recognized stock exchanges are easily marketable. A well-developed secondary market for securities increases the liquidity of the instruments traded therein.
TAX SHELTER:
Some investments provide tax benefits; others do not. They are of three kinds.
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certain other sources is tax-exempt, up to a certain limit, in the hands of the recipient. Terminal tax benefit Refers to relief from taxation when an investment is realized or liquidated. For E.g.: a withdrawal from a Public Provident Fund account is not subject to tax.
CONVENIENCE: The degree of convenience associated with investments varies widely. At one end of the spectrum is the deposit in a savings bank account that can be made readily and that does not require any maintenance effort. At the other end of the spectrum is the purchase of a property that may involve a lot of procedural and legal hassles at the time of acquisition alIot a great deal of maintenance effort subsequently. An investor tends to prefer maximization of expected return, minimization of risk, safety of funds and liquidity of investments
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2. A trustee or board who safeguards the assets and ensures compliance with the laws and rules. 3. The shareholders or unitholders who own (or have rights to) the assets. A "Marketing" or "Distribution" company to promote and sell the fund.
OPEN-ENDED FUND:
An open-ended fund is equitably divided into shares (or units) which vary in price in direct proportion to the variation in value of the funds net asset value. Each time money is invested new shares or units are created to match the prevailing share price; each time shares are redeemed the assets sold match
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CLOSED-ENDED FUND:
A closed-ended fund issues a limited number of shares (or units) in an initial public offering (or IPO). The shares are then traded on an exchange or directly through the fund manager to create a secondary market subject to market forces. If demand for the shares are high they may trade at a premium to net asset value. If demand is low they may trade at a discount to net asset value. Further share (or unit) offerings may be made by the scheme if demand is high although this may affect the share price.The added element of market forces tends to amplify the performance of the fund increasing investment risk through increased volatility.
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securities are all in a similar type of asset class or market sector then there is a systematic risk that all the shares could be affected by adverse market changes. To avoid these systematic risk investment managers may diversify into different non-correlated asset classes. If any one of the three is failing, because each is Non-correlated (i.e. behaves independently) then by logical extension at least one of the other two is doing well.
If one investor were to buy a large number of direct investments, the amount they would be able to invest in each holding is likely to be small. Dealing costs are normally based on the number and size of each transaction; therefore the overall dealing costs would take a large chunk out of the capital (affecting future profits). Pooling your money with that of other investors means you have the advantages of buying in bulk making dealing costs an insignificant part of the investment.
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based) fee. If the investor managed their own investments, this cost would be avoided. Often the cost of advice given by a stock broker or financial adviser is built into the scheme. Often referred to as commission or load (in the U.S.) this charge may be applied at the start of the plan or as an ongoing percentage of the fund value each year. While this cost will diminish your returns it could be argued that it reflects a separate payment for an advice service rather than a detrimental feature of collective investment schemes. Indeed it is often possible to purchase units or shares direct from the providers without bearing this cost.
LACK OF CHOICE
Although the investor can choose the type of fund to invest in, they have no control over the choice of individual holdings that make up the fund.
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TYPES OF RISK
Depending on the nature of the investment, the type of 'investment' risk will vary. A common concern with any investment is that you may lose the money you invest - your capital. This risk is therefore often referred to as capital risk. If the assets you invest in are held in another currency there is a risk that currency movements alone may affect the value. This is referred to as currency risk.Many forms of investment may not be readily salable on the open market (e.g. commercial property) or the market has a small capacity and can therefore may take time to sell. Assets that are easily sold are termed liquid therefore this type of risk is termed liquidity.
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REQURIED FOR PURCHASE KISSAN VIKAS PATRA POST OFFICE DEPOSIT MUTUAL 20-30 6 8.5 6.5-8.5 6 8..5 7-8 6 8.5 OF
Types of Data:
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Sampling Plan:
The sampling universe consisted of various mutual funds and their returns .
SWOT of the organization:SWOT analysis of organizations to provide recommendations on their performance and growth potential. It is a powerful tool for analyzing both complex qualitative and quantitative facets of an investment decision. The results of this analysis have been fed into marketing and organizational strategic plans and have been highly successful in strategy formulation. Through our SWOT analysis, our clients have been able to take advantage of niche markets and focus on product innovation which allows them to capture greater margins. Our SWOT analysis identifies strengths and weaknesses and relates them with forward looking opportunities and threats. This helps to identify company and industry specific critical drivers and catalysts. SWOT Analysis identifies your companys:
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SWOT Analysis
Strengths: * Rich experience of the management.
