Page |1

LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT

Performance of mutual funds and

its
Awareness among the patrons in the
present
Market

Submitted to Lovely Professional

University
In partial fulfillment of the requirements for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted Supervisor
by: :
Dinit Mrs. Deepika
Mahendru Dhall
Reg. No.: 10807727 Lect. of lovely professional
university

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

(2008-
10)
 Page |2

ACKNOWLEDGME
NT

It is difficult to acknowledge precious a debt as that of learning as it is the only

to
debtrepay
thatexcept through
is difficult
gratitude.

First and foremost I wish to express my profound gratitude to the almighty, the
compassionate
merciful & with those grace & blessings. I have been able to
complete this work.
I convey my heart full thanks to the Relationship manager Mr.Vikas
Kumar and the staff members of INDIA INFOLINE LTD, with their help
and corporation.

It is my profound privilege to express my sincere thanks to Dr. Sanjay Modi,

Phagwara,
Director LIMfor giving me an opportunity to work on the project and giving me
completing this
full support in
project.

I am very thankful to my guide Mrs. Deepika Dhall (Lecturer in LIM,

coordinatorand
Phagwara) Ms.mySukhwinder kaur for his full support in completing
this project work.

Last but not least, I would like to thank my parents & my friends for their full
continuous support
cooperation & during the course of this
assignment.
 Page |3

TABLE OF
Conte CONTENTS page
nts no.

Certifica 2
te

Acknowledge 3
ment

Table of 4,
content 5

Executive 6
summary

Introduction to the 9
Project

Introduction of
Advantages
mutual fund and
Types of mutual fund
disadvantages
Sebi registered mutual
schemes
Pointers to measure mutual fund
funds
Tax rules for mutual fund
performance
History of mutual
investors
Procedure of registered
funds
Evaluating
mutual portfolio
funds
Investors
performancefinancial planning and
7 its
investment
results tips to improve your
How to reduce risk while
returns
investing

Introduction to the 3
company 5

Snapshot of India info

Introduction
line ltd. of
Unique
company
Pillars of the
approaches
Milestone
organization
History of India info
keys
line ltd
 Page |4

Objectives of the study and research 4

methodology 5

Data Presentation, Analysis and 4

Comparison of 4 major mutual
Interpretation 9
funds

Conclusion & 7
Suggestions 1

Annexu 7
re 3

Questionnaire
Financial
statements
Balance
sheet
Profit and loss
a/c
Glossary

Bibliograp 8
hy 2
 Page |5

EXECUTIVE
SUMMARY

Role of financial system is to enthusiast economic development. As investors

are gettingaware
educated, more and prudent they look for innovative investment instruments
so that investment
reduce they are able to minimize transaction costs, and maximize returns along
risk,
with certain level
convenience as a of
result there has been as advent of numerous innovative
financial instrument
bonds, company such as
deposits, insurance, and mutual finds. All of which could be
matched with
individuals investment needs. Mutual funds score over all other investment
options in terms returns,
safety, liquidity, of and are as transparent, convenient as it can get. Goal
of a mutual
provide fund is to
an efficient way to make money .In India there are 36 mutual funds with
different
Investment strategies and goals to choose from .different mutual funds have
different risks, of
differ because which
funds goals, funds manager, and
investment styles.
A mutual fund is an investment company that collects money from
invests it in amany people
variety and
of securities .the company then manages the money on an
ongoing basis
individuals andfor
businesses. Mutual funds are an efficient way to invest in stocks,
bonds, andfor
securities other
three
reasons:

a) The securities purchased are managed by

professional managers.
b) Risk is spread out or diversified, because you have a collection of different
stocks and
c) Costs bonds.
usually are lower than what you would pay on your own, since the
funds buy in large
quantiti
es.
 Page |6

OBJECTIVES OF THE
STUDY

1 The objective of the research is to study and analyze the awareness level of
. investors
fund of mutual
s.
2 To measure the satisfaction level of investors regarding
.3 mutual funds.
An attempt has been made to measure various variables playing in the
. minds of safety,
terms of investors in
liquidity, service, returns,
and tax saving.
4 To get insight knowledge about
.5 mutual funds
Understanding the different ratios & portfolios so as to tell the distributors
. about these terms,
this, managing by
the relationship with the
distributors
6 To know the mutual funds performance levels in the
.7 present market
To analyze the comparative study between other leading mutual funds in
.8 the present market.
To know the awareness of mutual funds among different
.9 groups of investors.
Finding out ways and means to improve on the services by INDIA
. INFOLINE LTD
Page |7
 Page |8

RECOMMENDATIONS AND
SUGGESTIONS:

