Performance of mutual fun ! an "t! A#arene!! amon$ t%e &atron! "n t%e &re!ent Mar'et

Su(m"tte to C%"t'ara (u!"ne!! Sc%ool In partial fulfillment of the requirements for the award of degree of






I, Amanpreet singh, M.B.A. (2ND semester) the student of

hit!ara Institute of

"ngineering #$e%hnolog&, 'a(pura here)& de%lare that the final pro(e%t report entitled *PERFORMANCE OF MUTUAL FUNDS IN THE PRESENT MARKET+ is an original wor!, %arried out under the super*ision of Mr Gaura, !%arma-!trate$"c (u!"ne!! un"t %ea .of mone/matter at up to the )est of m& !nowledge, the resear%h pro(e%t has not found the )asis for the award of an& other degree. and the same has not )een su)mitted to an& other institute for the award of an& other degree.






To provide a practical perspective to the knowledge that students undergo during their MBA, Chitkara Institute of Engineering &Technology person can never do work of this nature alone. I owe my sincere thanks to Mr. aura! "har#a (strategic unit hea$) for allowing me has included 45 days of summer training in its curriculum that helps to look at corporate world thoroughly. Any

to work as a trainee in Money Matter I%C. This was an experience that how a person need to relate the classroom with the practical application and working in the organi ation.
I e+press m& deep than!s to Mr2 B%arat S%arma -Branc% Mana$er.2 I shall remain inde)ted to him for his a)le and mature guidan%e and whole hearted %ooperation. I also than!s to M!2 Rac%na S%arma -HAD E3ecut",e. for help me in the %ompletion of pro(e%t report.


" # 4%5 ' Introduction to the (ro)ect Introduction of mutual fund Advantages and disadvantages Types of mutual fund schemes +e$i registered mutual funds (ointers to measure mutual fund performance Tax rules for mutual fund investors .istory of mutual funds (rocedure of registered mutual funds &valuating portfolio performance Investors financial planning and its results .investment tips to improve your returns .ow to reduce risk while investing *             Introduction to the company  +napshot of Moneymatter inc.  Introduction of company #4 - .- T&'(E )* C)%TE%T" Contents !ertificate Acknowledgement Ta$le of content &xecutive summary +age no.

. .$)ectives of the study and research methodology /ata (resentation% Analysis and Interpretation  !omparison of 4 ma)or mutual funds !onclusion 2 +uggestions -01 *" Annexure  3uestionnaire  4lossary *4 Bi$liography 151 ..

$: 6isk is spread out or diversified% $ecause you have a collection of different stocks and $onds. A mutual fund is an investment company that collects money from many people and invests it in a variety of securities .EC-TI.different mutual funds have different risks% which differ $ecause of fund7s goals% funds manager% and investment styles.E "-MM&/0 6ole of financial system is to enthusiast economic development. As investors are getting more educated% aware and prudent they look for innovative investment instruments so that they are a$le to reduce investment risk% minimi e transaction costs% and maximi e returns along with certain level of convenience as a result there has $een as advent of numerous innovative financial instrument such as $onds% company deposits% insurance% and mutual finds. Mutual funds are an efficient way to invest in stocks% $onds% and other securities for three reasons9 a: The securities purchased are managed $y professional managers./ E.the company then manages the money on an ongoing $asis for individuals and $usinesses. All of which could $e matched with individual7s investment needs. c: !osts usually are lower than what you would pay on your own% since the funds $uy in large 8uantities. / .In India there are #' mutual funds with different Investment strategies and goals to choose from . 4oal of a mutual fund is to provide an efficient way to make money . Mutual funds score over all other investment options in terms of safety% li8uidity% returns% and are as transparent% convenient as it can get.

E" )* T2E "T-30 1.nderstanding the different ratios 2 portfolios so as to tell the distri$utors a$out these terms% $y this% managing the relationship with the distri$utors To know the mutual funds performance levels in the present market To analy e the comparative study $etween other leading mutual funds in the present market. Asset Management !ompany7s thus needed to educate and develop 0 . 5. To measure the satisfaction level of investors regarding mutual funds. To know the awareness of mutual funds among different groups of investors. '.0 )'1ECTI. 4. The o$)ective of the research is to study and analy e the awareness level of investors of mutual funds. An attempt has $een made to measure various varia$le7s playing in the minds of investors in terms of safety% li8uidity% service% returns% and tax saving. 0. #.  &arly and mid earners $ring most of the $usiness for the Asset Management !ompany7s. ". To get insight knowledge a$out mutual funds . *. Thus Asset Management !ompany7s need to create awareness so that the salaried class people $ecome the prospective customer of the future. -. <inding out ways and means to improve on the services $y M)%ETM&TTE/ I%C. /EC)MME%3&TI)%" &%3 "- E"TI)%"4  !ustomer education of the salaried class individuals is far $elow standard.

 6egular session should $e organi ed on the handling of the india infoline software so as to resolve the account statement pro$lem.  The resolution of the 8ueries should $e fast enough to satisfy the distri$utors  Time to time presentationAtraining classes a$out the products should $e there. 1 .  There should $e given more time 2 concentration on the Tier@# distri$utors.  +alary class individuals are risk averse and thus they must $e assured of the advantage of =risk > diversification? in Mutual <unds.  All the persons who have cleared the AM<I exam should $e empanelled with Mutual <und so as to $e largest distri$utor $ase.1 schemes for the person7s who are at the late the market share.  6egular activities like canopy should $e done so as to get more interaction with the distri$utors.  +chemes with high e8uity level need to $e targeted towards self employed and professionals as they re8uire high returns and are ready to $ear risk.  There should $e more num$er of 6elationship Managers in different 6egions $ecause one 6M can handle a maximum of 1"5 distri$utors efficiently and also to cover untapped market.  The target market of salaried class individual has a lot of scope to gain $usiness% as they are more fascinated to Mutual <unds than the self employed. (ointing out the $rand name of the company repeatedly may not too fruitful. earning or retirement stage to gain  6eturn7s record must $e focused $y the sales executives while explaining the schemes to the customer.

2 2 .

In +imple Dords% Mutual fund is a mechanism for pooling the resources $y issuing units to the investors and investing funds in securities in accordance with o$)ectives as disclosed in offer document. Investors of Mutual funds are known as unit holders. Also known as an open@end investment company% to differentiate it from a closed@end investment company. Mutual funds stand ready to sell and redeem their shares at any time at the fundCs current net asset value9 total fund assets divided $y shares outstanding. Most open@end Mutual funds continuously offer new shares to investors.13 I%T/)3-CTI)% 5hat is a Mutual fun$6 Mutual fund is an investment company that pools money from shareholders and invests in a variety of securities% such as stocks% $onds and money market instruments. The 13 . Mutual fund issues units to the investors in accordance with 8uantum of money invested $y them. Most open@end Mutual funds stand ready to $uy $ack Bredeem: its shares at their current net asset value% which depends on the total market value of the fundCs investment portfolio at the time of redemption. Mutual funds invest pooled cash of many investors to meet the fundCs stated investment o$)ective. The profits or losses are shared $y the investors in proportion to their investments. Investments in securities are spread across a wide cross@ section of industries and sectors and thus the risk is reduced. /iversification reduces the risk $ecause all stocks may not move in the same direction in the same proportion at the same time.

In India% A Mutual fund is re8uired to $e registered with +ecurities and &xchange Board of India B+&BI: which regulates securities markets $efore it can collect funds from the pu$lic. <or example% an e8uity fund would invest e8uity and e8uity related instruments and a de$t fund would invest in $onds% de$entures% gilts etc. Mutual fund is a suita$le investment for the common man as it offers an opportunity to invest in a diversified% professionally managed $asket of securities at a relatively low cost. In +hort% a Mutual fund is a common pool of money in to which investors with common investment o$)ective place their contri$utions that are to $e invested in accordance with the stated investment o$)ective of the scheme. The investment manager would invest the money collected from the investor in to assets that are definedA permitted $y the stated o$)ective of the scheme.11 Mutual funds normally come out with a num$er of schemes with different investment o$)ectives which are launched from time to time.&%T& E" )* M-T-&( *-%3" • • • • 11 . &3.


7rofessional Manage#ent. The ma)or advantage of investing in a mutual fund is that you get a professional money manager to manage your investments for a small fee. Eou can leave the investment decisions to him and only have to monitor the performance of the fund at regular intervals.

3i!ersification. !onsidered the essential tool in risk management% mutual funds make it possi$le for even small investors to diversify their portfolio. A mutual fund can effectively diversify its portfolio $ecause of the large corpus. ,owever% a small investor cannot have a well@diversified portfolio $ecause it calls for large investment. <or example% a modest portfolio of 15 $luechip stocks calls for a few a few thousands.

Con!enient &$#inistration. Mutual funds offer tailor@made solutions like systematic investment plans and systematic withdrawal plans to investors% which is very convenient to investors. Investors also do not have to worry a$out investment decisions% they do not have to deal with $rokerage or depository% etc. for $uying or selling of securities. Mutual funds also offer speciali ed schemes like retirement plans% children7s plans% industry specific schemes% etc. to suit personal preference of investors. These schemes also help small investors with asset allocation of their corpus. It also saves a lot of paper work.

• •

Costs Effecti!eness A small investor will find that the mutual fund route is a cost@effective method Bthe AM! fee is normally ".5F: and it also saves a lot of transaction cost as mutual funds get concession from $rokerages. Also% the investor gets the service of a financial professional for a very small fee. If he were to seek a financial advisorCs help directly% he will end up paying significantly more for investment


advice. Also% he will need to have a si ea$le corpus to offer for investment management to $e eligi$le for an investment adviser7s services(i8ui$ity. Eou can li8uidate your investments within # to 5 working days Bmutual funds dispatch redemption che8ues speedily and also offer direct credit facility into your $ank account i.e. &lectronic !learing +ervices:. • Trans+arency. Mutual funds offer daily GAHs of schemes% which help you to monitor your investments on a regular $asis. They also send 8uarterly newsletters% which give details of the portfolio% performance of schemes against various $enchmarks% etc. They are also well regulated and +e$i monitors their actions closely. • Ta9 :enefits. Eou do not have to pay any taxes on dividends issued $y mutual funds. Eou also have the advantage of capital gains taxation. Tax@saving schemes and pension schemes give you the added advantage of $enefits under section 00.


Mutual funds allow you to invest small sums. <or instance% if you want to $uy a portfolio of $lue chips of modest si e% you should at least have a few lakhs of rupees. A mutual fund gives you the same portfolio for meager investment of 6s.1%555@5%555. A mutual fund can do that $ecause it collects money from many people and it has a large corpus



3I"&3.&%T& E" )* M-T-&( *-%3"4

7rofessional Manage#ent@ /id you notice how we 8ualified the advantage of professional management with the word ItheoreticallyIJ Many investors de$ate over whether or not the so@called professionals are any $etter than you or I at picking stocks. Management is $y no means infalli$le% and% even if the fund loses money% the manager still takes hisAher cut. DeCll talk a$out this in detail in a later section. Costs @ Mutual funds donCt exist solely to make your life easier@@all funds are in it for a profit. The Mutual fund industry is masterful at $urying costs under layers of )argon. These costs are so complicated that in this tutorial we have devoted an entire section to the su$)ect. 3ilution @ ItCs possi$le to have too much diversification Bthis is explained in our article entitled IAre Eou .ver@/iversifiedJI:. Because funds have small holdings in so many different companies% high returns from a few investments often donCt make much difference on the overall return. /ilution is also the result of a successful fund getting too $ig. Dhen money pours into funds that have had strong success% the manager often has trou$le finding a good investment for all the new money. Ta9es @ Dhen making decisions a$out your money% fund managers donCt consider your personal tax situation. <or example% when a fund manager sells a security% a capital@gain tax is triggered% which affects how profita$le the individual is from the sale. It might have $een more advantageous for the individual to defer the capital gains lia$ility.

&8uity funds% if selected in the right manner and in the right proportion% have the a$ility to play an important role in achieving most long@term o$)ectives of investors in different segments. Dhile the selection process $ecomes much easier if you get advice from professionals% it is e8ually important to know certain aspects of e8uity investing yourself to do )ustice to your hard earned money.


1. . 1.

pen > &nded +chemes. +pecial +chemes.n the other hand% an open@ended fund rarely denies to its investor the facility to redeem existing units.   Index +chemes. 2.E • • • 4rowth +chemes. '0 "T/-CT-/E • • • ..ence% the unit capital of the schemes keeps changing each day. 1. +uch schemes thus offer very high li8uidity to investors and are $ecoming increasingly popular in India. . '0 I%.E"TME%T )'1ECTI. Balanced +chemes.T o$liged to keep sellingAissuing new units at all times% and may stop issuing further su$scription to new investors. . Income +chemes. (lease note that an open@ended fund is G. !lose > &nded +chemes. . Interval +chemes. )7E% < E%3E3 "C2EME" The units offered $y these schemes are availa$le for sale and repurchase on any $usiness day at GAH $ased prices. 1/ . )T2E/ "C2EME" • • Tax +aving +chemes.1/ T07E" )* M-T-&( *-%3 "C2EME" 1. +ector +pecific +chemes.

. . After an initial closed period% the scheme may offer direct repurchase facility to the investors.&( "C2EME" These schemes com$ine the features of open@ended and closed@ended schemes. I%C)ME "C2EME" These schemes% also commonly called /e$t +chemes% invest in de$t securities such as corporate $onds% de$entures and government securities. In the interim% investors can $uy or sell units on the stock exchanges where they are listed. >. . !losed@ended schemes are usually more illi8uid as compared to open@ ended schemes and hence trade at a discount to the GAH.owever% $ecause they invest in e8uities% these schemes are exposed to fluctuations in value especially in the short term. C()"E3 < E%3E3 "C2EME" The unit capital of a close@ended product is fixed as it makes a one@time sale of fixed num$er of units. /)5T2 "C2EME" These schemes% also commonly called &8uity +chemes% seek to invest a ma)ority of their funds in e8uities and a small portion in money market instruments.: with a stated maturity period after which the units are fully redeemed at GAH linked prices. =.nlike open@ended schemes% the unit capital in closed@ended schemes usually remains unchanged. These schemes are launched with an initial pu$lic offer BI(. These schemes are ideal 10 . . The prices of these schemes tend to $e more sta$le compared with e8uity schemes and most of the returns to the investors are generated through dividends or steady capital appreciation.10 2. This discount tends towards the GAH closer to the maturity date of the scheme. I%TE/. +uch schemes have the potential to deliver superior returns over the long term. They may $e traded on the stock exchange or may $e open for sale or redemption during pre@ determined intervals at GAH $ased prices.

