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OF INDIABULLS FINANCIAL SERVICES LTD.
Submitted in partial fulfillment for MASTER OF BUSINESS ADMIMISTRATION
Indian Institute of Planning & Management Satbari, New Delhi-74 Submitted by :Name : Prateek Arora Class : FD1 Batch : ISBE-A FW 10/12 Enrolment NO.: D1012FWISBE-A10036-(NOI-2-NA-2044)
FINANCE DEPARTMENT Page 1
Under Guidance :CA Kuldeep Mittal Divisional manager(indiabulls)
Project on Mutual fund
With regard to my Project with Mutual Fund. I would like to thank each and every one who offered help, guideline and support whenever required. I would like to sincerely acknowledge the constant support and guidance of my mentor Mr. Anil Kumar. He provided me with all the resources and autonomy which made me put in the best of Efforts. I would also like to express my gratitude towards Mr. Kuldeep Mittal for giving me the opportunity to undergo summer internship at INDIABULLS HOUSE. I am extremely grateful to the whole employee Fraternity of INDIABULLS HOUSE, for their acceptance and support and for being so friendly. The opportunity to work for INDIABULLS HOUSE has enlightened my approach towards my chosen field and gave me a fantastic corporate exposure. Last but not the least I would like to thank my co-trainees Mr. Abhijit and Ms. Roshi Kapoor for helping me in the research work and who were always there to extend a hand of co-operation.
Project on Mutual fund
CERTIFICATE This is to certify that Mr. Prateek Arora a student of IIPM New Delhi has completed project work on “MUTUAL FUNDS” under my guidance and supervision. I certify that this is an original work and has not been copied from any source.
Name of Project Guide CA Kuldeep Mittal
books. NEW DELHI is based on primary & secondary data found by me in various departments.A. DATE: Enrollment no. Kuldeep Mittal. magazines and websites & Collected by me in under guidance of C.: D1012FWISBE-A10036-(NOI-2-NA-2044) PRATEEK ARORA MBA (Two Years) FINANCE DEPARTMENT Page 4 .Project on Mutual fund DECLERATION I hereby declare that this Project Report entitled “PROJECT ON MUTUTAL FUND” submitted in the partial fulfillment of the requirement of Master of Business Administration (MBA) of THE INDIAN INSTITUTE OF PLANNING AND MANAGEMET.
This Project gave me a great learning experience and at the same time it gave me enough scope to implement my analytical ability. This Report will help to know about the investors‟ Preferences in Mutual Fund means Are they prefer any particular Asset Management Company (AMC). Which Option (Growth or Dividend) they prefer or Which Investment FINANCE DEPARTMENT Page 5 . The main reason the number of retail mutual fund investors remains small is that six in ten people with incomes in India do not know that mutual funds exist.Project on Mutual fund EXECUTIVE SUMMARY In few years Mutual Fund has emerged as a tool for ensuring one‟s financial well being. The analysis and advice presented in this Project Report is based on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. the number who decide to invest in mutual funds increases to as many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision. But once people are aware of mutual fund investment opportunities. Which type of Product they prefer. Mutual Funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of investing in mutual funds.
One can have a brief knowledge about Mutual Fund and its basics through the Project. the Company Profile. Objectives of the study. The first part gives an insight about Mutual Fund and its various aspects. FINANCE DEPARTMENT Page 6 .Project on Mutual fund Strategy they follow (Systematic Investment Plan or One time Plan). Research Methodology. This Project as a whole can be divided into two parts.
Project on Mutual fund CONTENTS Acknowledgement Declaration Executive Summary FINANCE DEPARTMENT Page 7 .
Project on Mutual fund COMPANY PROFILE Indiabulls Financial Services Limited: FINANCE DEPARTMENT Page 8 .
FINANCE DEPARTMENT Page 9 . and Infinity Technology Trustee Pvt. Transatlantic Corporation Ltd. HDFC Bank. Indiabulls Financial Services Limited. Standard Chartered Bank. and the Northern region. Indiabulls Financial Services Private Limited on March 16. the Western region including Mumbai. ICICI Bank. 2001 due to change in the main objects of the Company from Infotech business to Investment & Financial Services business. ABN Amro Bank. private equity and institutional investors such as LNM India Internet Ventures Ltd.P. 2004 and the name of the Company was changed to M/s. rest of Maharashtra and Gujarat. Uttar Pradesh and Punjab. allowing it to access the two most important regions for Indian financial markets. Farallon Capital Partners. It became a Public Limited Company on February 27. nearby cities. 55 – 103183. 2000 as M/s Orbis Infotech Private Limited at New Delhi under the Companies Act. 1956 with Registration No..P. The name of the Company was changed to M/s.. Ltd. including the National Capital Territory of Delhi.700 million as investments from venture capital. and has developed significant relationships with large commercial banks such as Citibank. L.Project on Mutual fund Indiabulls Financial Services Limited was incorporated on January 10. and access the highly skilled and educated workforce in these cities. The Company and its subsidiaries have facilities from the above mentioned banks and financial institutions aggregating to millions... Lord Krishna Bank and IL&FS. The Company headquarters are co-located in Mumbai and Delhi. The Company was promoted by three engineers from IIT Delhi. Union Bank. and has attracted more than Rs. parts of Haryana. R R Capital Partners L.
President.Project on Mutual fund Origin of the company The Company was established by three engineers from IIT Delhi. private equity and institutional investors. The details are as follows: Sameer Gehlaut. and has attracted significant amount of investments from venture. CFO & Whole Time Director: FINANCE DEPARTMENT Page 10 . Chairman. CEO & Whole Time Director Rajiv Rattan.
Director: . FINANCE DEPARTMENT Page 11 .Project on Mutual fund Saurabh Mittal.
to conduct de-materialization and rematerialization of shares 5. acquiring. purchasing or procuring equity shares. provide lease and hire purchase services. To carry on the business of portfolio management services. To conduct depository participant services. to provide consultancy in the area of lease and hire purchase financing. To carry on the business of financing. Government agencies. holding. To provide financial consultancy services. custodial services. bonds.Project on Mutual fund 1. To receive funds. instruments and hybrid financial instruments 4. FINANCE DEPARTMENT Page 12 . deposits and investments from the public. 2. debts. securities of any kind issued or guaranteed by the Company. To conduct the business of sale. obligations. distribution and transfer of shares. mortgages. asset management services 7. investment advisory services. debentures. To hold investments in various step-down subsidiaries for investing. to provide investment advisory services on the internet or otherwise 3.2 Main Objects of the Company 1. financial institutions and corporate bodies 6. purchase.