Good brand equity Giving the very good return from inception * Stabilized and loyal clients. * Well combination of new energetic and experienced employees. * Wide variety of investment product to match with every level of customer * Giving the mutual fund exposure
Weakness: * Insufficient office equipments. * Not all employees have his/her cabin. * Work place (back office) is quite congested. * Not very popular in rural area
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Threats; * Increasing interest rate scenario. * Execution risk. * Competition from local and multinational players. * Rising inflation could reduce savings and investments
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updated about the market activities, as they dont have any sources of getting the updates of the market.
reason for organizing such an activity was the closing financial year in which the people would require to pay the tax, and the investment in the tax saver scheme can assist them in saving their tax.
PERFORMANCE APPARAISAL:
It is the activity used to determine the extent to which an employee performs work effectively. Other terms of performance evaluation include performance review, performance rating, performance appraisal, and employee appraisal and employee evaluation.
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1. DEVELOPMENT:
It is used to find out which employee need training, helps in subordinate-supervisor counseling relation and encourages subordinate behavior to help employee.
2. MOTIVATION:
It encourages initiative, develops a sense of responsibility and stimulates efforts to perform better.
3. COMMUNICATION:
It serves as a basis for ongoing discussion between superior and subordinate about job related matters and thus they get to know each other better.
4. LEGAL COMPLIANCE:
It serves as a legally defensible reason for promotion, transfer, reward and discharges.
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11. Leadership
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Objective of compensation:
The objective of the compensation function is to crate a system of rewards that is equitable to the employee and employer alike. The desired
outcome is an employee who is attracted to the work and motivated to do a good job for the employer. Compensation should be 1. Adequate
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3.1- Job profile at reliance Money: The time duration of the project is 3 months starting from 25 t h May. We were given targets to be achieved during training months. The targets of each month were: 3Demat Accounts 1SIP or Mutual Fund worth Rs10,000 General Insurance Premium worth Rs50,000 Life Insurance Premium worth Rs1,00,000
I was supposed to use the database provided by the company to make cold calls or by directly meeting people to get new leads
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While talking to customers, I analyze their needs. Whether they want to go for investment purpose or insurance or both. Suggest them the plan that best suits them. If they agree to it then either we send across the agents to close the deal or close it themselves.
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Problems faced while selling products: Customer dissatisfied with the services.
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company and a new entrant may be able to sustain or not. Insurance means LIC for people. Past experience, word of mouth. Misguidance by agents. People do not want insurance products. Lack of knowledge and awareness about general and life insurance. People risk appetite is very low, so they are afraid of mutual fund as well. People relate the problems of mobile phones of Reliance Communication with Reliance Money.
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Educate the prospects on the products and services. Customize the approach to each of the different
customers involved in the sales process. Establish a knowledge base for sales people, resellers and partners. Ramp up the new salespeople more quickly and keep them on road. Track the prospects as they move through the sales process. Harvest other types of information from your market to help the company close business more quickly. The data of the prospects can be used for research and
development purpose. Enabling the consistent flow of information to the customer and encouraging feedback from them. Helping the customers do the Financial Planning for future.
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MY RESPONSIBILITY IN ORGANISATION:
I worked with Reliance money with a profile of Project trainee. This profile offers me to understand the need of the customer and provide them the best deal possible with maximization of the profit, both for the company as well as for the customer. The most important aspect for the role of financial advisor is trust. So for fulfillment of the targets one needs to: Capitalize on old and loyal clientage which can be building slowly by advising people in the best possible way. Generating new leads through various activities. Generation of leads: Since I was new in this field so I had to start from the scratch and generate new leads to sustain in the market. Cold calling is one of the trusted ways of getting to the customers without meeting them. Although the rate of
conversion remained very less. For cold calling the quality and
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product I attended diversified calls. This helped me to implement cross selling to get better results. IBMR, Bangalore.
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The right time to call a customer cannot be decided, as the customer may in a different mood at the time of calling.