By investing in a mix of this nature% $alanced schemes seek to attain the o$)ective of income and moderate capital appreciation and are ideal for investors with a conservative% long@term orientation. These schemes invest in $oth e8uities as well as de$t. An Index also serves as a relevant $enchmark to evaluate the performance of mutual funds.11 for conservative investors or those not in a position to take higher e8uity risks% such as retired individuals. . +u$)ect to such conditions and limitations% as prescri$ed under +ection 00 of the Income@ tax Act% 1*'1.owever% as compared to the money market schemes they do have a higher price fluctuation risk and compared to a 4ilt fund they have a higher credit risk. '&(&%CE3 "C2EME" These schemes are commonly known as . T&.nits purchased cannot $e assigned A transferredA pledged A redeemed A switched > out until completion of # years from the date of allotment of the respective .y$rid schemes. @.I% "C2EME" Investors are $eing encouraged to invest in e8uity markets through &8uity Kinked +avings +cheme B=&K++?: $y offering them a tax re$ate. A. "&. . +uch investors are happy to receive the returns posted $y the markets. "C2EME" The primary purpose of an Index is to serve as a measure of the performance of the market as a whole% or a specific sector of the market. ?. As it is not practical to 11 . I%3E. The +cheme is su$)ect to +ecurities 2 &xchange Board of India BMutual <unds: 6egulations% 1**' and the notifications issued $y the Ministry of <inance B/epartment of &conomic Affairs:% 4overnment of India regarding &K++.nits. +ome investors are interested in investing in the market in general rather than investing in any specific fund.

+&BI 6&4I+T&6&/ M.AK <. Alliance !apital Mutual fund% #. <. "ECT)/ "7ECI*IC "C2EME".6TI+ Mutual fund ". Benchmark Mutual fund% 5. AI4 4lo$al Investment 4roup Mutual fund 4.G/+ 1. Bharti ALA Mutual fund 0. Baroda (ioneer Mutual fund ' Birla Mutual fund -. +ector +pecific +chemes generally invests money in some specified sectors for example9 =6eal &state? +peciali ed real estate funds would invest in real estates directly% or may fund real estate developers or lend to them directly or $uy shares of housing finance companies or may even $uy their securiti ed assets. !anara 6o$eco Mutual fund *. !6B Mutual fund B+uspended: 12 .12 invest in each and every stock in the market in proportion to its si e% these investors are comforta$le investing in a fund that they $elieve is a good representative of the entire market.T. Index <unds are launched and managed for such investors. B.

/eutsche Mutual fund 1". <idelity Mutual fund 1-. KI! Mutual fund #1. . /+( Blackrock Mutual fund% 1# &delweiss Mutual fund 14. /B+ !hola Mutual fund% 11. I!I!I +ecurities <und% "1. Notak Mahindra Mutual fund% "*. Morgan +tanley Mutual fund #".+B! Mutual fund% "5. MM <inancial Mutual fund "'. I!I!I (rudential Mutual fund "4. IK 2 <+ Mutual fund% "". . M( Morgan Mutual fund "-.23 15. I/<! Mutual fund% "5. <ranklin Templeton Mutual fund 1'. &scorts Mutual fund% 15./<! Mutual fund% 1*. IG4 Mutual fund% "#. 4oldman +achs Mutual fund 10. Mirae Asset Mutual fund 23 .

6eligare A&4.C2&% E 7(&C&. M-M'&I < =00 0>1.TI Mutual fund If the complaints remain unresolved% the investors may approach +&BI for facilitating redressal of their complaints. Investors may send their complaints to9 "EC-/ITIE" &%3 E..E"T)/ &""I"T&%CE &%3 E3-C&TI)% ()I&E) E.21 ##. 3uantum Mutual fund% #5. =T2 *())/.G Mutual fund #-.n receipt of complaints% +&BI takes up the matter with the concerned Mutual fund and follows up with it regularly. (rincipal Mutual fund #4. . . +ahara Mutual fund% #0. +BI Mutual fund #*.C2&% E ')&/3 )* I%3I& ("E'I) )**ICE )* I%. +hriram Mutual fund 45. Tata Mutual fund% 4#. D E '()CF. '&%3/&-F-/(& C)M7(E. Taurus Mutual fund 4". 21 . 6eliance Mutual fund #'. '&%3/& (E). +undaram BG( (ari$as Mutual fund% 41.

22 . 7ointers to Measure Mutual *un$ 7erfor#ance 22 .

"har+e ratios the :etter a fun$s returns are i$eal for co#+aring fun$s that ha!e a #i9e$ relati!e to the a#ount of risk asset classes.I&TI)% 3E"C/I7TI)% I3E&( /&% E "tan$ar$ 3e!iation alloHs to e!aluate the !olatility "houl$ :e near to itIs #ean of the fun$. returnP "tan$ar$ $e!iation of *un$. &l+ha is negati!e K returns of stock are Horst then #arket. taken. . &l+ha is +ositi!e K returns of Houl$ e9+ect fro# a fun$. 'eta J 1 K high risky :asically in$icates the le!el of !olatility associate$ 'eta K 1 K &!g 'eta L1 K (oH /isky !alues range /-"M-&/E /. It Hith the fun$ as co#+are$ to the :ench#ark. unsyste#atic risk . gi!en its :eta. Ta9 /ules *or Mutual *un$ In!estorsG 2. The stan$ar$ $e!iation of a fun$ return. 'ET& 'eta is a fairly co##only use$ #easure of risk.2. It also #easures the returns. /-s8uare$ $escri:es :etHeen 0 an$ 1. an$ the stock are :etter then #arket return it actually +ro$uces.s8uare #easures the correlation of a fun$Is /-s8uare$ #o!e#ent to that of an in$e9. #easures this risk :y #easuring the $egree to Hhich the fun$ fluctuates in relation to its #ean return. "2&/7E /&TI) "har+e /atioK *un$ return in e9cess of risk free The higher the "har+e ratio. &l+ha is Oero K returns are sa#e as #arket. &(72& &l+ha is the $ifference :etHeen the returns one 1 re+resents full correlation. Hhere 0 the le!el of association :etHeen the fun$Ns !olatility re+resents no correlation an$ an$ #arket risk. ME&"-/E" "T&%3&/3 3E.

NIL TA: FREE NIL 9. AOP5B 678 OI NIL AS PER SLAB 678 -978 #"t% "n e3at "on.2<98 -9=8 >678!ur -978>678 !urc%ar$e .2<98 -9=8 >678!ur c%ar$e> e ucat"o n ce!!. Dome !t"c Com& 678 NIL <78 678 -978 #"t% NIL TA: FREE NIL 9.E4u"t/ !c%eme! Ot%er !c%eme! D". NIL TA: FREE NIL 9." en "ncom e D". 992@@8 -978>678 !urc%ar$e ><8 e ucat"on ce!!." en "!tr"(ut"on ta3 2- S%or Lon t Ter m Ca&" tal ! Re!" ent In "." ual 5 HUF 678 NIL $ Ter m tal S%ort Term Ca&"ta l Lon$ Term Ca&"tal Ga"n TDS All Sc%e me! E4u" L"4u" t/ Sc% eme ! Sc%eme ! Ot%er Sc%eme! Ca&" Ga"n! Ga"n Ga"n AS PER SLAB 678 -978 #"t% "n e3at "on. NIL TA: FREE NIL 9.2<98 -9=8 >678!ur c%ar$e> e ucat"o n ce!!. 992@@8 2- Partne 678 r!%"& F"rm! NIL <78 678 -978 #"t% "n e3at "on.2<98 -9=8 >678!ur c%ar$e> e ucat"o n ce!!. 992@@8 -978>678 !urc%ar$e ><8 e ucat"on ce!!. 6?26@8 -692=8 >678!urc %ar$e><8 e ucat"on ce!!.

TI was de@linked from the 6BI and the Industrial /evelopment Bank of India BI/BI: took over the regulatory and administrative control in place of 6BI.TI was .TI: on 1*'#. "econ$ 7hase < 1BA@-1BB. . The first scheme launched $y .nit Trust of India% at the initiative of the 4overnment of India and 6eserve Bank.TI% pu$lic sector mutual funds set up $y pu$lic sector $anks and Kife Insurance !orporation of India BKI!: and 4eneral Insurance !orporation of India B4I!:.marked the entry of non@ . 2. +BI Mutual <und was the first non@ . It was set up $y the 6eserve Bank of India and functioned under the 6egulatory and administrative control of the 6eserve Bank of India.TI had 6s.TI Mutual <und esta$lished in Mune 1*0.followed $y !an $ank Mutual <und B/ec 0-:% (un)a$ Gational Bank Mutual <und BAug 0*:% Indian Bank Mutual <und BGov 0*:% Bank of India BMun *5:% Bank of Baroda Mutual <und B. The history of mutual funds in India can $e $roadly divided into four distinct phases9 @ *irst 7hase < 1B?=-A@ An Act of (arliament esta$lished .'%-55 crores of assets under management.nit +cheme 1*'4. (Entry of 7u:lic "ector *un$s) 1*0. At the end of 1*00 . 2I"T)/0 )* M-T-&( *-%3 The mutual fund industry in India started in 1*'# with the formation of . KI! esta$lished its mutual fund in Mune 1*0* while 4I! had set up its mutual fund in /ecem$er 1**5. In 1*-0 .2.ct *":.nit Trust of India B.

ndertaking of ."*%0#5 crores as at the end of Manuary "55#% representing $roadly% the assets of .ndertaking of the . Also% 1**# was the year in which the first Mutual <und 6egulations came into $eing% under which all mutual funds% except .44%541 crores of assets under management was way ahead of other mutual funds.TI Mutual <und Ktd% sponsored $y +BI% (GB% B.TI Mutual <und% conforming to the +&BI Mutual <und 6egulations% and with recent mergers taking place among different private sector funds% the mutual fund industry has entered its current phase of consolidation and growth.nit Trust of India Act 1*'# .-'%555 crores of assets under management and with the setting up of a . The +pecified . It is registered with +&BI and functions under the Mutual <und 6egulations.nit Trust of India with 6s.TI was $ifurcated into two separate entities.15#150 crores under 4"1 schemes.nit Trust of India with assets under management of 6s.TI which had in March "555 more than 6s.TI were to $e registered and governed. The industry now functions under the +&BI BMutual <und: 6egulations 1**'. As at the end of Manuary "55#% there were ## mutual funds with total assets of 6s. 2/ . The 1**# +&BI BMutual <und: 6egulations were su$stituted $y a more comprehensive and revised Mutual <und 6egulations in 1**'. Thir$ 7hase < 1BB.-200.ne is the +pecified . The erstwhile Nothari (ioneer Bnow merged with <ranklin Templeton: was the first private sector mutual fund registered in Muly 1**#. *ourth 7hase < since *e:ruary 200.nit Trust of India% functioning under an administrator and under the rules framed $y 4overnment of India and does not come under the purview of the Mutual <und 6egulations. 1%"1%055 crores.4-%554 crores .B and KI!.2/ At the end of 1**#% the mutual fund industry had assets under management of 6s. The second is the . Dith the $ifurcation of the erstwhile . In <e$ruary "55#% following the repeal of the . . (Entry of 7ri!ate "ector *un$s) Dith the entry of private sector funds in 1**#% a new era started in the Indian mutual fund industry% giving the Indian investors a wider choice of fund families. The num$er of mutual fund houses went on increasing% with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and ac8uisitions. The .+ '4 scheme% assured return and certain other schemes. As at the end of +eptem$er% "554% there were "* funds% which manage assets of 6s.

55 lacs for detailsO see the +&BI BMutual funds: 6egulations% 1**'. +uccess in managing a small or in a fund focusing on a particular segment of the market cannot $e relied upon as an evidence of anticipated performance in managing a large or a $road $ased fund. Besides% longer@term track record compensates for the effects of a fund managerCs particular investment style. .20 52&T I" T2E 7/)CE3-/E *)/ /E I"TE/I% "E'I6 & M-T-&( *-%3 5IT2 An applicant proposing to sponsor a Mutual fund in India must su$mit an application in <orm A along with a fee of 6s. It is important $ecause long@term track record moderates the effects which unusually good or $ad short@term performance can have on a fundCs track record. E. These include inter alia% executing the trust deed and investment management agreement% setting up a trustee companyA$oard of trustees comprising two@ thirds independent trustees% incorporating the asset management companyBAM!:% contri$uting to at least 45F of the net worth of the AM! and appointing a custodian."5. The following factors are important in this process9 !onsider long@term track record rather than short@term performance."5% 555.&(-&TI% 7)/T*)(I) 7E/*)/M&%CE It is important to evaluate the performance of the portfolio on an ongoing $asis.pon satisfying these conditions% the registration certificate is issued su$)ect to the payment of registration fees of 6s. /iscipline in investment approach is an important factor as the 20 . The application is examined and once the sponsor satisfies certain conditions such as $eing in the financial services $usiness and possessing positive net worth for the last five years% having net profit in three out of the last five years and possessing the general reputation of fairness and integrity in all $usiness transactions% it is re8uired to complete the remaining formalities for setting up a Mutual fund. &valuate the track record against similar funds.


pressure to perform can make a fund manager suscepti$le to have an urge to change tracks in terms of stock selection as well as investment strategy. The o$)ective should $e to differentiate investment skill of the fund manager from luck and to identify those funds with the greatest potential of future success.

