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AS A PARTIAL FULLFILLMENT OF PGDM PROGRAMME Submitted By:
ROLL No. 09DM122 BATCH: 2010-2012
EXTERNAL GUIDE Mr. Sreenivasan Relationship Manager
INTERNAL GUIDE Prof. Seshadev Sahoo Associate Professor
INSTITUTE OF MANAGEMENT & INFORMATION SCIENCE BHUBANESWAR
I Balasubramani S student of Post Graduate Diploma in Management of Institute of Management & Information Science, bearing enrolment number 09DM122 declare that this project ” at UTI MUTUAL FUND, BHUBANESWAR, is an original record of work done by me as a part of partial fulfilment of PGDM programme of IMIS, Bhubaneswar. I also declare that this project report has not been submitted to any other university or institution except UTI Mutual Fund, Bhubaneswar and Institute of Management and Information Science, Bhubaneswar.
(Signature) Balasubramani S Roll no. - 09DM122
The satisfaction of completion of any task is incomplete without mentioning the name of the people who made it possible and whose constant guidance and encouragement crowned our efforts with success. I owe a great many thanks to a great many people who helped me out and supported me during my summer internship program. I would like thank my project guide Mr. Sreenivasan, (Relationship Manager, UTI Asset Management Ltd. Chennai) for giving me the opportunity, constant encouragement, support and guidance and for imparting their views regarding the working of the Mutual Fund industry. This project could not have been complete without the guidance of my Internal project guide Seshadev Sahoo, IMIS, Bhubaneswar. I also express my thanks to the faculties of IMIS for giving their constant helping hand to me. I also wish to express my gratitude to all those who have directly or indirectly given assistance in making this project easier and possible. Prof.
As an intern with UTI Asset Management Ltd, I was working for the sales department under the guidance of the Relationship Manager, Sreenivasan. This report describes my work as an intern at RCAM. Ltd. Its purpose is to transmit a good knowledge inheritance mostly about technical details and to facilitate the work of those who will use it especially to the company. This project during my internship shows the performance of different UTI mutual fund schemes along with that another objective that was given to me was to push the distributors to sell UTI schemes. Initially, I was offered to look after the Alternate Channel and a few National Distributors. Later on, I was asked to assist my Relationship Manager, who was looking after IFAs. This period of two months helped to understand the proper market scenario and the working conditions of the Mutual Fund industry.The report is structured in such a way that it describes about some of the UTI Mutual Fund schemes or funds and how they are performing over a few years period of time. I hope the report might help in improving and reflecting the work done during the period of two months.
CONTENTS Chapter I ------------------------------------------------------------------Introduction Objective of the study ------------------------Scope ---------------------------------------------
Limitation ----------------------------------------- 11 Chapter II ----------------------------------------------------------------Research Methodology 12 – 13 14 .15 Chapter III ----------------------------------------------------------------- Concept of Mutual Fund Concept of Mutual Fund --------------------Why Mutual Fund? ---------------------------How Mutual Funds work? -------------------Returns ---------------------------------------------14 15 15 15 16 Chapter IV --------------------------------------------------------------Types Of Mutual Funds Chapter V ---------------------------------------------------------------Mutual Fund Industry in India --------------------Growth Of Mutual Fund in India ----------------Structure of Mutual Fund in India --------------Risks & Disadvantage -------------------------------Chapter VI ---------------------------------------------------------------ASSOCIATIONS OF MUTUAL FUND IN INDIA CRISIL Fund House Rating ----------------------Top Mutual Fund Players in India ------------Market Share -------------------------------------16 .19 20 – 25 20 23 25 25 28 – 38 28 29 36 37  .
50 41 43 50 51.Chapter VII -------------------------------------------------------------Introduction to Mutual Funds ------------------Growth ------------------------------------------------Benefits ------------------------------------------------- 40 .73 Chapter VIII ------------------------------------------------------------------ Introduction to UTI Mutual Fund --------------------Sponsors of UTI -------------------------------------------Future Focus ------------------------------------------------Investment by the Trust ---------------------------------Eligible Investors -------------------------------------------Tax Treatment ----------------------------------------------- 51 53 55 57 57 58 62 63 65 69 70 71 72 – 85 Tax on Capital Gains ----------------------------------------Short Term Capital Gains ---------------------------------Short Term Capital Losses ---------------------------------Long Term Capital Gains ----------------------------------Repurchase ---------------------------------------------------Consolidation of Unit Certificates -----------------------Chapter IX -------------------------------------------------------------------- .
94 87 88  .Plans & Schemes ---------------------------------------------Capital Appreciation Encashment -----------------------Fixed Amount Encashment -------------------------------Triggers ---------------------------------------------------------Direct Credit ---------------------------------------------------Capital Gains & Reinvestment Facility -----------------How to Opt for Triggers ------------------------------------Cancellation of Triggers ------------------------------------Alerts & Services ---------------------------------------------Online Transactions ------------------------------------------ 72 73 74 75 76 77 79 81 82 83 Chapter X -----------------------------------------------------------------------Suggesstions & Recommendations -------------------------Conclusions -------------------------------------------------------Annexure ---------------------------------------------------------------------------Questionnaire ----------------------------------------------Analysis ------------------------------------------------------ 83 – 88 83 86 87 .
(Unlike stocks.24. The primary asset categories found in mutual funds are money markets. however. 000 in a mutual fund with an NAV of Rs. your investment value will decrease as well. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified.75. When somebody invests in a mutual fund. detailed in the fund's prospectus. which means that they own a small percentage of the fund's entire portfolio. The assets in a mutual fund's portfolio are managed by a professional money manager(s) who decides which securities to buy and sell based on the fund's investment objective. The price of a share at any time is called the fund's net asset value. the value of the fund decreases. professionally managed basket of securities at a relatively low cost. If somebody invests Rs. the value of your investment also increases. When the value of the portfolio increases. The income earned though these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. or NAV. one can own fractional shares in a mutual fund). and/or stocks. These shares are a fractional representation of the entire mutual fund's diversified holdings. debentures and other securities.40 shares of that fund.1. bonds. they are actually buying shares in the fund. If. Mutual funds may invest in a single asset class or a  . The money is thus collected is then invested in capital market instruments such as shares.Concept of Mutual Fund: A Mutual Fund is a trust that pools the saving of a number of investors who shares a common financial goal. they will receive 40.
Value of the securities held in the portfolio is translated on daily basis directly to the value of the units held by the unit holders. Unit holders assume investment risk. a fund that holds 85% stocks. For example. Mutual fund is only one kind of financial intermediary. mutual fund is the purest form of financial intermediary because there is almost perfect pass through of money between unit holders and the securities in which they invest. because mutual fund invest in  . In a sense. 10% bonds and 5% cash equivalents is typically categorized as a stock fund. the fund category indicates the primary investments (holdings) of the fund. Contrastingly a commercial bank is not a pass through type of financial intermediary.combination of all. cost-effective and easy way to invest in the financial markets. Typically. Bank collect deposit from depositors and these depositors have no knowledge of how their funds will be used. Though regulations ensure disciplined investments in ceilings on expenses that are charged to the unit holders. It is very important to understand that an investor can lose money in a mutual fund. Maintaining the weight of each category and the decision on when to buy or sell is the function of the mutual fund's manager(s). The flow chart below describes broadly the working of mutual fund: Why mutual fund? Mutual funds are a popular investment for many types of investors because they offer a convenient. Unit holders are indicated-a-priori in what type securities their funds will be invested. including the possible loss of principal. Bank invest the money of depositors where they feel appropriate at a specific time and banks give interest on these deposits which is not linked with how the loans and advances perform.
either growing its assets (capital gains) and/or generating income (dividends) for its investors. we want to know the fund's return-its track record over a specified period of time. keep in mind that past performance is no guarantee of future  . and ten year. five. Unlike bank deposits. A fund that has a high return in one year may have experienced losses in other years-these fluctuations may not be apparent in its average return. year to date. you should evaluate returns for a time period of several years-not just one year or less. Returns As an investor. Generally expressed as an annualized percentage rate. While a fund's return shows its track record. return is calculated assuming that all distributions from the fund are reinvested. mutual funds are not insured under Deposit Insurance & Credit Guarantee Corporation Act. while bank depositors are the bank’s creditors . three. one must keep track of their distributions and cost basis of purchased/reinvested shares. So what exactly is "return"? A mutual fund's return is the rate of increase or decrease in its value over a specific period of time usually expressed in the following increments: one. Distributions in the form of capital gains (short-term and long-term) and dividends may be passed on (paid) to shareholders as income or reinvested to purchase more shares. Mutual fund unit holders are fund shareholders. Since return is a common measure of performance.Since average returns can sometimes "hide" short-term highs and lows. 1961. How Mutual Funds work: Every mutual fund has a goal . you can use it to evaluate and compare mutual funds within the same fund category. and since the inception of the fund. For tax purposes.securities whose value rise and fall.
Net returns are the true returns of both load and no-load funds after deducting all costs and expenses. When using returns to compare funds. As a prospective mutual fund investor.results. Based on Investment objective: • • • • Growth scheme or Equity scheme Income scheme or debt oriented scheme Balanced scheme Money market scheme. Open ended mutual funds: If you are looking for a scheme that gives you the feasibility for subscription all through the year. you can decide to invest in growth scheme. always use net returns. income scheme or balance scheme either as an open-ended or a close-ended mutual fund. an  . Other Equity-related schemes: • • • Tax savings scheme Index scheme Sectoral scheme. Types of Mutual funds: Existing types of mutual funds can be classified into three types. They are: Based on Maturity period: • • Open-ended mutual fund Close-ended mutual funds.
mutual funds invest a majority of funds in equities (shares) and a small portion in money market instruments. Close ended mutual funds: Unlike an open-ended mutual fund. you can buy and sell units at Net Asset Value (NAV) prices. Growth scheme or Equity scheme If you do not expect immediate liquidity and willing to gain over a period of time. The net asset value of your funds is likely to increase or decrease with corresponding changes in interest rates.  . money market instruments and government securities. at NAV related prices. With no fixed maturity period.open-ended mutual fund is the appropriate choice. Fluctuations in the equity market may not affect you. corporate debentures. Investments are made in fixed income securities such as bonds. Also. this involves investing in income funds that can fetch you regular and steady income. political and economic factors. you can buy or sell the units on the respective stock exchanges. which is influenced by external factors such as social. You may not benefit from capital appreciation as it is very limited but the risks are much lower compared to the growth fund. the maturity period is fixed ranging from 3-15 years. you have the option for subscription only during a specified period. Income scheme Also termed as monthly income scheme. Under the growth scheme. An additional feature of close-ended mutual fund is the option of selling the units back to the mutual fund. growth scheme could be your preferred choice. Over a long period of time they promise increased return on investments but are exposed to high risks given the perennial fluctuation in equity markets. Once the initial public issue of shares is over. normally at the time of public issue of shares or debentures. but the change in interest rates (as and when it become effective) is likely to have an impact on returns. Ease of liquidity is the key aspect of open-ended mutual funds.