Time consuming Less success rate 2. Corporate Time consuming Contacts with higher authorities play a major role
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market into groups of buyers with similar needs and preference and than select the more attractive groups/segments as part of their marketing strategy.
POSITIONING:
Here in the case of Reliance Money they did the very good segmentation, targeting, positioning in the market. They have positioned itself very well in the consumers mind by the way of attractive advertisement and excellent past record. Now Deutsche asset management a brand in the market and its on the consumers mind as a CASH COW
TARGETING:
Here in the case of Reliance Money, its targeting strategy is simply superb. Reliance Money has basically targeting the all type of customer in every level. They have the vide variety of product range that suit for every customer.
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TARGET
YOUTH YOUTH
POSITIONING
CREDIT CARD, TWO
FULLNEST ONE
YOUTH
PLAN ULIPLOAN,
PLAN,
HOME-
INSURANCE, LOAN,
FULLNEST TWO
MIDDLE AGE
INVESTMENT, INSURANCE,
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Primary Objective:
MFs: Investments ULIPs: Protection + Investments
Investment Duration:
MFs: Works out for Medium term, Long Term Investors. Risky for Short Term investors. ULIPs: Works out for Long Term Investors only.
Flexibility:
MFs: Very flexible. Plenty of scope to correct your mistakes if you made any wrong investment decisions. You can easily shuffle your portfolio in MFs. ULIPs: Flexibility is limited to moving across the different funds offered with your policy. Correcting mistakes can turn out to be expensive. Moving funds from one ULIP to an other ULIP of a different fund house can be expensive.
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Liquidity:
MFs: Very liquid. You can sell your MF units any time(except ELSS). Some MF's like those from Reliance have introduced redemptions at ATMs. ULIPs: Limited liquidity. Need to stay invested for the minimum number of years specified before you can redeem.
Investment Objective:
MFs: MF's can be used as your vechile for investments to achive different objectives. (Eg: Buying a car three years from now. Downpayment for a home five years from now. Childrens education 10 years from now. Childrens marriage 15 years from now. Retirement planning 25 years from now. Medical expenses after retirement 25 years from now) ULIPs: ULIPs can be used for achieving only long term objectives (Childrens education, Childrens marriage, Retirement planning)
Tax Implications:
MFs: All investments in MF's don't qualify for section 80C. Only investments in ELSS qualify for 80C. ULIPs: Provide Tax Benefits under section 80C. MFs: Returns on equity MF's are exempt from long term capital gains tax.
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Can easily rebalance your risk between equity and debt without any tax implications.
Best suited for medium risk taking individuals who wish to invest in equity and debt funds(atleast 40% or higher exposure to debt). No additional tax burden for those investing mainly in debt unlike in MFs.
ADVANTAGES OF MFS:
Better returns than ULIPs. Lower charges than ULIPs. Very flexible and enables you to switch your investments from non performing MF's to better performing MFs
Very Liquid can be redeemed at anytime. Best suited for medium to high risk taking individuals who wish to invest a significant portion in equity funds(atleast 65% exposure in equities).
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1. Preference of Investment
Fig7.1
Result
of
Preference
of
Investment
Interpretation: This shows that although the mutual funds market is on the rise yet, the most favored investment continues to be in the Share Market. So, with a more transparent system, investment in the Stock Market can definitely be increased.
Interpretation: With the increase in cyber education, the awareness towards online share trading has increased by leaps and bounds. This awareness is expected to increase further with the increase in Internet education.
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Interpretation: This pie-chart shows that reliance money has a reasonable amount of Brand awareness in terms of a premier Retail stock broking company. This brand image should be further leveraged by the company to increase its market share over its competitors.
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Interpretation: Although there is sufficiently high brand equity among the target audience yet, it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby, that, the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness.
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Interpretation: This pie-chart corroborate the fact that Strategic marketing, today, has gone beyond only meeting Sales targets and generating profit volumes. It shows that all the competitors are striving hard not only to woo the customers but also to make them Brand loyal by generating customer satisfaction.