BUSINESS MODEL The Company and its subsidiaries have a vast client base spread all over India and have been augmenting its client base across the country. The company‟s revenues are largely based on fee/commission income generated through providing securities brokerage & related financial services to individual investors and independent advisors. equity or debt instrument research activity instrument in debt and/or equity instruments. The Company and its subsidiaries focus on a core client base of individual investors and the marketing associates who serve them. receive funds from investors. The Company offers the following products and services in the financial markets: Stocks Options and Futures 25 Depository Services Commodities Insurance Products Mutual Funds Bonds and Debt Products FINANCE DEPARTMENT Page 13 . which makes its business model a low risk model as compared to a business model which may be dependent on very few clients. To operate mutual funds.Project on Mutual fund 8.
production.4 Functional Departments of the Organization. covering 18 states. Book fairs and FINANCE DEPARTMENT Page 14 . A company organized with a functional structure groups people together into functional departments such as purchasing. sales. 1. accounts. The locations of the offices have been selected based on the demand of financial products in any particular city. advertising. Outstation business development. subscriptions. marketing.Project on Mutual fund GEOGRAPHICAL DISTRIBUTION OF BRANCHES ISL has a national presence through its 160 branches.
2. These departments would normally have functional heads that may be called managers or directors depending on whether the function is represented at board level. Functional structures are perhaps the most common organizational model used by companies.1 Business Update: Year-on-Year (Y-o-Y) Comparison Q1 FY 10-11 Key Financial Highlights (Q1 FY 10-11 v/s Q1 FY 09-10) Q1 FY 10-11 Q1 FY 09-10 Growth FINANCE DEPARTMENT Page 15 . alternatives include matrix arrangements or business unit teams.Project on Mutual fund Seminar etc..
36 39.34% 60.65 78. Cr.00% SME CV 25.24 2.00% PL EPS (Rs. Cr.97% Quarter-on-Quarter (Q-o-Q) Comparison Q1 FY 10-11 Key Financial Highlights (Q1 FY 10-11 v/s Q4 FY 09-10) Q1 FY 10-11 Total (Rs.00% 14.) EPS (Rs.07 2.92% 143.65 74.24 111.) PBT (Rs.00% 395.) 199.00% Q1 FY 09-10 MORTGAGE CORPORATE 50.56% 5.60 94.09 Cr. Cr.Project on Mutual fund Total revenues (Rs. Cr.58 4.56 Growth 9.14% 41.) PAT (Rs.09 Q1 FY 09-10 428.) 4.) PBT (Rs.99 41.) PAT (Rs.3 Asset composition : FINANCE DEPARTMENT Page 16 .95% 80.80 133.00% 6. Cr.99 18. 471.) 199.81% 2.80 133.58 Revenues 471.
4 Improving Liability Profile: FINANCE DEPARTMENT Page 17 .00% 6.00% MORTGAG E CORPORA TE SME CV 18.00% Q1 FY 10-11 1.Project on Mutual fund 6.00% Increasing share of low‐risk mortgage loans Composition of long tenure loans up to 69% and will result in sustained asset growth • Medium term loans are down to 31% of the overall loans from 56% in Q1 FY 09‐10 • Growth in mortgage loans will lead to lower provisioning costs 2.00% 69.
Project on Mutual fund
Q1 FY 09-10
2.00% BANK LOANS 36.00% 62.00% CP NCDs
CRISIL Rating Report on Indiabulls Financial Services Ltd.: IBFSL‟s resource profile has gradually improved over the past two years, with lower dependence on short-term market borrowing, stronger and larger number of lender relationships, and lower borrowing costs.
NCD Issuance: In July 2010 IBFSL has raised Rs 1,260 Cr. from allotment of 3‐ years‟ secured redeemable Non‐Convertible Debenture (NCDs) to leading Banks, PFs and Financial Institutions. Shift towards long term debt and NCDs from large number of public sector banks and financial institutions at competitive rates. Company to further focus on diversifying its sources of funding
Project on Mutual fund
10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Q1 FY 09- Q2 FY 09- Q3 FY 09- Q4 FY 09- Q1 FY 1010 10 10 10 11
AA (Stable) Rating from ICRA (An Associate of Moody‟s Investors Service) and CARE to contribute towards efficient management of cost of funds as the company enhances its borrowing programme to fund its expanding loan portfolio Company has been able to avail long term loans from PSU banks at very competitive rates for its home loans portfolio
2.6 Headroom for growth :
Project on Mutual fund
10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Q1 FY 09-10 Q2 FY 09-10 Q3 FY 09-10 Q4 FY 09-10 Q1 FY 10-11 NET WORTH BORROWINGS
CRAR of 28.48% provides for considerable headroom for growth of loan portfolio for the next 3 years. Company to focus on long duration term loans and NCDs to fund expansion of its asset book
2.7 Income Sources :
87.00% INTERST INCOME FEE INCOME
Steady long term and sustained loan book growth to further increase contribution of „Interest Income‟
FINANCE DEPARTMENT Page 20
36% 36.00% 30.00% 46.54% Q1 FY 09-10 Q2 FY 09-10 Q3 FY 09-10 Q4 FY 09-10 Q1 FY 10-11 Steadily growing portfolio and income will further improve the cost income ratio Improving cost income ratio will help stabilize spreads as the company expands its portfolio towards low risk mortgage assets 2.00% 5.19% 26.00% 40.00% 0.Project on Mutual fund Steady growth in disbursements and enhanced cross‐selling of related services to borrowers will expand „Fee Income‟ and also improve cost‐income ratio Improving recoveries from written‐off loan assets will steadily grow 2.8 Improving Cost-Income Ratio 50.00% 20.00% 45.16% 25.00% 10.00% 25.9 Stable Asset Quality : FINANCE DEPARTMENT Page 21 .00% 15.00% 35.56% 33.
20% 0.00% Q1 FY 09-10 Q2 FY 09-10 Q3 FY 09-10 Q4 FY 09-10 Q1 FY 10-11 0.72% 1.64% Net NPA as % of AUM CRISIL Rating Report on India bulls Financial Services Ltd. NPA Levels to reduce further as company shifts its product mix towards low risk mortgage assets Historical baggage of high risk assets constitutes major portion of the NPAs and will continuously comedown with asset growth mainly in mortgage assets FINANCE DEPARTMENT Page 22 .00% 1.90% 1.: Mortgage financing is less susceptible to economic cycles in terms of growth and portfolio quality visà-vis other retail asset classes such as auto loans and personal loans. therefore.20% 1.40% 0.44% 0.60% 1.60% 0.40% 1. believes that IBFSL‟s shift of business focus to mortgages will lead to a structural improvement in the company‟s asset quality.90% 0.Project on Mutual fund 2. CRISIL.00% 0.80% 1.80% 0.