government securities etc. preservation of capital and moderate income. Information Technology. Subscriptions to the units not more than Rs. Money Market schemes Easy liquidity. you cannot assign/transfer/pledge/redeem/switch the units purchased under this scheme until completion of 3 years from the date of allotment of individual units. You can select money market schemes for its short period and less risks.  . 000 would be eligible to a deduction from Income tax. as an investor you would be exposed to higher risks. the performance of the market as a whole. Sectoral schemes You can decide to invest in specific sectors namely. you can enjoy Tax incentives for investments in specified avenues. This is possible as the funds are invested both in equities (shares) and fixed income securities (such as bonds. Banking. corporate debentures and government securities). it is less volatile compared to other funds. Commercially safe. you enjoy the twin benefits of growth and a regular income.Balanced scheme Investing in balanced fund. Tax Savings scheme Equity linked savings schemes (ELSS) and pension schemes are the two schemes that offer tax rebates or tax benefits. Under this scheme. your funds are invested exclusively in short-term instruments such as treasury bills. However. commercial paper. or a specific sector is assessed. certificates of deposit and inter-bank call money. Governed by the provisions of the Income Tax Act. Index schemes Under this scheme. FMCG.these are key aspects of money market schemes.10. This means. This helps you to decide on whether to invest on the market as a whole or in any specific fund. in case the proportion of investment is higher in equities than in fixed income securities.
financial problems (rising inflation. Income Risk. Also called exchange-rate risk. Currency Risk. This is because the portfolio is less diversified and very specific. The possibility that a fixed-income fund's dividends will decline as a result of falling overall interest rates. a poor harvest) will weaken a country's economy and cause investments in that country to decline. Country Risk. Market Risk. The possibility that returns could be reduced for Americans investing in foreign securities because of a rise in the value of the U. The possibility that a bond fund will decline in value because of an increase in interest rates. with periods when prices rise and other periods when prices fall • • • • • • • • •  . Manager Risk. dollar against foreign currencies. The possibility that political events (a war. government default). Also called default risk. national elections).S. Industry Risk. • Call Risk. Sectoral schemes pose high risk as compared to equity schemes. Credit Risk. Interest Rate Risk. The possibility that an actively managed mutual fund's investment adviser will fail to execute the fund's investment strategy effectively resulting in the failure of stated objectives. Following is a glossary of some risks to consider when investing in mutual funds. concentrating on selected industrial group. The possibility that a group of stocks in a single industry will decline in price due to developments in that industry. The possibility that stock fund or bond fund prices overall will decline over short or even extended periods. The possibility that a bond issuer will fail to repay interest and principal in a timely manner. or natural disasters (an earthquake. Stock and bond markets tend to move in cycles.Pharmaceuticals etc. The possibility that falling interest rates will cause a bond issuer to redeem—or call —its high-yielding bond before the bond's maturity date. The possibility that increases in the cost of living will reduce or eliminate a fund's real inflation-adjusted returns. Inflation Risk.
to market the product correctly abreast of selling. Large sections of Indian investors are yet to be intellectuated with the concept. The mutual fund industry can be broadly put into four phases according to the development of the sector.  . both quality wise as well as quantity wise. Before. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. but it accelerated from the year 1987 when nonUTI players entered the industry. In the past decade. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. the monopoly of the market had seen an ending phase. it is the prime responsibility of all mutual fund companies. constitute less than 11% of the total deposits held by the Indian banking industry. the total of it is less than the deposits of SBI alone. The first scheme launched by UTI was Unit Scheme 1964. the Assets Under Management (AUM) was Rs. First Phase . Putting the AUM of the Indian Mutual Funds Industry into comparison. Indian mutual fund industry had seen dramatic improvements.Mutual Funds Industry in India The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow.6. At the end of 1988 UTI had Rs.1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.The main reason of its poor growth is that the mutual fund industry in India is new in the country. Hence. 67bn.700 crores of assets under management. Each phase is briefly described as under.
21.541 crores of assets under management was way ahead of other mutual funds. Also.805 crores. As at the end of January 2003. 1. The Specified Undertaking of Unit Trust of India. Bank of India (Jun 90).29. except UTI were to be registered and governed. With the bifurcation of the erstwhile UTI  . PNB. It was bifurcated into two separate entities.since February 2003 This phase had bitter experience for UTI.1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993.44.1987-1993 (Entry of Public Sector Funds) Entry of non-UTI mutual funds. The second is the UTI Mutual Fund Ltd. Indian Bank Mutual Fund (Nov 89). BOB and LIC.47. Bank of Baroda Mutual Fund (Oct 92). One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.835 crores (as on January 2003). a new era started in the Indian mutual fund industry. The end of 1993 marked Rs. under which all mutual funds. sponsored by SBI. there were 33 mutual funds with total assets of Rs. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. It is registered with SEBI and functions under the Mutual Fund Regulations.Second Phase . Fourth Phase .The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996.004 as assets under management. SBI Mutual Fund was the first followed by Canbank Mutual Fund (Dec 87). LIC in 1989 and GIC in 1990. functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The Unit Trust of India with Rs. giving the Indian investors a wider choice of fund families. 1993 was the year in which the first Mutual Fund Regulations came into being. Third Phase . with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. Punjab National Bank Mutual Fund (Aug 89).The number of mutual fund houses went on increasing.
000 crores of AUM and with the setting up of a UTI Mutual Fund. some 24 million shareholders was accustomed with guaranteed high returns by the beginning of liberalization of the industry in 1992.76.  .153108 crores under 421 schemes. Though the 1988 year saw some new mutual fund companies. but UTI remained in a monopoly position. People rarely understood.which had in March 2000 more than Rs. and with recent mergers taking place among different private sector funds. The expectations of investors touched the sky in profitability factor. the mutual fund industry has entered its current phase of consolidation and growth. conforming to the SEBI Mutual Fund Regulations. to park their money in UTI Mutual Fund. 2004. But yes. This good record of UTI became marketing tool for new entrants. which manage assets of Rs. For 30 years it goaled without a single second player. there were 29 funds. Unit Trust of India invited investors or rather to those who believed in savings. The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. The year was 1963. and of course investing was out of question. As at the end of September.
and paving the gateway for mutual funds to launch pension schemes. the investors disinvested by selling at a loss in the secondary market. 1. the quantitative will be investors. Partly owing to a relatively weak stock market performance. 67bn. There were rather no choices apart from holding the cash or to further continue investing in shares.540bn. 67bn. Those days. by the end of 1987. with funds trading at an average discount of 10 20 percent of their net asset value. It rose as high as Rs.At last to mention. the Assets Under Management rose to Rs. since only closed-end funds were floated in the market.The net asset value (NAV) of mutual funds in India declined when stock prices started falling in the year 1992. The more the variety offered. One more thing to be noted.The measure was taken to make mutual funds the key instrument for long-term saving. more and more people will be inclined to invest until and unless they are fully educated with the dos and donts of mutual funds. The Assets Under Management of UTI was Rs. people were miles away from the preparedness of risks factor after the liberalization. mutual funds have not yet recovered. From Rs. Let me concentrate about the performance of mutual funds in India through figures. The performance of mutual funds in India suffered qualitatively. 470 bn.The supervisory authority adopted a set of measures to create a transparent and competitve environment in mutual funds. introduction of open-ended funds. as long as mutual fund companies are performing with lower risks and higher profitability within a short span of time.However. the market regulations did not allow portfolio shifts into alternative investments. Some facts for the growth of mutual funds in India  . the losses by disinvestments and of course the lack of transparent rules in the whereabout rocked confidence among the investors. Some of them were like relaxing investment restrictions into the market. The 1992 stock market scandal. in March 1993 and the figure had a three times higher performance by April 2004.
SEBI allowing the MF's to launch commodity mutual funds. Soon they will find scope in the growing cities. We have approximately 29 mutual funds which is much less than US having more than 800. Today most of the mutual funds are concentrating on the 'A' class cities. Emphasis on better corporate governance. • • • • • • • • Structure of Mutual Fund industry:  . Mutual fund can penetrate rurals like the Indian insurance industry with simple and limited products. Our saving rate is over 23%. 'B' and 'C' class cities are growing rapidly.• • 100% growth in the last 6 years. There is a big scope for expansion. Introduction of Financial Planners who can provide need based advice. US based. highest in the world. Only channelizing these savings in mutual funds sector is required. Trying to curb the late trading practices. Number of foreign AMC's are in the que to enter the Indian markets like Fidelity Investments. with over US$1trillion assets under management worldwide.
It takes decisions on when and where to invest the money. approved by SEBI. A bond fund with below-average risk. It has the authority to sack AMC employees for non-adherence to the rules of the regulator. The above 3 tier structure of Indian mutual funds is very strong and virtually no chance for fraud.e. issue a fund’s units. should not be  . for example. A custodian should be a registered entity with SEBI. CAMS is a leading Transfer Agent in India. Trustees: Two third of the trustees are independent professionals who own the fund and supervises the activities of the AMC. Transfer Agents: Transfer Agent Company interfaces with the customers. State Bank of India and Life Insurance Corporation of India (LIC) are the sponsors of UTI Mutual Funds. This is to avoid influence of the promoter on the custodian. The pooled money is invested in the securities. Custodian: A Custodian keeps safe custody of the investments (related documents of securities invested). Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited are the sponsors of HDFC mutual funds. help investors while redeeming units. It doesn’t own the money. They are legally appointed i. If the promoter holds 50% voting rights in the custodian company it can’t be appointed as custodian for the fund. JP Morgan Chase is one of the leading custodians. Punjab National Bank. Sponsor appoints trustees. The fund sponsor raises money from public. AMC is only a feefor-service provider.Sponsor: Sponsor is basically a promoter of the fund. Risks involved in Mutual fund Different mutual fund categories as previously defined have inherently different risk characteristics and should not be compared side by side. who become fund shareholders. It safeguards the interests of the investors. It may also provide fund accounting services and transfer agent services. Provides balance statements and fund performance fact sheets to the investors. AMC: Asset Management Company (AMC) is a set of financial professionals who manage the fund. For example Bank of Baroda.
stock funds overall have a higher risk/return potential than bond funds. stocks historically have been subject to the greatest short-term price fluctuations—and have provided the highest long-term returns. and in turn have generated higher long-term returns. Even though both funds have low risk for their respective categories. Investors looking for a fund which incorporates all asset classes may consider a balanced or hybrid mutual fund. A few of the advantages which a investor gets by investing in a mutual fund over a direct investor are: • • • • • • • • • Professional investment management Risk reduction through diversification Convenience Availability of alternative portfolio objectives and products Unit holders account administration and services ensuring liquidity of investment Lower transaction and other costs Regulatory protection Relatively higher returns than other financial instruments vis-à-vis their risks Minimum initial investment Disadvantages • • • • • No guarantee Diversification penalty Costs Absence of guarantee on returns Extra fees and commissions (Ex: loads)  . However. Of all the asset classes. cash investments offer the greatest price stability but have yielded the lowest long-term returns. Mutual fund gives its investors an edge over direct investors.compared to a stock fund with below average risk. Bonds typically experience more short-term price swings. These funds can be very conservative or very aggressive.
risk factors. the extent of investment and the duration of investment. Every investor must carefully read the prospectus to check the goals of the particular mutual fund. size of the asset and liquidity features. • Features of scheme. Seek expert opinions INTRODUCTION: The Scope of the study is: Scope. set your objectives. This will also throw light on the fees. fees and company profile should be given due importance. Objectives and Limitations: Title: “Funds & Process of UTI Mutual Fund “ Objective of the study: • • to get an insight knowledge about mutual fund understanding different ratios  .• • Tax on profit made Discretion of fund's manager (not for index funds) Before deciding to invest in a mutual fund. • • • • • • Consider past performance of all the schemes of the mutual fund Compare with other schemes with similar investment objective Check the market ratings for debt oriented schemes Assess the returns in the NAV. Check out the advisors to the mutual fund and who manages it. expenses.