Customer education of the salaried class individuals is far below

standard.
Management Thus Asset
Companys need to create awareness so that the salaried
class people become
the prospective customer of
the future.
Early and mid earners bring most of the business for the Asset

Management
Companys. Asset Management Companys thus needed to educate and
develop schemes
the persons for at the late earning or retirement stage to gain
who are
the market share.
Returns record must be focused by the sales executives while

explainingPointing
to the customer. the schemes
out the brand name of the company repeatedly
may not too
The fruitful.
target market of salaried class individual has a lot of scope to

gain
they are morebusiness, as to Mutual Funds than the
fascinated
self employed.
Schemes with high equity level need to be targeted towards self

employed
professionals and require high returns and are
as they
ready to bear class
Salary risk. individuals are risk averse and thus they must be

assured
advantage of the
of risk diversification in
MutualThere
Funds.should be given more time & concentration on the

Tier-3 distributors.
The resolution of the queries should be fast enough to
satisfy the distributors
Time to time presentation/training classes about the
products should be there.
There should be more number of Relationship Managers in different
one RMRegions because
can handle a maximum of 125 distributors efficiently and also to
cover
mark untapped
et. Regular activities like canopy should be done so as to get more

interaction with the

distributo
rs. Regular session should be organized on the handling of the india

infolinethe
as to resolve software
accountso
statement problem.
All the persons who have cleared the AMFI exam should be

Fund soempanelled with Mutual

as to be largest
distributor base.
Page |9
 P a g e | 10

INTRODUCTIO
What is a Mutual N
fund?
Mutual fund is an investment company that pools money from shareholders
of
andsecurities,
invests insuch as stocks, bonds and money market instruments. Most
a variety
stand ready to buy
open-end Mutual funds back (redeem) its shares at their current net asset value,
total
whichmarket
depends value of the fund's investment portfolio at the time of
on the
Mutual
redemption. Most open-endoffer new shares to investors. Also known as an
funds continuously
company, investment
open-end to differentiate it from a closed-end investment company. Mutual
of many investors
funds invest pooled tocash
meet the fund's stated investment objective. Mutual
and redeem
funds their shares
stand ready to sell at any time at the
asset value: total
fund's current net fund assets divided by
shares outstanding.

In Simple Words, Mutual fund is a mechanism for pooling the resources by

investors andto
issuing units investing
the funds in securities in accordance with objectives as
document.inInvestments
disclosed offer in securities are spread across a wide cross-section of
and thus the risk is
industries and sectors reduced. Diversification reduces the risk because all stocks
samenot
may direction
move in in the
the same proportion at the same time. Mutual fund issues
accordance
units to the investors in of money invested by them. Investors of Mutual
with quantum
funds are known as unit
 P a g e | 11

holders. The profits or losses are shared by the investors in proportion to their
Mutual funds The
investments. normally come out with a number of schemes with different
which are launched
investment objectives from time to time. In India, A Mutual fund is required to be
Securities and
registered withExchange Board of India (SEBI) which regulates securities
collect funds
markets before from the public. In Short, a Mutual fund is a common pool of
it can
investors
money in with common investment objective place their contributions that are
to which
accordance
to be invested in the stated investment objective of the scheme. The investment
with
invest thewould
manager money collected from the investor in to assets that are defined/
objective
permitted bythe
of thescheme.
stated For example, an equity fund would invest equity and
instruments
equity relatedand a debt fund would invest in bonds, debentures, gilts etc.
investment
Mutual fundforis athe common man as it offers an opportunity to invest in a
suitable
managed basket of securities at a
diversified, professionally
relatively low cost.

ADVANTAGES OF MUTUAL
FUNDS
 P a g e | 12

Professional
Management.
The major advantage of investing in a mutual fund is that you get a
professional money your investments for a small fee. You can leave the
manager to manage
investment decisions
to him and only have to monitor the performance of the fund at
regular intervals.

Diversificat
ion.
Considered the essential tool in risk management, mutual funds make it
possible for even
small investors to diversify their portfolio. A mutual fund can effectively
diversify its
portfolio because of the large corpus. However, a small investor cannot
have a well-
diversified portfolio because it calls for large investment. For example, a
modest portfolio
10 bluechip stocksof calls for a few a few
thousands.