I%.E"T)/N" *I%&%CI&( 7(&%%I%
7lanning for long ter# o:Qecti!es

&%3 IT" /E"-(T".

Many people get overwhelmed $y the thought of retirement and they think how they will ever save the huge money that is re8uired to lead a peaceful and happy retired life. ,owever% the fact is that if we save and invest regularly over a period of time% even a small sum of money can $e ade8uate. It is a proven fact that the real power of compounding comes with time. Al$ert &instein called compounding Ithe eighth wonder of the worldI $ecause of its ama ing a$ilities. &ssentially% compounding is the idea that one can make money on the money one has already earned. ThatCs why% the earlier one starts saving% the more time money gets to grow. Through Mutual funds% one can set up an investment programme to $uild capital for retirement years. Besides% it is an ideal vehicle to practice asset allocation and re$alancing there$y maintaining the right level of risk at all times. It is important to know that determination and maintaining the right level of risk tolerance can go a long way in ensuring the success of an investment plan. Besides% it helps in customi ing fund category allocations and suita$le fund selections. There are certain $road guidelines to determine the risk tolerance. These are9 Be realistic with regard to volatility. .ne needs to seriously consider the effect of potential downside loss as well as potential upside gain. /etermine a Icomfort levelI i.e.



If one is not confident with a particular level of risk tolerance% and then select a different level. 6egardless of the level of risk tolerance% one should adhere to the principles of effective diversification i.e. The allocation of investment assets among different fund categories to achieve a variety of distinct riskAreward o$)ectives and a reduction in overall portfolio risk. It helps to reassess risk tolerance every year. The risk tolerance may change due to either ma)or ad)ustment in return o$)ectives or to a reali ation that an existing risk tolerance is inappropriate for oneCs current situation. Market cap of a company signifies its market value% which is e8ual to the total num$er of shares outstanding multiplied $y the current stock price. The market cap has a role to play in the kind of returns the stock might deliver and the risk or volatility that one may have to encounter while achieving those returns.<or example% large companies are usually more sta$le during the tur$ulent periods and the mid cap and small cap companies are more vulnera$le. As regards the allocation to each segment% there cannot $e a standard com$ination applica$le to all kinds of investors. &ach one of us has different risk profile% time hori on and investment o$)ectives. Besides% while deciding on the allocation% one has to keep in mind the fact whether the allocation is $eing done for an existing investor or for a new investor. Dhile for an existing investor% the allocation that already exists has to $e considered% for a new investor the right way to $egin is $y considering funds that invest predominantly in large cap stocks. The exposure to mid and small caps can $e enhanced over a period of time. It is always advisa$le to take help of professionals to decide the allocation as well as select the appropriate funds. ,owever% investors themselves have an important role to play in this process.



&ll aHar$-Hinning fun$s #ay not :e suita:le for e!eryone Many investors feel that a simple way to invest in Mutual funds is to )ust keep investing in award winning funds. <irst of all% it is important to understand that more than the awardsO it is the methodology to choose winners that is more relevant. A rating firm generally ela$orates on the criteria for deciding the winner7s i.e. consistent performance% risk ad)usted returns% total returns and protection of capital. &ach of these factors is very important and has its significance for different categories of funds. Besides% each of these factors has varying degree of significance for different kinds of investors. <or example% consistent return really focuses on risk. If someone is afraid of negative returns% consistency will $e a more important measure than total return i.e. 4rowth in GAH as well as dividend received. A fund can have very impressive total returns overtime% $ut can $e very volatile and tough for a risk adverse investor. Therefore% all the award winning funds in different categories may not $e suita$le for everyone. Typically% when one has to select funds% the first step should $e to consider personal goals and o$)ectives. Investors need to decide which element they value the most and then prioriti e the other criteria. .nce one knows what one is looking for% one should go a$out selecting the funds according to the asset allocation. Most investors need )ust a few funds% carefully picked% watched and managed over period of time. @ I%.E"TME%T TI7" T) IM7/).E 0)-/ /ET-/%" 1. FnoH your risk +rofile Before you take a decision to invest in e8uity funds% it is important to assess your risk tolerance. 6isk tolerance depends on certain factors like emotional temperament% attitude and investment experience. 6emem$er% Hwhile ascertaining the risk tolerance% it is crucial to consider oneCs desire to assume risk as the capacity to assume the risk. It helps to understand different categories of overall risk tolerance% i.e. !onservative% moderate or aggressive. Dhile a conservative investor will accept lower returns to minimise price volatility% a moderate investor would $e all right with greater price volatility than conservative risk tolerances to pursue higher returns. An aggressive investor wouldnCt mind large swings in the GAH7s to seek the highest returns. Though identifying the desire for risk is a tough )o$% it can $e made easy $y defining oneCs comfort one.

owever% if you remain focused on the long@term o$)ectives and follow a disciplined approach to investing% you can not only handle volatility properly $ut also turn it to your advantage.1 .ere are some of them9 Eou may consider selling a fund when your investment plan calls for a sale rather than doing so for emotional reasons. Besides% consistency in terms of performance as well as portfolio selection is another factor that should play an important part while analy ing the performance. . In other words% you need to assess as to how much risk did the fund manger su$)ect you to% and did he give you an ade8uate reward for taking that risk. In addition% for a decent portfolio si e% it is all right to have some exposure in the sector and specialty funds. "ell your fun$. . Therefore% it is possi$le that a portfolio having 5 schemes may $e ade8uately diversified whereas another one with 15 schemes may have very little diversification. <or example% if you have 15 funds in your portfolio% it does not necessarily mean that your portfolio is ade8uately diversified. Therefore% if an investment in a Mutual fund scheme takes you past your risk tolerance while providing you decent returnsO it cannot always $e termed as good performance. . 6emem$er% to have a well@$alanced e8uity portfolio% it is important to have the right level of exposure to different segments of the e8uity market like large cap% mid@cap and small cap. =. if you nee$ to There is no standard formula to determine the right time to sell an investment in Mutual fund or for that matter any investment. Eou need to hold a fund long enough to evaluate its performance over . Besides% you also need to consider whether own risk profile allows you to accept the revised level of risk >.. Ideally% to analy e performance% one should consider returns as well as the risk taken to achieve those returns. 3onNt ha!e too #any sche#es in your +ortfolio Dhile it is true that diversification helps in earning $etter returns with a lower level of fluctuations% it $ecomes counterproductive when one has too many funds in the portfolio. -n$erstan$ an$ analyOe N oo$ 7erfor#anceN C4ood performanceC is a su$)ective thing. .. To determine the right level of diversification% one has to consider factors like si e of the portfolio% type of funds and allocation to different asset classes.1 2. (onger ti#e horiOon +ro!i$es +rotection fro# !olatility As an e8uity fund investor% you need to understand that volatility is an integral part of the stock market. In fact% at times to ensure that your investment remains within the parameters defined in the investment plan% you may to $e forced to exit from that scheme.owever% you can definitely $enefit $y following certain guidelines while deciding to sell an investment in a Mutual fund scheme.

In other words% if you take a wrong decision% there is always a risk of missing out on good rallies in the market or getting out too early thus missing out on potential gains. @. A diversified fund% therefore% is an ideal choice for someone who is looking for steady returns over the longer term. 3i!ersifie$ !s. <or example% you may $egin reviewing your portfolio on a half@yearly $asis. /e!ieH your +ortfolio +erio$ically It is always a good idea to review your portfolio periodically. Many of us make the mistake of either holding on to funds for too long or exit in a hurry.2 a complete market cycle% i. The idea is that if one or more stocks do $adly% the portfolio wonCt $e affected as much. .nsystemic: risk. If you have made a proper selection% you would generally $e re8uired to make changes only if the fund changes its o$)ective or investment style% or if your needs change. At the same time% if one stock does very well% the portfolio wonCt reap all the $enefits. A concentrated portfolio works exactly in the opposite manner. It is important to do a thorough analysis $efore taking a decision to sell. In fact we get return on our investment purely and solely $ecause at the very $eginning we take the risk of parting with our funds% for getting higher value $ack at a later date.e. As discussed earlier% a well @ diversified portfolio helps in spreading the investments across different sectors and segments of the market.. Thus% a concentrated portfolio is ideally suited for those investors who have the capacity to shoulder higher risk in order to improve the chances of getting $etter returns.  Dell known economist and Go$el (ri e recipient Dilliam +harpe tried to segregate the total risk faced in any kind of investment into two parts @ systematic B+ystemic: risk and unsystematic B.2 . Dhile a fund with a concentrated portfolio has a $etter chance of providing higher returns% it also increases your chances of underperforming or losing a large portion of your portfolio in a market downturn. It doesnCt make sense to hold a fund when it no longer meets your needs. Concentrate$ 7ortfolio The choice $etween funds that have a diversified and a concentrated portfolio largely depends upon your risk profile. Besides% you may $e re8uired to review your portfolio in greater detail when your investments goals or financial circumstances change. 2)5 T) /E3-CE /I"F 52I(E I%.E"TI% 4  Any kind of investment we make is su$)ect to risk. around three years or so. Eou should consider coming out of a fund if its performance has consistently lagged its peers for a period of one year or so. (artition itself is a risk. ?.

 Dhile there is no way to keep away from risk% we can always reduce the impact of risk..KK% Infosys% adverse news a$out Infosys will only impact investment in Infosys% all other stocks will not have any impact.  &conomic cycles% war and political situations have effects on all forms of investments..  Inflation erodes returns generated from all investments e. Also these exist in the system and there is no way to stay away from them. +ome of the $iggest examples of systematic risk are inflation% recession% war% political situation etc..g.nsystematic risk is associated with particular form of investment. If our investment is distri$uted across various asset classes the impact of unsystematic risk is reduced.  If we have placed fixed deposit in several $anks% then even if one of the $anks goes $ankrupt our entire fixed deposit investment is not lost. If return from fixed deposit is 0 per cent and if inflation is ' per cent then real rate of return from fixed deposit is reduced $y ' per cent.  Another form of risk is unsystematic risk.  +ystematic risk is that risk which exists in the system.  +uppose we invest in stock market and the market falls% then only our investment in e8uity gets affected . /iversification helps in reducing the impact of unsystematic risk. . . +imilarly anyone who wants to invest has to first face systematic riskO there can never make any kind of investment without systematic risk.  +imilarly if our e8uity investment is in Tata Motors% . It is like learning to walk. By investing regularly we average out the impact of risk.  +imilarly if returns generated from e8uity market is 10 per cent and inflation is still ' per cent then e8uity returns will $e lesser $y the rate of inflation.  Mutual fund% as an investment vehicle gives us $enefit of $oth diversification and averaging.6 if we have placed a fixed deposit in particular $ank and $ank goes $ankrupt% than we only lose money placed in that $ank.  To reduce the impact of systematic risk% we should invest regularly. . +ince inflation exists in the system there is no way one can stay away from the risk of inflation. This risk does not exist in the system and hence is not applica$le to all forms of investment.  Anyone who wants to learn to walk has to first fallO you cannot learn to walk without falling.

.  Mutual fund as an investment vehicle helps reduce% $oth% systematic as well as unsystematic risk.-  (ortfolio of mutual funds consists of multiple securities and hence adverse news a$out single security will have nominal impact on overall portfolio.- . 926 Intro uct"on to Cor&orate MONEA MATTER Inc2 P P P A ompan& whi%h )elie*es in Cu!tomer Del"$%t2 A ompan& that offers a Com&lete Ba!'et of F"nanc"al Solut"on!2 A ompan& with a )elief of hanging the 4inan%e Industr& in India .  By systematically investing in mutual fund we get $enefit of rupee cost averaging.

"quit& Anal&sis # 'esear%h. Is a mar!eting and distri)ution %ompan& for *arious finan%ial produ%ts.ota! 9ife Insuran%e. I44 > $o!&o. It has its head offi%e in Delhi. Distri)ution of 4inan%ial 5rodu%ts. 8nited.. 9I insuran%e )usiness< Ba(a( Allian=. 5rem 5al 6harma in 2332 in 'a(asthan. was started )& Mr. Mone& Matter In%. H"!tor"cal Bac'$roun of t%e $rou&B0 Mone& Matter In%. It has si+ )ran%hes in 'a(asthan. .. 5ortfolio Management 6er*i%es. A*i*a. :D4 orporate $ie78ps with 22 leading %ompanies 9i!e I I I et% for life 6tandard 9ife. >riental. $he ma(or a%ti*ities and offerings of the %ompan& are "quit& )ro!ing. et%. and almost with all the 9eading AM @s in India for mutual funds. . In 'a(asthan the& wor! under the name of Mone& Matter Aealth Ad*isor& 5*t 9td. et% for ?eneral Insuran%e. $ata Aig. $he& are opening our )ran%hes in 5un(a) and 'a(asthan in the first phase and are planning to open 23 )ran%hes a%ross 5un(a) and 'a(asthan within a &ear.. . $he& are ha*ing a 5rudential. In 5un(a). Mone& Matter In%.

2. ustomer 7 entri% Business Models7'elationship *Bs 5rodu%t 5ositioning. 'ight now the& ha*e four )ran%hes in 5un(a). Balan%ed. 8nderstand finan%ial needs and !e& e+pe%tations .. "m)ed the right *alues # )eha*ior a%ross the organi=ation Focu! on Cu!tomerD not &ro uct 2 2 2 1. Ke/ Calue D"fferent"at"on 1. 2331./ . . Define %ustomer profile and su)7segments. 4or 5un(a) 'egion the& ha*e their head offi%e in Mohali. 2. Dis%iplined. "na)ling management model and %ulture ... "mpowerment within defined )oundaries /.. ommer%ial B 6M"./ 6tarted their ser*i%es on 6eptem)er . Mass onsumer # Mass 6elf7 -. ?reat 9eadership 7 5assionate. Aant to )e a 9eader in emplo&ed segments.