The role of an integrated financial infrastructure is to stimulate and sustain economic growth. The financial services sector has kept pace with the growing needs of corporate and other borrowers. This stability was ensured through the resilience that has been built into the system over time. even when other markets in the Asian region were facing a crisis. The US$28 billion Indian financial services sector has grown at around 15 per cent and has displayed stability for the last several years. FINANCE DEPARTMENT Page 23 . Reforms are continuing as part of the overall structural reforms aimed at improving the productivity and efficiency of the economy. insurers and mutual fund companies have developed a wide range of products and services to suit varied customer requirements.Project on Mutual fund SECTOR OVERVIEW INDIAN FINANCIAL SERVICES INDUSTRY India is a large and growing economy with rapidly expanding financial services sector. The sector has witnessed a transformation over the last decade as a result of the economic liberalization which started in 1991. Banks. capital market participants.
CAPITAL MARKETS The Indian capital markets have undergone a substantial change over the last decade. The market has also witnessed substantial progress in terms of regulatory reforms. India is now placed among the mature markets of the world. increased capital requirement. Banks and trade financiers have also played an important role in promoting foreign trade of the country. India has the third largest investor base in the world after USA and Japan.4800 million in 1995-96 to approximately Rs. Regulatory changes.094 million in April 2004. These have been accompanied by an accelerated growth in trading volumes. and sophistication of listed securities including single stock futures and options.Project on Mutual fund The Reserve Bank of India (RBI) has successfully introduced a regime where interest rates are more in line with market forces. With over 20 million shareholders. Financial institutions have combated the reduction in interest rates and pressure on their margins by constantly innovating and targeting attractive consumer segments. greater customer sophistication and application of technology have forced the brokerage industry to consolidate. application of technology to trading and settlement. with BSE and NSE combined average daily turnover expanding approximately from Rs.232. FINANCE DEPARTMENT Page 24 .
The size of the market presents immense opportunities to new players with only 20 per cent of the country‟s insurable population currently insured.Project on Mutual fund Over the last 7 years. This consolidation is expected to continue. the market share of the top 5 brokers has increased from 6% (1996-97) to 13% (December. Allianz. Standard Life. 2003). AMP and Sun Life among others. INSURANCE SECTOR With the opening of the market. marketing and distribution. Foreign majors have entered the country and announced joint ventures in both life and non-life areas. foreign and private Indian players are keen to convert untapped market potential into opportunities by providing tailor-made products. Lombard General. the erstwhile state sector companies have become aggressive in terms of product offerings. The consolidation in the online business is even greater. FINANCE DEPARTMENT Page 25 . With competition. The presence of a host of new players in the sector has resulted in a shift in approach and the launch of innovative products. Major foreign players include New York Life. and provide an opportunity for the top broker to own 15% market share or more over the next 3-4 years. services and valueadded benefits. Tokio Marine. The Insurance Regulatory and Development Authority (IRDA) has played a proactive role as a regulator and a facilitator in the sector‟s development. Aviva. AIG. with the top 5 players owning more than 90% of the market. with most of the consolidation coming in the last 2 years.
The industry has grown in size by about 200 percent from March 1993 to December 2003. the structure of funds available and the composition of net assets across various industry segments. partly fuelled by recent structural changes. FINANCE DEPARTMENT Page 26 . and increased investor appetite for market linked instruments (such as equities. The retail financial services sector is expected to grow at very high rates and the market share leaders will be able to enjoy exceptional growth if they can execute on providing diversified services at low cost to a large number of clients with world class service standards. such as the opening up of the Insurance sector for private insurance companies as stated above.Project on Mutual fund There are four public sector and nine private sector insurance companies operating in general/non-life insurance business with a premium income of over US$ 2. The market‟s potential has been estimated to have a premium income of US$ 80 billion with a potential size of over 300 million people. The rapid growth has led to considerable changes in regulation.) due to the rapid decline in local interest rates and commensurate reduction in attractiveness of fixed income instruments. mutual funds etc.58 billion. This has the potential to reach US$ 9 billion in the next five years. as well as in the portfolio of investment funds. The General Insurance Corporation (GIC) (which covers the non-life sector) had a total premium income of US$ 2 billion in 2001-02. the Indian mutual fund industry has been one of the fastest growing sectors in the Indian capital and financial markets.1. Mutual Funds Sector Over the past ten years.Other financial services sectors are growing rapidly too. at Rs.40 trillion in terms of assets under management.
95 4 Tata Equity P/E Fund .Growth 8 Bharti AXA Treasury Advantage Fund .03 5 Sahara Liquid Fund .38 288.78 Page 27 .Growth 6 HDFC Growth Equity Fund - 7 Axis Liquid Fund - Institutional .Fixed Pricing Option .Regular Growth FINANCE DEPARTMENT Apr 2011 13 Apr 2011 13 Apr 2011 13 Apr 2011 13 Apr 2011 1784.Growth Apr 2011 113.90 1173.Project on Mutual fund The major players in the Indian Mutual Fund Industry are: Rank Scheme Name Date NAV (Rs.13 Growth 49.91 Traded Scheme 3 Tata Balanced Fund .37 1089.89 2 SBI Gold Exchange 13 Apr 2011 2092.) 1 HDFC Capital Builder 13 Fund .13 Growth Apr 2011 83.