Convenient
Administration.
Mutual funds offer tailor-made solutions like systematic investment plans
and systematic
withdrawal plans to investors, which is very convenient to investors.
Investors also about
have to worry do notinvestment decisions, they do not have to deal with
brokerage
depository,oretc. for buying or selling of securities. Mutual funds also offer
specialized
schemes like retirement plans, childrens plans, industry specific schemes,
etc. to suit
personal preference of investors. These schemes also help small investors
with asset of their corpus. It also saves a lot of
allocation
paper work.
Costs
AEffectiveness
small investor will find that the mutual fund route is a cost-effective
method (the2.5%)
is normally AMC and
fee it also saves a lot of transaction cost as mutual
funds get concession
from brokerages. Also, the investor gets the service of a financial
professional forwere
small fee. If he a very
to seek a financial advisor's help directly, he will end
up paying more for investment advice. Also, he will need to have a
significantly
sizeable corpusmanagement
for investment to offer to be eligible for an investment
advisers services.
 P a g e | 13

Liquidi
ty.
You can liquidate your investments within 3 to 5 working days (mutual
funds dispatch
redemption cheques speedily and also offer direct credit facility into your
bank account
Electronic i.e.
Clearing
Services).
Transpare
ncy.
Mutual funds offer daily NAVs of schemes, which help you to monitor your
investments
regular basis.on a also send quarterly newsletters, which give details of
They
the portfolio, of schemes against various benchmarks, etc. They are also
performance
well
Sebi regulated and actions
monitors their
closely.
Tax
benefits.
You do not have to pay any taxes on dividends issued by mutual funds.
You also have
advantage the
of capital gains taxation. Tax-saving schemes and pension
schemes give you of
added advantage thebenefits under
section 88.

Affordabil
ity
Mutual funds allow you to invest small sums. For instance, if you want to
buy
blueachips
portfolio of
of modest size, you should at least have a few lakhs of rupees.
A mutual
gives you fund
the same portfolio for meager investment of Rs.1,000-5,000. A
mutual fund can
that because do
it collects money from many people and it
has a large corpus.
P a g e | 14
 P a g e | 15

DISADVANTAGES OF MUTUAL
FUNDS:

Professional Management- Did you notice how we qualified the

management with the word "theoretically"? Many investors debate over
advantage of professional
so-calledor
whether professionals
not the are any better than you or I at picking stocks.
means infallible,
Management is by no and, even if the fund loses money, the manager still
talk about
takes thiscut.
his/her in detail
We'll in a
later section.
Costs - Mutual funds don't exist solely to make your life easier--all funds
The Mutual
are in fund
it for a industry is masterful at burying costs under layers of
profit.
so complicated
jargon. that are
These costs in this tutorial we have devoted an entire
section to the subject.

Dilution - It's possible to have too much diversification (this is explained

entitled "Are You Over-Diversified?"). Because funds have small holdings
in our article
different
in so many companies, high returns from a few investments often don't
on the overall return. Dilution is also the result of a successful fund
make much difference
money pours
getting into
too big. funds that have had strong success, the manager often
When
good
has trouble finding a all the
investment for
new money.

Taxes - When making decisions about your money, fund managers don't
personal tax situation. For example, when a fund manager sells a security,
consider your
is capital-gain
a triggered, which
tax affects how profitable the individual is from the sale. It
more advantageous
might have been for the individual to defer the
capital gains liability.
Equity funds, if selected in the right manner and in the right proportion, have
important
the abilityrole in achieving
to play an most long-term objectives of investors in different
selection process
segments. becomes much easier if you get advice from professionals, it
While the
to know certain aspects
is equally important of equity investing yourself to do justice to your
hard earned money.
P a g e | 16
 P a g e | 17

TYPES OF MUTUAL FUND

SCHEMES

1. BY
STRUCTURE
Open Ended
Schemes.
Close Ended
Schemes.
Interval
Schemes.

2. BY INVESTMENT
OBJECTIVE
Growth
Schemes.
Income
Schemes.
Balanced
Schemes.

3. OTHER
SCHEMES
Tax Saving
Schemes.
Special
Schemes.
Index
Schemes.
Sector Specific
Schemes.

1 OPEN ENDED
. SCHEMES
The units offered by these schemes are available for sale and repurchase on
any
NAV business day at
based prices. Hence, the unit capital of the schemes keeps changing each
day.
thus Such
offer schemes
very high liquidity to investors and are becoming increasingly popular
in India.
note thatPlease
an open-ended fund is NOT obliged to keep selling/issuing new units
at allissuing
stop times, and may
further subscription to new investors. On the other hand, an open-
ended
denies fund
to itsrarely
investor the facility to redeem
existing units.
 P a g e | 18

2 CLOSED ENDED
. SCHEMES
The unit capital of a close-ended product is fixed as it makes a one-time sale of
fixed
units.number of
These schemes are launched with an initial public offer (IPO) with a stated
maturity period
after which the units are fully redeemed at NAV linked prices. In the interim,
investors canthe
sell units on buy or exchanges where they are listed. Unlike open-ended
stock
schemes, the unit
in closed-ended capital usually remains unchanged. After an initial closed
schemes
period, the scheme
offer direct repurchasemayfacility to the investors. Closed-ended schemes are
usually
compared more illiquid as schemes and hence trade at a discount to the NAV.
to open-ended
This discount
towards tends
the NAV closer to the maturity date of
the scheme.