Limitations of the study: • Data for a few days were not available so the data of that day were taken based on the previous day’s data.com In this project we have evaluated some of the funds by using • • • • Sharpe’s ratio Treynor’s ratio Sortino ratio M2  . • In this project only equity based schemes are taken so this project does not show the performance of how the debt based funds have performed.• to know the performance of a few funds Scope of the study: The project is based only on equity based funds of UTI Mutual Fund. Com UTImutual.com Icicidirect.com Bseindia. In the project with help of a few ratio which help in finding the risks and returns and will also help in finding out which are the top funds based on the findings from these ratios.com Company Fact sheets Yahoo finance. Methodology: The methodology was based on data collected through secondary sources like: • • • • • • Bluechipindia.
At the same time it also factors in the desire to generate returns which are higher than those from risk-free returns Mathematically the Sharpe ratio tells us whether a portfolio's returns are due to smart investment decisions or a result of excess risk. A negative Sharpe ratio indicates that a risk-less asset would perform better than the security being analyzed.• R squared Sharpe Ratio: high returns are generally associated with a high degree of volatility. the better its risk-adjusted performance has been. This measurement is very useful because although one portfolio or fund can reap higher returns than its peers. The greater a portfolio's Sharpe ratio. The Sharpe ratio represents this trade-off between risk and return. The investors accept this volatility only because they want higher returns.  . it is only a good investment if those higher returns do not come with too much additional risk.
Average Return of the Risk-Free Rate) / Beta of the Portfolio Sortino Ratio: A ratio developed by Frank A. A high R-squared (between 85 and 100) indicates the fund's performance patterns have been in line with the index. It is similar to the Sharpe ratio. the benchmark is the S&P 500. This differentiation of upwards and downwards volatility allows the calculation to provide a risk-adjusted measure of a security or fund's performance without penalizing it for upward price changes Mathematically. the benchmark is the T-bill. with the difference being that the Treynor ratio uses beta as the measurement of volatility. A fund with a low R-squared (70 or less) doesn't act much like the index. Mathematically. (Average Return of the Portfolio .Treynor’s Ratio: the Treynor ratio is a risk-adjusted measure of return based on systematic risk.  . Sortino to differentiate between good and bad volatility in the Sharpe ratio. For equities. R-squared values range from 0 to 100. For fixed-income securities. An R-squared of 100 means that all movements of a security are completely explained by movements in the index. R squared: A statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index.
It functions under the supervision and guidelines of its Board of Directors. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. Till date all the AMCs are that have launched mutual fund schemes are its members.  • • .A higher R-squared value will indicate a more useful beta figure. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the country. Association of Mutual Funds in India (AMFI) With the increase in mutual fund players in India. For example. The objectives are as follows: • This mutual fund association of India maintains a high professional and ethical standards in all areas of operation of the industry. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association. a need for mutual fund association in India was generated to function as a non-profit organisation. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. it is most likely offering higher risk-adjusted returns. A low R-squared means you should ignore the beta. if a fund has an Rsquared value of close to 100 but has a beta below 1. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August. 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.
Ltd. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.  . BOB Asset Management Co. Ltd. Pvt. Ltd. At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies. JM Financial Mutual Fund Kotak Mahindra Asset Management Co. Ltd. Ltd. Institutions • • Private Sector Indian:• • • • • • BenchMark Asset Management Co. Credit Capital Asset Management Co. AMFI undertakes all India awarness programme for investors inorder to promote proper understanding of the concept and working of mutual funds. Ltd. the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. Ltd.• Association of Mutual Fund of India do represent the Government of India. UTI Asset Management Company Pvt. Canbank Investment Management Services Ltd. Cholamandalam Asset Management Co. Ltd. GIC Asset Management Co. Jeevan Bima Sahayog Asset Management Co. • • • The sponsorers of Association of Mutual Funds in India Bank Sponsored • • • • SBI Fund Management Ltd. It develops a team of well qualified and trained Agent distributors. Escorts Asset Management Ltd.
Ltd. Ltd Sundaram Asset Management Company Ltd. none of these products comprehensively cover the critical qualitative aspects  . Ltd. A few qualitative factors have also been incorporated in some of the scheme level products. (India) Pvt. Pvt. ING Investment Management (India) Pvt. Ltd. Ltd. However. Sahara Asset Management Co. Ltd. Ltd. Ltd. HSBC Asset Management (India) Private Ltd. Principal Asset Management Co. Predominantly India Joint Ventures:• • • Predominantly Foreign Joint Ventures:• • • • • • • • • • • Mutual funds have over time become one of the most popular investment avenues worldwide for both retail and institutional investors. Alliance Capital Asset Management (India) Pvt. The increasing importance of mutual fund as a vehicle for investment has led to higher focus on its performance evaluation. These products have typically used past performance analysis and various risk-return measures in awarding rankings/ratings. DSP Merrill Lynch Fund Managers Limited HDFC Asset Management Company Ltd. Fidelity Fund Management Private Limited Franklin Templeton Asset Mgmt. Individual fund (or scheme) level ranking and rating products have been in vogue for many decades now. Morgan Stanley Investment Management Pvt. Deutsche Asset Management (India) Pvt.• • • • UTI Capital Asset Management Ltd. Pvt. Standard Chartered Asset Mgmt Co. Ltd. Ltd. Prudential ICICI Asset Management Co. Tata Asset Management Private Ltd. ABN AMRO Asset Management (I) Ltd. Birla Sun Life Asset Management Co. Pvt.
Scheme Name AIG India Liquid Fund AIG India Treasury Plus Fund Benchmark Dynamic CaPPS Series 1 .Growth Option Instrument Category Credit Quality Ratings Credit Quality Ratings Capital Protection Oriented Fund Rating Credit Quality Ratings Rating Assigned AAAf AAAf AAA(so) Bharti AXA Liquid Fund AAAf AAAf Bharti AXA Treasury Advantage Fund (formerly Bharti AXA Credit Quality Treasury Plus) Ratings  . Also the opinion on overall management quality and practices followed will apply irrespective of size of operations though assets under management (AUM) will form a component in overall evaluation of the viability of fund house. CRISIL in the normal course of business will undertake a Fund House Rating assignment only for fund houses which are in existence for at least two years. Although the assessment incorporates a review of the firm's investment performance track record. the rating is not intended to consider the prospective performance of various schemes managed by the fund. Since most of the parameters needed to be evaluated under the product can be judged appropriately only after an organization is in existence and has been practicing these processes and policies for a reasonable period of time. Moreover. CRISIL’s Fund House Ratings The rating will reflect CRISIL's current opinion on process quality and risk management capability in fund management practices. none of the methodologies addresses firm wide factors such as organizational structure. management quality and operational practices and processes followed.that are essential for a fund to assure its key stakeholders (investors and owners) that the fund is well-managed to meet its stated objectives. given the scheme level nature of these products.
Birla Sun Life Capital Protection Oriented Fund (3 years plan)Capital Protection (formerly Birla Sun Life Capital Protection Oriented Fund .Three year close ended plan) DWS Cash Opportunities Fund (formerly DWS Credit Opportunities Cash Fund) DWS Insta Cash Plus Fund (formerly Deutsche Insta Cash Plus Fund) DWS Premier Bond Fund DWS Short Maturity Fund Capital Protection Oriented Fund Rating Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings  AAf AAAf AAAf AAAf .Oriented Fund (Three-Year Plan)) Rating Birla Sun Life Capital Protection Oriented Fund (5 years plan) (formerly Birla Sun Life Capital Protection Oriented Fund .(Five-Year Plan)) Birla Sun Life Capital Protection Oriented Fund Series 1 Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings AAA(so) AAA(so) AAA(so) Birla Sun Life Cash Manager (formerly Alliance Cash Manager) Birla Sun Life Dynamic Bond Fund Birla Sun Life Income Fund AAAf AAAf AAAf AAAf AAAf AAAf AAAf AAAf AAA(so) Birla Sun Life Savings Fund (formerly Birla Sun Life Liquid Credit Quality Plus Fund) Ratings Birla Sun Life Short-Term Fund Birla Sun life Income Plus (formerly Birla Income Plus) DSP BlackRock Floating Rate Fund (formerly DSP Merrill Lynch Floating Rate Fund ) Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings DSP BlackRock Liquidity Fund (formerly DSP Merrill Lynch Credit Quality Liquidity Fund ) Ratings DWS Capital Protection Oriented Fund (3 years plan) (formerly DWS Capital Protection Fund .
Series 1 (Five Year Capital Protection Plan) Oriented Fund Rating Franklin Templeton Capital Safety Fund . HDFC High Interest Fund HDFC Income Fund ICICI Prudential FMP Series 44-1 Year Plan A ICICI Prudential FMP Series 44-15 Months Plan ICICI Prudential FMP Series 44-18 Months Plan ICICI Prudential FMP Series 47-1 Year Plan C Capital Protection Oriented Fund Rating Fund House Rating Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings AAA(so) AAA(so) AAA(so) CRISIL Fund House Level-1 AAAf AAAf AAAf AAAf AAAf AAAf  .DWS Ultra Short-Term Fund (formerly DWS Liquid Plus Fund) Edelweiss Liquid Fund Fortis Fixed Term Plan Series 14 C Fortis Money Plus Fund (formerly ABN AMRO Money Plus Fund) Fortis Overnight Fund (formerly ABN AMRO Overnight Fund) Franklin Templeton Capital Protection oriented Fund (FiveYear Plan) Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Capital Protection Oriented Fund Rating AAAf AAAf AAAf AAAf AAAf AAA(so) Franklin Templeton Capital Protection oriented Fund (Three.Series 1 (Three Year Plan) HDFC Asset Management Company Ltd.Capital Protection Year Plan) Oriented Fund Rating Franklin Templeton Capital Safety Fund .
Series VI AAA(so) IDFC Capital Protection Oriented Fund .Quarterly Interval Plan D Credit Quality Ratings ICICI Prudential Interval Fund II .Quarterly Interval Plan II Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings AAAfr AAAf AAAf AAAf AAAf AAAf P1+f AAAf AAAf AAAf AAAf AAA(so) ICICI Prudential Interval Fund II .Quarterly Interval Pan F Credit Quality Ratings ICICI Prudential Interval Fund II .Series V AAA(so) IDFC Capital Protection Oriented Fund .Quarterly Interval Plan E Credit Quality Ratings ICICI Prudential Liquid Plan (formerly Prudential ICICI Liquid Plan) ICICI Prudential Short Term Plan (formerly Prudential ICICI Short Term Plan) ICICI Prudential Ultra Short Term Plan IDBI Liquid Fund IDFC Capital Protection Oriented Fund .Plan A ICICI Prudential Flexible Income Plan ICICI Prudential Floating Rate Plan (formerly Prudential ICICI Floating Rate Plan) ICICI Prudential Interval Fund .ICICI Prudential Fixed Maturity Plan .Series 33 .Series VII AAA(so) IDFC Capital Protection Oriented Fund Series I AAA(so)  .Series IV Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Capital Protection Oriented Fund IDFC Capital Protection Oriented Fund .
