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CONCEPT A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, -professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:

Mutual Fund Operation Flow Chart


The project basically carried out to give good guidelines for investor. And also to educate the investors about mutual funds. The project idea is to project mutual funds as the better avenue for investment. Mutual fund is productive package for a layinvestor with limited finances. Mutual fund is a very old practice in U.S., and it has made a recent entry into India. Common man in India still finds ‘Bank’ as a safe door for investment. This shows that mutual funds have not gained a strong foot-hold in his life.

The project creates an awareness that the mutual fund is worthy investment practice. The various schemes of mutual funds provide the investor with a wide range of investment options according to his risk-bearing capacities and interest. Besides, they also give a handy return to the investor. The project analyses various schemes of mutual fund by taking different mutual fund schemes from different AMC’S. The future challenges for mutual funds in India are also considered.


The study basically made to educate the investors about Mutual Funds. Analyze the various schemes to highlight the risk and return of diversity of investment that mutual funds offer. Thus, through the study one would understand how a common man could fruitfully convert a pittance into great penny by wisely investing into the right scheme according to his risk- taking abilities.


DSP Merrill Lynch Investment Managers Ltd. Each scheme is calculated their risk and return using different performance measurement theories. Canbank Investment Management Services. The reasons for such performance are immediately analyzed in the commentary. 4 . and Templeton Asset Management (India) Pvt. Pie charts are used to reflect the portfolio risk and return. Ltd. Ltd.SCOPE OF THE STUDY: The study is limited to the analysis made for three major types of schemes offered by four AMC’s namely Indian infoline Asset Management Co.

3. To understand the risk and return of the various schemes. 2. To understand the recent trends in the MF world. 5 . To show the wide range of investment options available in MF’s by explaining various schemes offered by different AMC’s. Dividends. or by the rise in value of the securities. A mutual fund. interest and profits from the sale of any securities (capital gains) are passed on to the shareholders in the form of distributions. 4. Shareholders who invest in a fund each own a representative portion of those investments. To find out the various problems faced by Indian mutual funds and possible solutions. bonds. To help an investor to make a right choice of investment. To project mutual funds as the ‘productive avenue’ to invest in contrast to the laxity of ‘bank investing’. And shareholders generally are allowed to sell (redeem) their shares at any time for the closing market price of the fund on that day. Mutual fund investors make money either by receiving dividends and interest from their investments. or money market instruments. also referred to as an open-end fund.including stocks. 5. 6. less any expenses charged by the fund. while considering the inherent risk factors. is an investment company that spreads its money across a diversified portfolio of securities -.OBJECTIVES: 1.

A mutual fund is a special type of company that pools together money from many investors and invests it on behalf of the group. such as stocks. in each of its underlying securities. Mutual funds raise the money by selling shares of the fund to the public. In any case. shareholders are free to sell their shares at any time. depending upon the performance of the securities held by the fund. you're probably already familiar with these investments. For most mutual funds. bonds and money market instruments. in effect. Funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles. shareholders receive an equity position in the fund and. In return for the money they give to the fund when purchasing shares. much like any other company can sell stock in itself to the public. yet it was only in the 1990’s that mutual funds became mainstream investments. 6 . or perhaps even own some. although the price of a share in a mutual fund will fluctuate daily. it's important that you know exactly how these investments work and how you can use them to your advantage. as the number of households owning them nearly tripled during that decade. With recent surveys showing that over 88% of all investors participate in mutual funds. dating back to the early 19th century. The first modern American mutual fund opened in 1924.DR GLEN BROWN Mutual funds have been around for a long time. in accordance with a stated set of objectives.

For 7 . source s of secondary data are government publications. Primary data is the data collected specifically for the Secondary data is the data collected previously by someone else for some other purpose. Data is collected directly from people and organization via questioners or surveys before being analyzed to reach conclusions concerning the issues covered in the questionnaire or survey. worldwide web etc. WWW.Sebi. ∗ Other documents generated with in the organization.indiainfoline.Methodology of Study To fulfill the objective of the study both primary and secondary data has been In this study the secondary is mainly taken from ∗ The company `s training material.amfindia. which can be analyzed and interpreted according to requirements. ∗ Reconciliation statements. and the applications of Reliance equity fund. In this study primary data was collected through interaction with staff of India info line pvt Ltd. which have to access ∗ WWW. WWW. newspapers.

due to which the study may not be detailed in all aspects. The study is limited by the detailed study of various schemes. magazines and newspapers etc. as primary data was not accessible. 2. 3. The study is limited only to the analysis of different schemes and its suitability to different investors according to their risk-taking ability. 8 . offer documents. The study is based on secondary data available from monthly fact sheets. The study is conducted in short period.LIMITATIONS OF THE STUDY: 1. web sites. 4.


through the study one would understand how a common man could fruitfully convert a pittance into great penny by wisely investing into the right scheme according to his risk.taking abilities. Analyze the various schemes to highlight the risk and return of diversity of investment that mutual funds offer.The study basically made to educate the investors about Mutual Funds. You achieve this diversification through a Mutual Fund with far less money than you can do on your own. Diversification: Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. BENEFITS OF MUTUAL FUND INVESTMENT Professional Management: Mutual Funds provide the services of experienced and skilled professionals. Convenient Administration: Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries. 10 . backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. Mutual Funds save your time and make investing easy and convenient. Thus. delayed payments and follow up with brokers and companies.

the investor gets the money back promptly at net asset value related prices from the Mutual Fund. 11 . you can systematically invest or withdraw funds according to your needs and convenience. Low Costs: Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage. Liquidity: In open-end schemes. Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. regular withdrawal plans and dividend reinvestment plans. custodial and other fees translate into lower costs for investors. Transparency: You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme. the proportion invested in each class of assets and the fund manager's investment strategy and outlook. the units can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund. In closed-end schemes. Flexibility: Through features such as regular investment plans.Return Potential: Over a medium to long-term.

The funds are open for subscription only during a specified period. By Structure: Open–ended funds: An open –end fund is one that is available for subscription all through the year. Investors can conveniently buy and sell units at Net Asset Value (“NAV”) related prices.Affordability: Investors individually may lack sufficient funds to invest in high-grade stocks. STRUCTURE AND CONSTITUENTS OF FUND MUTUAL FUND Sponsor Trustee AMC Custodian Mutual fund schemes may be classified on the basis of its structure and its investment objective. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy. The key feature of open-end schemes is liquidity. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exist route to the investors. Closed-ended funds: A closed –end funds has a stipulated maturity period which generally raging from 3 to 15 years. These do not have a fixed maturity. some close –ended funds give 12 .

corporate debentures and Government securities. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of option of selling back the units to the Mutual fund through periodic repurchase at NAV related prices. Such Schemes generally invest in fixed income securities such as bonds. It has been proven that returns from stocks. By Investment Objective: Growth Funds: The aim of growth funds is to provide capital appreciation over the medium to long-term. They are open for sale or redemption during pre-determined intervals at NAV related prices. Such schemes normally invest a majority of their corpus in equities. 13 . Income Funds: The aim of income funds is to provide regular and steady income to investors. Income Funds are ideal for capital stability and regular income. Interval Funds: Interval funds combine the features of open-ended schemes.