Project on Mutual fund MUTUAL FUNDS ALL ABOUT MUTUAL FUNDS WHAT IS MUTUAL FUND BY STRUCTURE BY NATURE EQUITY FUND DEBT FUNDS BY INVESTMENT OBJECTIVE OTHER SCHEMES PROS & CONS OF INVESTING IN MUTUAL FUNDS ADVANTAGES OF INVESTING MUTUAL FUNDS DISADVANTAGES FUNDS MUTUAL FUNDS INDUSTRY IN INDIA MAJOR PLAYERS OF MUTUAL FUNDS IN INDIA HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY CATEGORIES OF MUTUAL FUNDS FINANCE DEPARTMENT Page 28 OF INVESTING MUTUAL .
debentures and other securities. the fund belongs to all investors.Project on Mutual fund INVESTMENT STRATEGIES WORKING OF A MUTUAL FUND GUIDELINES OF THE SEBI FOR MUTUAL FUND COMPANIES DISTRIBUTION CHANNELS DOES FUND PERFORMANCE AND RANKING PERSIST? PORTFOLIO ANALYSIS TOOLS RESEARCH REPORT OBJECTIVE OF RESEARCH SCOPE OF THE STUDY DATA SOURCES SAMPLING DATA ANALYSIS MUTUAL FUND AND ITS VARIOUS ASPECTS Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. The joint ownership of the fund is thus “Mutual”. i.e. FINANCE DEPARTMENT Page 29 . This pool of money is invested in accordance with a stated objective. The money thus collected is then invested in capital market instruments such as shares.
professionally managed basket of securities at a relatively low cost. bonds and other securities. Each shareholder participates in the gain or loss of the fund. A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities. FINANCE DEPARTMENT Page 30 . Units are issued and can be redeemed as needed.Project on Mutual fund Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. The funds Net Asset value (NAV) is determined each day.
Mutual Fund investor is also known as a mutual fund shareholder or a unit holder ADVANTAGES OF MUTUAL FUND Portfolio Diversification Professional management Reduction / Diversification of Risk Liquidity Flexibility & Convenience Reduction in Transaction cost Safety of regulated environment Choice of schemes Transparency FINANCE DEPARTMENT Page 31 .Project on Mutual fund When an investor subscribes for the units of a mutual fund. he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund).
Project on Mutual fund DISADVANTAGE OF MUTUAL FUND No control over Cost in the Hands of an Investor No tailor-made Portfolios Managing a Portfolio Funds Difficulty in selecting a Suitable Fund Scheme FINANCE DEPARTMENT Page 32 .
Project on Mutual fund CATEGORIES OF MUTUAL FUND FINANCE DEPARTMENT Page 33 .
Based on their investment objective: Equity funds: These funds invest in equities and equity related instruments. at any point of time. With fluctuating share prices. fresh investments can not be made into the fund.In this case a key stock market index. historically. Hence. investment in equity funds should be considered for a period of at least 3-5 years. However. Close-ended funds: These funds raise money from investors only once. FINANCE DEPARTMENT Page 34 . generally smoothens out in the long term.100% of the capital is invested in equities spreading across different sectors and stocks.Project on Mutual fund Mutual funds can be classified as follow : Based on their structure: Open-ended funds: Investors can buy and sell the units from the fund. after the offer period. such funds can yield great capital appreciation as. such funds show volatile performance. It can be further classified as: i) Index funds. Morgan Stanley Growth Fund). If the fund is listed on a stocks exchange the units can be traded like stocks (E. equities have outperformed all asset classes in the long term. like BSE Sensex or Nifty is tracked. Therefore. At the same time.g. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. ii) Equity diversified funds. even losses.. thereby offering higher returns at relatively lower volatility. short term fluctuations in the market.
v) Sector funds. e. on the risk-return ladder.Equity Linked Saving Scheme provides tax benefit to the investors.Project on Mutual fund iii|) Dividend yield funds. Balanced fund: Their investment portfolio includes both debt and equity.Invest 100% of the assets in sectors which are related through some theme.g. Debt fund: They invest only in debt instruments. construction. cements sectors etc.it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. ii) Equity-oriented funds -Invest at least 65% in equities.Invest 100% of the capital in a specific sector. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. As a result. vi) ELSS. e. and are a good option for investors averse to idea of taking risk associated with FINANCE DEPARTMENT Page 35 . iv) Thematic funds. Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities. remaining in debt. A banking sector fund will invest in banking stocks. they fall between equity and debt funds.g. -An infrastructure fund invests in power.
they invest exclusively in fixed-income instruments like bonds. a large portion being invested in call money market. in the absence of arbitrage opportunities. Funds are allocated to equities. Higher proportion (around 75%) is put in money markets. such funds invest a major portion of the portfolio in long-term debt papers.These funds invest 100% in money market instruments.Typically. vi) Income funds LT. Put your money into any of these debt funds depending on your investment horizon and needs. i) Liquid funds. iii) Floating rate funds . Therefore.Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. iv) Arbitrage fund.They invest 100% of their portfolio in long-term government securities. v) Gilt funds LT. Floaters invest in debt instruments which have variable coupon rate. Government of India securities.Project on Mutual fund equities. vii) MIPs. and money market instruments such as certificates of deposit (CD).Invest in short-term debt papers. ii) Gilt funds ST. FINANCE DEPARTMENT Page 36 . commercial paper (CP) and call money.They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market.They invest 100% of their portfolio in government securities of and T-bills. debentures. derivatives and money markets.
at a fixed interval. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month. The investor gets fewer units when the NAV is high and more units when the NAV is low. to an equity scheme of the same mutual fund. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month. Payment is made through post dated cheques or direct debit facilities. INVESTMENT STRATEGIES 1. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum. This is called as the benefit of Rupee Cost Averaging (RCA) 2. 3.Project on Mutual fund viii) FMPs. FINANCE DEPARTMENT Page 37 .fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.
It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones. analyzing the required information data and providing an alternative solution to the problem . collecting. Duration of Study: The study was carried out for a period of eight weeks. Secondary data can be used only for the reference. One of the most important users of research methodology is that it helps in identifying the problem. and primary data has been collected by interacting with various people. however primary data collection was given more importance since it is overhearing factor in attitude studies. from 15th June 2011 to 10th August 2011. Research has been done by primary data collection. Data sources: Research is totally based on primary data. The secondary data has been collected through various journals and websites. Sampling: Sampling procedure: FINANCE DEPARTMENT Page 38 .Project on Mutual fund RESEARCH METHODOLOGY This report is based on primary as well secondary data.
Sample size is based on number of assumption for investment in Mutual Fund. pie charts. The data has been analyzed by using mathematical/Statistical tool.Project on Mutual fund The sample was selected through different year of financial statement of the company and through various observations in the company while doing internship and by past performance of mutual fund . Time limitation. The sample size may not adequately represent the whole market. Sample design: Data has been presented with the help of bar graph. Limitation of study Possibility of error in data interpretation because data collected from different sources and different years of balance sheet which may cause to possibility of error. FINANCE DEPARTMENT Page 39 . line graphs etc.
company fixed deposits. Debenture s Co. we get this in a tabular form Return Safety Volatility Liquidit y Convenie nce Moderate Equity High Low High High Bonds Moderate High Moderate Moderate High Co. FDs Moderate Moderate Moderate Low Low Moderate Low Low Low Moderate FINANCE DEPARTMENT Page 40 . all these investment options could be judged on the basis of various parameters such as.return. bank deposits. volatility and liquidity.Project on Mutual fund DATA ANALYSIS Why has it become one of the largest financial instruments? If we take a look at the recent scenario in the Indian financial market then we can find the market flooded with a variety of investment options which includes mutual funds. real estate etc. measuring these investment options on the basis of the mentioned parameters. gold. fixed income bonds. life insurance. corporate debentures. safety convenience. equities. PPF.