Super Plus Plan JP Morgan India Active Bond Fund JPMorgan India Capital Protection Oriented Fund Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Capital Protection Oriented Fund Rating Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality  JPMorgan India Liquid Fund JPMorgan India Short Term Income Fund JPMorgan India Treasury Fund (formerly JPMorgan India Liquid Plus Fund) Kotak Floating Rate Fund .Long Term Plan (formerly JM Liquid Plus Credit Quality Fund) Ratings JM High Liquidity Fund JM Income Fund JM Money Manager Fund .Short Term Plan AAAf AAAf AAAf AAAf .Investment Plan ING Dynamic Asset Allocation Fund (formerly ING Vysya Dynamic Asset Allocation Fund) ING Liquid Fund (formerly ING Vysya Liquid Fund) ING Treasury Advantage Fund (formerly ING Liquid Plus Fund) AAAf AAA(so) AAAf AAAf AAAf AAAf AAAf AAAf AAAf AAA(so) JM Floater Fund .Rating IDFC Capital Protection Oriented Fund Series II Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Credit Quality Ratings Capital Protection Oriented Fund Rating Credit Quality Ratings Credit Quality Ratings AAA(so) IDFC Capital Protection Oriented Fund Series III AAA(so) IDFC Super Saver Income Fund .
Series I) SBI Debt Fund Series (set of 27 funds) SBI Debt Fund Series (set of 27 funds) SBI Magnum InstaCash Fund .Liquid Floater Plan SBI Magnum Instacash Fund .Short-Term Fund (formerly DBS Chola Freedom Income .Short-Term Fund) L&T Liquid Fund (formerly DBS Chola Liquid Fund) L&T Short-Term Floating Rate Fund (formerly DBS Chola Short-Term Floating Rate Fund) L&T Triple Ace Fund (formerly DBS Chola Triple Ace) UTI Capital Asset Management Ltd UTI Income Fund Religare Liquid Fund (formerly Lotus Liquid Fund) Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Fund House Rating Credit Quality Ratings Credit Quality Ratings AAAf AAAf AAAf AAAf AAAf CRISIL Fund House Level-1 AAAf AAAf AAAf AAAf AAA(so) Religare Short Term Plan (formerly Lotus India Short Term Credit Quality Plan) Ratings Religare Ultra Short Term Fund (formerly Lotus India Liquid Credit Quality Plus Fund) Ratings SBI Capital Protection Oriented Fund .Series II (formerly SBI Capital Protection Fund .Series I) SBI Capital Protection Oriented Fund .Ratings Kotak Liquid Fund L&T Freedom Income .Series I 5 years plan (formerly SBI Capital Suraksha Fund .Cash Plan Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings  AAA(so) AAAf P1+f AAAf AAAf .
I (3 years plan) (formerly Sundaram BNP Paribas Oriented Fund Capital Protection Oriented Fund Series .SBI Premier Liquid Fund (formerly SBI Magnum Institutional Income Fund-Saving Plan) SBI Short Horizon Fund .Short Term Ratings Plan) Sundaram BNP Paribas Money Fund (formerly Sundaram Money Fund) Tata Capital Protection Fund (Five Years and Six Months Plan) Tata Capital Protection Fund (Three Years and Six Months Plan) Taurus Liquid Fund Credit Quality Ratings Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Credit Quality Ratings AAAf AAAf AAA(so) AAA(so) AAAf AAAf Taurus Short term Bond Fund (formerly Taurus Liquid Plus Credit Quality Fund) Ratings  .Short Term Fund (formerly SBI Short Term Fund) SBI Short Horizon Fund .I (three-year plan)) Rating Sundaram BNP Paribas Capital Protection Oriented Fund Series .Ultra Short Term Fund (formerly SBI Short Horizon Fund .I (5 year plan) (formerly Sundaram BNP Paribas Capital Protection Oriented Fund Series .5 Years Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating AAA(so) AAA(so) AAA(so) Sundaram BNP Paribas Flexible Fund .Short Term Plan Credit Quality (formerly Sundaram BNP Paribas Floating Rate .3 Years Sundaram BNP Paribas Capital Protection Oriented Fund Series 2 .II) Sundaram BNP Paribas Capital Protection Oriented Fund Series 2 .Liquid Plus Fund) Sahara Liquid Fund Sahara Short Term Bond Fund Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings Credit Quality Ratings AAAf AAAf AAAf AAAf AAAf AAA(so) Sundaram BNP Paribas Capital Protection Oriented Fund Capital Protection Series .
Series I .Triple AAAce (Capital Protection Oriented) Portfolio Management Scheme .Series I .Series I (Three-Year Oriented Fund Plan)) Rating AAA(so) AAA(so) Major Players in Indian Mutual Fund industry: Some of the major players on the Indian mutual fund scene: • • • • • • • • • • • • ABN AMRO Mutual Fund Benchmark Mutual Fund Birla Mutual Fund BOB Mutual Fund Canbank Mutual Fund Chola Mutual Fund Deutsche Mutual Fund DSP Merrill Lynch Mutual Fund Escorts Mutual Fund Fidelity Mutual Fund Franklin Templeton Investments HDFC Mutual Fund  .Series I (Five-Year Oriented Fund Plan)) Rating UTI Capital Protection Oriented Fund .5 years plan Capital Protection (formerly UTI Capital Protection Fund .Payout Option Capital Protection Oriented Fund Rating Capital Protection Oriented Fund Rating AAA(so) AAA(so) UTI Capital Protection Oriented Fund .3 years plan Capital Protection (formerly UTI Capital Protection Fund .Growth Option Triple AAAce (Capital Protection Oriented) Portfolio Management Scheme .
• • • • • • • • • HSBC Mutual Fund ING Vysya Mutual Fund JM Financial Mutual Fund Kotak Mahindra Mutual Fund LIC Mutual Fund Morgan Stanley Mutual Fund PRINCIPAL Mutual Fund Prudential ICICI Mutual Fund UTI Mutual Fund Sahara Mutual Fund SBI Mutual Fund Standard Chartered Mutual Fund Sundaram Mutual Fund Tata Mutual Fund Taurus Mutual Fund Unit Trust of India UTI Mutual Fund • • • • • • • •  .
1963  . LIC MF and SBI MF have lost a part of its market share to the private players. The graph clearly indicates that UTI MF. UTI standing at the top with 14. A mutual fund is a pool of money contributed by individuals who have similar financial goals. the Unit Trust of India Act. giving a basic understanding of the investment style of the fund.80% of the total market share followed by HDFC MF and ICICI MF in 2nd and 3rd position respectively. bonds and/or money market instruments. MUTUAL FUNDS A detailed analysis is undertaken for any particular scheme. The Mutual Fund Industry: The history of the mutual fund industry in India can be traced back to 1964 with the setting up of the Unit Trust of India (UTI) by the Government of India. Since then UTI has grown to be a dominant player in the industry.Market Share – 2010: The graph as shown below portrays the market share of the top-10 players in the mutual fund industry. The money collected is the invested in various securities such as equities. its performance and the composition of its portfolio. UTI is governed by a special legislation. debentures.
which for the first time established comprehensive regulatory framework for the mutual fund industry. Since then several mutual funds have been set up by the private and joint sectors. 02. there were 33 funds with 391 schemes and assets under management with Rs. 113005 crores as total assets under management. UTI had total asset of Rs 6. Also the two Insurance companies LIC and GIC have established mutual funds. which makes it an ideal investment avenue.  . The second phase was between 1987 and 1993 during which period 8 funds were established (6 by banks and one each by LIC and GIC). The Securities and Exchange Board of India (SEBI) came out with comprehensive regulation in 1993 which defined the structure of Mutual Fund and Asset Management Companies for the first time. This signaled a growth phase in the industry and at the end of financial year 2000.849 crores. 6 public sector banks have set up mutual funds. Growth of Mutual Funds The Indian Mutual fund industry has passed through three phases.028 crores at the end of 1994 and the numbers of schemes were 167. Investing in mutual has various benefits.1. The first phase was between 1964 and 1987 when Unit Trust of India was the only player. 32 funds were functioning with Rs. The third phase began with the entry of private and foreign sectors in the Mutual fund industry in 1993. Currently there are 34 Mutual Fund organizations in India.700 crores. By the end of 1988. Several private sectors Mutual Funds were launched in 1993 and 1994. Since then. Kothari Pioneer Mutual fund was the first fund to be established by the private sector in association with a foreign fund.The industry was opened up for wider participation in 1987 when public sector banks and insurance companies were permitted to set up mutual funds.The share of the private players has risen rapidly since then. As on August end 2000. Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993. This resulted in the total assets under management to grow to Rs 61.
When one purchases shares. and then calculate the Net Asset Value (NAV) of the mutual fund. figures out how many shares have been purchased by shareholders. the fund manager invests his funds. the fund manager counts up the value of all the fund's holdings. Funds can afford to do so as they manage large pools of money. high-level investment professionals. Professional investment management One of the primary benefits of mutual funds is that an investor has access to professional management. Every day." When one buys a mutual fund. along with the money contributed by the other shareholders. the primary asset he is buying is the manager. That is because Mutual funds hire full-time. When one invests in a mutual fund. one just need to send money. along with all the other shareholders of the fund. A good investment manager is certainly worth the fees one will pay. unless one has time to spend on researching the companies one selects for one's portfolio. Good mutual fund managers with an excellent research team can do a better job of monitoring the companies they have chosen to invest in than one can. This routine is repeated every day on a neverending basis. and they will issue new shares for him at the most recent price. and it sells shares in the fund to individual investors. The managers have real-time access to crucial market information and are able to execute trades on the largest and most cost-effective scale. If one wants to buy shares.Primary benefits of investing in Mutual Funds.  . which is why mutual funds are sometimes known as "open-end funds. The investment company is responsible for the management of the fund. he becomes a part owner of a large investment portfolio. the price of a single share of the fund on that day. who will be controlling which assets are to be chosen to meet the funds' stated investment objectives.