3 INTERVAL
. SCHEMES
These schemes combine the features of open-ended and closed-ended
schemes. They
on the stock may be or
exchange traded
may be open for sale or redemption during pre-
determined
NAV based intervals at
prices.
4 GROWTH
. SCHEMES
These schemes, also commonly called Equity Schemes, seek to invest a
majority of their
equities and funds
a small in
portion in money market instruments. Such schemes have
the potential
deliver to returns over the long term. However, because they invest in
superior
equities, these
are exposed to schemes
fluctuations in value especially in
the short term.
5 INCOME
. SCHEMES
These schemes, also commonly called Debt Schemes, invest in debt securities
such asdebentures
bonds, corporate and government securities. The prices of these schemes
tend to be with
compared moreequity
stableschemes and most of the returns to the investors are
generated through
dividends or steady capital appreciation. These schemes are ideal for
conservative investors
not in a position to takeorhigher
thoseequity risks, such as retired individuals.
However, as compared
money market schemestothey
the do have a higher price fluctuation risk and
compared
have a higherto a Gilt fund they
credit risk.
 P a g e | 19

6 BALANCED
. SCHEMES
These schemes are commonly known as Hybrid schemes. These schemes invest
in both
well equities
as debt. By as
investing in a mix of this nature, balanced schemes seek to
attain
incomethe objective
and moderateof capital appreciation and are ideal for investors with a
conservative,
orientati long-term
on.

7. TAX SAVING
SCHEMES
Investors are being encouraged to invest in equity markets through Equity
Linked Savings
(ELSS) Scheme
by offering them a tax rebate. Units purchased cannot be assigned /
transferred/ pledged / out until completion of 3 years from the date of
redeemed / switched
allotment
Unit of the respective
s.
The Scheme is subject to Securities & Exchange Board of India (Mutual Funds)
Regulations, 1996
and the notifications issued by the Ministry of Finance (Department of Economic
Affairs),
Government of India
regarding ELSS.
Subject to such conditions and limitations, as prescribed under Section 88 of the
Income-tax
196 Act,
1.

8 INDEX
. SCHEMES
The primary purpose of an Index is to serve as a measure of the performance of
the market
whole, or a as a
specific sector of the market. An Index also serves as a relevant
benchmark to evaluate
the performance of mutual funds. Some investors are interested in investing in
the market
rather than in generalin any specific fund. Such investors are happy to receive
investing
the
the returns
markets.posted
As it isby
not practical to invest in each and every stock in the
market in proportion
size, these to its
investors are comfortable investing in a fund that they believe is a
good representative
the entire of Funds are launched and managed
market. Index
for such investors.
 P a g e | 20

9 SECTOR SPECIFIC
. SCHEMES.
Sector Specific Schemes generally invests money in some specified sectors for
example: Real
Estate Specialized real estate funds would invest in real estates directly, or
may fund real
developers estate
or lend to them directly or buy shares of housing finance companies
or may
their even buy
securitized
assets.

SEBI REGISTERED MUTUAL

FUNDS

1. FORTIS Mutual
fund
2. Alliance Capital Mutual
fund,
3. AIG Global Investment Group
Mutual fund
4. Benchmark Mutual
fund,
5. Baroda Pioneer
Mutual fund
6. Birla Mutual
fund
7. Bharti AXA Mutual
fund
8. Canara Robeco
Mutual fund
9. CRB Mutual fund
(Suspended)
10. DBS Chola Mutual
fund,
11. Deutsche Mutual
fund
12. DSP Blackrock Mutual
fund,
13. Edelweiss Mutual
fund
14. Escorts Mutual
fund,
 P a g e | 21

15. Franklin Templeton

Mutual fund
16. Fidelity Mutual
fund
17. Goldman Sachs
Mutual fund
18. HDFC Mutual
fund,
19. HSBC Mutual
fund,
20. ICICI Securities
Fund,
21. IL & FS Mutual
fund,
22. ING Mutual
fund,
23. ICICI Prudential Mutual
fund
24. IDFC Mutual
fund,
25. JM Financial Mutual
fund
26. JP Morgan Mutual
fund
27. Kotak Mahindra Mutual
fund,
29. LIC Mutual
fund
31. Morgan Stanley
Mutual fund
32. Mirae Asset Mutual
fund
33. Principal Mutual
fund
34. Quantum Mutual
fund,
35. Reliance Mutual
fund
36. Religare AEGON Mutual
fund
37. Sahara Mutual
fund,
 P a g e | 22