Balanced Funds: The aim of balanced funds is to provide both growth and regular income. These schemes generally invest in safer short-term instruments such as treasury bills. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods. each time you buy or sell units in the fund. or fall equally when the market falls. The advantage of a no load is that the entire corpus is put to work. 14 . These are ideal for investors looking for a combination of income and moderate growth. the NAV of these schemes may not normally keep pace. Money Market Funds: The aim of money funds is to provide easy liquidity. a commission will be payable. no commission is payable on purchase or sale of units in the fund. That is. Returns on these schemes may fluctuate depending upon the interest rate prevailing in the market. certificates of deposit. It could be corpus is put to work. No-Load Funds: A No-Load Fund is one that does not charge a commission for entry or exit. In a rising stock market. commercial paper and inter-bank call money. Typically entry exit loads range from 1% to 2%. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. Load Funds: A Load Funds is one that charges a commission for entry of exit. That is. preservation of capital and moderate income.

Investments in Equity Linked Saving Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act. Index Schemes: Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE Sectoral Schemes: Sectoral Funds are those. Special Schemes Industry Specific Schemes: Industry Specific Schemes invest in the industries specified in the offer document. 2000 and the amount is invested before September 30. provided the capital asset has been sold to April 1. The Act also provide opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds. 15 . 2000. The investment or these funds is limited to specific like InfoTech. FMCG and Pharmaceuticals etc.Other Schemes: Tax Saving Schemes These schemes offer tax rebates to the investor under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. which invest exclusively in a specified industry or a group of industries or various segments such as ‘A’ Group shares or initial public offerings.

Indian Bank Mutual Fund (Nov 89). Bank of Baroda Mutual Fund (Oct 92).700 crores of assets under management. 004 crores. The history of mutual funds in India can be broadly divided into four distinct phases First Phase – 1964-87(UTI MONOPOLY) An Act of Parliament established Unit Trust of India (UTI) on 1963. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. the mutual fund industry had assets under management of Rs. SBI Mutual Fund was the first non. 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. Punjab National Bank Mutual Fund (Aug 89). At the end of 1988 UTI had Rs. public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).UTI.47.6. Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non. 16 . Bank of India (Jun 90). The first scheme launched by UTI was Unit Scheme 1964. at the initiative of the Government of India and Reserve Bank the. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. At the end of 1993.History of the Indian Mutual Fund Industry The mutual fund industry in India started in 1963 with the formation of Unit Trust of India.UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87).

a new era started in the Indian mutual fund industry. representing broadly. assured return and certain other schemes. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. except UTI were to be registered and governed.Third Phase – 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993. the assets of US 64 scheme. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.805 crores. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. under which all mutual funds. 541 crores of assets under management was way ahead of other mutual funds. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. giving the Indian investors a wider choice of fund families. As at the end of January 2003. 21. 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. 17 . 835 crores as at the end of January 2003. The number of mutual fund houses went on increasing. The Specified Undertaking of Unit Trust of India. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. Also.44. 1993 was the year in which the first Mutual Fund Regulations came into being. with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. there were 33 mutual funds with total assets of Rs. 1. Fourth Phase – since February 2003 In February 2003.29.

000 crores of assets under management and with the setting up of a UTI Mutual Fund. sponsored by SBI.76. It is registered with SEBI and functions under the Mutual Fund Regulations. As at the end of June 30. there were 31 funds. The graph indicates the growth of assets over the years.The second is the UTI Mutual Fund Ltd. 2003. which manage assets of Rs. The Assets under management of the Specified Undertaking of the Unit Trust of India has therefore been excluded from the total assets of the industry as a whole from February 18 .104762 crores under 376 schemes. PNB. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. the mutual fund industry has entered its current phase of consolidation and growth. GROWTH IN ASSETS UNDER MANAGEMENT Note: While UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit Trust of India effective from February 2003. conforming to the SEBI Mutual Fund Regulations. BOB and LIC. and with recent mergers taking place among different private sector funds.

the industry has Rs 100. now enjoy a dominant position in the country. In India this industry began with the setting up of the Unit Trust Of India (UTI) in 1964 by the government of India in order to mobiles small saving. Kothari Pioneer Mutual fund was the first fund to be established in the private sector with foreign fund. The private sector now controls around RS 45. It holds scope for growth. As on June 2002.396 cr. The total asset under management over the past 4 to 5 tears has almost remain stagnant around the Rs 100. despite all that has been said about it is still in a nascent stage and has extremely bright future ahead. almost half the size of the industry.703 crore asset under management spread across 36 funds with more than 390 schemes. The industry is still one-tenth size of the banking deposits in the country.818 crore assets under management. During the past 37 years. However. The mutual fund industry has become a fastest growing sector in the country’s capital and financial market with an average compounded growth rate of 20 percent over the past five years.547 cr as of March2000.Resent Trends in Mutual Funds Industry The Indian Mutual fund industry. 000 crore mark. trouble hit UTI has lost its dominant position in the industry and the asset under management has slipped drastically to Rs 46. The private sector mutual fund industry in its resent ‘avatar’ is barely 7 years old. which were permitted along with foreign partners in 1993. UTI has grown to be a dominant player in the industry with assets with over Rs 76. This has put a question mark in front of the claims that mutual funds are growing part of the financial savings and planning industry in India. This is despite increasing competition with more than 30 asset management companies for investor’s money. 19 . Private sector mutual funds.

spurred on by changes and amendments in regulation as the mutual fund regulation that established a comprehensive legal framework for the mutual fund industry to develop coherently. pension funds and post offices schemes that provide not only guaranteed return but also tax-free returns. enhanced transparency and improvement regulation. uncertain. ING Investments manages around Rs. Mutual fund products are competing with the banks deposits. mutual funds are unable to provide assured return since they are investing in financial markets and returns from them are.364 crore as on June 2002. These transformation benefiting the investor friendly open-ended schemes. by definition. currently. CEO ING Investment Management. “The industry is in the process of evolving into a bigger and better investment medium for all market segment”. Drastic Transformation: The industry is undergoing a transformation and is witnessing large number of mergers. 20 . Say Kavita Hurry. increasing the range of funds to choose from. further. Reserves Banks of India (RBI) bonds. However. The securities and Exchange Board Of India (SEBI) came out with comprehensive regulation in 1993 which defined the structure of the mutual fund and asset management Companies for the first time. acquisitions and takeovers in the schemes and asset management companies.Substantial development have made.