Mutual fund unit-holders can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities. Transparency: Regulations for mutual funds have made the industry very transparent. Mutual funds invest in a broad range of securities. 000. Convenience and Flexibility: Investing in mutual funds has its own convenience. collect the interest payments and see that ones dividends on portfolio securities are received and his rights exercised. Fund managers decide what securities to trade. Liquidity: In open-ended schemes. This limits investment risk by reducing the effect of a possible decline in the value of any one security.5.Diversification: A crucial element in investing is asset allocation. It also uses the services of a high quality custodian and registrar. This allows him to easily rebalance his portfolio to respond to significant fund management or economic changes. And with a no-load fund. one can get one's money back promptly at net asset value related prices from the mutual fund itself. By pooling ones funds with others. one still enjoy the benefits of a diversified portfolio and a wide range of services. One can track the investments that have been made on one's behalf and the specific investments made by the mutual fund scheme to see  . However. It plays a very big part in the success of any portfolio. While one owns just one security rather than many. small investors do not have enough money to properly allocate their assets. Another big advantage is that one can move his funds easily from one fund to another within a mutual fund family. one pays little or no sales charges to own them. one can quickly benefit from greater diversification. and sometimes less. Low Cost: A mutual fund let's one participate in a diversified portfolio for as little as Rs.
there is no cap on the amount one can buy from the fund and the unit capital can keep growing. Variety: There is no shortage of variety when investing in mutual funds. These funds are not generally listed on any exchange. There are funds that focus on blue-chip stocks. In addition to this.ended). Investors can buy or sell units at NAV-related prices from and to the mutual fund on any business day. These descriptions are organized by the type of securities purchased by each fund: equities. whatever the age. This section provides descriptions of the characteristics -. bonds or a mix of stocks and bonds. Types of Mutual Funds: Getting a handle on what's under the hood helps one become a better investor and put together a more successful portfolio. The mutual fund schemes can be classified according to both their investment objective (like income. you get regular information on the value of your investment.such as investment objective and potential for volatility of one's investment of various categories of funds. technology stocks. These schemes have unlimited capitalization.where one's money is going. money market instruments. Such funds can issue and redeem units any time  . financial position. tax saving) as well as the number of units (if these are unlimited then the fund is an open-ended one while if there are limited units then the fund is close. Open-ended schemes are preferred for their liquidity. or some combination of these. To do this one must know the different types of funds that cater to investor needs. fixed-income. risk tolerance and return expectations. penended schemes do not have a fixed maturity. Open-ended schemes: Open-ended schemes do not have a fixed maturity period. One can find a mutual fund that matches just about any investing strategy he selects. growth.
ended funds over close-ended are as follows: Any time exit option. Hence.during the life of a scheme. Any time entry option. However. Investors can buy into these funds during the period when these funds are open in the initial issue. after the initial issue. The market price of the units could vary from the NAV of the scheme due to demand and supply factors. Close ended schemes: Close-ended schemes have fixed maturity periods. After that such schemes can not issue new units except in case of bonus or rights issue. signature verifications and bad deliveries. one can buy or sell units of the scheme on the stock exchanges where they are listed. The advantages of open. an open-ended fund allows one to enter the fund at any time and even to invest at regular intervals. unit capital of open-ended funds can fluctuate on a daily basis. the issuing company directly takes the responsibility of providing an entry and an exit. investors' expectations and other market factors INTRODUCTION:  . This provides ready liquidity to the investors and avoids UTIon transfer deeds.
The UTI Asset Management Company has its registered office at: UTI Tower. The fund managers are also ably supported with a strong in-house equity research department. With a view to reach to common investors at district level. a risk management department is also in operation. registered in Guernsey.UTI Mutual Fund is managed by UTI Asset Management Company Private Limited (Estb: Jan 14. the SEBI (Mutual Funds) Regulations and the objectives of the schemes. State-of-the-art systems and communications are in place to ensure a seamless flow across the various activities undertaken by UTI AMC. Mumbai . It has a nationwide network consisting 68 UTI Financial Centers (UFCs) and UTI International offices in London. UTI Mutual Fund has come into existence with effect from 1st February 2003.29000 Crores. All these have evolved UTI Mutual Fund to position as  . UFCs and registrar offices are connected on a robust IT network to ensure cost-effective quick and efficient service. the Trust Deed. 1993 on February 3 2004. Bandra (East). Bandra . Dubai and Bahrain. It has a well-qualified. who has been highly empowered to manage funds with greater efficiency and accountability in the sole interest of unit holders. 4 satellite offices have also been opened in select towns and districts. Channel Islands. for undertaking portfolio management services and also acts as the manager and marketer to offshore funds through its 100 % subsidiary. It has reset and upgraded transparency standards for the mutual funds industry. professional fund management team. All the branches. UTI International Limited.400 051 will provide professionally managed back office support for all business services of UTI Mutual Fund (excluding fund management) in accordance with the provisions of the Investment Management Agreement. UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers) Regulations. UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizenry.Kurla Complex. UTI Asset Management Company presently manages a corpus of over Rs. Gn Block. 2003) who has been appointed by the UTI Trustee Company Private Limited for managing the schemes of UTI Mutual Fund and the schemes transferred / migrated from UTI Mutual Fund. To ensure better management of funds.
a dynamic. Punjab National Bank PNB is a statutory body performing banking activities in terms of Banking Companies (Acquisition and Transfer of undertaking) Act 1970 under which the Undertaking of the Bank was taken over by the Central Government. It has a track record of uninterrupted profits since inception in 1908.03.2003) covering almost every State and Union Territory in the Country. The financial strength of the Bank and its long tradition of efficient customer service are drawn substantially from the extensive reach of its 2. serving over 10 crore policy holders and managing a Fund of over Rs.Bank of Baroda (BOB).03. efficient. the total branch network is 2. During the period since inception.753 as at 31. the largest public financial investment institution and life insurer in India have entered into an agreement with the Government of India Sponsors of the UTI Mutual Fund. Ba n k o f Ba r o d a Bank of Baroda was established in July 1908 by Maharaja . it has always maintained its practice of sound value based banking to emerge as one of the premier public sector Banks of the country today.Sir Sayajirao Gaikwad III.-186000 crores. responsive.715 strong branch network (as of 31. The Bank is also one of the few Indian Banks with a formidable presence overseas with 38 branches. Punjab National Bank (PNB) and State Bank of India (SBI) and Life Insurance Corporation of India (LIC). The main object of the bank under the said Act is asAn act to provide for the acquisition and transfer of the undertaking of certain banking companies. restructured. having regard to their  .2006 Life Insurance Corporation of India Life Insurance Corporation of India (LIC) is amongst the largest insurance companies in the world. and transparent and SEBI compliant entity SPONSORS: Three leading public sector banks . Thus.
Offices of the Trust: The Organizational structure of the Trust is based on three-tier system.75813. in conformity with the policy of the State towards securing the principles laid down in clause (b) and (c) of Article 39 of the Constitution of India and for matter connected therewith or incidental therein. 1956 will be the Trustee of transferred/migrated schemes are the first and sole trustee of the Mutual Fund under the Trust Deed dated December 9. State Bank of India The State Bank of India is the largest public sector bank in India with 9033 branches in India and 48 offices in 28 countries worldwide. to meet progressively and serve better. in order to further to control the heights of the economy.03.made by them towards setting up of the UTI Mutual Fund. In addition to this. Mumbai . Punjab National Bank has 4037 branches and 4 subsidiaries. UTI Trustee Company Private Limited A company incorporated under The Companies Act. Bandra .400 051. resources coverage and organization. Gn Block. 2002 executed between the Sponsors and the Trustee Company (the Trustee) Registered office: UTI Tower. SBI also has 17 subsidiaries The sponsors are neither responsible nor liable for any loss resulting from the operation of all the schemes of UTI Mutual Fund beyond the contribution of an amount of Rs. The apex body is the Corporate Office which decides all corporate policies of the Trust and ensures proper implementation of the same. The Corporate Office of the Trust is situated in Bombay. The second and middle tier is the Zonal Offices which are extended arms of the Corporate  .2003.10000/.size.49 crores as on 31. the needs of the development of the economy and to promote the welfare of the people.Kurla Complex. Bandra (East). The bank has a deposit size of Rs.
Office. They are mainly responsible for implementing various decisions taken by the Corporate Office. They also guide, supervise and monitor the functions of the Branch Offices under their Jurisdiction. The Trust has 4 Zonal offices situated at Bombay, Calcutta, madras and New Delhi looking after Western, Eastern, Southern and Northern Zones respectively.
The last and lowest tier comprises of the Branch Offices. There are 41 Branch offices. Each has certain districts under its jurisdiction. Their functions include sale of units under all schemes, appointment, training of agent and conduction of periodic sales promotion meetings, organizing training/refresher courses for the agents in the districts assigned to the Branch, supply of forms, folders, publicity material etc. to the agents and render repurchases and other per and post sales services to investors in respect of all schemes/plans decentralized at Branch Office level. The CRs are also under the administrative control of the branch offices. The branches are responsible for supervising and monitoring the performance of the CRs at the district level, for organizing training and for holding state-level conference of the CRs Agency Force: The Trust has developed over the years a strong agency force canvassing sale of units to the general public at present there are over 90000 agents spread over the country who form a vitally effective and motivating link with potential investors. Their effort in converting the after-sales service. Chief Representatives (CRs): The Trust has developed the system of selecting the CRs at all important districts. Their main function is to promote business in the districts and to guide the investors and agents about the various schemes of the Trusts. There are at present 292 CRs covering 349 district. Collection Centers: In order to further widen the net work for mobilizing savings, distribution and collection and
of application forms and speedier remittance of funds, the Trust has authorized many CRs of important districts to run Collection Centers. The Collection Centers accept the applications along with the cheques/drafts under all close ended schemes and forward the same to respective branch offices under whose jurisdiction they are functioning. They are also authorized to accept applications accompanied by draft only under open ended schemes. There are about 100 Collection Centers all over the country at the district level which are authorized to accept applications along with cheques/drafts. No Collection Centre is allowed to accept case Mobilization of funds: The Trust mobilizes savings by sale of units under various schemes which are formulated within the parameters of the Unit Trust of India Act, and the General Regulations. The schemes fall under two board categories viz. Open-ended Schemes and Close-ended Schemes. UTI has different types of schemes to suit the diversified needs of different strata of society. For example it has the Senior Citizens Scheme to take care of the hospitalization needs of the elderly and retired persons and at the same time also has attractive schemes like CGGF, RUS and CCCF for the children. All these schemes are broadly classified into 2 different types: (i) Income Schemes where the return is in the form of periodical dividend (either at pre-determined rate or as declared on a yearly/half yearly basis) plus some appreciation on the demotion and (ii) Growth schemes where income distribution is in the form of capital growth. Through either of the routes, the investors, shares the benefit of growth and prosperity of the Capital Market. The Open-ended Schemes are open for sale throughout the year (except when books are closed) and the investors are eligible for the full year's dividend irrespective of the date of purchase. Under Close- ended Schemes, units are offered for sale only for a specified period
and the Schemes are for fixed period of that period the Scheme is redeemed Pricing of Units: The price at which the Trust sells the units is known as Sale Price and the price at which the Trust buys back the units is called the Repurchase Price. The Trust fixes the sale and repurchase prices under the various schemes from time to time. Wherever these prices are changed they are published in leading newspapers. In determining the sale price of units, the Unit Trust of India has to take into account the interests of the unit holders who continue with the Trust as well as of those investors who would come in later. The unit holders who remain with the Trust have to bear the expenses of acquisition of the portfolio of investment, management and other charges and at the same time receive also the benefits accruing to the Trust. Those who wish to join at a later date can come in provided, they agree to share the expenses already incurred by the Trust and also pay a part of the income earned by the Trust on its investments, if they are to rank equal with the unit holders and expect to receive the same rate of dividend.