0 . M"!!"on E C"!"on . 5rodu%t features are designed for the spe%ifi% segment. and %olle%tions.. /. not (ust for a produ%t. -. 4inan%ials and segment profita)ilit&. operations. 6egment strateg& for sales. ...0 . "*aluating the %ustomer as a whole.

"nri%hing 9i*es. Honesty . Spread Smiles M"!!"on $o %reate superior long7term shareholder *alue in finan%ial se%tors a%ross "merging Mar!ets >rgani% ?rowth A%quire and $ransform Impro*e 5rodu%ti*it& 'is!7'eward Balan%e >ptimi=e apital P"llar! Right People Organizational Alignment Processes Execution Discipline Calue! Caring .1 . 6pread 6miles ."na)ling 6u%%ess. Enriching Lives.1 C"!"on Enabling Success. Passion to Excel . Disciplined Professionalism Unique Business value model Proposition model path ment Financial Critical KPI EmpowerPeople . Team Work .

Mone& Matter In%. Stoc' Bro'"n$ Ser.2 929 Mone/ Matter Inc2 to "t! cu!tomer! In its am)ition to emerge as a %omplete finan%ial ad*isor. growth !nows no limits and su%%ess re%ogni=es no )oundaries. the in*estments a*enues ha*e also in%reased.. :ere."ce! Mone& Matter In%.C Ser. >ur *ision is C$o %ater to the unique needs and requirements of the mass affluent )& pro*iding %omplete finan%ial solutions and there)& ena)ling them to transform their dreams into realit&."ce! . :as re%entl& entered into personal finan%ial planning se%tor .2 .It proposes to %ater all ad*i%e to its %ustomer pertaining to personal finan%e. Aith India emerging as a strong mar!et. %reates a plethora of opportunities for the %ustomer )& opening up in*estment *istas )a%!ed )& resear%h7)ased ad*isor& ser*i%es. :elping the %ustomer %reate wa*es in his portfolio and empowering the in*estor %ompletel& is the ultimate goal. to ad*i%e our %ustomers the right a*enue a%%ording to their suita)ilit&.

>ur highl& s!illed resear%h team. Instead we pro*ide ser*i%es whi%h are multi dimensional and multi7fo%used in their s%ope. Ae ma!e trading safe to the ma+imum possi)le e+tent. D"!tr"(ut"on of F"nanc"al Pro uct! $he paradigm shift from pure selling to !nowledge )ased selling dri*es the )usiness toda&. %onstant feed)a%! and sound ad*isor& fa%ilities. $his %ru%ial information is gi*en as a %onstant feed)a%! to our %ustomers. through dail& reports Besides this. mar!et anal&sis and mar!et predi%tions. 6M6. phone %alls et%. se%ure result7 oriented information on mar!et trends. -3 . we also offer spe%ial portfolio anal&sis pa%!ages that pro*ide dail& te%hni%al ad*i%e on s%rips for su%%essful portfolio management and pro*ide %ustomi=ed ad*isor& ser*i%es to help &ou ma!e the right finan%ial mo*es that are spe%ifi%all& suited to &our portfolio. we o%%up& all segments in the retail finan%ial ser*i%es industr&. $here are se*eral ad*antages in utili=ing our 6to%! Bro!ing ser*i%es. $his is what we pro*ide in our 6to%! Bro!ing ser*i%es. Ae offer ser*i%es that are )e&ond (ust a medium for )u&ing and selling sto%!s and shares. $o empower the in*estor further we ha*e made serious efforts to ensure that our resear%h %alls are disseminated s&stemati%all& to all our sto%! )ro!ing %lients through *arious deli*er& %hannels li!e email.-3 It is an undisputed fa%t that the sto%! mar!et is unpredi%ta)le and &et en(o&s a high su%%ess rate as a wealth management and wealth a%%umulation option. $he differen%e )etween unpredi%ta)ilit& and a safet& an%hor in the mar!et is pro*ided )& in7depth !nowledge of mar!et fun%tioning and %hanging trends. Aith our wide portfolio offerings. %omprising of te%hni%al anal&sts as well as fundamental spe%ialists. %hat. )& a%%ounting for se*eral ris! fa%tors and planning a%%ordingl&. whi%h are the reasons wh& it is one of the )est in the %ountr&. Ae are assisted in this tas! )& our in7depth resear%h. planning with foresight and %hoosing one of the options with %are.

there)& pro*iding planning and ad*isor& ser*i%es to the mass affluent. $he mar!et7sa**& and the ignorant in*estors. Dudi%ious planning that is %ustomi=ed to meet the future needs of the %ustomer deli*er a ser*i%e that is e+emplar&. )oth find this ser*i%e *er& satisfa%tor&."!or/ Ser."ce! Ae deli*er ad*isor& ser*i%es to a %ross7se%tion of %ustomers. we are in a position to pro*ide tailor made poli%ies for different segments of %ustomers. $he edge that we ha*e o*er %ompetition is our portfolio of offerings and our professional e+pertise. Aith the opening up of the insuran%e se%tor and with a large num)er of pri*ate pla&ers in the )usiness.-1 A team of highl& qualified and dedi%ated professionals drawn from the )est of a%ademi% and professional )a%!grounds are %ommitted to maintaining high le*els of %lient ser*i%e deli*er&. In our (ourne& to -1 . $he ser*i%e is )a%!ed )& a team of dedi%ated and e+pert professionals with *aried e+perien%e and )a%!ground in handling in*estment portfolios. monitoring and managing the portfolio through *aried te%hnologi%al initiati*es. $his is made possi)le )& the e+pertise we ha*e gained in the )usiness o*er the &ears. A . :ere we understand the %ustomer needs and lifest&le in the %onte+t of present earnings and pro*ide adequate ad*isor& ser*i%es that will ne%essaril& help in %reating wealth. high net7worth %lients and %orporates. $o further tap the immense growth potential in the %apital mar!ets we enhan%ed the s%ope of our retail )rand. Ae pro*ide )oth life and non7life insuran%e produ%ts to retail indi*iduals. In!urance Bro'"n$ At Mone& Matter In%. $he& are %ontinuall& engaged in designing the right in*estment portfolio for ea%h %ustomer a%%ording to indi*idual needs and )udget %onsiderations with a %omprehensi*e support s&stem that fo%uses on trading %ustomersE portfolios and pro*iding *alua)le inputs. $he in*estment planning for ea%h %ustomer is done with an un)iased attitude so that the ser*i%e is trul& %ustomi=ed .

-2 . insuran%e is no more seen as onl& a ta+ sa*ing produ%t )ut also as an in*estment produ%t. Aith us &ou will find unmat%hed features to ma!e &our e+perien%e %ompleteF • Galue 5ri%ing 'ather than )ased on the si=e of &our a%%ount and *olume of trading. planning of )usiness needs and retirement needs and a host of other ser*i%es. 4or this purpose we offer a %omprehensi*e and personali=ed ser*i%e that en%ompasses planning and prote%tion of finan%es. Pr". :ere we follow a hard7nosed )usiness approa%h with the soft tou%h of dedi%ated %ustomer %are and personali=ed attention. Aith Indian mar!ets seeing a sea %hange. all pro*ided on a one7to7one )asis. we would )e positioned to pro*ide the )est of the produ%ts a*aila)le in this )usiness to our %ustomers. B& setting up a separate entit&. 1%/ Mone/ MatterF >ur ser*i%es are designed !eeping the requirements of in*estors in mind. we will )e )etter positioned to le*erage our relationships with the produ%t pro*iders and pla%e the requirements of our %ustomers appropriatel& with the produ%t pro*iders. we offer transparent. personali=ed ser*i%e is pro*ided here )& a dedi%ated team %ommitted in gi*ing hassle7free ser*i%e to the %lients.-2 emerge as a personal finan%e ad*isor. )oth in terms of in*estment pattern and attitude of in*estors. fair pri%ing so that e*er&one en(o&s same )enefits.ate Cl"ent Grou& $his spe%iali=ed di*ision was set up to %ater to the high net worth indi*iduals and institutional %lients !eeping in mind that the& require a different !ind of finan%ial planning and management that will augment not (ust e+isting finan%es )ut their life7st&le as well. 4urther.

and tra%! progress effi%ientl&. >ur In*estment 6pe%ialists are a*aila)le to help &ou understand and de%ipher Cfundamental # te%hni%alC details offered through our partners. 'asic In!est#ent 7rinci+les of the Money Matter Inc. ad*an%ed s%reening and %harting tools. • 'esear%h Ae help &ou ma!e informed in*estment de%isions with powerful mar!et resear%h. &sta$lishing realistic financial goals is an essential first step towards successful investing.nderstanding investments that are $est suited to help achieve your goals is e8ually important. .-. <ollowing these time@tested investment principles ena$le you to $uild a strong foundation of financial security.. Investment principles guide you in your investment choices. we partner &ou e+%lusi*el&F right from assessing &our e+perien%e and ris!. To+ 7rinci+les4 -. to asset allo%ation # portfolio anal&sis. mapping &our long term # short term requirements. • 6upport A 'elationship Manager to ser*i%e all &our requirements pro*ides &ou %ustomi=ed and timel& support in%luding alerting &ou in ad*an%e of opportunities from &our wish list or when &ou ma& ha*e to sell 2. • 5lanning towards ?oals Be%ause different people need different finan%ial planning. .

6upee@cost averaging can $e an effective strategy with funds or stocks that can have sharp ups and downs% $ecause it gives more opportunities to purchase shares less expensively. Instead% as the example $elow demonstrates% the average cost of your shares will $e lower. Therefore it is important to start saving early in order to $enefit from the power of compounding returns. This refers to the practice of investing the same amount of money in the same investment vehicle at regular intervals% regardless of market conditions. . Dhen the return is reinvested% investor earns a return on the return and a return on that return and so on. If the investor takes the rupee@cost averaging approach% the amount invested is always the same. Thus% the investor automatically $uys more shares when the price is low and fewer when the price is high. The investorCs natural instinct might $e to stop investing if the price starts to drop $ut history suggests that the $est time to invest may $e when you are getting good value. The $enefit of this approach is that% over time% you may reduce the risk of having shares with the highest cost price. This is achieved through returns that are earned% $ut not spent. Co#+oun$ing !ompounding is the a$ility of an asset to generate earnings% which are then reinvested in order to generate their own earnings. Through compounding% a small amount of money over time can grow into a su$stantial sum. In other words% compounding refers to generating earnings from previous earnings.-- /u+ee-Cost &!eraging A systematic approach to long@term investing is called rupee@cost averaging. -- .owever% rupee@cost averaging does not assure a profit and it does not protect against investment losses in declining markets. Investments can increase in value over time @ and the longer the time frame% the greater the value.

3i!ersification /iversification is a strategy that can $e neatly summed up $y the timeless adage I/onCt put all your eggs in one $asket. Asset allocation aims to $alance risk and reward $y apportioning a portfolioCs assets according to your investment o$)ectives% your risk tolerance and your investment hori on. <or example% diversification could mean that you own several stocks% $ut they all come from various types of industries or different parts of the world. This is necessary $ecause over time some of the investments may $ecome out of alignment with the investment goals% as investments -.I &sset &llocation Asset allocation involves dividing an investment portfolio among different asset categories% such as stocks% $onds% and cash. In fact% according to many researches and studies% asset allocation determines approximately *5F of the return. If a certain company is $adly hit% you will have other stocks that may $e a$le to Itake up the slack. The rationale $ehind this techni8ue contends that a portfolio of different kinds of investments will% on average% yield higher returns and pose a lower risk than any individual investment found within the portfolio. These asset categories have different risk@ return characteristics% so if you have them in your portfolio% their different patterns of $ehavior offset each other. By having a variety of different stocks% your funds are more protected. /e:alancing 6e$alancing your mutual fund portfolio on a regular $asis maintains the desired asset allocation in your investment strategy. It is a risk@management techni8ue that mixes a wide variety of investments within a portfolio. . <or instance% while one asset category increases in value% another may $e decreasing or not increasing as much.-. The remaining 15F of the return is determined $y which particular investments Bstock% $ond% mutual fund% etc.: Eou select and when you decide to $uy them.I In other words% your funds are spread over a variety of investment instruments. Basically% re$alancing is $ringing portfolio $ack to original asset allocation mix. Asset allocation is generally the most important factor in determining the return on your investments.

The advantage of this method is that investments will tell you when to re$alance. 6e$alancing can $e $ased either on the calendar or on the investments. +ome will grow faster than others. Many financial experts recommend that investors re$alance their portfolios on a regular time interval% such as every six or twelve months. 92? Name! an Locat"on of Grou& Com&an"e! Mone/ Matter Inc2 9o%ationsF > > > > > > Mohali (:ead >ffi%e . By re$alancing your portfolio% you will ensure that you stick to original plans and have the kind of discipline that leads to long@term success. The advantage of this method is that the calendar is a reminder of when investor should consider re$alancing. . <or example% letCs say it is determined that stock investments should represent '5F of portfolio. 5un(a)) 6ri ?anganagar ('a(asthan) Anupgarh ('a(asthan) 6uratgarh ('a(asthan) 'amsinghpur ('a(asthan) 9udhiana (5un(a)) -/ . But after a recent stock market increase% stock investments represent 05F of portfolio.-/ donCt all move the same way at the same time.thers recommend re$alancing only when the relative weight of an asset class increases or decreases more than a certain percentage that investor has identified in advance. Eou will need to either sell some of stock investments or purchase investments from an under@weighted asset category in order to reesta$lish original asset allocation mix.

-0 8p%oming Bran%hesF > > > > Dalandhar (5un(a)) Nawanshahar (5un(a)) Amritsar (5un(a)) . 9I4" IN68'AN " AGIGA 9I4" IN68'AN " -0 ."ce! Pro uct! P P P P P P P Insuran%e Mutual 4unds 6hares orporate 4D@s 5ortfolio Management 6er*i%es ?old Bonds T%e Com&an"e! Mone/ Matter Deal! In In L"fe In!urance $A$A AI? .hanna (5un(a)) Pro uct!5Ser.>$A.