chief executive officer. Sun F&C. an important step towards maturating of the industry will be develop third party distribution channel and expand distribution outside of the major cities.” notes Moddy’s ICRA report. “The challenges for the private fund players manager will be to break the ‘big city’ limit and begin to sell and educate the rest of the market and to diversify sales”. Here.427 crore. in addition to maintain and improving best practices and better company governances”. Further the report notes.New challenges and growth areas: However. A strong retail back-bone will create better standards. Stable and long-term fiscal incentives designed to capture long-term retail and private pension savings will be of utmost importance for the industry. government’s fiscal policy and have the capital market regulators for the industry’s continued growth will play an essential role.” Adds Nikhil Kattau. Sun F&C currently manages around Rs. “asset management companies must attract more retail investors. Now there is an industry –wide limit for investing in overseas securities $500 million offering Indian Mutual funds and Indian investor the possibility to invest in the non-Indian security mutual funds is a fundamental step towards modernization and evolution of the market. greater competition and more liquidity. says Moody’s Investors services and ICRA report on the industry. Another fundamental turning point in the growth of the mutual fund market is the opening of the market to the foreign investments. 21 . “The industry needs go deeper into the existing markets and wider into the new markets and provides newer financial products to grow.

are now seen flexing their muscles. any fall in any segment by more than 30 percent obviously indicates that something serious is happening and concerned people need to take remedial steps. UTI still remains a formidable force to reckon with.” Market Trends: A lone UTI with just one scheme in 1964 now competes with as many as 400 odd products and 34 players in the market. private fund managers will be motivated and encouraged to develop new products and foreign managers will be attracted to the dynamic market. which have gained substantial mass. 22 . and even the regulators have become more mature and responsible. a system of risk-reward has been created where the corporate sector is more transparent then before. investors would be reassured of a stable industry. While UTI has always been a dominant player on the bourses as well as the debt markets. Last six years have been the most turbulent as well as exiting ones for the industry. With maturing financial markets and increasing marketing there are reasons for “more than moderate optimisms. Product innovation is now passé with the game shifting to performance delivery in fund management as well as service. registrars and transfer agents. till it fate decided by its masters in North Block. the onus of building investor confidences falls on the shoulders of the private sector mutual funds. In spite of the stiff competition and losing market share. In an economy growing at 6 percent per annum. In the relative absence of UTI from the scène.In a supportive environment. Those directly associated with the fund management industry like distributors. The industry is also having a profound impact on financial markets.By rewarding honest and transparent management with higher valuations. the new generations of private funds.

boasts of an Asset base that is much higher than its bank deposits. The U.34 crore during the first nine months of the year as against a net inflow of Rs.604. 7819.Funds have shifted their focus to the recession free sectors like pharmaceuticals. but this trend is beginning to change.S. Funds collection. which averaged at less than Rs100bn per annum over five-year period spanning 199398 doubled to Rs210bn in 1998-99. mutual fund assets are not even 10% of the bank deposits. (Source: Thinktank. Funds performances are improving. 99) This is forcing a large number of 23 . Indeed private MFs saw a net inflow of Rs. The power shift towards mutual funds has become obvious. Recent figures indicate that in the first quarter of the current fiscal year mutual fund assets went up by 115% whereas bank deposits rose by only 17%. In the current year mobilization till now have exceeded Rs300bn. The Financial Express September.40 crore in the case of public sector funds. The coming few years will show that the traditional saving avenues are losing out in the current scenario. The fund mobilization trend by mutual funds in the current year indicates that money is going to mutual funds in a big way. What is particularly noteworthy is that bulk of the mobilization has been by the private sector mutual funds rather than public sector mutual funds. The collection in the first half of the financial year 1999-2000 matches the whole of 1998-99.S. Mutual funds are now also competing with commercial banks in the race for retail investor’s savings and corporate float money. India is at the first stage of a revolution that has already peaked in the U. Total collection for the current financial year ending March 2000 is expected to reach Rs450bn. Many investors are realizing that investments in savings accounts are as good as locking up their deposits in a closet. In India. FMCG and technology sector.

Their role as intermediaries cannot be ignored. Banks v/s Mutual Funds BANKS Low High Low MUTUAL FUNDS Better Low High Returns Administrative exp. Risk 24 .banks to adopt the concept of narrow banking wherein the deposits are kept in Gilts and some other assets which improves liquidity and reduces risk. It is just that Mutual Funds are going to change the way banks do business in the future. The basic fact lies that banks cannot be ignored and they will not close down completely.

MF Funds Managers Fund as Per SEBI guidelines & AMC Agreement Provides Necessary Custodian Services Provide Banking Services Custodian Appointed by AMC Bankers Appointed by AMC Registrars and Transfer Agents Provide Registrars Services and act as a Transfers Agents 25 .STRUCTURE OF MUTUAL FUNDS Sponsor Company Establishes MF as a Trust Registers MF with SEBI Managed by a Board of Trustees Mutual Fund Hold Unitholders’ Fund in MF Ensure Compliance to SEBI Enter into Agreement with AMC Appointed by Board of Trustees Asset Management Company Appointed by Trustees Float.

Figure gives an idea of the structure of Indian mutual funds. The sponsor is required to contribute at least 40 per cent of the minimum net worth (Rs 10 crore) of the asset management company. namely sponsor. 1993. registrars and transfer agents. 1996. 1908. a mutual fund is to be formed by the sponsor and registered with SEBI. executed by the sponsor in favour of trustees named in such an instrument. mutual fund trust. 26 . which came into force on 20 January 1993. A mutual fund shall be constituted in the form of a trust and the instrument of trust shall be in the form of a deed. duly registered under the provisions of the Indian Registration Act. The sponsor must have a sound track record and general reputation of fairness and integrity in all his business transactions. The regulations have since been replaced by the Securities and Exchange Board of India (Mutual Funds) Regulations. their functions and obligations. The sponsor for a mutual fund can by any person who. They are of course assisted by other independent administrative entities like banks. 1996. We may discuss in brief the formation of different entities.The formation and operations of mutual funds in India is solely guided by SEBI (Mutual Fund) Regulations. AMC and custodian. As per SEBI Regulation. A mutual fund comprises four separate entities. acting alone or in combination with another body corporate establishes the mutual fund and gets it registered with SEBI. through a notification on 9 December 1996 (Appendix 2).