38. SBI Mutual

fund
39. Shriram Mutual
fund
40. Sundaram BNP Paribas
Mutual fund,
41. Taurus Mutual
fund
42. Tata Mutual
fund,
43. UTI Mutual
fund

If the complaints remain unresolved, the investors may approach SEBI for
facilitating redressal
their complaints. On of
receipt of complaints, SEBI takes up the matter with the
concerned
and followsMutual
up withfund
it regularly. Investors may send their
complaints to:

SECURITIES AND EXCHANGE BOARD OF INDIA

(SEBI)
OFFICE OF INVESTOR ASSISTANCE AND EDUCATION
(OIAE)
EXCHANGE PLAZA, G BLOCK, 4TH
FLOOR,
BANDRA-KURLA
COMPLEX,
BANDRA (E), MUMBAI
400 051.
PHONE:
26598510-13
 P a g e | 23

Pointers to Measure Mutual Fund

Performance
 P a g e | 24

MEASURE DESCRIPTIO IDEAL

S N RANGE
STANDAR Standard Deviation allows to evaluate the volatility Should be
D
DEVIATIO near
of thetofund.
its mean
The standard deviation of a fund
N return.
measures this risk by measuring the
degree
the fundtofluctuates
which in relation to its
mean return.
BET Beta > 1 = high
Beta is a fairly commonly used
A risky
measure of risk. It
basically indicates the level of volatility associated
Beta = 1 fund
with the = Avg as compared to the
Beta <1 = Low
benchmark.
Risky
R- R- square measures the correlation of a funds valu ran
SQUARE R-squared es
movement to that of an index. R-squared describes between ge
0
and 1, where
the level 0
of association between the fund's volatility represents
no
andcorrelation
market and 1 represents full
risk. correlation.
ALPH Alpha is the difference between the Alpha is positive =
A returns one from a fund, given its beta, and
would expect returns
the of
stock are
better
return then market
it actually produces. It also measures
the returns.
unsystematic
Alpha is negative =
risk .
returns ofworst then
stock are
market.
Alpha is zero = returns
are
same as
market.
SHARP Sharpe Ratio= Fund return in excess of risk free The higher the
E
RATI Sharpe ratio,
return/ Standard deviation of Fund. Sharpe ratios the better a
O funds returns
are ideal for comparing funds that have a mixed relative to the
amount
asset of risk take
classes. n.
Tax Rules For Mutual Fund
Investors*
 Equit Other Divid Dividend distribution tax
y
scheme schemes end
P a g e | 25
s inc
o
m
e
Sh Lo Shor Long TD Al Eq Liqui Othe
o
r n
g tTerm Term S lSch u
it d
Sche r
Scheme
tTer Ter Capit Capit e
me y
Sc m
es s
m m a a
l s h
em
Ca l
Cap Gains Gain es
p
ita ita
lGa lGa
ins in

Resid 10 NI A 10 NI TAX NI 28.32 14.16

ent % L S
PER % L FRE L % %
(20 (25 (12.5
Indiv SLAB E
%
wit %
+10% %
+10%su
idua
h
inde s
urchar rcharge
l
/ HUF x
ation +
ge+edu 3%educa
) catio tio
n
cess n
cess
) )
Partn 10 NI 30 10 NI TAX NI 28.32 22.66
ersh % L % % L FRE L % %
(20 (25 (20
ip E
%
wit %
+10% %
+10
Firm h s %
inde urchar surchar
s
x
ation g
ge+edu e+3%
) catio educati
n
cess o
n
) cess)
AOP 1 NI A 10 NI TAX NI 28.32 22.66
/BO 0
% L S
PER % L FRE L % %
(20 (25 (20
I SLAB E
%
wit %
+10% %
+10
h
inde s
urchar %
surchar
x
ation g
ge+edu e+3%
) catio educati
n
cess o
n
 P a g e | 26

HISTORY OF MUTUAL
FUND
The mutual fund industry in India started in 1963 with the formation of Unit
Trust of India,
initiative of theatGovernment
the of India and Reserve Bank. The history of mutual
funds in India
be broadly can into four distinct
divided
phases: -

First Phase
1964-87
An Act of Parliament established Unit Trust of India (UTI) on 1963. It was set
up byof
Bank the Reserve
India and functioned under the Regulatory and administrative control
of theof
Bank Reserve
India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank
India (IDBI) took of the regulatory and administrative control in place of
over
RBI. The launched
scheme first by UTI was Unit Scheme 1964. At the end of 1988 UTI had
Rs.6,700 crores of
assets under
management.