-1 I I I 5'8D"N$IA9 9I BADAD A99IANH BI'9A 68N 9I4" :D4 6BI '"9IAN " 9I4" 6$A' :"A9$: I I I 9>MBA'D 6$ANDA'D 9I4" In General In!urance $A$A AI? ?"N"'A9 IN68'AN " '"9IAN " ?"N"'A9 IN68'AN " BADAD A99IANH ?"N"'A9 IN68'AN " '>IA9 68ND'AM 8NI$"D NA$I>NA9 >'I"N$A9 N"A INDIA I44 > $>.I> -1 .

• • 4ates India Birla Tyres -2 .-2 92= Our Mana$ement Team Prof"le of Mana$ement Team Name Designation "+perien%e Industrial "+perienan%e Mr. 5rem 5al hief >ffi%er >perating 2.&rs • /unlop India Ktd 6harma • Indag 6u$$er Ktd.

3 Ktd..3 . .

6hallu :ead Administration # 4inan%e7 6trategi% 8nit 0 &rs • • I!I!I (rudential 6eliance Mr.umar Du)e& :ead 6ales7 6trategi% 8nit 1&rs • • • +BI KI<& .. &rs • • • I!I!I (rudential Notak Kife Insurance% AHIHA Kife Ms.1 .ant Informat"on B 0 .. 6antosh ./<! +td I!I!I (rudential Ot%er Rele. ?aura* 6harma 6trategi% 8nit :ead /.1 Mr.

-) Ban!ing intermediation is still at low le*els pro*ides signifi%ant opportunit& for a new entrant.2 .2 In "a 0 A 'e/ mar'et for Mone/ Matter Inc2 1) 5ro*ides MMI with a%%ess to one of the most rapidl& growing e%onomies. 0) 4oreign Dire%t In*estment inflows e+pe%ted to dou)le to J11Bln. /) "mergen%e of 'is! infrastru%ture li!e %redit Bureaus help to esta)lish prudent pra%ti%es. 2) 9arge under and un7ser*ed segments. and steadil& impro*ing infrastru%ture. . 1) In%reasing le*els of foreign trade .) 6trong ma%ro7e%onomi% fundamentals. 2) ?rowing glo)al integration. .) A*aila)ilit& of talent. . state7of7art lower %ost te%hnolog&..

. .. A%hie*e mar!et share of . attra%ting di*erse talent due to its unique )usiness model and wide produ%t range .K (top own7)ran%h pla&ers) within target segment. . Ne3t F". 6er*e a satisfied %ustomer )ase of L2 million %ustomers.e Aear Goal 1.. Be the )est emplo&er in finan%ial ser*i%es industr& in India.. 2 .

Pro uct! an Ser. $he& gi*e their ser*i%es inF • • • • • • • • Insuran%e Demat A%%ount Mutual 4unds Bonds 6hare De)enture orporate 4D@s ?old Com&an"e! a!!oc"ate #"t% t%e Branc% P P P P P P P P P P $A$A AI? .. 9I4" IN68'AN " AGIGA 9I4" IN68'AN " I I I 5'8D"N$IA9 9I BADAD A99IANH BI'9A 68N 9I4" :D4 6BI '"9IAN " 9I4" 6$ANDA'D 9I4" ..- ."ce! #"t% Bran !B0 $his is )asi%all& a Aealth Management 8nit dealing in almost all in*estment options present in the mar!et.>$A.

. To make the people aware a$out the new products.e! of HR De&artment • • • $o pro*ide )est wor!ing en*ironment. . To give the $est possi$le services.. P P P P P P P P P P P 6$A' :"A9$: I I I 9om)ard $A$A AI? ?"N"'A9 IN68'AN " '"9IAN " ?"N"'A9 IN68'AN " BADAD A99IANH ?"N"'A9 IN68'AN " '>IA9 68ND'AM 8NI$"D NA$I>NA9 >'I"N$A9 N"A INDIA I44 > $>.. $o retain the emplo&ees.e! of Sale! De&artment • • • To improve sales strategies.. $o handle the grie*an%es of the emplo&ees.I O(Gect". O(Gect".

T analysis is often used in academia to highlight and identify strengths% weaknesses% opportunities and threats. The techni8ue is credited to Al$ert . If the o$)ective is G. Identification of +D..umphrey% who led a convention at +tanford .Ts. A +D.that are harmful to a%hie*ing • 1ea!nessesF attri)utes of the person or the o)(e%ti*e(s).Ts are essential $ecause su$se8uent steps in the process of planning for achievement of the selected o$)ective may $e derived from the +D. The +D. It is particularly helpful in identifying areas for development .niversity in the 1*'5s and 1*-5s using data from <ortune 555 companies. +trategic (lanning% has $een the su$)ect of much research.A "5)T &%&(0"I" "5)T analysis is a strategic planning method used to evaluate the "trengths% 5eaknesses% )pportunities% and Threats involved in a pro)ect or in a $usiness venture.T analysis may $e incorporated into the strategic planning model./ 2. It involves specifying the o$)ective of the $usiness venture or pro)ect and identifying the internal and external factors that are favora$le and unfavora$le to achieve that o$)ective.T analysis must first start with defining a desired end state or o$)ective. • OpportunitiesF e+ternal %onditions that are helpful to a%hie*ing the o)(e%ti*e(s). $hat are helpful to a%hie*ing the o./ . • StrengthsF attri)utes of the person or o)(e%ti*e(s). . • ThreatsF e+ternal %onditions whi%h %ould do damage to the o)(e%ti*e(s). o.Ts. A +D.T attaina$le a different o$)ective must $e selected and the process repeated. <irst% the decision makers have to determine whether the o$)ective is attaina$le% given the +D.

. . 9ow retention 'ate.0 S1OT Anal/!"! of Mone/ Matter Inc2 Stren$t%! • • • • Asso%iation with 22 %ompanies.0 . 5rodu%t 'ange "+perien%e and Iouth staff >pportunit& for In*estment 1ea'ne!!e! • • • Infrastru%ture Inadequate 5romotion 6trategies. )++ortunities • • • ?rowing %ompan& ?rowing Awareness 8ntapped mar!et Threats • • • :igh ompetition hanging Norms of I'DA 9a%! of Interest of 5eople Insuran%e.

whether long term or short term. $hese asset management or in*estment management %ompanies %olle%ts mone& from the in*estors and in*ests those mone& in different 6to%!s. whi%h represent a portion of the holdings of the fund. the& re%ei*e the return a%%ording to the mar!et %onditions. Iou %an thin! of a mutual fund as a %ompan& that )rings together a group of people and in*ests their mone& in sto%!s. $he in*estors who in*est their mone& in the Mutual fund of an& in*estment Management ompan&.er. In*estors %an generall& sell the shares of their mutual funds at an& time the& want."e# of t%e &ro uct! an matter "nc2 t%e"r eta"l! u!e (/ mone/ Mutual fun$s Mutual 4unds Definition refers to the meaning of Mutual 4und.1 92H O. $hese things help the fund mangers to spe%ulate properl& in the right dire%tion. $he in*estment %ompanies re%ei*e profit )& allo%ating peopleEs mone& in different sto%!s and )onds a%%ording to their 6pe%ulation a)out the Mar!et $rend.1 . A mutual fund is nothing more than a %olle%tion of sto%!s andBor )onds.. "a%h in*estor owns shares. the in*estors sell the 6hares of the Mutual 4und. re%ei*e an "quit& 5osition in that parti%ular mutual fund. )onds. Ahen after %ertain period of time. Bonds and other finan%ial se%urities in a di*ersified manner. whi%h is a fund. But. Before in*esting the& %arr& out thorough resear%h and detailed anal&sis on the mar!et %onditions and mar!et trends of sto%! and )ond pri%es. >ther than some spe%ifi% mutual funds whi%h %arr& %ertain Maturit& $erm. the return will *ar& a%%ording to mar!et *alue of the sto%!s and )onds in whi%h that parti%ular mutual fund made in*estment. managed )& an in*estment %ompan& with the finan%ial o)(e%ti*e of generating high 'ate of 'eturns. But. and other se%urities. . generall& the share holders of mutual fund sell their share when the pri%es are up and apital ?ain is sure to happen.

sto%!s ha*e histori%all& a*eraged a)out 13K annual returns :owe*er. e*en in the long run • • In*estments in sto%!s %an generate returns through di*idends.2 Iou %an ma'e mone/ from a mutual fun in three wa&sF 1) In%ome is earned from di*idends on sto%!s and interest on )onds. and &ou get *oting rights in %ertain %ompan& issues >*er the long run. Iu"c' Fact! on S%are! • >wning a sto%! or a share means &ou are a partial owner of the %ompan&. A fund pa&s out nearl& all of the in%ome it re%ei*es o*er the &ear to fund owners in the form of a distri)ution. Iou %an then sell &our mutual fund shares for a profit. &our return is the di*idend plus the %apital gain. "hares A !%are is a unit of a%%ount for *arious finan%ial instruments in%luding sto%!s. &ou also run a ris! of ma!ing a %apital loss if &ou ha*e sold the !%are at a pri%e )elow &our )u&ing pri%e. limited partnerships. 6o. . Most funds also pass on these gains to in*estors in a distri)ution. A share is issued )& a %ompan& or %an )e pur%hased from the sto%! mar!et. whi%h entitles its holder to )e one of the owners of the %ompan&. In British "nglish. In simple Aords. sto%!s offer no guarantee of an& returns and %an lose *alue. 2) If the fund sells se%urities that ha*e in%reased in pri%e. :owe*er. a share or sto%! is a do%ument issued )& a %ompan&.) If fund holdings in%rease in pri%e )ut are not sold )& the fund manager. the fundEs shares in%rease in pri%e. e*en if the pri%e . the usage of the word share alone to refer solel& to sto%!s is so %ommon that it almost repla%es the word sto%! itself.. and '"I$Es. B& owning a share &ou %an earn a portion and selling shares &ou get %apital gain. the fund has a %apital gain. mutual funds.2 .

and the )ul! of a %ompan&Es %apital is issued this wa&. the amount due is %arried forward and paid the following &ear.) Part"c"&at"n$ &reference !%are! $he holder re%ei*es a stated di*idend ea%h &ear and is entitled to share in an& profits remaining after ordinar& shareholders ha*e had their )ite. $his entitlement ran!s ahead of ordinar& shareholdersE di*idends. (6ometimes these are redeema)le.!orporate fdsAloans are offered $y companies that are looking to raise money from the open market. and if this is not produ%ed one &ear. in whi%h %ase the& are similar to loan se%urities. Preference !%are! $hese ha*e priorit& o*er ordinar& shares in entitlements to di*idend pa&ments and in %laims to the assets of a %ompan& if it is wound up. Ah& do /3 . 6hares %ome in different formsF Or "nar/ !%are! No spe%ial rights (e+%ept *oting rights) are atta%hed to these. Cumulat". 1%at are Cor&orate F"3e De&o!"t! orporate fi+ed deposits are normal fi+ed deposits offered )& ompanies. :igher the interest rates offered higher are the ris!s in*ol*ed./3 5art of the ownership of a %ompan&. !orporate fds typically pay a higher rate of interest% $ut also carry a relatively higher risk than $ank fds.e &reference! !%are! $he holder of these shares is entitled to a fi+ed annual di*idend. 9u%!& or astute in*estorsma& also reap a %apital gain as the mar!et *alue of the shares in%reases. /uring the course of the </% even if the prevailing interest rates go up or down% you will $e entitled to the rate of interest that was committed to you. A person who )u&s a portion of a %ompan&Es%apital )e%omes a shareholder in that %ompan&Es assets and as su%h re%ei*es a share of the %ompan&Es profits in the form of an annual di*idend. Cor+orate fi9e$ $e+ositsPloans <ixed deposit B</: is an investment option that allows you to invest a sum of money for a fixed time period and at a fixed rate of interest. $he interest rates offered are generall& higher than Ban! interest rates and %an )e in range from 2K71/K .

orporate Deposits are go*erned as per 6e%tion . It@s not re%ommended that &ou put a )ig sum in same %ompan&. R"!'! #"t% Com&an/ F"3e De&o!"t! $here are two main ris!s asso%iated with ompan& Deposits . Default R"!' B $hese ompan& deposits %arr& a ris! %alled Default 'is!. the& %an offer deposits at attra%ti*e rate of interest to %ommon pu)li%. Un!ecure De&o!"t! F Ban! Deposits are se%ured )& 'BI up to 1 la%s rupees per )ran%h. 9in! Caut"on Po"nt! 5remature "+it from ompan& 4D@s are not that simple li!e Ban! 4D@s. howe*er these are Nunse%uredO loans (we will tal! a)out it) . one of the reasons for this %an )e that the& do not want to raise the additional %apital )& issuing shares. whi%h means. then )etter in*est 1 la%s in 2 different %ompan&. Also if &ou are in*esting for some *er& important goal. the& are F A. B. $he point here is awareness. some %ompanies whi%h offer 4i+ed Deposits are *er& esta)lished and are highl& reputed.e!t "n Cor&orate F"3e De&o!"t!5loan! $here is nothing good or )ad . If &ou want to in*est 2 la%s in %ompan& fi+ed deposits. $here is no su%h Insuran%e on ompan& Deposits. If &ou want to par! mone& for short7term and are %omforta)le with the ris!s whi%h %ome with %orporate fi+ed deposits. this %an happen for man& reasons li!e their )usiness might not )e going good that time or )e%ause of re%ession . It %an happen that %ompan& is out of %ash at that time or does not ha*e suffi%ient mone& in their hand to pa& )a%! . then )etter settle with Ban! 4i+ed Deposits and not orporate deposits. Iou might ha*e to run from one pla%e to another and send loads of letters and some times e*en gi*e reasons for 5remature Aithdrawals . whi%h means that if )an! does not return &ou the mone& or goes )an!rupt. it@s )etter to settle with 27 /1 . hen%e the& are totall& unse%ured .1A of ompanies A%t. 'BI will pa& &ou up to 1 la%s of deposits./1 %ompanies ha*e these depositsM Ahen %ompanies ha*e %ash %run%h and require mone&. howe*er &ou %an@t ta!e it at fa%e *alue and ignore the ris!sin*ol*ed. these orporate fi+ed deposits %an )e a good produ%ts for &ou. S%oul /ou "n. at maturit& the& might not )e a)le to return &our maturit& amount and default in the pa&ment. that would di*ersif& &our ris! to some e+tent.