The other option offering high return is real estate but that even comes with high volatility and moderate safety level.Project on Mutual fund Bank Deposits PPF Moderate High Low Moderate High Low High Low High High Life Insurance Low High Low Low Moderate Gold Moderate High Moderate Moderate Gold Real Estate Mutual Funds High Moderate High Low Low High High Moderate High High We can very well see that mutual funds outperform every other investment option.appetite. comparing it with the other options. even the liquidity and convenience involved are too low. Even the convenience involved with investing in equities is just moderate. it scores low on return . so it‟s not an happening option for person who can afford to take risks for higher return. we find that equities gives us high returns with high liquidity but its volatility too is high with low safety which doesn‟t makes it favourite among persons who have low risk. On three parameters it scores high whereas it‟s moderate at one. Now looking at bank deposits. it scores better than equities at all fronts but lags badly in the parameter of utmost important ie. Gold have always been a favourite among Indians but when we look at FINANCE DEPARTMENT Page 41 .
the investor can enjoy the best investment option as per the investment objective. III) Returns get adjusted for the market movements: as the mutual funds are managed by experts so they are ready to switch to the profitable option along with the market movement. Although it ensures high safety but the returns generated and liquidity are moderate. Suppose they predict that market is going to fall then they FINANCE DEPARTMENT Page 42 . Its principle of diversification allows the investors to taste all the fruits in one plate. Now everybody can choose their fund according to their investment objectives. we can say that mutual fund emerges as a clear winner among all the options available. Such as if some are good at return then they are not safe. The reasons for this being: I) Mutual funds combine the advantage of each of the investment products: mutual fund is one such option which can invest in all other investment options. there exists no single option which can fit to the need of everybody. But mutual funds have definitely sorted out this problem. Straightforward.likewise. II)dispense the shortcomings of the other options: every other investment option has more or les some shortcomings. Similarly the other investment options are not at par with mutual funds and serve the needs of only a specific customer group. if some are safe then either they have low liquidity or low safety or both….Project on Mutual fund it as an investment option then it definitely doesn‟t gives a very bright picture. just by investing in it.
Therefore. By using some of the portfolio analysis tools. so it is getting difficult for the investors to take right investing decision. „Quality‟ determines how much risk a fund is taking to generate those returns. Portfolio analysis tools: With the increasing number of mutual fund schemes. there exists one more reason which has established mutual funds as one of the largest financial intermediary and that is the flexibility that mutual funds offer regarding the investment amount. So the easiest available option for investors is to choose the best performing funds in terms of “returns” which have yielded maximum returns. one needs to use a combination of these tools to make a thorough analysis of the funds. One can start investing in mutual funds with amount as low as Rs. he can become more equipped to make a well informed choice. There are many financial tools to analyze mutual funds. 500 through SIPs and even Rs. But if we look deeply to it. we can find that the returns are important but it is also important to look at the „quality‟ of the returns. 100 in some cases. The present market has become very volatile and buoyant.Project on Mutual fund can sell some of their shares and book profit and can reinvest the amount again in money market instruments. Each has their unique strengths and limitations as well. IV) Flexibility of invested amount: Other then the above mentioned reasons. it becomes very difficult for an investor to choose the type of funds for investment. One can make a judgment on the FINANCE DEPARTMENT Page 43 .
portfolio turnover ratio. alpha. It is used as a short term decision making tool. which determines the volatility of a fund. trey nor measure. High standard deviation of a fund implies high volatility and a low standard deviation implies low volatility. R-squared. Thus. FINANCE DEPARTMENT Page 44 . Beta analysis: Beta is used to measure the risk. portfolio turnover ratio and total expense ratio. A beta that is greater than 1 means that the fund is more volatile than the benchmark index. Rsquared. if the fund‟s portfolio doesn‟t have a relevant benchmark index then a beta wo1\2Q2QQuld be grossly inappropriate. beta. Now I have compared two funds of SBI on the basis of standard deviation. Deviation is defined as any variation from a mean value (upward & downward).Project on Mutual fund quality of a fund from various ratios such as standard deviation. The success of beta is heavily dependent on the correlation between correlation between a fund and its benchmark. Sharpe ratio. Sharpe ratio. total expense ratio etc. It basically indicates the level of volatility associated with the fund as compared to the market. A fund with a beta very close to 1 means the fund‟s performance closely matches the index or benchmark. beta would indicate the volatility against the benchmark index. In case of funds. as compared to the market. the returns fluctuate every day. Since the markets are volatile. while a beta of less than 1 means that the fund is more volatile than the benchmark index. In case of funds. So before going into details. beta. let‟s have a look at these ratios: Standard deviation: in simple terms standard deviation is one of the commonly used statistical parameter to measure risk.
Now the tough task for investors start. R-Squared (R2): R squared is the square of „R‟ (i. It describes the level of association between the fun‟s market volatility and market risk.squared (more than 0.. HDFC . Beta should be ignored when the r-squared is low as it indicates that the fund performance is affected by factors other than the markets. Whenever an investor thinks of investing in mutual funds. coefficient of correlation).e. The value of R. they may carry on the further process themselves or can go for advisors like SBI. through the AMCs FINANCE DEPARTMENT Page 45 .80) indicates that beta can be used as a reliable measure to analyze the performance of a fund. he must look at the investment objective of the fund. A high R. Then the investors sort out the funds whose investment objective matches with that of the investor‟s.Project on Mutual fund For example if we are considering a banking fund. it‟s a very tough job for the investors to choose the best fund for them. Of course the investors can save their money by going the direct route i.e.squared ranges from0 to1. we should look at the beta against a bank index. How do investors choose between funds? When the market is flooded with mutual funds.