6. Frequency of Trading
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Interpretation: This shows that people invest only upto 10% of their earnings in the stock market, again reiterating the volatile and non-transparent structure of the Indian stock market. Hence, effective and efficient steps should be undertaken to woo the customers to invest more in the lucrative stock market
FINDINGS:
To find the market potential and market penetration of Reliance Money product offerings in Bangalore To collect the real time information about preference level of customers using Demat account and their inclination towards various other brokerage firms e.g. Indiabulls, Sharekhan, Indiainfoline, Religare, Alankit, and Unicon. To expand the market penetration of Reliance money. To provide pricing strategy of competitors to fight cut throat competition. To increase the product awareness of Reliance money as single window shop for investment solutions.
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RECOMMENDATIONS Based on the findings of our project we would like to suggest the following:-
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mutual fund awareness program can help to increase the penetration of mutual funds in the market. Reliance should declare in black ink that they will charge just 1 paisa per transaction. People tend to think that there must be some hidden charges. Rs750 account opening charges are too high when targeting a corporate so the company should be flexible on this amount.
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KEY ISSUES AND CONCLUSIONS Based on the above SWOT analysis and study of the available data I have come to the following conclusions: HUGE POTENTIAL: All though relatively new entrants in the market, Reliance is slowly
but surely gaining a strong hold because it is finally able to grasp the investment climate in Delhi. Secondly the branch managers at all the branches are very knowledgeable with a lot of experience in the financial markets so under their leadership can definitely expand its base The entire workforce consists of mostly youngsters, which means they can be encouraged and motivated to do good work because they have a long way to go and most of them are eager to climb the ladder. IBMR, Bangalore.
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Huge investments taking place: The Stock Market has been very buoyant until now especially in the past 3 years. This particular trend is very favorable because a soaring SENSEX means higher returns, which encourages the investors to invest their money in the market. Although in the past
3 months the market has shown very unpredictable trend and has already lost over 1000 points. So in order to make the best the only thing required is to recruit more field staff who should be trained in a proper way to get better results. In case of insurance, it requires push selling because people always associate it with emergencies and unpleasant situations like death and they dont want to think about such situation let alone prepare for them, which means it requires a lot of conviction on part of the executives.
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Large untapped market: People have just opened up to the idea of ULIPs because till now they knew only two kinds of insurance plans, endowment and term plans so the concept of high returns with protection is very new to them and slowly and slowly these are becoming popular so there is a huge market waiting to be tapped.
In the past few years there has been a tremendous inflow of funds in the Indian market which has lead to the sky rocketing SENSEX. In fact there has been a tremendous response from the investors not only in shares but mutual funds as well. The Rs5700Cr infused in the market through the Reliance Equity mutual Funds is an example of the growing trust of investors who earlier shied from such investments due to stock market fiascos like the Harshad Mehta scam or the US64 disaster in which investors lost huge amounts of money as well as their trust in financial instruments.
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QUESTIONNAIRE
QUESTIONNAIRE
Q1. In which of these Financial Instruments do you invest into? Shares Mutual Funds Bonds Derivatives Q2. Are you aware of online Share trading? Yes No Q3. Heard about Reliance money? Yes No Q4. Do you know about the facilities provided by Reliance money?
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Q7. Are you currently satisfied with your Share trading company? Yes No Q8. How often do you trade? Daily Weekly Monthly Yearly Q9. What percentage of your earnings do you invest in share trading? Up to 10% Up to 25% Up to 50% Above 50% Q13. How do you rate these share trading companies? a. Reliance money 1. 2. 3. b. ICICI Direct c. India Bulls 4. 5.
d. Kotak Mahindra Q14. What more facilities do you think you require with youre. Others (Please DEMAT specify) account?
Personal Information
Male
Female
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BIBLOGRAPHY
Agarwal, J.D. "Security Analysis & Portfolio Management: A Review, Finance India, Vol. II No. 1, March 1989. Bhatt, V. V. "An Appraisal Of Some Recent Estimates Of Savings and Investments", ICRNI, Vol. 5, 1963. Douglas A. Hayes and W. Scott Bauman "Investments: Analysis and Management" III Ed., 1976, MacMillan Malhotra, Naresh "Marketing Research and Applied Orientation" IV Ed., 2005, Pearson
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REFERENCES
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MUTUAL FUND INVESTMENT IS SUBJECT TO MARKET RISKS. PLEASE READ THE OFFER DOCUMENT CAREFULLY BEFORE INVESTING
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