This is valid only for $ank fds.K less returns then ta!e unne%%essar& ris! .o"      ompanies whi%h offer interest higher than 1. R 0ou can raise a loan against your *34 Eou can $orrow up to 05F of your deposit amount Bin some cases% only after a few months of your </7s existence:. R Choice of ti#e +erio$4 Eou can make a deposit for any period of time% from 15 days to 15 years. Bank fds are guaranteed up to 6s1 lakh $y the /eposit Insurance and !redit 4uarantee !orporation. :ere are some words of %aution while %hoosing ompan& deposits . ompanies whi%h are not pa&ing regular di*idends to the shareholder ompanies whose Balan%e 6heet shows losses ompanies whi%h are )elow in*estment grade (A or under) rating. 1%"c% Com&an/ F"3e De&o!"t! /ou !%oul a. 3isa$!antages R /elati!ely loH returns4 Because fds are very low@risk instruments% they offer low returns compared with alternative investment options such as stocks and mutual funds./2 .K. /2 . 5*t limited ompanies and 5artnership firms as its *er& diffi%ult to (udge their performan%e &$!antages R f$s offer a safe return4 fds are usually secure and are very low@risk investments.nlike other investments such as stocks% mutual funds or even real estate% you don7t need to monitor your fds on a daily or monthly $asis% or undertake any kind of maintenance work. R (oH #aintenance4 .

/.nlike other investment options% interest income earned from fds will $e added to your income and taxed. =. As a result% unlike a savings $ank deposit% you will lose the flexi$ility of accessing your funds whenever needed. . Always appoint a nominee on your </ for 8uick withdrawals% and to avoid hassles if you are not around.. Eou can $reak your </ if needed% $ut you would have to pay a penalty% which could include $oth a reduced interest rate as well as charges that are typically around 1Fof the investment amount. Ta9es an$ f$s R Ta9-sa!ing in!est#ents4 . <ds from companies might pay more $ut come at a much higher risk than $ank fds.nder section 05!% you can get a tax deduction of up to 6s1 lakh a year if you invest in a five@year </. In times of rising inflation% avoid fds $ecause your money will lose its purchasing power. . @ things to Hatch out for 1. 2. These fds are not deposit@guaranteed. R If you do not fall in a taxa$le sla$% then furnish <orm 154 or 15. R (ock-u+s4 Eour money will $e locked up in an </ for the duration of the deposit./. R -nfa!oura:le ta9 treat#ent4 . R f$s an$ ta9 $e$uction at source (T3")4 If the aggregate interest income that you are likely to earn from all your $ank fds held in a single $ranch is at least 6s15%555 in a financial year B6s5%555 in the case of corporate fds: then T/+ will $e deducted at 15F. to your $ank to prevent T/+ on the interest income that is paid to you. Dhen making a deposit% check the penalty clause for early withdrawal.

/- . Eou might want to split your investment and make multiple deposits in small si es and spread them across different maturities as opposed to making a single large deposit. ?. The +ecurities &xchange Board of India B+&BI: re8uires the investor to maintain a /emat account. &$!antages of 3e#at The demat account reduces $rokerage charges% makes pledgingAhypothecation of shares easier% ena$les 8uick ownership of securities on settlement resulting in increased li8uidity% avoids confusion in the ownership title of securities% and provides easy receipt of pu$lic issue allotments. The /emat account num$er which is 8uoted for all transactions to ena$le electronic settlements of trades to take place. <or fds longer than a year% if your interest is paid at maturity% the taxes on interest income from your fds are due on interest earned% even if the interest hasn7t $een received $y you Demat account! The term 3e#at% in India% refers to a dematerialised account. (urchases and sales of securities on the /emat account are automatically made once transactions are executed and completed. A /emat Account is opened $y the investor while registering with an investment $roker Bor su$ $roker:. If you need to withdraw funds for an emergency% instead of $reaking the </% you might want to consider taking an overdraft of up to 05F on your </ rather than pay the withdrawal penalty./- >. <or individual Indian citi ens to trade in listed stocks or de$entures. Access to the demat account re8uires an internet password and a transaction password as well as initiating and confirming transfers or purchases of securities. In a demat account shares and securities are held in electronic form instead of taking actual possession of certificates. This way% even if you do have to make a premature withdrawal% you will not pay a penalty on the entire amount $ut )ust on the limited amount you withdraw. @.

It also helps you avoid $ad deliveries caused $y signature mismatch% postal delays and loss of certificates in transit. /. Go odd lot pro$lem% even one share can $e sold thus there is an advantage . !hange in address recorded with /( gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separatelyO P Transmission of securities is done $y /( eliminating correspondence with companiesO P Automatic credit into demat account of shares% arising out of $onusAsplitAconsolidationAmerger etc./.5 per cent paya$le on physical shares:% avoid filling up of transfer deeds% and o$tain 8uick receipt of such $enefits as stock splits and $onuses. It is the system where no paper is involved. Its a safe and convenient way to hold securities . /emat account holders can also avoid stamp duty Bas against 5. . <urther% it eliminates risks associated with forgery% counterfeiting and loss due to fire% theft or mutilation. &limination of risks associated with physical certificates such as $ad delivery% fake securities% delays% thefts etc . Immediate transfer of securities is there . There is a ma)or reduction in paperwork involved in transfer of securities%reduction in transaction cost etc . There is no stamp duty on transfer of securities . Object Of Demat System India has adopted this system in which $ook entry is done electronically. (hysical form is extinguished and shares or securities are held in electronic mode. Before the introduction of the depository system $y the /epository Act% 1**'% the process of sale% purchase and transfer of shares was a huge pro$lem and the safety perspective was ero. Demat Benefits The $enefits are enumerated as follows9 .

It ensures transfer settlements and reduces delay in registration of shares. It helps avoid $ad delivery pro$lem due to signature differences% etc. PAfter dematerialising the certificates% 6egistrar updates accounts and informs depository of the completion of // . P/epository participant intimates /epository of the re8uest through the system. Benefit to Brokers The depository system reduces risk of delayed settlement. It provides more accepta$ility and li8uidity of securities. It increases the efficiency of the registrars and transfer agents and the +ecretarial /epartment of the company. 'enefit to the Co#+any The depository system helps in reducing the cost of new issues due to less printing and distri$ution cost. P/epository participant su$mits the certificates to the registrar of the Issuer !ompany.olding investments in e8uity and de$t instruments in a single account. It increases overall of trading and profita$ility.% loss% theft% mutilation% forgery% etc.// P . +eparate /6< has to $e filled for each I+IG Gum$er. It provides $etter facilities for communication and timely services with shareholders% investor etc. It ensures greater profit due to increase in volume of trading.It increases confidence in investors. The complete process of dematerialisation is outlined $elow9 P+urrender certificates for dematerialisation to your depository participant. Go stamp duty is paid on transfer of shares. Benefit to the Investor The depository system reduces risks involved in holding physical certificated% e. !ontains Demat conversion !onverting physical holding into electronic holding Bdematerialising securities: In order to dematerialise physical securities one has to fill in a /6< B/emat 6e8uest <orm: which is availa$le with the /( and su$mit the same along with physical certificates one wishes to dematerialise. It ensures faster communication to investors.g. It eliminates chances of forgery > $ad delivery.It ensures faster payment on sale of shares. P6egistrar confirms the dematerialisation re8uest from depository.

+o% you can check on your holdings% transactions and status of re8uests through the net $anking facility./0 dematerialisation. Banks are also advantageous $ecause of the num$er of $ranches they have. 4enerally% $anks credit your demat account with shares in case of purchase% or credit your savings accounts with the proceeds of a sale on the third day. But there are three distinct advantages of having a demat account with a $ank Q 8uick processing% accessi$ility and online transaction. All the charges vary from /( to /(. +ome $anks give the option of opening a demat account in any $ranch% while others restrict themselves to a select set of $ranches. &ccount-o+ening fee /epending on the /(% there may or may not $e an opening account fee. Fees Involved There are four ma)or charges usually levied on a demat account9 Account opening fee% annual maintenance fee% custodian fee and transaction fee.owever% players such as I!I!I Bank% 4lo$e !apital% Narvy !onsultants and the +tate Bank of India to do so. Demat Options Banks score over others Around "55 =depository participants? Bdps: offer the demat account facility. P/epository updates its accounts and informs the depository participant.olding !orporation offers a lifetime account opening fee% which allows you to hold on to your demat account over a long period. A comparison of the fees charged $y different dps is detailed $elow. But most players levy this when you re@open a demat account% though the +tock . +ome private $anks also provide online access to the demat account. P/epository participant updates the demat account of the investor. &nnual #aintenance fee This is also known as folio maintenance charges% and is generally levied in advance. A $roker who acts as a /( may not $e a$le to provide these services. /0 . This fee is refunda$le. ./<! Bank and . (rivate $anks% such as .TI Bank% do not have one.

5 to 6s 1 per I+IG per month. Besides% production of (AG card in original at the time of opening of account has $een made mandatory effective from April 1% "55'. /( should provide the investor with a copy of the agreement and schedule of charges for their future reference. The account opening form must $e supported $y copies of any one of the approved documents to serve as proof of identity B(./1 Custo$ian fee This fee is charged monthly and depends on the num$er of securities Binternational securities identification num$ers Q I+IG: held in the account. I/ BBeneficiary . This fee varies for $oth demat and remat re8uests. The /( will open the account in the system and give an account num$er% which is also called B. The fee also differs $ased on the kind of transaction B$uying or selling:. /ps will not charge custody fee for I+IG on which the companies have paid one@time custody charges to the depository.wner /1 .A: as specified $y +&BI. +ome dps charge only for de$iting the securities while others charge for $oth. In addition% service tax is also charged $y the dps. Dhile some dps% such as +BI% charge a flat fee per transaction% . Transaction fee The transaction fee is charged for creditingAde$iting securities to and from the account on a monthly $asis. <urther% the investor has to sign an agreement with /( in a depository prescri$ed standard format% which details rights and duties of investor and /(./<! Bank and I!I!I Bank peg the fee to the transaction value% su$)ect to a minimum amount. The dps also charge if your instruction to $uyAsell fails or is re)ected. Opening an account +teps involved in opening a demat account <irst an investor has to approach a /( and fill up an account opening form. In addition to the other fees% the /( also charges a fee for converting the shares from the physical to the electronic form or vice@versa. <or demat% some dps charge a flat fee per re8uest in addition to the varia$le fee per certificate% while others charge only the varia$le fee.I: and proof of address B(. All applicants should carry original documents for verification $y an authori ed official of the depository participant% under his signature. It generally ranges $etween 6s 5.

e. Additionally% agreements are entered at various levels in the process of demateriali ation. The role of key market players in case of demateriali ed securities% such as stock@$rokers% needs to $e supervised as they have the capa$ility of manipulating the market. Disadvantages of Demat The disadvantages of demateriali ation of securities can $e summarised as follows9 Trading in securities may $ecome uncontrolled in case of demateriali ed securities. +&BI has rationalised the cost structure for dematerialisation $y removing account opening charges% transaction charges for credit of securities% and custody charges vide circular dated Manuary "0% "555. It is incum$ent upon the capital market regulator to keep a close watch on the trading in demateriali ed securities and see to it that trading does not act as a detriment to investors. The /( may revise the charges $y giving #5 days notice in advance./2 Identification num$er:. Multiple regulatory frameworks have to $e confirmed to% including the /epositories Act% 6egulations and the various By@Kaws of various depositories. Account at transferee /( should also $e a )oint account in the same se8uence of ownership. These may cause anxiety to the investor desirous of simplicity in terms of transactions in demateriali ed securities.owever% the advantages of demateriali ation outweigh its disadvantages and the changes ushered in $y +&BI and the !entral 4overnment in terms of compulsory demateriali ation of securities is important for developing the securities market to a degree of advancement. Account at transferor /( is a )oint account% the B. <urther% +&BI has vide circular dated Govem$er *% "555 advised that with effect from Manuary *% "55'% no charges shall $e levied $y a depository on /( and conse8uently% $y a /( on a Beneficiary .: when a B. <reely traded securities are an essential component of such an /2 . Identical in all respects. . In case the B. AccountAs at transferee /( and at transferor /( are one and the same% i.wner BB. transfers all the securities lying in his account to another $ranch of the same /( or to another /( of the same depository or another depository% provided the B.