Repurchase Price: The price at which the Trust is prepared to buy the units back from the unit holders is called the repurchase price. The principle for calculating the repurchase price is the same as in the case of the sale price, only difference being that the incidental charges incurred by the Trust for liquidating the underlying investments are recovered from such unit holders. For this reason, the repurchase price is always lower than the sale price. The Trust also announces Net Asset Value (NAV) of our listed schemes every week. Even for Equity oriented scheme which are not listed, NAVs are announced every week after one year of operation. NAV is determined by totaling the appreciation of listed and unlisted securities, initial Capital, reserves
and surplus, interest earned, dividend earned, interest on debentures and profit on sale of securities and deducting from it the amortization of initial/rights issue expenses if any, stamp fees and handling charges. On dividing this by the outstanding Capital the NAV per unit is obtained. Investment by the Trust: The primary aim of the Trust is to provide a reasonable and growing rate of return to the unit holders apart from assuring safety of Capital. Consistent with this policy, the Trust invests its funds in various securities spread over a large number of companies. Presently, the Trust has investments in over 1540 companies covering different industries such as textiles, engineering, chemicals, aluminum, paper, cement, sugar, iron and steel, electricity generation and supply, transport equipment etc. The funds invested by the Trust aggregated to about Rs. 36,900 crores under all schemes as on 30th June, 1993. Future Outlook Focus: In the changing economic environment with the establishment of mutual funds in the public sector and in the private sector the Unit Trust has now a challenging role of play in the sphere of mobilizing savings from the household sector as well as investing these funds profitably. The UTI is well positioned to meet this challenge even as it discharges its Department called the Investors Relation Dept. To provide high quality service the Trust has embarked on a massive technology up gradation programme, the first phase of which is expected to be completed by 1st July, 1994. UTI is also pursuing strategies aimed at designing newer research -driven product, up gradation of portfolio management risk control techniques and innovative marketing strategy.
UTI Bank: With the objective of providing banking services to UTI and the Unit holders and to enable
The process of issue of unit certificates to the unit holders will be completed with in 15 days from the date of receipt of application and .D.D) along with application from the investors and lodge them with the collection centers. Agents collect cheque or demand draft (D.Approximately 3 crores of Rs. The collection centre of was started by UTI with a view to give service to the unit holders at their door steps. Change of address. The bank will use the latest information technology and telecommunications. s are drawn on the place where at which UTI officer are located and such D.customers to avail efficient and qualitative service that meet his specific needs. change. Non-receipt of dividend warrant.  . Eg: Non receipt of certificate. Besides after sale service will be given by the collection centers. COLLECTION CENTER Unit Trust of India collection center was started in the year 1993 under the control of Chief Representative with his 200 agents.D. change of nomination etc.D. it is proposed to set up a bank which will have its registered office at Ahmedabad. Now the system has been developed with collection centers and Franchise officers which should be run by chief representatives. Formally collection was made by post offices commercial banks. Soon after the concerned UTI office receives the D. s along with application will be scrutinized and accepted at the collection centers and the acknowledged will be given across counter. would be collected at collection centre under different schemes of UTI. Since D. death claims.Ds .D.s and related application.
. Grandmaster. a) A resident individual or a NRI or a person of Indian origin residing abroad either singly or jointly with another or up to two other individuals on joint/anyone or survivor basis. An individual may make an application in his personal capacity or in his capacity as an officer of a Government or of a Court. step-parent or other lawful guardian on behalf of a resident or a NRI minor. 1956 or established under State or Central Law for the time being in force. MNC. b) A parent. An application cannot be made by an adult and minor jointly. Master plus. j) A Financial Institution. MIF. g) An eligible trust including Private Trust being irrevocable trust and created by an instrument in writing. GSF. a regional rural bank. NIF and ISF). Master gain. (not available in US-95. (not available in US 2002) (An application by a partnership firm shall be made by not more than three partners of the firm and the first named person shall be recognized by UTI AMC for all practical purposes as the unit holder. f) A bank including a scheduled bank. PEF. c) An association of persons or body of individuals whether incorporated or not.Eligible Investors:Any resident or non-resident Indian as well as non-individuals as indicated below may make an application for purchase of units. a co.operative bank etc. Master growth. d) A Hindu Undivided Family both e) A body corporate including a company formed under the Companies Act. The first named person in the application form should either be authorized by all remaining partners to sign on behalf of them or the partnership deed submitted by the partnership firm should so provide. h) A society as defined under the scheme.
(Available only in US 2002) Note: These schemes are not an offer to any resident/citizen of the United States of America. As In the case with any investment there can be no guarantee that the Tax position prevailing at the time of investment in the Schemes will endure in definitely. Further statements with regard to tax benefits mentioned herein below are mere expressions of opinion and are not representations of the Mutual Fund to induce any investor t o acquire units whether directly from the Mutual Fund or indirectly from any other persons by the secondary market operations. Thus the prospective members should not treat the contents of this section of the memorandum as advice relating to legal. (Not available in US 2002) m) Mutual Funds (not available in US 95 and US 2002) n) An individual for the benefit of another individual who is a mentally handicapped person.com. investment or any other matter and are . Investors may post their grievances at our website: WWW. No person residing in the United States of America can apply for the units under the schemes or acquire them. 1996. Half yearly scheme portfolio disclosure will be mailed to the unit holders or published in the newspapers as permitted under SEBI (Mutual Funds) Regulations. taxation.Utimf. Tax Treatment for the Investors (Unit holders) The information stated below is based on UTI Mutual Fund's understanding of the tax laws and only for the purposes of providing general information to the members of the Schemes.l) Files registered with SEBI. Unit holders Information:Accounts statement (on each transaction) and annual financial results shall be provided to investors by post/any other mode.
effective from 1 April 2004. Tax benefits/Consequences to Mutual Fund UTI Mutual Fund is a Mutual Fund registered with SEBI and as such is eligible for benefits under section 10 (23D) of the income Tax Act. 2) Act. 2004 has come into force. An exemption has been granted under section 115 R of the Act to open ended equity oriented mutual funds from paying distribution tax on income distributed without any time limit. Tax benefits/Consequences to Unit holders: Tax on income in respect of units As per the section 10 (35) of the Act. no tax is required to be deducted at source. TDS on income of units: As per the provisions of section 194K and section 196A of the Act where any income is credited or paid on or after 1st April 2003 by a Mutual Fund.e. 1061 (hereinafter referred to as "the Act") to have its entire income exempt from income tax. Tax on capital gains Long term capital gains Section 10 (38) of the Act grants exemption to any income arising from the transfer of a long term capital asset.The Mutual Fund will receive all income without any deduction of tax at source under the provisions of Section 196 (iv) of the Act. income received by investors under the schemes of UTI MF is exempt from income tax in the hands of the recipient unit holders. attracts securities transaction tax and is made after 1st October 2004 i.advised to consult his or her own tax consultant with respect to the specific tax implications arising out of its or her participation in the Schemes. the date on which Chapter VII of the Finance (No. being units of an equity oriented fund provided the transaction giving rise to the capital gains. .
. arising from the transfer of a short-term capital asset. the date on which Chapter VII of the Finance (No. Further. then. and (b) Such transaction is chargeable to securities transaction tax under the Chapter.5 per cent surcharge in case of corporate Unit holders irrespective of the amount of taxable income. being a unit of an equity oriented fund and (a) the transaction of sale of such unit is entered into on or after 1st October 2004. Short term capital gains Section 111A of the Act provides that where the total income of an assessee includes any income chargeable under the head "Capital Gains".2 ) Act. 850.For this purpose "equity oriented fund" means where the investible funds are invested by the Mutual Fund in equity shares in domestic companies to the extent of more than fifty percent of the total proceeds of such fund set up under a scheme of a Mutual Fund specified under clause 10 (23D) of the Act.000 and 2. an additional surcharge of 2 percent by way of education cess would be charged on amount of . 2004 has come into force. i.term capital gains shall be computed at the rate of ten per cent. where the total income exceeds Rs.e. the tax payable by the assessee on such short-term capital gains is at the rate of 10% Provided that in the case of an individual or a Hindu undivided family. where the total income as reduced by such short-term capital gains on units is below the maximum amount which is not chargeable to income-tax. such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short. being a resident. The said tax rate would be increased by applicable surcharge of 10 per cent in case of non corporate Unit holders.
other than corporate Unit holders.2) Act. For this purpose securities transactions on which the transaction tax is leviable are (a) Purchase or sale of an equity share in a company or a derivative or a Unit of an equity oriented fund. TDS on capital gains Resident Investors As per Central Board of Direct Taxes ('CBDT') circular No. 2004.tax inclusive of surcharge. entered into in a recognized stock exchange. Securities transaction tax will be levied at the rate of 0. in case of resident unit holders no tax is required to be deducted from capital gains arising at the time of repurchase or redemption of the units. the mutual fund is required to deduct tax at source @ 40% for short-term capital gains (Clause 2 (b) (viii) of Part II of the First Schedule to the Finance Act 2004). 850. However no tax on capital gains tax would be withheld from proceeds paid to non-resident investors from long term capital gains arising out of redemption of units in an equity oriented fund. where the total income exceeds Rs. the Mutual Fund is liable to deduct tax @ 30% on short-term capital gains. Surcharge on income tax will be levied at 10 per cent on such tax in respect of all Unit holders. The TDS will have to be increased by a surcharge of 10% on short term capital gains arising to . Non resident investors As per Part II of the First Schedule to the finance Act 2004 (Clause 1 (b) (i) (G).000. Other-than-domestic companies For other than domestic companies. the date notified in the official gazette. or (b) Sale of a Unit of an equity oriented fund to the Mutual Fund. As per the finance (No.e. 715 dated 8th August 1995.15% of the value of the securities purchased on a recognized stock exchange in India from 1st October 2004 i.
. In case of other-than.2) Act. Further. the tax should be deducted at the rate provided in the Finance Act of the relevant year or at the rate provided in the DTAA.5%. then losses arising from such sale to the extent of income received or receivable on such units. will be ignored for the purpose of computing his income chargeable to tax. which are exempt under the Act. if any person buys or acquires units within a period of three months prior to the record date fixed for declaration of dividend or distribution of income and sells or transfers the same within a period of nine months from such record date. whichever is more beneficial to the assessee. the unit holder will be required to provide the Mutual Fund with a certificate obtained from his Assessing Officer stating his eligibility for the lower rate. in the case of remittance to a country with which a Double Taxation Avoidance Agreement (DTAA) is in force. Short term capital losses:According to section 9 4 ( 7 ) of the Act as amended by the Finance (No. an additional surcharge of 2 per cent by way of education cess would be charged on amount of tax inclusive of surcharge. Foreign Institutional Investors In case of Foreign Institutional Investors (FIIs) no tax would be deductible at source from the capital gains arising on repurchase/redemption of units in view of the specific provisions of sec. 196D(2) of the Act. the TDS will have to be increased by a surcharge of 2. As per Circular No. In order for the unit holder to obtain the benefit of a lower rate available under a DTAA.728 dated October 30. 8.5 lacs.NRIs whose total income during the year exceeds or is likely to exceed Rs. 1995 issued by the CBDT. 2004.domestic companies.
the loss so ignored shall be considered as cost of acquisition of such additional units held on the date of sale by such person.com .utimf. Further. where additional units have been issued to any person without any payment. gifts from persons exceeding Rs. Thus.2) Act. 1962 for Public Religious & Charitable Trust.amfindia. Investment in units of the Mutual Fund will rank as eligible form of investment under section 11(5) of the Act read with Rule 17C(i) of the Income Tax Rules. Value of investment in units under the schemes is completely exempt from Wealth Tax. However. WWW. 1958 has abolished the levy of Gift Tax in respect of gifts made on or after 1st October 1998. subject to certain exceptions. The Gift Tax Act. 2004 has inserted sub-section (8) in Section 94 which provides that.Further.25.000/. if the original units were acquired within 3 months prior to the record date fixed for receipt of additional units and sold within 9 months from such record date. gifts of units on or after 1st October. on the basis of existing units held by such person then the loss on sale of original units shall be ignored for the purpose of computing income chargeable to tax. 1998 are exempt from Gift Tax.com and website of AMFI namely WWW. Finance (No.are taxable as income in the hands of donee on or after 1st September 2004 pursuant to section 2 (24) (xiii) of the Act read with section 56(2) (v) of the Act Daily Net Asset Value (NAV) Publication The NAVs shall be issued to the press for publication on a daily basis and will also be available on website of UTI Mutual Fund.