It is also the responsibilities of the trustees to control the capital property of mutual funds schemes. As per SEBI guidelines. The AMC or its employees cannot act as a trustee. The trustees are required to submit half-yearly reports to SEBI on the activities of the mutual fund. The AMC must act as per SEBI guidelines. The mutual fund raises money through sale of units under one or more schemes for investing in securities in accordance with SEBI guidelines. It is the job of the mutual fund trustees to see that the schemes floated and managed by the AMC appointed by the trustees. At least half the trustees should be independent persons. as well as a quarterly report on its activities. The trustees have the right to obtain relevant information from the AMC. No person who is appointed as a trustee of a mutual fund can be appointed as a trustee of any other mutual fund unless he is an independent trustee and prior permission is obtained from the mutual fund in which he is a trustee. 27 .The board of trustees manages the mutual fund and the sponsor executes the trust deeds in favour of the trustees. an asset management company is appointed by the trustees to float the schemes for the mutual fund and manage the funds raised by selling units under a scheme. The trustees appoint a custodian and supervise their activities. They can also dismiss the AMC under specific condition as per SEBI regulations. trust deeds and management agreement between trustee & the AMC. are in accordance with the trust deeds and SEBI guidelines. The trustees can be removed only with prior approval of SEBI.

28 . Alliance Capital Mutual Fund. SBI Mutual Fund. SMC mutual fund. Zurich India Mutual Fund. Reliance Capital Mutual Fund. Sundaram Mutual Fund. Pioneer ITI Mutual Fund. Kotak Mahindra Mutual Fund.List of AMCs Benchmark Mutual Fund Birla. Tata Mutual Fund.HDFC Mutual Fund. Dundee Mutual Fund. Indian Bank Mutual Fund. DSP Merrill Lynch Mutual Fund. Principal Mutual Fund. PNB Mutual Fund. Morgan Stanley Mutual Fund. Prudential ICICI Mutual Fund. Sun Life Mutual Fund BOB Mutual Fund. LIC Mutual Fund. Fund. Taurus Mutual Fund. Shriram Mutual Fund. Deutsche Mutual Fund. Templeton Mutual Fund. HSBC Mutual Fund. Canbank Mutual Fund. BOI Mutual Fund. ING Savings Trust Mutual Fund. Escorts Mutual Fund. Alliance Capital. First India Mutual Fund. Chola Mutual Fund. JM Mutual Fund. JF Mutual Fund. Unit Trust of India. Mutual Fund. UTI Mutual Fund. Standard Chartered Mutual Fund. Sun F&C Mutual Fund. IL&FS Mutual Fund.


Using simple concepts of diversification. one can maximize his returns on investments & multiply one’s savings. One must invest wisely & get maximum returns.11 2340. details about the concept & working of mutual fund. A sound investment is one which gives the investor reasonable returns with a proper profitable management This report gives the details about various investment objectives desired by an investor. To lock up one’s hard earned money in a savings bank’s account is not enough to counter the monster of inflation. stable returns & limited exposure to equity investment. power of compound interest. This report also covers 30 .3 NEED AND IMPORTANCE OF STUDY A small investor is the one who is able to correctly plan & decide in which profitable & safe instrument to invest.83 255.UTI MUTUAL FUND ZURICH INDIA MUTUAL FUND LIC MUTUAL FUND 103 39 27 509. To save is not enough. Investment is a serious proposition one has to look into various factors before deciding on the instruments in which to invest. One must plan investment in such a way that his investment objectives are satisfied.

31 .the different players in Mutual Funds and different avenues of investment & in detail about “SMC MUTUAL FUNDS”.

1.SEBI GUIDELINES (BRIEFLY) Schemes of a Mutual Fund: • The asset Management Company shall launch no scheme unless the trustees approve such scheme and a copy of the offer document has been filed with the Board. • The offer document shall contain disclosures which are adequate in Every mutual fund shall along with the offer document of each scheme order to enable the investors to make the investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the groups companies of the sponsor a close-ended scheme shall be fully redeemed at the end of the maturity period. • The mutual fund and asset management company shall be liable to refund the application money to the applicants. • pay filing fees. If the mutual fund fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1). “Unless a majority of the unit holders otherwise decide for its rollover by passing a resolution”. If the moneys received from the applicants for units are in exceeded subscription as referred to in clause (b) of sub-regulation (1) The asset management company shall issue to the applicant whose (uncompleted) 32 . 2.

Rules Regarding Advertisement: • The offer document and advertisement materials shall not be misleading or contain any statement or opinion. Every mutual or the asset Management Company shall prepare in respect of each financial year an annual report and annual statement of accounts of the schemes and the fund as specified in Eleventh schedule. records and document are maintained. which are incorrect or false. 33 . records and documents. Every mutual fund shall have the annual statement of accounts guided by an auditor who is not any way associated with the auditor of the asset management company. Investment Objectives and Valuation Policies: • The price at which the units may be subscribed or sold and the price at which such units any time is repurchased by the mutual fund shall be made available to the investors. for each scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in give a true and fair view of the state of affairs of the fund and intimate to the Board the place where such books of account. General Obligations: • Every asset management company for each scheme shall keep and maintain proper books of accounts. • The financial year for all the schemes shall end as of March 31 of each year.

Proactive For Action in Case Of Default: • On and from the date of the suspension of the certificate or the approval

as the case may be the mutual fund, trustees or asset management company, shall cease to carry on any activity as mutual fund, trustees or asset management company, during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents, or securities that may be in its custody of control, telling to its activities as mutual fund, trust asset management company. Restrictions on Investments: • A mutual fund scheme shall not invest more than 15% of its NAV In

debt instruments issued by a single issuer, which are rated not below investment grade by a credit rating agency authorized to of the scheme with the prior approval of the Board of Trustees and the Board of asset management company y. • A mutual fund scheme shall not invest more than 10% of its NAV in

unrated debt instruments issued by a single issuer and the total investments in such not exceed 25% of the NAV of the Board of asset Management Company. • No mutual fund under all its schemes should own more than ten per cent

of any company’s. paid up capital carrying voting rights, • Such transfers are done at the prevailing market price for quoted

Instruments on spot basis; the securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made. • A scheme may invest in another scheme under the same asset

management company or any other mutual fund without charging any fees, provided that aggregate interschmes investment made by all schemes under the same management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund.

The initial issue expansion in respect of any scheme may not exceed six

per cent of the funds raised under that scheme. • Every management company shall buy and sell securities on the basis of

deliveries and shall in all cases of purchases, take delivery of relative securities and in all cases of sales, deliver the securities and shall in no case put itself in a position whereby it Has to make short sale or carry forward transaction or engage in bad finance. • Every management company shall, get the securities purchased or

transferred in the name of the mutual fund on account of the concerned scheme, wherever investments are intended to be of long-term nature. • Pending deployment of funds of a scheme in securities in terms of

investment objective is of the scheme a mutual fund can invest the funds, of the scheme in short term deposits of scheduled commercial banks. • No mutual fund scheme shall make any investment in;

I. Any unattested security of an associate or group company of the sponsor or II. Any security issued by way of private placement by an associate or group company of the sponsor; or The listed securities of group companies of the sponsor which is in Excess of 30% of the net assets [of all the schemes of a mutual fund] • No mutual fund scheme shall invest more than 10 per cent of its NAV in

the equity shares or equity related instruments of any company. Provided that, the limit of 10 per cent shall not be applicable for investments in index fund or sector industry specific scheme.