2.25% (entry load) but could cost the investors in terms of returns if the investor is not an expert. the investors can get more number of units and vice-versa. the investor is always at a profit. 500 or Rs. The mf advisors‟ thoughts go beyond just investment objectives and rate of return.Project on Mutual fund directly but it will only save 1-2. 100. In this case. which will result in reducing the average cost and enhancing returns. In case if the NAV of fund falls. Investors can also benefit by increasing the SIP amount during market downturns. greater the chances of benefiting from lower prices. So it is always advisable to go for MF advisors. Some of the basic tools which an investor may ignore but an mf advisor will always look for are as follow: 1. Rupee cost averaging allows an investor to bring down the average cost of buying a scheme by making a fixed investment periodically. More frequent the investment interval. Rupee cost averaging: The investors going for Systematic Investment Plans (SIP) and Systematic Transfer Plans(STP) may enjoy the benefits of RCA (Rupee Cost Averaging). This results in the average cost per unit for the investor being lower than the average price per unit over time. like Rs 5. Whereas STP allows investors who have lump sums to park the funds in a low-risk fund like liquid funds and make periodic transfers to another fund to take advantage of rupee cost averaging. Rebalancing: FINANCE DEPARTMENT Page 46 . The investor needs to decide on the investment amount and the frequency. even if the market falls.000 a month and nowadays even as low as Rs.
This ensures that the investor books some profits and maintains the asset allocation in the portfolio.Project on Mutual fund Rebalancing involves booking profit in the fund class that has gone up and investing in the asset class that is down. In case of mutual funds. the dividends from debt funds may be transferred to equity schemes. This gives the investor a small exposure to a new asset class without risk to the principal amount. 4. Such transfers may be done with or without entry loads. the dividend is reinvested not into the same scheme but into another scheme of the investor's choice. Diversification: Diversification involves investing the amount into different options. the investor needs to specify the event. The trigger could be the value of the investment. depending on the MF's policy. the amount or the number of units to be redeemed and the scheme into which the switch has to be made. 3. Some fund houses allow such switches without charging an entry load. Trigger and switching are tools that can be used to rebalance a portfolio. Tax efficiency: FINANCE DEPARTMENT Page 47 . The funds redeemed can be switched to other specified schemes within the same fund house. level of the market indices or even a date. level of capital appreciation. the investor may enjoy it afterwards also through dividend transfer option. Trigger facilities allow automatic redemption or switch if a specified event occurs. The net asset value of the scheme. To use the trigger and switch facility. Under this. For example.
SWP implies capital gains for the investor. the growth option is more tax efficient for all investors. This is because investors can redeem units using the SWP where they will have to pay 10 per cent as long-term capital gains tax against the 12. Investors who need a regular stream of income have to choose between the dividend option and a systematic withdrawal plan that allows them to redeem units periodically. Investors in higher tax brackets will end up paying a higher rate as shortterm capital gains and should choose the dividend option. Even then an investor needs to examine costs. tax implications and minimum applicable investment amounts before committing to a service. simplicity and affordability.Project on Mutual fund Tax factor acts as the “x-factor” for mutual funds. All the tools discussed over here are used by all the advisors and have helped investors in reducing risk.50 per cent (plus surcharge and education cess) on dividends paid out. Debt funds have to pay a dividend distribution tax of 12. then the SWP is suitable only for investors in the 10-per-cent-tax bracket. If it is short-term.50 per cent DDT paid by the MF on dividends. If the capital gain is long-term (where the investment has been held for more than one year). Tax efficiency affects the final decision of any investor before investing. What are the most lucrative sectors for mutual fund managers? FINANCE DEPARTMENT Page 48 . The investors gain through either dividends or capital appreciation but if they haven‟t considered the tax factor then they may end loosing.
The investments made by the fund managers are used for prediction. The expert management of the funds will always look for profitable and high paying sectors. Because the investments done by the MFs acts as trendsetters. of MFs betting on it Automotive 255 banking & financial 196 services cement construction consumer durables conglomerates Chemicals consumer FINANCE DEPARTMENT & 237 51 218 259 non 146 Page 49 .Project on Mutual fund This is a question of utmost interest for all the investors even for those who don‟t invest in mutual funds. Their investments show that which sector is hot? And will set the market trends. So we can have a look at most lucrative sector to know about the recent trends: Sector name No. Huge investments assure liquidity and reflects appositive picture whereas tight investment policy reflects crunch and investors may look forward for a gloomy picture.
miscellaneous. Other than it other sectors on height are oil & gas. chemicals. Sectors performing average are automotive. manufacturing. FINANCE DEPARTMENT Page 50 . services and tobacco. consumer non.Project on Mutual fund durables engineering & capital 317 goods food & beverages information technology media entertainment Manufacturing metals& mining Miscellaneous oil & gas Pharmaceuticals Services Telecom Tobacco Utility 259 275 250 290 250 200 264 150 225 & 218 175 284 From the above data collected we can say that engineering & capital goods sector has emerged as the hottest as most of the funds are betting on it. metals & mining and information technology. telecom. media & entertainment. conglomerates. We can say that this sector is on boom and presents a bright picture. food & beverages. The sectors which are not so favourite are banking & financial services. cement & construction. pharmaceuticals and utility.durables.
Thus this analysis not only gives a picture of the mindset of fund managers rather it also reflects the liquidity existing in each of the sectors. It is not only useful for investors of mutual funds rather the investors of equity and debt too could take a hint from it. it is always advisable for other investors too take a look on it. It can be further presented in the form of a graph as follow: 350 300 250 Axis Title 200 150 100 50 0 conglomerates chemicals metals& mining services automotive engineering & capital goods food & beverages oil & gas media & entertainment pharmaceuticals banking & financial services consumer non durables cement & construction information technology FINANCE DEPARTMENT consumer durables manufacturing miscellaneous telecom tobacco utility Page 51 .Project on Mutual fund And the sector which failed to attract the fund managers is consumer durables with just 51 funds betting on it. Asset allocation by fund managers are based on several researches carried on so.
9. Thus. Sharpe ratio: sharpe ratio is a risk to reward ratio. A fund with a higher sharpe ratio means that these returns have been generated taking lesser risk.85 and beta value is 0. the fund is less volatile and yet generating good returns. it means that this fund is less aggressive than the market. The ratio is calculated as: FINANCE DEPARTMENT Page 52 . In other words. given similar returns.88 0. which helps in comparing the returns given by a fund with the risk that the fund has taken.80 in case 1.2 Case 2 0. the rsquared is more than 0. In case 2.Project on Mutual fund For example: Case 1 R2 B 0. implies that it would be wrong to mention that the fund is aggressive on account of high beta. the fund with a higher sharpe ratio offers a better avenue for investing.9 In the above tableR2 is less than 0.65 1.