Alternatively. or as specified under each scheme. the cheque/draft is issue din the name of the second or subsequent unit holder provided the Unit Certificate is on the basis of any one or survivor. The money is remitted either in cash or by cheque/draft as desired by the holder. An agent is expected to render all assistance to his customers who have invested in units and help them in the matter of dealing with the unit certificate in different ways. A unit holder desirous of enchasing his units should complete and sign the form on the reverse of unit certificate with the signature/s duly witnessed and send the unit certificate to the Trust/Register Agency which has issued the unit certificate. The cheque/draft is issued in the name of the first unit hold. he may get his signature on the reverse of the unit certificate attested by a Magistrate under his seal or by a Special Executive Magistrate of Notary Public. when repurchases are suspended. his specimen signature. To enable an agent to render assistance to customers who have invested in units. it is necessary for him/her to know the procedure followed by the Unit Trust of India effecting various transactions.For all schemes of the Trust: The work of agent does not cease with the canvassing and booking of applications for sale of units under the various Schemes/Plans/. If a unit holder feels that this signature may not agree with the specimen furnished by him at the time of purchasing units. Repurchase: The Trust repurchases unit at the prevailing repurchase price throughout the year except during the month of June. The encashment will not ordinarily take more than 6 working days provided the signature/s agrees with the signature/s recorded on the original application form. However. he may hand over his unit certificate dulydischarged to his bankers requesting them to forward it to the office concerned of Unit Trust of India/ Registrar Agency after .
The nomination can be made in favor of 2 persons including minor. In the letter case Unit Trust of India/Registrar will send the cherub direct to the bank for credit to the unit holder's account. Unit Link Insurance Plan. The warrants are current for 3 months from the date of issue. The agency banks and post offices who sell units do not handle repurchase work. Units will be repurchased only by the office of the Trust/Registrar Agency which has issued them since all relevant records will be with the office only. banks can accept unit certificate from their account holders and forward the certificate to Unit Trust of India for repurchase after attesting the signature of the unit holder as a matter of service to their customers. he should advise the office of Unit Trust of India/ Register which has issued the unit certificates held by him and his new address/dividend instructions. Rajlakshimi Unit Scheme. For any minor. Grandmaster 1993 and Children's College Carreer Fund 93: The facility of nomination will be available where the units are held in single name or in 2 names jointly. Nomination: Following Nomination facilities are available to all the Unit holders of the Trust uniformly under all the schemes except Children's Gift Growth fund. a duplicate warrant is issued provided the units are outstanding and the unit holder authorizes Unit Trust of India/Register Agency in the form of non-payment is received from the bank. Issue of Duplicate Dividend Warrant: If any dividend warrant is lost or not received by the unit holder. the name .attesting his signature. Income Distribution: Revalidation of a Dividend Warrant: Dividend warrants are drawn payable as per as all branches of State Bank of India and its associates in the case of Unit Scheme 1964 and other selected banks in the case of other Schemes. However. Change of Address/Dividend Instructions: When a unit holder desires to change either his address or his dividend instructions.
Nomination is registered free of charge by Unit Trust of India and can made at the time of purchase of units or subsequently. or Letters of Administration. In the case of the Unit certificate standing in the name of a single individual unit holder who has not exercised his right of nomination. Formalities to be completed by claimants or surviving unit holders in event of death of a unit holder: In case of the units have been purchased jointly or on any one or survivor basis. Face value up to Rs.000/Documents required Death claim application Unstamped letter . Unit certificate/s and Legal representation in the form of either Succession Probate of the will. To avoid hardship to small investors. the Unit Trust of India has evolved a relaxed procedure as under: 1.. The guardian should be the person other than the applicant. The guardian should be mentioned. The death certificate in original issued by the municipal or local authorities and the unit certificate will have to be sent along with the letter of request to Unit Trust of India.and address of the guardian should be mentioned. 5. the surviving holder/s of the unit certificate will have to make a request to Unit Trust of India of the Unit Certificates in name/s of the surviving holder/s agree deleting the name of the deceased unit holder. In the event of the death of the unit holder or both the holders (where there are 2 holders) the nominee whose name has been written first as per the order of precedence indicated by the unit holder will be entitled to the units standing to the credit of the deceased unit holder/s. Under Unit Scheme 64 it will not be necessary to obtain a separate nomination form. the claimant will have to submit the following documents in original to establish his claim to the units held by the deceased unit holders: Death certificate issued by the municipal or local authorities.
After the loan is fully repaid. Transfer: The unit holders desirous of transferring his units wholly or in part (multiples of fifty) to another person/s has to execute the prescribed transfer form the transferee/s and forward it to Unit Trust of India for registration along with the relative unit certificates. the face value of the units will be considered as the appropriate value for such loans.000/. Issue of Duplicate Certificate: In the cases where the Unit certificate was originally dispatched by ordinary Post or where the face value of the Unit certificate nor received is up to Rs.2. 5000 and upto Rs.the claimant will have to obtain and submit legal representation to the estate of the deceased. Banks have their own margin for granting of loans. The dividend is also remitted to the unit holder according to . the bank will advise the Trust to that effect and the Bank's lien recorded in the books of Unit Rust of India is removed.000/Death claim application Stamped Bond of Indemnity Surety Declaration Multipurpose Application If the amount of over Rs.of value transferred. 5.000 upon receipt of a complaint form the unit holder/s about non receipt of the unit certificate a duplicate is issued. 100/. Pledge: Banks will accept unit certificates issued under various schemes of the Trust where the units are transferable or when they are issued under a scheme listed on the Stock Exchanges as collected security for granting loans to their account holders. The transfer deed is required to be stamped with share transfer stamps of the value of 50 paise per Rs. 25. Face value more than Rs. 25. Generally.
In the case of joint holdings the signature of all the holders are necessary. Change in name due to Marriage/Divorce/Adoption any other reason: For change in name due to reasons specified above. Marriage: Marriage declaration form and Unit Certificate Divorce: Divorce declaration and court order Adoption: Adoption declaration and court order Name change for other reasons: Copy of Gazette notification and old and new signatures attested by bankers. details about the total number of contributions paid by him/her and the date and other . the following documents are required. the Unit Certificates must be sent to the office of issue of the Trust with an application in Form for effecting the change. they can be consolidated into one unit certificate free of charge. In all such cases. Change in Status: Change in status will arise when a minor unit holder becomes an adult (18 years of age) or when a resident unit holder becomes a non. he/she is required to give the Trust advance notice of one month through a letter. If there are a number of unit certificates issued in the name of same person/persons.resident.the new instruction to be recorded with Unit Trust of India. The letter should contain permanent address. Premature withdrawal: In case the member wishes to terminate his membership. Consolidation Sub-Division of Unit Certificates. The unit holder/s is required to apply for consolidation in the prescribed from available in unit Trust of India and tender the unit certificates to be consolidated with the applications. Only one unit certificate is issued for each application for administration convenience.
He/she is also required to submit attested copies of First Information Report (FIR). Maturity Claims: The Trust sends to the member intimation of maturity one month in advance with an option to invest the maturity proceeds in other schemes of the trust or to receive the same in cash. It should be signed in the similar manner as in the original application. debentures. the unit holder (second named person) or legal heir (in absence of second named person) should submit the membership certificate together with death certificate in original and a letter mentioning the specific cause of death. the claimant is required to fill in the prescribed form for the purpose which is available at the officer of the Trust. through various schemes that address different needs of investors. The pool of money thus collected is then invested by the Asset Management Company (AMC) in different types of securities. If the death is due to accident. It pools money from like-minded shareholders and invests in diversified portfolio of securities. money market instruments or . The member has to surrender the membership certificate and exercise his option. bonds. convertibles. Inquest Report.particulars of payment of last contribution. Plans and Schemes SIP / STP / SWP Systematic Investment Plan (SIP) Systematic Withdrawal Plan (SWP) Systematic Transfer Plan (STP) Systematic Investment Plan (SIP) A mutual fund is a trust. These could include shares. Post Mortem report and any other documentary evidence of the accidental death. Premature Claims: In the event of death of the member.
This facility shall be subject to the terms and conditions contained in the SWP / STP enrollment form. Systematic Withdrawal Plan (SWP) SWP is a Tax efficient way of obtaining regular income. Capital Appreciation Encashment Under this facility. This is shared by unit holders in proportion to the number of units they own. and such units shall be subtracted from the Unit balance of that unitholder. Investor can opt for any one of the following two options offered by the Schemes Fixed Amount Encashment Under this facility. during the stipulated lock-in-period of 3 years / 7 years respectively The . earned by the Scheme during the specified period shall be automatically redeemed and paid to the investors at the Applicable NAV. if any. The Registrar may terminate SWP/ STP on receipt of appropriate notice from the Unitholder. Investor can opt for SWP for periodic withdrawal of sums from their accounts. subject to load. Such objective is clearly laid down in the offer document for that scheme. Thus the appreciation. if any. the Unit holders can opt to redeem/ switch (transfer) fixed amount of money from their accounts at periodic intervals. the Unit holders can opt to redeem amounts equivalent to the appreciation in their investment value at periodic intervals. 1961. Presently this option is available only for investors in Growth Plan/Option The amount thus withdrawn / switched shall be converted into units at the Applicable NAV. based on the investment objective of a particular scheme. It will terminate automatically if all Units are liquidated or withdrawn from the account or upon the receipt of notification of death or incapability of the Unit holder SWP / STP shall not be available for investments under 54 EA / 54 EB of the Income Tax Act. The fund adds value to the investment in two ways: income earned and any capital appreciation realized through sale.other securities.
There are no minimum amount restrictions. STP can be modified/terminated by the unit holder by submitting a written request 5 days in advance Dividend Sweep One more convenient method of investing is provided by UTI Mutual Fund. Further there is no facility for transfer of partial dividend or . An investor can opt for systematic transfer of fixed amount or of the Capital Appreciation on investment in the scheme to any desired scheme on a monthly or quarterly basis. STP can availed of as a monthly or quarterly basis from one plan to another plan in the same scheme or to another scheme within the fund All transfers will take place on the 30th/ 31st of every Month/ Quarter based on the NAV of that day. The dividends (net of TDS if any) earned by the Unit holder will be sweeped / transferred into any desired Scheme or Plan. This facility helps the unit holder to build up his wealth continuously. Systematic Transfer Plan (STP) The Systematic Transfer Plan gives investors the option of systematic transfer of fixed amounts/ capital appreciation on a periodic basis to another Plan/ Scheme of the Mutual Fund.withdrawal / Transfer would happen on the date prescribed by the Investment Manager and would be subject to applicable load structures for respective schemes. even if the Scheme in which the sweep is taking place has an entry load. STP of Capital Appreciation is available only under the Growth plan and not under Dividend Plan. The amount of transfer under STP will be considered as redemption and will be made at the applicable redemption price on the day of transfer and at the applicable load. Investors desiring to opt for these benefits are requested to read the instructions contained in the enrollment form carefully SWP can be modified/terminated by the unit holder by submitting a written request 5 days in advance. In this option one can invest the Dividend declared in a particular scheme in other scheme. if any. No load will be applicable for sweep in.