Second Phase 1987-1993 (Entry of Public

Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by
public sector banks
Life Insurance and
Corporation of India (LIC) and General Insurance Corporation
of
SBIIndia (GIC).
Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by Can
bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual
 P a g e | 27

Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92).
LIC established
its mutual fund in June 1989 while GIC had set up its mutual fund in
December 1990.
At the end of 1993, the mutual fund industry had assets under
management of Rs.47,004 crores.
Third Phase 1993-2003 (Entry of Private
Sector Funds)
With the entry of private sector funds in 1993, a new era started in the
industry,
Indian giving
mutual the Indian investors a wider choice of fund families. Also,
fund
whichwas
1993 the the
firstyear
Mutual
in Fund Regulations came into being, under which all
UTI were
mutual to beexcept
funds, registered and governed. The erstwhile Kothari Pioneer (now
Franklin with
merged Templeton) was the first private sector mutual fund
registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
revised Mutual Fund
comprehensive and Regulations in 1996. The industry now functions under
Fund) Regulations
the SEBI (Mutual
1996.
The number of mutual fund houses went on increasing, with many foreign
up funds
mutual in India
funds and also the industry has witnessed several mergers and
setting
end of January
acquisitions. As2003,
at thethere were 33 mutual funds with total assets of Rs.
Unit Trustcrores.
1,21,805 of IndiaThe
with Rs.44,541 crores of assets under management was
mutual
way ahead of other
funds.
Fourth Phase since
February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI
into two
was separate entities. One is the Specified Undertaking of the Unit Trust
bifurcated
under
of Indiamanagement
with assets of Rs.29,835 crores as at the end of January 2003,
assets of US 64
representing scheme,
broadly, theassured return and certain other schemes. The
Unit Trust Undertaking
Specified of India, functioning
of under an administrator and under the rules
Government
framed by of India and does not come under the purview of the Mutual
Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.
with
It SEBI and functions under the Mutual Fund Regulations. With the
is registered
erstwhile UTI
bifurcation of which
the had in March 2000 more than Rs.76,000 crores of assets
and with
under the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
management
Regulations, and with recent mergers taking place among different private
Fund
mutualfunds,
sector fund industry
the has entered its current phase of consolidation and
September,
growth. As at2004, there
the end of were 29 funds, which manage assets of Rs.153108
schem under 421
crores
es.
 P a g e | 28

WHAT IS THE PROCEDURE FOR REGISTERING A MUTUAL FUND

WITH SEBI?
An applicant proposing to sponsor a Mutual fund in India must submit an
application
along with ainfee
Form A
of Rs.25, 000. The application is examined and once the
sponsor
conditionssatisfies
such as certain
being in the financial services business and possessing
positive net worth
the last five years, for
having net profit in three out of the last five years and
possessing the general
 P a g e | 29

reputation of fairness and integrity in all business transactions, it is required

to complete
remaining the
formalities for setting up a Mutual fund. These include inter alia,
executing the trust management agreement, setting up a trustee
deed and investment
company/board
comprising two- of trustees
thirds independent trustees, incorporating the asset
management company
(AMC), contributing to at least 40% of the net worth of the AMC and
appointing a custodian.
Upon satisfying these conditions, the registration certificate is issued subject
to the payment
registration feesof
of Rs.25.00 lacs for details; see the SEBI (Mutual funds)
Regulations,
EVALUATING1996.
PORTFOLIO
PERFORMANCE

It is important to evaluate the performance of the portfolio on an ongoing

basis.
factorsThe
arefollowing
important in this process: Consider long-term track record rather
than short-term
performance. It is important because long-term track record moderates the
effects which
unusually good or bad short-term performance can have on a fund's track
record. Besides,
longer-term track record compensates for the effects of a fund manager's
particular investment
style. Evaluate the track record against similar funds. Success in managing a
small or in
focusing onaafund
particular segment of the market cannot be relied upon as an
evidence
anticipatedof performance in managing a large or a broad based fund.
Discipline
approach isin an
investment
important factor as the pressure to perform can make a fund
manager
to have ansusceptible
urge to change tracks in terms of stock selection as well as
investment
The objectivestrategy.
should be to differentiate investment skill of the fund manager
from luck
identify and funds
those to with the greatest potential of
future success.