)onds %ome with less ris! )ut also a lower return rate. $he downside is that )ondholders are onl& entitled to the prin%ipal plus interest and. Ahen &ou pur%hase sto%! &ou@re in effe%t pur%hasing partial ownership of a %orporation. as mentioned. Bonds are !nown as fi+ed7in%ome se%urities )e%ause the& pro*ide a fi+ed amount of mone& if &ou hold on to them until maturit&. Bon ! . a )ond is nothing more than an I>8.O while the pur%haser is the Nin*estor. $his means that should the organi=ation go )an!rupt. whi%h are made at a predetermined rate and s%hedule. the )ond issuer is required $o pa& the in*estor interest pa&ments. But when &ou pur%hase )onds &ou )e%ome a %reditor to the %orporation or go*ernment.03 advanced market and demateriali ation addresses such issues and is a step towards the advancement of the market. don@t share in %ompan& profits. as a )ondholder &ou would get paid )efore a shareholder. $he organi=ation that offers the I>8 (the )ond) is !nown as the Nissuer. $here are two s%enarios when this is parti%ularl& trueF 03 . 1%/ Bot%er #"t% Bon !F Bonds tend to )e the more logi%al option whene*er &ou %an@t afford the short7term *olatilit& of the sto%! mar!et. whi%h gi*es &ou a higher %laim on assets than shareholders ha*e.!2 Stoc'! $he important distin%tion )etween sto%!s and )onds is that )onds are de)t and sto%!s are equit&. In sum. whi%h gi*es &ou %ertain rights su%h as *oting in shareholder meetings and sharing in %orporate profits.O Be%ause no)od& would loan his or her hard7earned mone& to an un!nown part& for nothing. Bon ! 1%at I! a Bon F In essen%e.

a ma(orit& of &our assets should )e in equities. 4or shorter7term '>I needs. let@s imagine a &oung professional who is planning to return to graduate s%hool in a few &ears@ time. In &our -3s and . $herefore )onds are the safe.333. ItEs alwa&s possi)le for the )orrower to default on the de)t pa&ments. $o minimi=e ris!. 4or e+ample. it is said to )e selling at a dis%ount. $herefore a fi+ed7in%ome se%urit& su%h as )onds is the wise %hoi%e. All of these fa%tors pla& a role in determining the *alue of a )ond and the e+tent to whi%h it fits in &our portfolio. Bon Ba!"c!B C%aracter"!t"c! Bonds ha*e a num)er of %hara%teristi%s of whi%h &ou need to )e aware. In &our /3s and )e&ond the ma(orit& of &our in*estments should )e in the form of fi+ed in%ome. in &our 23s and . It is also worth mentioning that while )onds are generall& safe )ets. the &oung professional %an@t afford the ris! of losing the mone& for his or her edu%ation. A )ondEs pri%e flu%tuates throughout its life in response to a num)er of *aria)les (more on this later). logi%al %hoi%e. Ahen a )ond sells )elow fa%e *alue. A newl& issued )ond usuall& sells at the par *alue.3s when &our fo%us is on )uilding wealth. the& aren@t ris! free. )ut this amount %an )e mu%h greater for go*ernment )onds. Face Calue5Par Calue $he fa%e *alue (also !nown as the par *alue or prin%ipal) is the amount of mone& a holder will get )a%! on%e a )ond matures.01 retirement and shorter7term return on in*estment needs. Ahile the sto%! mar!et pro*ides the opportunit& for higher growth. most personal finan%ial ad*isors ad*o%ate di*ersif&ing &our portfolio and %hanging its distri)ution of asset %lasses as &ou pro%eed through life. Ahen a )ond trades at a pri%e a)o*e the fa%e *alue. who )& definition li*e on fi+ed in%omes.3s as &ou )egin to fo%us more on retirement. followed )& muni%ipal )onds. %an@t afford to lose their prin%ipal )e%ause the& need it to pa& their monthl& )ills. ?o*ernment )onds are the safest )onds. Ahat %onfuses man& people is that the par *alue is not the pri%e of the )ond. orporate )onds normall& ha*e a par *alue of J1. and then %orporate )onds. 'etirees. it is said to )e selling at a premium. 01 . the per%entages shift out of sto%!s into )onds.

the higher the interest rate. Matur"t/ $he maturit& date is the date in the future on whi%h the in*estorEs prin%ipal will )e repaid. all things )eing equal. quarterl& or annuall&. re%ords are more li!el& to )e !ept ele%troni%all&. $he reason )ehind this is that a go*ernment will alwa&s )e a)le to )ring in future 02 . !nown as a floating7rate )ond.3 &ears (though terms of 133 &ears ha*e )een issued). All things )eing equal.02 Cou&on -T%e Intere!t Rate. )ut itEs possi)le for them to pa& monthl&. 4or e+ample. $he %oupon is e+pressed as a per%entage of the par *alue. the 8. $he %oupon is the amount the )ondholder will re%ei*e as interest pa&ments. A rate that sta&s as a fi+ed per%entage of the par *alue li!e this is a fi+ed7rate )ond. Its default ris! (the %han%e of the de)t not )eing paid )a%!) is e+tremel& small 7 so small that 8. then itEll pa& J133 of interest a &ear. a lower %oupon means that the pri%e of the )ond will flu%tuate more.333. :owe*er. in general. $herefore. this was more %ommon in the past. A )ond that matures in one &ear is mu%h more predi%ta)le and thus less ris!& than a )ond that matures in 23 &ears. as the issuerEs sta)ilit& is &our main assuran%e of getting paid )a%!. Another possi)ilit& is an ad(usta)le interest pa&ment. I!!uer $he issuer of a )ond is a %ru%ial fa%tor to %onsider. most )onds pa& interest e*er& si+ months. ItEs %alled a C%ouponC )e%ause sometimes there are ph&si%al %oupons on the )ond that &ou tear off and redeem for interest. go*ernment se%urities are !nown as ris!7free assets. go*ernment is far more se%ure than an& %orporation. As pre*iousl& mentioned.6. a longer term )ond will flu%tuate more than a shorter term )ond. su%h as the rate on $reasur& )ills. Maturities %an range from as little as one da& to as long as . the longer the time to maturit&. Nowada&s. Also.6. In this %ase the interest rate is tied to mar!et rates through an inde+. Iou might thin! in*estors will pa& more for a high %oupon than for a low %oupon. If a )ond pa&s a %oupon of 13K and its par *alue is J1.

A document given $y the company which descri$es the de$t and is a proof of de$t is known as /e$enture. 1. inde$tedness. It is not necessary that de$enture must $e under seal. It may or may not constitute charge on the assets. whi%h are safer in*estments. is without It an a is of a type of of seal is a 3e:entures4certificate. acknowledgment company . $he %hart )elow illustrates the different )ond rating s%ales from the ma(or rating agen%ies in theu. while ris!& %ompanies ha*e a low rating. A company can also issue irredeema$le de$entures without any undertaking to repay.F Mood&Es. It secures the repayment of loan $y creating charge on the assets.? It includes stock% $onds and any other company7s securities. 6tandard and 5oorEs and 4it%h 'atings.. Blue7%hip firms. $his added ris! means %orporate )onds must offer a higher &ield in order to enti%e in*estors 7 this is the ris!Breturn tradeoff in a%tion. re*enue through ta+ation. whi%h is far from guaranteed. A de$enture signed $y two =. >. /e$enture directors de$enture. ha*e a high rating.0. But there is no restriction on issue of a single 0. A de$enture is always in written form. De(enture! Meaning of 3e:entures9@ 3e:enture is a (atin Hor$ Hhich #eans Sto oHe $e:tI. An oral promise to pay $ack the de$t is not a 2. $he )ond rating s&stem helps in*estors determine a %ompan&Es %redit ris!.6. A %ompan&. $hin! of a )ond rating as the report %ard for a %ompan&Es %redit rating. must %ontinue to ma!e profits. Characteristics valid de$enture. valid. /e$entures are issued in series. It may or may not $e under seal. . on the other hand. In the Hor$s of Thomas &velyn% =a de$enture is a document under company7s seal% which provides for the payment of a principal sums and interest there on at regular intervals% which is usually secured $y a fixed or floating charge on the company7s property or undertaking and which acknowledges a loan to the company.

<ixed rate of interest is paid on de$entures at regular intervals of time. /e$enture holders have no right to vote in any meeting of the company. Go register of these de$entures is maintained $y the company. 6e@issue of redeemed de$entures can $e made either $y re@issuing the same de$entures or $y replacing them with other de$entures. /e$ee#a:le 3e:entures4. =.The de$entures which are registered in the registers of the company in the name of de$enture holder are known as 6egistered /e$entures.. /e$entures are secured $y either fixed or floating charge on assets of the company. Irre$ee#a:le or 7er+etual 3e:entures4. .Irredeema$le de$entures are those de$entures which do not have any fixed date of redemption. It is not compulsory to register the name of unsecured de$enture holders as they do not carry any charge.<ollowing are different kinds of de$entures9@ 1. !oupons are attached with these de$entures for the payment of interest.Bearer /e$entures are those de$entures which work as negotia$le instruments.0- ?. Fin$s of 3e:entures4. But it does not mean that they are negotia$le instruments.6edeema$le de$entures are those which are redeemed or paid off after the termination of fixed term. -nsecure$ or %ake$ 3e:entures4. .nsecured or naked de$entures carry no fixed or floating charge on the assets of the company. The amount paid off includes the principal amount and the current year7s interest.nsecured de$enture holders are ordinary creditors of the company. "ecure$ 3e:entures4. 2. Interest on these de$entures is paid only to the registered holder. These de$entures are fully transfera$le. . @. The company always has the option of either to redeem a specific num$er of de$entures each year or redeem all the de$entures at specified date. /egistere$ 3e:entures4.These de$entures are )ust the opposite of the secured de$entures. They are redeemed either in 0- . But interest may also $e paid through $earer coupons. A. >. ?. 'earer 3e:entures4.The secured de$entures are those de$entures which are secured either $y fixed or floating charge or $oth on any of the assets or property of the company. The powers of the transferee of $earer de$entures are same as the original de$enture holder. These de$entures are fully transfera$le and payment is made only to the $earer of the de$enture.

the event of winding up or at a very remote period of time% say 155 years.2 Non0Con. .!onverti$le /e$entures are those de$entures which have the option of their conversion into the e8uity or preference shares and such conversion has $een approved $y passing special resolution. .ert"(le De(enture!B0 Non7 on*erti)le De)entures are totall& opposite to the %on*erti)le de)entures. Irredeema$le or perpetual de$enture holders can never force the company to redeem their de$entures. Con!erti:le 3e:entures4. 0.0. @. Non7%on*erti)le de)entures are those de)entures whi%h do not ha*e the option of their %on*ersion into the equit& or preferen%e shares.

0/ )'1ECTI. 7/)'(EM4 The pro$lem at hand was to study and measure the awareness level of people regarding mutual funds in the city. $he resear%h pro%ess whi%h was followed )& me %onsisted following steps.  To know the awareness of mutual funds among different groups of investors. &. 0/ .  To get insight knowledge a$out mutual funds  .  An attempt has $een made to measure various varia$le7s playing in the minds of investors in terms of safety% li8uidity% service% returns% and tax saving.E" )* T2E "T-30  The o$)ective of the research is to study and analy e the awareness level of investors of mutual funds.nderstanding the different ratios 2 portfolios so as to tell the distri$utors a$out these terms% $y this% managing the relationship with the distri$utors  To know the mutual funds performance levels in the present market  To analy e the comparative study $etween other leading mutual funds in the present market. 6u%h framewor! is %alled N'"6"A' : D"6I?NO. /E"E&/C2 MET2)3)() 0 M& resear%h pro(e%t has a spe%ified framewor! for %olle%ting the data in an effe%ti*e manner.  To measure the satisfaction level of investors regarding mutual funds.

'"6"A' : IN6$'8M"N$ A %lose friend questionnaire was %onstru%ted for m& sur*e&. (ii) Pr"mar/ DataF Dire%t %olle%tion of data from the sour%e of information. -". Secon ar/ DataF Indire%t %olle%tion of data from sour%es %ontaining past or re%ent past information li!e Ban!@s Bro%hures. Newspaper # Maga=ines et% . $hus handigarh. $he se%ondar& data has )een used to ma!e things more %lear. I ha*e %olle%ted the information from the respondents with the help of questionnaire D. $he sample was drawn from wal! in %ustomers of India Info line 9td. 2. 4a%t sheets of mutual funds.3 respondents. 6e%ondar& data # primar& data. .. DA$A 6>8' "6F $wo t&pes of data were ta!en into %onsideration i. Boo!s. c. b) Sam&le S"JeF $he sample %onsisted of . Annual pu)li%ations.00 B2 DECELOPING THE RESEARCH PLAN B T%e e. te%hnolog& in%luding personal inter*iewing.e. ANA9IH" $:" IN4>'MA$I>N $he ne+t step is to e+tra%t the pertinent findings from the %olle%ted data. Contact Met%o ! I ha*e %onta%ted the respondents through personal inter*iews. 8nion 00 . Puestionnaire %onsisting of a set of questions made to )e filled )& *arious respondents. M& ma(or emphasis was on gathering the primar& data. C2 >99" $IN? $:" IN4>'MA$I>N After this. 6AM59IN? 59AN $he sampling plan %alls for three de%isions. a) Sam&l"n$ Un"t: I ha*e %ompleted m& sur*e& in $erritor&.elo&ment of Re!earc% Plan %a! t%e follo#"n$ Ste&!B 1. sur*e& et%. I ha*e ta)ulated the %olle%ted data # de*eloped frequen%& distri)utions. $he sele%tion of the respondents was done on the )asis of simple random sampling.

01 the whole data was grouped aspe%t wise and was presented in ta)ular form. ". $hus. 01 . 5'"6"N$A$I>N6 >4 4INDIN?6 $his was the last step of the sur*e&. frequen%ies # per%entages were prepared to render impa%t of the stud&.

&%&(0"I" &%3 I%TE/7/ET&TI) % In.e!tment nee !F 02 .02 3&T& 7/E""E%T&TI)%.