With the introduction of above option. the Investor can either opt for: 1. To avail of this facility request a change in the mode of payment from "Warrant Payment" to "Direct Credit" facility and send your bank details to our nearest investor service center. An investor can avail of this facility by having an Account with any of the banks listed below: • Hdfc bank • Citi bank • Standard chartered bank • Uti bank • Idbi bank • Icici bank This Direct Credit facility is available with the above banks for all the debt and Equity schemes of UTI Mutual Fund. The process to be followed by the investors for availing the Direct Credit facility for Redemptions proceeds/Dividend Payout would be as under: Investors whose direct credit mandate is already registered with us. subject to payment of tax 3. Transfer of full dividend to some other plan in the same scheme of other schemes Investors may avail any of the above facilities by ticking the appropriate box in the Application Form or may contact the ISCs or the AMC for further details. Reinvestment of full dividend into the same scheme. Pay out of full Dividend. their redemption proceeds/ dividend payout will directly be credited in their respective bank accounts .transfer of dividend to multiple schemes. subject to deduction of tax 2. Direct Credit The Convenience of ' No Cheques' Redemptions and Dividends are now free from the delay and inconvenience of ' CHEQUES' Investors can now receive redemption and dividend proceeds DIRECTLY in their bank account.
requesting for direct credit of their redemption proceeds /Dividend payout into their Bank accounts All redemptions in a folio after the mandate is received will happen by direct credit to the investor's account. How to opt for Triggers A unit holder may opt for this facility at any time by submitting a written application or by filling the relevant form. Under this option. Triggers can help Investor make the most of market movements without the hassle of constant tracking. it may take up to a maximum 5 business days to implement it. the entire account will be redeemed when the chosen event occurs Different Trigger Options Following are the types of triggers offered by UTI Mutual Fund: The Value Trigger . the transaction for which Trigger is to be cancelled etc When a request is made for canceling a trigger. would need to submits a mandate to UTI Mutual Fund.Investors may avail any of the above facilities by ticking the appropriate box in the Application Form or may contact the ISCs or the AMC for further details Triggers Triggers are options provided to the unit holder as part of systematic withdrawal plan to enable automatic redemption on the happening of the desired event. Under this option. Name of the scheme. the entire account will be redeemed when the chosen event occurs Cancellation of Trigger A mandate of triggers could be cancelled by giving a letter to that effect mentioning information like Folio No. How to opt for Triggers? A unit holder may opt for this facility at any time by submitting a written application or by filling the relevant form. Triggers can also be used as an efficient downside protection tool.Investors who have not opted for direct credit facility.
as and when his investment value reaches 8. and have set the Trigger at Rs 15.000/Capital Gains Distribution and Reinvestment Facility Allows you to redeem or reinvest when the requisite period for realization of long-term capital gain is reached Triggers at Transaction Level An investor carries out two separate investment transactions with the Fund at two different times (even within the same folio). an investor now can specify the desired value being lower than the investment amount i.g. We will automatically redeem you when the repurchase value reaches Rs 15.000 with us. the Trigger would be fired.or lower.000/-.000/.Redemption will be triggered when your investment reaches a value that you have defined For example . Downside Triggers For Value Trigger. he could specify separate triggers for each of the transactions and these triggers could be of different types. Value and Index Trigger and not for Capital Gains Trigger. he can specify a Value Trigger of 8. Switch Option for Triggers Earlier redemption was the only available option on the happening of a particular event.You have invested Rs 10.e.000/-. The Switch option is available ONLY for Date. . In case of depreciation in NAV. Now investors can switch to other Plan within the same Scheme or another Scheme of the UTI Mutual Fund as and when the Trigger is fired. An investor has to specify the Index value on reaching of which. Index Based Triggers All equity schemes can now avail a new trigger based on NSE Nifty / BSE Sensex values. if an investor invest say Rs 10. investments should be redeemed/ switched.000/-. For e. a Stop Loss Concept.
launched with the mission" to be the pre-eminent destination for personalized financial solutions helping individuals to create wealth". Just type NAV or DIV and Scheme code on your mobile and send as SMS to 9892606666 and you will receive the details. Email Services: The following Value Added Services are provided to the Investors who have given their Email SMS SMS Services Get the NAVs. whenever you wish to. The message is clear . Dividend of all UTI MF schemes wherever you are. Plus. you can get automatic updates on schemes of your interest and also latest happenings at UTI MF.Alerts Instead of Redemption or Switch. Change of address Change of bank details Change in Income Tax Details Change in Mode of Payment. Value and Index Triggers and an email will be sent to the investor informing him about the happening of event.UTI country is now closer to you than ever before! Online Transaction As an Investor of UTI Mutual Fund. you will be able to conduct the following online non-monetary transactions. Email address of the investors is a must for this option. The company is focused in creating a better standard of living for people by relieving them of any . an investor may only opt to be alerted as and when the Trigger gets fired (happening of specified event). Mission: UTI is a premier Investment Consultancy Firm. The alert option is available ONLY for Date. just by registering yourself.
Philosophy UTI's knowledge combined with its investors trust and involvement will lead to the growth of wealth and make it an exciting experience.It is keeping up by doing intense research and providing customized products. by proper counseling of investment decisions in different avenues. The company is leaving no stone unturned to stand by its philosophy.financial crunch they might face. .
Developing the Research Plan 3. It is limited only to products that are offered by UTI Procedure of the Study: 1. 3. 4. 2. The study will be limited to only town. Identifying new customers which will help the company to increase the market share by tapping these new segments. Problem Identification 2. It might not reflect the characteristics of other potential areas. Sample for the Study: Data for the present study will be collected from general public in town Method and tools for Collection of Data A personal interview will be conducted with the help of a well. Limitations of the Study: 1. Relevant data will be collected from the sample chosen that is most appropriate for the study in terms of Reliability. Making the potential customer identifying problems and then cater to his needs. Validity and Predictability.SYNOPSIS OF TASK UNDERTAKEN Awareness of UTI presence in town To evaluate the awareness of various financial products available to public The purpose is to determine • • 1. Choosing the appropriate sample . Assessing the extent of penetration of financial products in the chosen geographical area.structured questionnaire. 2. All data collected will be Primary data. Investors' interest among various investment options The awareness of financial products available to investor. Understanding the potential customers' requirements and thereby providing customized solutions.
4. Data mining 10. Constructing thechosen instrument 6. Preparing the Research Report SUGGESTIONS AND RECOMMENDATIONS . Analysis 11. Pilot Testing 7. Drawing relevant Interpretations 12. Identifying the required Instruments 5. Modifying the Instruments based on the feedback from the Pilot Testing 8. Data Collection 9.
They could make aware of the services they render to the public. It can take advantage of this and start a new mutual fund. The company can start new schemes of mutual fund and start investing in stocks. A good portion of the general public is not quite aware of the existence of such an investment firm like UTI. This could attract new customers which can be transformed into a long lasting relationship. This could be put into action by having print advertisements in papers like The Economic Times. KOTAK. 3) The company gives people access to a wide variety of mutual funds. coupled with dedicated work put in by its employees The following could help the company to become a pioneer in its field. This could be a good segment to tap with.UTI has achieved a lot of customer confidence. HDFC. The company could undertake promotional activities with the general public as the target group. Not much can be suggested in regard to the policies and principles it has. People will have good confidence in this. debts and government securities. 2) Competitors like Sundaram. Business Line. Financial Express etc. CONCLUSION: . Entry into the IPO allotment procedure could be quite helpful and profitable. The company lacks publicity. are known better than UTI. 1) The present year has seen a boom in equities and a large number of IPO's are being issued by a number of companies. which caters to most of the available investing instruments. It has a special and dedicated Research Desk who is into constant monitoring of the share markets. The good success rate is a clear reflection about the company's strong rules. etc. Advertisement in CNBC-India could give a very good brand image to the company.
Not only did it give a learning experience but also gave an idea on how we could incorporate the various investment options. but the present day has given people to try a wide range of companies. As the interest rates all over are dropping. It offered exposure to the wide range of investment options available in mutual funds. people are switching to other avenues which fetch better results. into a good planning package. The risk factors involved could be understood easily. discovered by the economists. The risk band that initially existed has been eased out and people are on the lookout for new and better stuff. It was a very fruitful experience working in UTI as a management trainee. The decision in regard to investments is based on the sector performance as well as the strong fundamentals of the company. The act of speculation has considerably been reduced due to the statistical data and its analysis that companies like UTI and people have become intelligent investors rather than mere speculators.Investment in India has become more of a security necessity than a business lifestyle. In olden days. one could invest only in a few companies. QUESTIONNAIRE .
Monthly Income of family . PROFESSION: A) Government Employee B) Private Employee C) Business Man D) Others 4 .1. QUA LIFICATION: 3. SEX: Male Female 5. MARI TALSTATU S Married Unmarried 6.NAME AND ADDRESS: 2.
UTI Variable Investment Scheme c. 15000 . Other Schemes 10. How do you know about UTI & its schemes? a) Advertisements b) Friends c) Ag e n t s d) Any other sources. Are you satisfied with the returns of above . in which of the following you have invested your money a ) Mutual Fund b) Insurance Policies c) Commercial Banks d) Shares & Debentures e) Others 8. 50000-60000 d) Above Rs 60000 7. Do you have interest in saving something: If yes. 9.25000 b) Rs. If you are a customer of UTI. have you ever been introduced by the following schemes? a. UTI Infrastructural Investment Scheme d.a) Rs. UTI Master Share Unit Scheme b. 25000-40000 c) Rs.
What is your opinion about the rate of interest given by UTI? . in what manner? a) Interest b) Dividend c) Services d) Others 12. Do you think that the customer services in UTI are improving in recent years? Yes / No 15.schemes YES/NO 11. Do you think UTI is prompt in attending their customers? YES/No 14. What is your opinion about the services of UTI? a) Excellent b) Satisfactory c) Good d ) Ba d 13. If yes.
Suggestions If Any. 16.A) Good B) Satisfactory C) Not satisfactory. Place: Date Signature .
UTI Worksheet Analysis Sample Size .100 Percentage Proportion of Professionsal's Investment in UTI Mutual fund Professionals Goverment Employee Private Employee Business Man Others No: Of: Response 60 20 15 5 Total 100 Income Of Investors .
60000 > 60000 Num: Of: Response 8 27 37 28 Total 100 .Monthly Income 15000 .25000 25000 .40000 40000 .
Investment Interest Of People Investment Types Mutual Funds Insurance Policies Commercial Banks Shares & Debentures Others Interest Of Respondants 17 12 40 22 9 Total 100 .
UTI Marketing Types Advertisements Friends Agents Any Other No: Of: Respondants 40 20 30 10 Total 100 UTI Satisfactory Rating .
Rating scale Excellant Good Satisfactory Bad % 70 21 9 0 Total 100 .
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