Portfolio turnover is the purchase and sale of securities in a fund's portfolio. Turnover is simply a measure of the percentage of portfolio value that has been transacted. These costs consist primarily of management fees and additional expenses such as trading fees. legal fees. then. auditor fees and other operational expenses. not an indication of the percentage of a fund's holdings that have been changed.Project on Mutual fund Sharpe ratio = (Average return. which represents the TER: Total expense ratio = (Total fund Costs/ Total fund Assets) FINANCE DEPARTMENT Page 53 . Turnover is important when investing in any mutual fund. The total cost of the fund is divided by the fund's total assets to arrive at a percentage amount. since the amount of turnover affects the fees and costs within the mutual fund. means the fund has bought and sold all its positions within the last year.risk free rate) / standard deviation Portfolio turnover ratio: Portfolio turnover is a measure of a fund's trading activity and is calculated by dividing the lesser of purchases or sales (excluding securities with maturities of less than one year) by the average monthly net assets of the fund. A ratio of 100%. Total expenses ratio: A measure of the total costs associated with managing and operating an investment fund such as a mutual fund.
56% 11.71% 40.00% 11.57% - - 21.26% 18.73% 1M 9.e.46% 44. magnum equity fund and magnum multiplier plus following the same benchmark i.24% Now in the above table. we have two funds from SBI ie. We have their returns FINANCE DEPARTMENT Page 54 .71% 6M 15. In this case.44% 45.61% 45.28% 59. BSE 100.53% 26.07% 48. we have compared their returns during various time periods.47% 30.31% 11.18% 1Y 3Y 5Y 26.Project on Mutual fund Performance report and portfolio analysis of magnum equity fund and magnum multiplier plus against their benchmark BSE100: YTD Magnu m equity fund 23.16% 5.02% 3M -7.96% Magnu m multipl ier plus Bench mark BSE10 0 17.74% -2.
Again.17% and 2. the past performance just tells the background and history of the fund.72% respectively. the YTD return of all 3 is negative even then the benchmark is at a better position than the funds.65% which is a huge figure. If we look at a long term perspective.21% and benchmark by a mere 4.28% return scored over equity fund just by a margin of 0. In th last 3 months too. during last 1 month. FINANCE DEPARTMENT Page 55 . 6 months.47%. A 45. Here not only the fund mangers failed to beat or match the market. but in case of 3 year returns.07%. Also. 3month. during last 1 month return of all three got positive but the funds always remained behind the benchmark. now moving down to 1 yr return. It is greater than equity fund by 10. But the ultimate surprise comes when we look at the datas of last 6 months. then magnum multiplier plus totally outperformed both magnum equity fund as well as bse 100. Similarly. 3 year and 5 year.28%. Rather they also performed as laggards.Project on Mutual fund YTD.35% and from benchmark by 15. both the funds were behind bse100 but all the three gave negative returns and the difference between them and benchmark was narrowed down. we can clearly see that bse 100 emerges as a true winner.71% but both the funds failed to match it even. 1 year. From the following analysis we can infer that inspite of all the steps taken. surely multiplier plus gave the maximum return but it fell sharply in comparison to its 5 yr return. The benchmark gave a return of 30. In case of 5 year returns.47% and 26. neither the benchmark nor the magnum equity fund stands anywhere near multiplier plus. When the bse 100 gave returns of 11. The bse 100 outscored multiplier plus and equity fund by 6. these funds were trailing by 29. by looking at it we cannot interpret that the fund will perform in the same way in the future too. giving negative returns. it is not always possible for the fund managers to always beat the market.
Therefore.46% 31% 2. But beta of both the funds is smaller than 1 that means both the funds are less volatile than the market index.squared values are more than 0.42% 25% 2. FINANCE DEPARTMENT Page 56 .84% 1. The beta of magnum equity fund is higher than that of magnum multiplier plus.90%.D of multiplier plus is greater than that of equity fund by 0. Generally higher the SD higher is the risk and vice-versa.5% multiplier Analysis: We can see that the standard deviation of both the funds are more or less same even then the S. A look at the Sharpe ratio indicates that magnum equity has outperformed multiplier plus. A higher Sharpe ratio of equity fund depicts that these return have been generated taking lesser risk than the multiplier plus. As r.5% 26. equity fund is more volatile than multiplier plus. magnum multiplier plus is riskier than magnum equity fund.80 in both the cases.96% 26. Therefore.00% 0.95% 0. we can rely on the usage of beta for the analysis of these funds.90% 0. It Is less volatile than the other.Project on Mutual fund Quantitative data: Ratios Magnum equity fund Magnum plus Standard deviation Beta r-squared Sharpe ratio Portfolio turnover Total expense ratio 1.
3. To know the Preferences for the portfolios.e. it indicates that beta can be used as a reliable measure to analyze the performance of these funds. To find out the Preferences of the investment in mutual fund .5% OBJECTIVES OF THE STUDY 1. Total expense ratio of both the funds are same i. FINANCE DEPARTMENT Page 57 .squared is higher. Portfolio turnover ratio of magnum equity fund is higher than multiplier plus. To know why one has invested or not invested 4. 2. So its beta is more reliable. It may lead to an increase in expenses but could be ignored if could generate higher return by changing the composition of portfolio. To find out what should do to boost Mutual Fund Industry..Project on Mutual fund R-squared of both the funds are greater than 0.80. Magnum equity fund‟s R. 2. 5. It mean the manager is frequently churning the portfolio of equity fund than of multiplier plus. To find out the most preferred channel.
Project on Mutual fund SCOPE OF THE STUDY A big boom has been witnessed in Mutual Fund Industry in recent times. which company. The research was carried on in Gurgaon and New Delhi. FINANCE DEPARTMENT Page 58 . I surveyed on my Project Topic “Project on Mutual Fund” The study will help to know the preferences of the company. portfolio. A large number of new players have entered the market and trying to gain market share in this rapidly improving market. This project report may help the company to make further planning and strategy. mode of investment. I had carried out the research work in the head office of Indiabulls where I completed my Project work. option for getting return and so on they prefer.