INVESTORS’ RIGHTS AND OBLIGATIONS Investor’s Rights: The offer document of a scheme lays down the investors’ rights. Investors are the owners of the scheme’s assets, and it is therefore imperative that they are aware of their rights with respect to the scheme’s assets, its management, recourse to the trustees, the AMC and other constituents. The important rights of the unit-holders are outlined below: ♦ Unit-holders have a proportionate right in beneficial ownership of the

scheme’s assets otherwise held in trust for them by the Trustees of the fund. They also have the proportionate right to any dividend or income declared under the scheme. ♦ Unit-holders have the right to obtain from the trustees any information

that may have an adverse bearing on their investments. ♦ Unit-holders are entitled to receive dividend warrants within 42 days of

the date of dividend declaration. ♦ The appointment of an AMC of a fund can be terminated by 75% of the

unit-holders of the scheme present and voting at a special meeting that can be called for the purpose with the prior approval of SEBI. ♦ Unit-holders have the right to inspect major documents of the fund i.e.

material contracts (the trust deed, the investment management agreement, the custodian services agreement and the registrar and transfer agency agreement), memorandum and articles of association of the AMC, recent audited financial statements, the texts of SEBI (MF) Regulations, Indian Trusts Act and the offer document of the scheme.


do not offer “assured return” schemes. Unit-holders are not distinct from the trust and therefore cannot sue the trust i. under Indian law. redemption. the fundamental concept of a mutual fund is that the investors invest as their own risk and cannot force the AMC to assure a specified level of return.♦ Investors have the right to approve any changes in the ‘fundamental attributes’ of a closed-end scheme (type of scheme. they are also subject to certain limitations in their capacity as unit-holders. 37 . In India. mutual funds. the investors need to understand that except in certain circumstances the sponsors of a mutual fund do not have any legal obligation to meet the shortfall in case the assured return is not achieved. In other countries. and transfer). however. But. Also. some of the fund sponsors have. ♦ Each unit-holder has the right to receive a copy of the annual financial statements. Legal Limitations to Investors Rights Investors need to note that while they enjoy several rights as outlined above. offered such assured returns to investors. in the initial stages of development of the fund industry. and periodic statements regarding his transactions (purchase. provided the consent of 75% of unit-holders has been obtained. distributions and reinvestments. if they feel aggrieved by any action of the trustees that is seen not to be in their interest. In case of openend schemes they have the right to be adequately informed of such changes.e. an investor can initiate legal proceedings against the trustees who are the protectors of the investors’ interests. so they can exercise the option redeeming their holdings in the fund. as any profits or losses on fund investments in any case belong to the investors. investment objective and terms of issue). they jdo not have legal recourse to the trust as. the Trust is not a district or separate legal entity. However.

Failure to effectively study the offer document does not entitle him later to have recourse to the fund. an exception has been made by SEBI in case of schemes where such assurance is provided in the offer document. the monitoring is entirely the investor’s own responsibility. But. the AMC or any other constituent. Only if the offer document has specifically provided such guarantee by a named sponsor. the risk factors. It is only after he has invested in a scheme that he becomes entitled to the rights discussed earlier.Since assured return schemes do exist in India. his rights and the fund’s and the sponsors’ track record. the investors will have the right to sue the sponsors to make good any shortfall in promised returns. The courts have also upheld this view in relevant cases in India. He can certainly exercise in a reasonable way his right to ask the trustees for information that he requires. He must appreciate the fundamental attributes of the scheme. with a guarantee from the sponsor to meet any shortfall. A prospective investor does not enjoy any standing or rights with respect to the fund. Investors’ Obligations It is the investor’s duty to carefully study the offer document before investing in units of a scheme. 38 . In case a unit-holder is aggrieved by any actions of the Fund or AMC. The investor must also monitor his investment in a scheme by carefully studying the scheme’s financial statements. the trustees or the AMC. the appropriate form for him to approach is SEBI as mentioned below. its portfolio composition and research reports published by mutual fund tracking agencies.

it is common practice for mutual funds to compute the share of each investor on the basis of the value of Net Assets per Share/Unit. commonly known as the Net Asset Value (NAV). The fund does not account for investors' subscriptions as liabilities or deposits but as Unit Capital. There are. Mutual funds in India are required to follow the accounting policies laid down in SEBI (Mutual Fund) Regulations. As there are many investors in a fund. Mutual fund employees and mutual fund agents need to be aware of the special requirements concerning accounting for the fund's assets. The fund's Net Assets are therefore defined as the assets minus the liabilities. and periodical budgets.Accounting and Valuation: The Importance of Accounting Knowledge The balance sheet of a mutual fund is different from the normal balance sheet of a bank or a company. securities custodians and registrars. liabilities of a strictly short-term nature that may be part of the balance sheet. This knowledge will help them better understand their responsibilities and their place in the organization. liabilities and transactions with investors and other outside constituents such as banks. and to explain the performance of mutual funds to investors. by getting an overview of the functioning of the fund. Net Asset Value (NAV) A mutual fund is a common investment vehicle where the assets of the fund belong directly to the investors. All of the fund's assets belong to the investors and are held in fiduciary capacity for them. This section of the workbook summarizes the important Regulations. 1996 and the amendments in 1998. the investments made on behalf of the investors are reflected on the assets side and are the main constituent of the balance sheet. 39 . On the other hand. however.

• NAV = Net Assets of the scheme / Number of Units Outstanding.Units sold or redeemed 40 .Other Payables . and -.e.The following are the regulatory requirements and accounting definitions lay down by SEBI.Other assets and liabilities. Market value of investments + Receivables + Other Accured Income + Other Assets =Accured Expenses .Other Liabilities No.Valuation of all investment securities held -. of Units Outstanding as at the NAV date • A fund's NAV is affected by four sets of factors: -.Purchase and sale of investment securities -. i.

41 . 3) Investment Risks Whether the mutual fund makes money in shares or loses depends upon the investment expertise of the Asset Management Company. risks are greater. The prices of shares are subjected to wide price fluctuations depending upon market conditions over which nobody has a control. If the investment advice goes wrong. INHERENT RISK FACTORS: 1) Market Risks: In general there are certain risks associated with the every kind of investment on shares. Moreover. Slump and Recovery.RISK INVOLVED IN MUTUAL FUNDS INDUSTRY Mutual funds are not free from risk. It is so because basically the mutual funds also invest their funds in stock markets on shares. but cannot be completely eliminated even by a good investment. the fund has to suffer a lot. These market risks can be reduced. the following risk are inherent in their dealing. It all depends upon the nature of the scheme. which they offer to investors. The investment expertise’s of various funds are different and it is reflected on the returns. in a pure growth scheme. Recession. The phase of the business cycle affects the market conditions to a large extent. 2) Scheme Risks There are certain risks inherent in the scheme itself. every economy has to pas through a cycle-Boom. which are volatile in nature and are not risk free. For instance. They are called market risks.