INVESTOR'S FINANCIAL PLANNING AND ITS

RESULTS.
Planning for long term
objectives
Many people get overwhelmed by the thought of retirement and they think
how
save they will ever
the huge money that is required to lead a peaceful and happy retired
life. However,
is that theand
if we save factinvest regularly over a period of time, even a small
sum
adequaof money can be
te.
 P a g e | 30

It is a proven fact that the real power of compounding comes with time.
Albert Einstein"the
compounding called
eighth wonder of the world" because of its amazing
abilities.
compoundingEssentially,
is the idea that one can make money on the money one has
already
why, theearned. That's
earlier one starts saving, the more time
money gets to grow.
Through Mutual funds, one can set up an investment programme to build
capital for retirement
years. Besides, it is an ideal vehicle to practice asset allocation and
rebalancing
maintaining thereby
the right level of risk at
all times.
It is important to know that determination and maintaining the right level of
risk
a longtolerance can go the success of an investment plan. Besides, it helps in
way in ensuring
customizing fund
category allocations and suitable fund selections. There are certain broad
guidelines
the risk to determine
tolerance.
These
are:
Be realistic with regard to volatility. One needs to seriously consider the
effect of potential
downside loss as well as potential upside gain. Determine a "comfort level"
i.e. If one is
confident nota particular level of risk tolerance, and then select
with
a different level.
Regardless 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
a variety ofto achieve
distinct risk/reward objectives and a reduction in
overall portfolio risk.
It helps to reassess risk tolerance every year. The risk tolerance may change
due to eitherinmajor
adjustment return objectives or to a realization that an existing risk
tolerance is inappropriate
for one's current
situation.
Market cap of a company signifies its market value, which is equal to the
total numbermultiplied
outstanding of sharesby the current
stock price.
The market cap has a role to play in the kind of returns the stock might
deliver and
volatility the
that risk
one or have to encounter while achieving those returns.For
may
example,
companieslarge
are usually more stable during the turbulent periods and the mid
cap and small
companies arecap
more
vulnerable.
 P a g e | 31

As regards the allocation to each segment, there cannot be a standard

combination applicable
all kinds of investors. to one of us has different risk profile, time horizon
Each
and investment
objectiv
es.
Besides, while deciding on the allocation, one has to keep in mind the fact
whether the allocation
is being done for an existing investor or for a new investor. While for an
existing investor,
allocation the exists has to be considered, for a new investor the
that already
right way to funds
considering begin that
is byinvest predominantly in large cap stocks. The
exposure
caps can beto mid and small
enhanced over a
period of time.
It is always advisable to take help of professionals to decide the allocation as
well as select
appropriate the However, investors themselves have an important role to
funds.
play in this process.

All award-winning funds may not be

suitable for everyone
Many investors feel that a simple way to invest in Mutual funds is to just
keep investing
winning funds. in award
First of all, it is important to understand that more than the
awards; it is the
methodology to choose winners that is
more relevant.
A rating firm generally elaborates on the criteria for deciding the winners i.e.
consistent
performance, risk adjusted returns, total returns and protection of capital.
Each of these factors
very important is its significance for different
and has
categories of funds.
Besides, each of these factors has varying degree of significance for different
kinds of investors.
For example, consistent return really focuses on risk. If someone is afraid of
negative returns,
consistency will be a more important measure than total return i.e. Growth in
NAV as well as
dividend
received.
A fund can have very impressive total returns overtime, but can be very
volatile and tough
risk adverse for Therefore,
investor. a all the award winning funds in different
categories
suitable formay not be Typically, when one has to select funds, the first step
everyone.
should begoals
personal to consider
and objectives. Investors need to decide which element they
value the mostthe
then prioritize andother
criteria.
 P a g e | 32

Once one knows what one is looking for, one should go about selecting the
funds according
the asset to Most investors need just a few funds, carefully picked,
allocation.
watched
managedand
over period
of time.