Income earned by IBFSL through various investments:. unquoted (at cost): -In equity shares of associate companies -In preference shares Current investments . Investment Amount Long term investments.Project on Mutual fund DATA ANALYSIS & INTERPRETATION (d). non 386853698 2000000000 FINANCE DEPARTMENT Page 59 . nontrade.
therefore 1. out of Rs.4% total income is earned through mutual fund investment in the market through IN House analysis team which is low risk investment. Reason for investment in Mutual Fund Reason Liquidity Moderate Risk To maintain the Cash FINANCE DEPARTMENT No.16350404283 Profit.unquoted -In units of mutual fund –non 9041547963 trade -In pass through Certificatesnon trade -In Bonds –non trade 204951518 50000000 Interpretation: Income earned by IBSFL . mutual fund contribute by Dividend income on units of mutual funds and on equity is Rs.216525008 . of time 30 10 60 Page 60 .Project on Mutual fund trade .
FINANCE DEPARTMENT Page 61 . And excess is transferred for investment in mutual funds. If invested wisely in mutual fund that gives good return as compared to moderate risk . Moderate Risk: Top performing mutual fund gives better returns then the bank interest rate .Project on Mutual fund balance No. of time 30 Liquidity Moderate Risk 60 10 To maintain the Cash balance Interpretation: Indiabulls have policy to invest some money in mutual fund because of the following reason some are as follows: Liquidity : Mutual fund investment have high degree of liquidity as compared to other investments if made. To maintain the cash balance : indiabulls have to maintain the cash balance as may be required as per daily basis.
(AMC) Name of AMC SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others No.Project on Mutual fund Out of 100 times invested in mutual funds. of units are approx and Name of AMC are on the basis of assumption. of units 550000 750000 300000 750000 560000 450000 700000 (Note: No. as company has policy not to disclose the data to outsiders) FINANCE DEPARTMENT Page 62 . 30 times money invested in mutual fund for the basis of liquidity. Indiabulls invested in different Assets Management Co. 60 times to maintain the cash budget.
5 80 Interpretation: In Indiabulls most of the time mutual funds they preferred UTI and Reliance Mutual Fund. of units figures in lakhs 60 3. UTI and Reliance Mutual fund is performing well in the market and having better return from others plans Preferred through Systematic Investment Plan.5 5.Project on Mutual fund Others HDFC Name of AMC Kotak SBIMF ICICI Reliance UTI 0 20 40 No.5 5.5 7. Preferred Portfolios Portfolio Equity Debt Balanced Percentage 30% 25% 45% FINANCE DEPARTMENT Page 63 .6 7.0 7.0 4.
Project on Mutual fund Percentage 30% 45% Equity Debt Balanced 25% Interpretation: From the above graph 30% preferred Equity Portfolio. 45% preferred Balance and 25% preferred Debt portfolio Preference of Indiabulls whether to invest in Sectoral Funds Response Yes No No. of time 25 75 FINANCE DEPARTMENT Page 64 .
Project on Mutual fund 25% 75% Yes No Interpretation: Out of 100 times. Generally indiabulls avoid for sectoral fund unless and until there is no proper conformation about the news for investment. 75% times indiabulls do not prefer to invest in Sectoral Fund because there is maximum risk and 25% prefer to invest in Sectoral Fund. FINANCE DEPARTMENT Page 65 . Because it contains the industry specific risk and increases the overall investment risk.
The company has established a network of easily – accessible branches across 160 locations throughout India. CONCLUSION Investing in mutual fund is good investing plan and good use of mobilization of resources as a risk associated with the investment is low and it is a good option to keep liquid asset like in mutual fund because at the time in demand of liquid cash liquid asset i. and the wide presence of these branches further enhance its brand recognition with prospective clients. IBFSL Continue to grow the client base and maintain a high – quality loan portfolio. OR through fund transfer. Mutual Fund is good option for investment as the risk related to investment with the return is low. mutual FINANCE DEPARTMENT Page 66 . commercial papers. Indiabulls Financial Services Ltd. NCD. Intercompany deposits with its subsidiaries.e. which helps attract new.Project on Mutual fund FINDINGS AND CONCLUSION FINDINGS Indiabulls Financial Services ltd. is one of India‟s leading companies and has strong brand recognition within India. potential clients. mobilizes its Cash surplus by buying or selling of mutual fund.
they are well known Brand. As the awareness and income is growing the number of mutual fund investors are also growing. UTI. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. Many of investors directly invest their money through AMC because they do not have to pay FINANCE DEPARTMENT Page 67 . etc. Reliance. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC). I observed that many of people have fear of Mutual Fund.Project on Mutual fund fund NCD can be sold and arrangement of fund can be done but to be successful in Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market that indiabulls in house department is doing before investing in mutual fund. Distribution channels are also important for the investment in mutual fund. They need the knowledge of Mutual Fund and its related terms. Products. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. People invest in those Companies where they have faith or they are well known with them. “Brand” plays important role for the investment. Channels etc. They can change investors‟ mind from one investment option to others. Sunderam. they are performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle. They think their money will not be secure in Mutual Fund. ICICI Prudential etc. SBIMF. Financial Advisors are the most preferred channel for the investment in mutual fund. There are many AMCs in India but only some are performing well due to Brand awareness.
because they are the main source to influence the investors. So the advisors should try to change their mindsets. Mutual funds offer a lot of benefit which no other single option could offer.Project on Mutual fund entry load. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective. Investors should be made aware of the benefits. SUGGESTIONS AND RECOMMENDATIONS The most vital problem spotted is of ignorance. Nobody will invest until and unless he is fully convinced. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. Now Indiabulls has also registered themselves as a mutual fund house which is a kind of diversify of business and it is a good indication for future growth . Only those people invest directly who know well about mutual fund and its operations and those have time. The advisors should target for more and more young investors. FINANCE DEPARTMENT Page 68 .
advisors must provide sound advice and high quality.Project on Mutual fund Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers. Younger people aged under 35 will be a key new customer group into the future. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. Though most of the prospects and potential investors are not aware about the SIP. Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. so making greater efforts with younger customers who show some interest in investing should pay off. FINANCE DEPARTMENT Page 69 . their need and time (how long they want to invest). To succeed however. Customers with graduate level education are easier to sell to and there is a large untapped market there. There is a large scope for the companies to tap the salaried persons. By considering these three things they can take the customers into consideration.
Project on Mutual fund BIBLIOGRAPHY NEWS PAPERS OUTLOOK MONEY TELEVISION CHANNEL (CNBC AAWAJ) MUTUAL FUND HAND BOOK FACT SHEET AND STATEMENT WWW.COM FINANCE DEPARTMENT Page 70 . MUTUALFUNDSINDIA.COM WWW.ONLINERESEARCHONLINE.AMFIINDIA.COM WWW.MONEYCONTROL.COM WWW.
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