Changes in Government bring in the risk of uncertainty which every player in the financial service industry has to face. It is often said that many economic decisions are politically motivated. 5) Political Risks Successive Governments bring with them fancy new economic ideologies and policies. its income paying capacity is affected. It may even go to the extent of winding up its business. So mutual funds are no exception to it. it cannot declare any dividend.4) Business Risks The corpus of a mutual fund might have been invested in a company’s shares. Though the mutual fund can withstand such a risk. If the business of that company suffers any set back. 42 .


Indianbulls is all set become an imposing wealth management firm in the country by giving the best to its clients as well as stakeholders.COMPANY PROFILE Indianbulls is emerging as one of the top most wealth management companies in India with a daily turnover of over 200 crores and 116 branches spread all over the country. Indianbulls has been set up to engage in • • • • • • • Stock Broking Institutional Broking Derivatives Depository Services Distribution of Investment Products Distribution of Insurance Commodities Broking 44 . and Collin Stewarts India Private Limited (Portfolio Management Services & Research along with institutional broking operations for Collin Stewarts which is the largest wealth management company in the UK). Intime Spectrum (India’s largest Registry & Transfer Agents). The Sharyans Group has an impressive portfolio of businesses under its fold which mainly fall under the real estate and financial services categories. The prominent subsidiaries of this Group are Prebone Yamane (Country’s largest debt broking company). Indianbulls will soon touch the pinnacles of success in the financial services industry by being a dominant force in the broking as well as the distribution arena. With an unblemished and reputed track record. Under the guidance of the Sharyans and Inga Group.


insightful analytical abilities and high standards of integrity.ITI Investment Flash Monthly 4 Pager .ITI Wealth Wise ITIFSL also offer daily technical calls through SMS to our clients free of charge ADVANTAGES TO INVESTERS: Why you need a financial planner? The financial planner is someone who can help you invest across investment avenues based on your risk profile and investment objectives. Post-investment. The day-to-day operations are managed by some of the best professionals in the industry having indepth understanding of underlying market trends and sound business practices The Research Team comprises of competent professionals with vast experience. he 46 .Research competency: Our primary strengths lie in research and operational efficiency. Some of research reports are as below: Economic Outlook and Updates Sector & Company Reports Technical Recommendations Daily Market Report Daily Technical Outlook Reports on New Fund Offerings Weekly analysis of mutual funds – Fund Focus Weekly debt report: Debt Dose Monthly Newsletter .

it is important that you select the right financial planner. BSE. Your financial planner should be certified and registered as a broker or mutual fund agent with NSE. Given the critical inputs provided by the financial planner in helping you achieve your financial goals. If necessary. We have AMFI certified professionals to advice you on mutual funds. ITI FSL has Trading and Clearing Memberships with major Stock Exchanges in India to offer broking services across market segments at all of the National-level Exchanges. this is a pre-requisite from the compliance point of view. selecting the one that suits you the best 47 . With the increasing list of investment avenues on offer. Competence Gone are the days when financial planning simply required delivering application forms. The traditional "one-size fits all" approach is passé. Here are the reasons why ITI is the right planner for you… Certification/Membership More than anything else. he suggests changes to your financial plan so that you are able to achieve your investment objectives as planned. AMFI etc. ITI FSL is a Depository Participant with CDSL. We also have memberships with commodity exchanges.monitors your investments and ensures that you are on course to achieve your investment objectives.

This 48 . Accessibility One of the common complaints from investors is that their financial planner is unavailable/inaccessible and therefore unable to provide adequate/prompt service. ITI provides you with the entire range of investment products from stocks. One-stop shop Every individual has different needs and the same undergo a change over a period of time. To that becoming a challenge. mutual funds. Value-add services In addition to financial planning. These value-add services form an integral part of our offering. With ITI fine staff of professionals. Furthermore. you can be sure that you will get the best advice and service to achieve your financial goals. The financial planner should be capable enough to understand these needs and offer suitable products to fulfill them. In other words. value-add services that can assist you in the investment process. the recommendations offered by ITI are backed by solid research. competence and skill set are the basic criteria that investors should look for in an investment planner. we offer a "one-stop" solution for all your investment needs. On-line tools and calculators are some of our more popular value-add services. bonds to fixed deposits. For this purpose. These tools can help you keep track of your investments. ITI provides related.

is particularly common in a one-man setup where the financial planner's services begin and end with him. it leaves you in a soup because your financial plan is in limbo. ITI has a team of professionals who are ever ready to serve you at any point of time. It is best to go with a financial planning initiative that is run by teams (as opposed to one-man setups) to ensure continuity of your financial plan. with little or no backup. We are spread across the country so that you can have access to us always KEY LEARNINGS IN THE ORGANIZATION  EQUITY  FUTURES  OPTIONS  COMMODITIES  IPO  MUTUAL FUNDS  SIP  TAX SAVING SCHEMES IN INDIA  ONLINE AND OFFLINE TRADING  PORTFOLIO MANAGEMENT 49 . If the financial planner is preoccupied with some important clients or if he relocates.


5 100 AGE GROUP OF RESPONDENTS NO. OF RESPONDENTS PERCENTAGE AGE AB O 51 . OF RESPONDENTS / PERCENTAGE 80 70 60 50 40 30 20 10 0 20 -2 9 30 -3 9 40 -4 9 50 -5 9 20 BE LO W VE 60 NO.5 17 17.5 24. OF RESPONDENTS NIL 69 13 34 35 49 200 PERCENTAGE NIL 34. Age:   Below 20 40 – 49   20 – 29 50 – 59   30 – 39 Above 60 AGE WISE CLASSIFICATION OF RESPONDENTS AGE BELOW 20 20-29 30-39 40-49 50-59 ABOVE 60 TOTAL NO.1.5 6.

Sex:  Male  Female GENDER OF THE RESPONDENTS GENDER MALE FEMALE TOTAL NO.Interpretation: According to the survey the respondents were of different age group. The investors of age 20-29 are 69 in number with 34. OF RESPONDENTS 158 42 200 PERCENTAGE 79 21 100 52 . The investors of age 30-39 are 13 with 6.5%. The investors of age below 20 are in no number. 40-49 there are 34 investors with 17% and in between 50-59 there are 35 investors with 17.5% and above 60 there are 49 investors with 24.5%. 2.5%.