13 From t%e a(o.e!t"n$ "n mutual fun ! for t%e !a'e o t%e"r fam"l/ f"nanc"al !ecur"t/2 From t%e a(o.eal! t%at t%e m"nor &ort"on of t%e $ra&% t%at "! to (u"l a cor&u! for ret"rement oe! not &la/ a maGor role "n t%e "n.e $ra&% "t "! clear t%at t%ere are man/ &eo&le #%o %a.e!tment ec"!"on!2 13 .e $ra&% "t al!o re.e &art"c"&ate "n t%e !ur.e/ an "ntere!te t%e maGor &ort"on of t%e !ur.e/ "n "cate! t%at t%e &eo&le are "n "n.

aluat"on 1%"c% of t%e follo#"n$ o /ou t%"n' a! a ta3 !a."n$ !c%emeF 11 .e e3act re!ult! for t%e e.e/ "nclu e! all t/&e! of &art"c"&ant! #%"c% ma/ $".11 T%e!e are t%e f"n "n$! from t%e !ur.e/ #%"c% "nclu e t%e num(er of &art"c"&ant! an t%e t/&e of t%e &art"c"&ant!2 T%"! !ur.

e!tment "n 12 .ar"ou! !c%eme!2 on t%e "ncome of t%e con!umer an t%e"r "n.12 T%e Gra&% "! (a!e .

1. Income Vs Investment Scheme 100% 80% 60% 40% 20% 0% Below 2 2 lac to 4 lac to 6 lac to Above 8 Lac 4 lac 6 lac 8 lac lac Tax Saving Money market Balance rowt! "ncome Interpretation I. II. 1. $his group is e*en in%lined towards growth 6%hemes to %ertain e+tent . 9ower in%ome group of )elow 2 la!h are more attra%ted towards the in%ome and mone& mar!et 6%hemes as the& %annot afford to ta!e too mu%h of ris!. Balan%ed s%heme is more popular with the in%ome group of 2 la!h to / la!h . . 5ersons with a salar& of / la!h and a)o*e are fas%inated )& ta+ sa*ing and mone& mar!et s%hemes. III.

1- T%e Gra&% "! !%o#"n$ t%e "nfluent"al factor amon$ t%e con!umer2 Influential Factor $# $0 2# 20 1# 10 # 0 +ew' .of People Serie'1 Interpretation I. II.er(Maga-ine %rien&'(%amily Banner' "nternet T)* No.e!t t%rou$% mone/ matter "ncF 1- . 1%"c% factor "nfluence /ou mo!t to "n. Ma(or %hun! are fas%inated )& the NewspapersB Maga=ine. Be%ause internet pro*ide the eas& and qui%!est wa& to get the information.a. 6e%ond )est instrument to fas%inate the %ustomer is the internet.

1. 1-K word of mouth and /K ad*ertisement. -2K in*estors %hoose safet&. .1. 11K past e+perien%e. 4A $>'6 Ban! 6er*i%es 6afet& Aord >f Mouth Ad*ertisement 5ast "+perien%e 23K -2K 1-K /K 11K 5"' "N$A?" INTERPRETATION Ahen as!ed that what fa%tor affe%t most while in*esting in Mutual 4unds through mone& matter in% than wide preferen%e is gi*en to safet&.23K )an! ser*i%es.

K 1/ .K .1/ To %o# muc% e3tent are /ou !at"!f"e #"t% t%e !er."ce! offere (/ mone/ matter "ncF &xtremely +atisfied 6atisfied $o 9esser "+tent Dissatisfied $o 9esser "+tent "+tremel& Dissatisfied 13K 13K .

3 23 10 . . >ut of the following whi%h option would &ou preferM >pen7ended lose7ended .Kare e+tremel& dissatisfied.10 INTERPRETATION >ut of the respondents 13K are e+tremel& satisfied with the ser*i%es offered )& mone& matter in% 13K are satisfied to lesser e+tent.

Investors want to take risk as they want to yield $etter returns. Among all investors gives want to have safety for their money. Indians are $ecoming aware of various investment options.11 I%TE/7/ET&TI)% As <II7s have entered Indian markets +ensex have crossed 15555 mark and investors have earned a lot in last financial year. Investors prefer more e8uity schemes than de$t schemes% around '5F of the investors invest in e8uity schemes and $alanced schemes. Around *1F of the investors prefer open 11 . Investors want high returns% li8uidity% safety and tax $enefit. (eople have started taking risk as they want to $ook profits.

Dhen 8uestions were asked a$out the performance of mutual funds in future 55F of investors said strong future% #5F of the investors said very strong future and 15F of the investors said moderate future.e. through +I( as well as lump sum. 12 . Investors prefer $oth systematic investment plan and lump sum.12 ended schemes rather than close ended schemes as there is flexi$ility in open ended schemes. Basically it depends upon the availa$ility of fund. It depends upon the availa$ility of funds that the investor wants to invest in +I( or as lump sum. +ome of the investors invest in $oth ways i.

 The target market of salaried class individual has a lot of scope to gain $usiness% as they are more fascinated to Mutual <unds than the self employed.  Time to time presentationAtraining classes a$out the products should $e there.  +alary class individuals are risk averse and thus they must $e assured of the advantage of =risk > diversification? in Mutual <unds.  The resolution of the 8ueries should $e fast enough to satisfy the distri$utors.  6egular activities like canopy should $e done so as to get more interaction with the distri$utors.  There should $e given more time 2 concentration on the Tier@# distri$utors.  &arly and mid earners $ring most of the $usiness for the Asset Management !ompany7s. (ointing out the $rand name of the company repeatedly may not too fruitful.  6eturn7s record must $e focused $y the sales executives while explaining the schemes to the customer.  There should $e more num$er of 6elationship Managers in different 6egions $ecause one 6M can handle a maximum of 1"5 distri$utors efficiently and also to cover untapped market. Thus Asset Management !ompany7s need to create awareness so that the salaried class people $ecome the prospective customer of the future.  +chemes with high e8uity level need to $e targeted towards self employed and professionals as they re8uire high returns and are ready to $ear risk. 23 . Asset Management !ompany7s thus needed to educate and develop schemes for the person7s who are at the late earning or retirement stage to gain the market share.23 /EC)MME%3&TI)%" &%3 "- E"TI)%"4  !ustomer education of the salaried class individuals is far $elow standard.

21 . of people visiting these places are mostly of service classes and they have to save tax% hence there is more opportunity of getting more no. !omplete insight knowledge a$out the mutual funds were mentioned in the pro)ect ". C)%C(-"I)% These were my o$)ectives of my pro)ect  To get an insight knowledge a$out mutual funds  . of applications. /ifferent ratios with complete graphical representation were explained in the pro)ect #.21  6egular session should $e organi ed on the handling of the india infoline software so as to resolve the account statement pro$lem.  To know the awareness of mutual funds among different groups of investors.  +hould have to provide more advertisements% canopies in the shopping mall% main markets $ecause no.  To evaluate consumer feed$ack on mutual funds <inding out ways and means to improve on the services $y india infoline ltd. To know the performance levels of the pro)ect I have done the comparative analysis of the pro)ect using the four ma)or leading mutual fund companies using different parameters.  All the persons who have cleared the AM<I exam should $e empanelled with Mutual <und so as to $e largest distri$utor $ase.nderstanding the different ratios 2 portfolios so as to tell the distri$utors a$out these terms% $y this% managing the relationship with the distri$utors  To know the mutual funds performance levels in the present market  To analy e the comparative study $etween other leading mutual funds in the present market. I satisfied my o$)ectives of the pro)ect in the following manner 1.

To know the consumer awareness I have done the survey using different customers so as to analy e the views a$out the mutual funds and perception of the customer in the present scenario. 5. To evaluate the ways and means to improve Money Matters Inc ltd. I have mentioned various suggestions that are listed a$ove &77E%3I. 22 .22 4.

2. All of the a$ove 2. To provide for medical emergencies d. . To save for children educationA marriage c. To create wealth f. To provide for family financial security e. )f the folloHing Hhat at +resent are your in!est#ent nee$s6 a. M-E"TI)%%&I/E 7E/")%&( 3ET&I("4 Name: Mobile Number: Address:____________________________________________________ ___ ___________________________________________________________ __ ___________________________________________________________ __ ___________________________________________________________ __ _______________________________ Occupation: _____________________ Age: ____________________________ 1. To $uild a corpus for retirement $.

g: . /irect e8uity d. d) 6eliance . 5hich of the folloHing you think as in!est#ent for ta9. %) <ranklin Templeton . Mutual fund $. All of the a$ove . f) +BI . Mutual funds $.2- 2. (pf e. <ixed deposit c. 2a!e you e!er :een in!este$ in #utual fun$s6 a. e) I!I!I (rudential . <ixed deposit c.Hhere you +refer to in!est a.sa!ing6 a. Kife insurance e. )ut of the folloHing in Hhich Mutual *un$ you ha!e in!este$6 a: )) Tata Mutual <und .ther If any %(lease +pecify 2- . Ees $. If you ha$ /s 1000P. Go =. (ostal office deposit 5. Insurance d..

A.pen ended . .2. To hoH #uch e9tent are you satisfie$ Hith the ser!ices offere$ :y in$ia infoline lt$ regar$ing #utual fun$s6 a: &xteremly satisfied. $: +atisfied to the lesser extent d: /issatisfied to lesser extent e: &xtremely dissatisfied. '. )ut of the folloHing Hhich o+tion Houl$ you +refer 6 a: !lose ended . 3o you +refer "I7 ("yste#atic In!est#ent 7lan) or in!esting lu#+ su#6 a: $: +I( Kump sum c: /epends upon the financial condition 2. @. $: .

GAH is arrived at $y dividing total value of all investment made under the scheme $y num$er of units of the scheme. +&BI rules stipulate that mutual fund trust as well as the AM! must maintain an arms length relationship with the sponsors to avoid any conflict to interests% which may affect the unit holders. "7)%")/" +ponsor of a mutual fund are those who esta$lish the mutual fund trust and the AM! they constitute the shareholders of the AM! and receive dividends on profits made $y the AM!. +uch funds earn returns more regularly than a growth fund $ut level of returns over longer periods normally lag $ehind those offered $y growth funds while returns in such funds may $e regular% their scale may fluctuate depending upon the prevalent interest rates and credit 8uality of the de$t securities. These are always in denominations of 6s.2/ ()""&/0 )* ")ME C)%CE7T" &MC The AM! is the corporate entity% which markets and manager and manages a mutual fund scheme and in return receives a management fee from the fund corpus. -%IT" . 2/ .nits in a mutual fund scheme are similar to shares of a )oint company. GAH is critical yardstick of the funds performance. %&. I%C)ME *-%3 These <unds invest largely in fixed income securities like $onds and de$entures. +&BI specifies that an AM! must $e separate entity the trust that manages it. It is the value of unit of a Mutual <und scheme and represents its true worth. 15 each the sum total of all the units constitutes corpus of mutual fund.

/E3EM7TI)% /is$ursement of unit capital on the maturity of that particular scheme to all its existing unit holders. 20 . !lose@ended funds mature after a specified period. &8uity funds may earn higher $ut they also carry larger risks. Dithdrawals are allowed at GAH minus a $ack end load. ()CF I% 7E/I)3 Time period during which investor can neither redeem nor they transfer their holdings to others. +ince stock markets travel through a natural cycle of $oom and $ursts one should normally stay invested ine8uity funds for a longer times to earn higher returns. M&%& EME%T *EE" An AM! that mangers 2 markets a mutual fund scheme is entitled to a management feeR 1F to "5F of the total funds managed% it could $e charged to the scheme irrespective of the performance of the scheme. '&(&%CE3 *-%3" A $alanced fund is the mixture of income fund and growth fund invested partly in e8uity to achieve a trade@of $etween risk and return. Kock in period is imposed to allow fund manager to deploy money for an ade8uate period of time to earn a reasona$le return premature withdrawals may desta$ili e the fund 2 are not $eneficial to the interests of investors. )7E% E%3E3 *-%3" Those funds in which investor can invest 2 withdraw whenever they wish% after the close of initial offer. C()"E E%3E3 In a close@ended fund an investor is allowed to su$scri$e only during the period of the initial offer.20 /)5T2 *-%3" 4rowth funds predominantly invest in stock market securities and carry risks larger than income funds. <or risk taking investor e8uity are $est suited.

C-"T)3&I% Banking organi ation that keeps in safe custody all the securities 2 other instruments $elonging to the fund to insure smooth inflow 2 outflow of securities.IT ()&3 Halue of deduction from GAH on the date when one choose to withdraw from a fund% load is imposed $ecause withdrawals carry transaction cost to AM! it can not $e more than 'F of GAH of corpus as prescri$ed $y +&BI many schemes offer redemption facility without exit load. Mutual funds incur many expenses during an issue% which are charged to the scheme. E%T/0 ()&3 !harge paid $y unit holder when he invests an amount in the scheme. +uch load is called entry load. /E I"T/&/ .21 M&/FET 7/ICE The price at which units of mutual funds are 8uoted in stock exchange where they are listed. It is also approved regulated and registered with +&BI. T/&%"7&/E%C0 Basic feature of mutual funds is transparency% their functioning is very efficient% well monitored 2 transparent working of AM! is regulated $y +&BI it is audited weekly% it 21 .rgani ation appointed $y an AM! to the schemes it is registered% monitored% and regulated $y +&BI% it provides re8uired services like system capa$ilities $ack up% accepts and processes investors applications in informs AM! a$out amounts receivedAdis$ursed for su$scriptionA purchaseA redemption it also handles communications with investors% perform data entry services and dispatches account statements. E. (IM-I3IT0 A$ility of investors to change its unit into cash within minimum time as and when he needs money.

4K&..!. An)aria..AM<IIG/IA. De$sites DDD..22 has to work under strict guidelines issued $y +&BI% and its GAH is calculated and pu$lished daily so that there is no chance of any default in the working of Mutual <unds.M 22 .GT6.!. 'I'(I) /&720 Books  /avid <% +wensen.!.!.EA.G&E!.K.IG/IAIG<.M.!.M DDD.M DDD.M DDD.M DDD. "555.4.!. A fundamental Approach to (ersonal Investment <ree (ress 41'  /.KIG&.M DDD.nconventional +uccess. "551 AM<I7s Mutual <und Testing (rogramme.DINI(&/IA.!. /haivat An)aria. ..

M DDD.!.M DDD.133 DDD.+.5(AI+A.A6&MA6N&T.+.M 133 .!.!.A6&MA6N&TBA+I!+.