5 8 .5 23 42 15 7. 3. OF RESPONDENTS 9 46 84 30 15 16 53 PERCENTAGE 4. OF RESPONDENTS / PERCENTAGE NO. mainly men prefer to go for investments. OF RESPONDENTS PERCENTAGE Interpretation: In the survey numbers of male respondents are more in number that is about 79% & the next position has been occupied by female respondents they are about 21% of the sample so. Occupation:   Household Professional   Business Retired   Service Student OCCUPATION OF THE RESPONDENTS OCCUPATION HOUSE HOLD BUSINESS SERVICE PROFESSIONAL RETIRED STUDENT NO.GENDER OF THE RESPONDENTS 180 160 140 120 100 80 60 40 20 0 MALE GENDER FEMALE NO.

with house hold occupying 4. PR O OCCUPATON FF O ES S 54 ST U SE SI .5%. A respondent from the business are occupying 23%. and then comes professional with 15%. retired people occupy 7. OF RESPONDENTS PERCENTAGE SE R ET R BU U H occupy 8 According to the survey the respondents were of different occupations.5%. Most respondents are from service sector is about 42% of the sample.TOTAL 200 100 OCCUPATION OF RESPONDENTS 90 80 70 60 50 40 30 20 10 0 LD ED AL S E ES O VI IO IR H N D EN C N T NO OF RESPONDENCE / PERCENTAGE NO. students %.

OF RESPONDENTS / PERCENTAGE 90 80 70 60 50 40 30 20 10 0 00 S S KH KH 00 LA LA KH . Annual Income   < One Lakh 2 – 3 Lakh   1 – 2 Lakh Above 3 Lakhs TABLE-4: ANNUAL INCOME OF THE RESPONDENT ANNUAL NO.5 42 2-3 LAKHS ABOVE 3 LAKHS TOTAL 48 15 200 24 7.5 100 ANNUAL INCOME OF THE RESPONDENT NO.00.4.0 S NO.000 1-2 LAKHS 53 84 26. 2 3 1- 2- < ANNUAL INCOME AB O VE 3 55 LA . OF RESPONDENTS PERCENTAGE 1. OF RESPONDENTS PERCENTAGE < 1.

5% respondents were of the income group more than 3 lacks. the respondents of the income group of less than 1 lack are of 26. 24% of the respondents were of the income group 2-3 lacks.Interpretation: According to the survey. They were about 42% of the respondents are of the income group between 1-2 lack.OF RESPONDENTS 200 NIL 200 PERCENTAGE 100 NIL 100 56 . 7. Do you invest any part of your savings?  Yes  No DO THE RESPONDENTS INVEST THEIR MONEY INVESTMENTS YES NO TOTAL NO.5%. 5.

What criteria you keep in your mind while selecting an investment opportunity (rank them accordingly)?   Security Tax Benefits   Yield Liquidity   Maturity INVESTOR PREFERENCE FOR VARIOUS INVESTMENT OBJECTIVES ATTRIBUTES SECURITY YEILD I 88 63 II 64 44 III 32 46 IV 9 24 57 V 7 23 WEIGHTED AVERAGE 55 47 RANK I II .RESPONDENTS INVESTING THEIR MONEY NO. 6. OF RESPONDENTS / PERCENTAGE 250 200 150 100 50 0 YES INVESTMENTS NO NO. OF RESPONDENTS PERCENTAGE Interpretation: All the respondents considered in the sample. Out of the total sample the respondents going for investments are total in numbers with all the two hundred respondents considered in sample are going for complete investments with 100%. do invest their savings.

OF RESPONDENTS 68 32 31 30 26 13 200 PERCENTAGE 33 16 16 15 13 7 100 58 . 6.MATURITY TAX BENEFIT LIQUIDITY 19 8 22 24 25 43 45 5 72 85 42 40 27 120 23 35 22 40 IV V III MODEL CALCULATION: = 88*5 + 64*4 + 32*3 + 9*2 + 7*1 / 1 + 2 + 3 + 4 + 5 = 440 + 256 + 96 +18 + 7 / 15 = 817/15 = 55. Normally what investment opportunities you prefer to invest your savings?   Bank deposits Mutual funds   Shares Insurance   Bonds/Debentures Real Estate NORMAL INVESTMENT OPPURTUNITIES THAT USUALLY RESPONDENT PREFER TO SAVINGS. OPTIONS BANK DEPOSITS SHARES BONDS / DEBUNTRES MUTUAL FUNDS INSURANCE REAL ESTATE TOTAL NO.

OPTIONS YES NO TOTAL NO.5 100 MUTUAL FUND IS A GOOD INVESTMENT OPTION 180 160 140 120 100 80 60 40 20 0 YES OPTIONS NO NO.5 20. OF RESPONDENTS PERCENTAGE 59 . OF RESPONDENTS 159 41 200 PERCENTAGE 79. OF RESPONDENTS / PERCENTAGE NO.7. Normally what investment opportunities you prefer to invest your savings?   Bank deposits Mutual funds Insurance If Mutual Funds Sample size200   Shares   Bonds/Debentures Real Estate MUTUAL FUND IS A GOOD INVESTMENT OPTION.

Many of those mutual funds are a good investment option & 20. The individuals are of the view that mutual fund is a good investment option.5% of the respondents feel 8. OF RESPONDENTS 138 62 200 PERCENTAGE 69 31 100 60 .5% is not a good investment option. In which Mutual funds did you invest?  Indiainfoline  Others If Indiainfoline TABLE-12: RESPONDENTS PREFFERING INDIAN INFOLINE AS A DISTRIBUTOR OF MUTUAL FUNDS OPTION INDIAN INFOLINE OTHERS TOTAL NO. Of the total sample survey around 79.

61 . The rest 31% of the respondents would like to prefer others.Interpretation: According to the survey. 69% of the respondents are aware of INDIAN INFOLINE as a distributor of mutual funds & these 69% of the investors would like to invest in INDIAN INFOLINE mutual fund option.


then follows is the bond Index Fund with 21%. 10. 5.Which type of schemes you prefer?   Liquid Fund Dynamic Bond Fund   Floating Rate Income Plus   Gilt Fund Bond Index Fund If Equity Funds TYPE OF SCHEME PREFFERED IN EQUITY FUNDS OPTION ADVANTAGE FUND MID CAP EQUITY PLAN MNC FUND INDEX FUND NO. followed by Gilt Fund. 10. thirdly Income Plus is seen with more percentage with 17. it is Based found that the respondents prefer dynamic bond fund which occupies 35%. Floating Rate Fund. OF RESPONDENTS 26 6 4 5 3 63 PERCENTAGE 33 8 5 6 4 .Interpretation: on the survey. & Liquid Fund with 12.

most of the investors choose dividend yield plus which occupies 41%.DIVIDEND YEILD PLUS INDIA OPPURTUNITIES FUND TOTAL 32 2 78 41 3 100 TYPE OF SCHEME PREFFERED IN EQUITY FUNDS ADVANTAGE FUND MID CAP EQUITY PLAN 33% 41% MNC FUND INDEX FUND 4% 6% 5% 8% DIVIDEND YEILD PLUS INDIA OPPURTUNITIES FUND 3% Interpretation: Based on the survey. then MNC fund with 6%. India opportunities fund 3%. mid cap 8%. that out of 78 sample size. Equity plan 5%. followed by Advantage Fund with 33%. 64 .


From the survey it is clear that most of the respondents feel Kotak Mahindra as a better option for mutual fund. & then to shares. 16 13. 12 9. Bonds / Debentures & then to Mutual Funds.Findings& Conclusions 4 5 6 7 8 1. Male occupy most of the sample size 3. 10 7. 15 12. Annual income of the respondents between 1-2 lacks prefers more of investments. The role of Financial Advisors play a key role in making investors educated about mutual fund. The majority of respondents were of the age group below 29 & above 60. Respondents irrespective of major investment or small are investing in some or other sources of investments. From the Survey conducted it is clear that 80% of the respondents feel that Mutual fund is a good investment option. 2. major of them prefer to mutual fund because of investment strategy. 5. 66 . Investor’s preference when going for an investment in primarily for security. 11 8. 9 6. Respondents prefer Bank Deposits as most secured for investment. 13 10. 69% of the respondents are aware of Kotak Mahindra as a distributor for Mutual Funds. Out of total respondents. Major part of the respondents belong to service sector. 14 11. 4. 78% of the Respondents the recommending Kotak Mahindra as a better investment opportunity. Around 33% of the respondents choose Financial advisors for guidance.


Suggestions • Kotak Mahindra has to review their portfolio frequently to maximize the wealth of the investors. The world of investments too has several ground rules meant for investors who are novices in their own right and wish to enter the myriad world of investments. • The awareness of mutual fund & its various schemes should be increased among the people by proper advertising. 68 .The Ground rules of Mutual Fund Investing Moses gave to his followers 10 commandments that were to be followed till eternity.. promotion and conducting investors meets. expectations and risk profile is of prime importance failing which. One should identify the degree of risk bearing capacity one has and also clearly state the expectations from the investments. one will make more mistakes in putting money in right places than otherwise. • The fund manager has to be aggressive in portfolio decisions especially MIP MIP II & I fund. Irrational expectations will only bring pain. These come in handy for there is every possibility of losing what one has if due care is not taken. (Data support) • Kotak Mahindra Sun Life has to invest in firms. 1) Assess yourself: Self-assessment of one’s needs. which are having good offers & high growth opportunities such as shares listed in GroupA.

Mutual funds invest with a certain ideology such as the "Value Principle" or "Growth Philosophy". One can lose substantially if one picks the wrong kind of mutual fund. Excessive exposure to any specific sector should be avoided. think first: one first has to decide what he wants the money for and it is this investment goal that should be the guiding light for all investments done. One should abstain from speculating which in other words would mean getting out of one fund and investing in another with the intention of making quick money. Don’t speculate: A common investor is limited in the degree of risk that he is willing to take. Both have their share of critics but both philosophies work for investors of different kinds. It is thus important to know the risks associated with the fund and align it with the quantum of risk one is willing to take. Identifying the proposed investment philosophy of the fund will give an insight into the kind of risks that it shall be taking in future. One should take a look at the portfolio of the funds for the purpose. In order to avoid any confusion it is better to go through the literature such as offer document and fact sheets that mutual fund companies provide on their funds. It is thus of key importance that there is thought given to the process of investment and to the time horizon of the intended investment.2) Try to understand where the money is going: It is important to identify the nature of investment and to know if one is compatible with the investment. as it will only add to the risk of the entire portfolio. 3) Don't rush in picking funds. One would do well to remember that nobody can perfectly time the market so staying invested is the best option unless there are compelling reasons to exit. 4) Invest. 69 .

All that one needs to do is to give post-dated cheques to the fund and thereafter one will not be harried later. even investors of equity should be judicious and invest some portion of the investment in debt. The Automatic investment Plans offered by some funds goes a step further. if one has to really benefit from them. No matter what the risk profile of a person is. it is important to beat the market by being systematic. Not all fund managers have the same acumen of fund management and with identification of the best man being a tough task. as the amount can be directly/electronically transferred from the account of the investor. since it is extremely difficult to know when to enter or exit the market. 70 . The SIPs (Systematic Investment Plans) offered by all funds helps in being systematic. Diversification even in any particular asset class (such as equity. As we said earlier. So putting one’s money in different asset classes is generally the best option as it averages the risks in each category. The basic philosophy of Rupee cost averaging would suggest that if one invests regularly through the ups and downs of the market. but will also reduce the risks. he would stand a better chance of generating more returns than the market for the entire duration.5) Don’t put all the eggs in one basket: This old age adage is of utmost importance. This might reduce the maximum return possible. Thus. it is always advisable to diversify the risks associated. 6) Be regular: Investing should be a habit and not an exercise undertaken at one’s wishes. it is good to place money in the hands of several fund managers. debt) is good.

9) Keep track of your investments: Finding the right fund is important but even more important is to keep track of the way they are performing in the market. One can always switch back to equity if the equity market starts to show some buoyancy.7) Do your homework: It is important for all investors to research the avenues available to them irrespective of the investor category they belong to. 71 . Asking the intermediaries is one of the ways to take care of the problem. Having identified the risks associated with the investment is important and so one should try to know all aspects associated with it. If the market is beginning to enter a bearish phase. This is even more important for debt funds as the returns from these funds are not much. This is important because an informed investor is in a better decision to make right decisions. as the fee charged ultimately goes from the pocket of the investor. Investors of equity should keep in mind that all dividends are currently tax-free in India and so their tax liabilities can be reduced if the dividend payout option is used. Funds that charge more will reduce the yield to the investor. then investors of equity too will benefit by switching to debt funds as the losses can be minimized. Finding the right funds is important and one should also use these funds for tax efficiency. Investors of debt will be charged a tax on dividend distribution and so can easily avoid the payout options. 8) Find the right funds: Finding funds that do not charge much fees is of importance.

" Investments in mutual funds too are not risk-free and so investments warrant some caution and careful attention of the investor. as people are likely to commit mistakes by being ignorant or adventurous enough to take risks more than what they can absorb. the initial expectation from the fund has been met with.e. Other factors like non-performance. read " When to say goodbye to your mutual fund.10) Know when to sell your mutual funds: Knowing when to exit a fund too is of utmost importance. are some of the reasons for to exit. Investing in mutual funds can be a dicey business for people who do not remember to follow these rules diligently. This is the reason why people would do well to remember these rules before they set out to invest their hard-earned money. 72 . One should book profits immediately when enough has been earned i. For more on it. hike in fee charged and change in any basic attribute of the fund etc.


com www. NEWS PAPERS Economic Times Business Standard. WEB SITES www. Investments Analysis & Portfolio Management PRASANA CHANDRA V.PANDAY www. 74 . TEXT BOOK www.amfiindia.mutualfundsindia.M. MAGAINES Business India Business World IV.BHALLA 2. Financial Accounting I.