7 INVESTMENT TIPS TO IMPROVE YOUR

RETURNS
1. Know your risk
profile
Before you take a decision to invest in equity funds, it is important to assess
Risk tolerance
your risk tolerance.depends on certain factors like emotional temperament,
experience.
attitude and investment Vwhile ascertaining the risk tolerance, it is crucial to
Remember,
desire
consider to one's
assume risk as the capacity to assume the risk. It helps to
categories ofdifferent
understand overall risk tolerance, i.e. Conservative, moderate or
conservative
aggressive. While a will accept lower returns to minimise price volatility, a
investor
would be all
moderate right with greater price volatility than conservative risk
investor
returns. An aggressive
tolerances to pursue higher investor wouldn't mind large swings in the NAVs to
returns.
seek theThough
highestidentifying the desire for risk is a tough job, it can be made
one's comfort
easy by defining
zone.
2. Don't have too many schemes in
your portfolio
While it is true that diversification helps in earning better returns with a
fluctuations,
lower level ofit becomes counterproductive when one has too many funds in
example,
the if you
portfolio. Forhave 15 funds in your portfolio, it does not necessarily mean
is adequately
that your portfolio diversified. To determine the right level of diversification, one
factors
has like size of the portfolio, type of funds and allocation to different asset
to consider
it is possible
classes. Therefore,that a portfolio having 5 schemes may be adequately diversified
one with another
whereas 10 schemes may have very little diversification. Remember, to have
equity
a well-balanced it is important to have the right level of exposure to different
portfolio,
equity market
segments of the like large cap, mid-cap and small cap. In addition, for a decent
all right to have
portfolio size, it is some exposure in the sector and
specialty funds.
3. Longer time horizon provides protection
from volatility
As an equity fund investor, you need to understand that volatility is an
market. However,
integral part of theifstock
you remain focused on the long-term objectives and
approach
follow to investing, you can not only handle volatility properly but also
a disciplined
advanta
turn it to your
ge.
4. Understand and analyze 'Good
Performance'
 P a g e | 33

'Good performance' is a subjective thing. Ideally, to analyze performance,

returns
one as well
should as the risk taken to achieve those returns. Besides,
consider
performance as
consistency in terms well as
of portfolio selection is another factor that should
whilean
play analyzing
important thepart
performance. Therefore, if an investment in a Mutual
past
fund scheme takes you while providing you decent returns; it cannot always
your risk tolerance
performance.
be termed as good In fact, at times to ensure that your investment remains within
defined
the parametersinvestment plan, you may to be forced to exit from that
in the
you needIntoother
scheme. assess as to how much risk did the fund manger subject you to,
words,
an
and did he give you for taking that risk. Besides, you also need to consider
adequate reward
profile
whether allows
own riskyou to accept the revised
level of risk
5. Sell your fund, if you
need to
There is no standard formula to determine the right time to sell an
for that matter
investment any investment.
in Mutual fund or However, you can definitely benefit by
guidelines while
following certain deciding to sell an investment in a Mutual fund scheme.
You may
Here are consider
some of them: selling a fund when your investment plan calls for a sale
for
rather than doing so You need to hold a fund long enough to evaluate
emotional reasons.
a complete
its performance market cycle, i.e. around three years or so. Many of us make the
over
holding on to
mistake of either funds for too long or exit in a hurry. It is important to do a
before taking
thorough analysis a decision to sell. In other words, if you take a wrong decision,
risk ofismissing
there always out a on good rallies in the market or getting out too early
potential
thus missing outYou
gains. on should consider coming out of a fund if its performance
lagged
has its peers for a period of one year or so. It doesn't make sense to hold
consistently
longer
a fund when ityour
meets no needs. If you have made a proper selection, you would
to make changes
generally be requiredonly if the fund changes its objective or investment style,
chang
or if your needs
e.
6. Diversified vs.
Concentrated Portfolio
The choice between funds that have a diversified and a concentrated
upon your
portfolio risk profile.
largely dependsAs discussed earlier, a well - diversified portfolio helps
investments
in spreading across
the different sectors and segments of the market. The idea is
stocks
that if one or more portfolio won't be affected as much. At the same time, if
do badly, the
well,stock
one the portfolio
does very won't reap all the benefits. A diversified fund, therefore, is
someone who
an ideal choice for is looking for steady returns over the longer term. A
exactly in the portfolio
concentrated opposite works
manner. While a fund with a concentrated portfolio
providing
has a better chance of it also increases your chances of underperforming
higher returns,
portion
or losingofayour
largeportfolio in a market downturn. Thus, a concentrated portfolio
for those investors
is ideally suited who have the capacity to shoulder higher risk in order to
of getting better
improve the chances
returns.
7. Review your portfolio
periodically
 P a g e | 34

It is always a good idea to review your portfolio periodically. For example,

reviewing
you your portfolio on a half-yearly basis. Besides, you may be required
may begin
portfolio in greater detail when your investments goals or financial
to review your
circumstances change.

HOW TO REDUCE RISK WHILE

INVESTING:

Any kind of investment we make is subject to risk. In fact we get return

on investment
our purely and solely because at the very beginning we take
with our funds,
the risk of parting for getting higher value back at a later date.
Partition itself is a risk.
Well known economist and Nobel Prize recipient William Sharpe tried to
total risk
segregate faced in any kind of investment into two parts - systematic
the
unsystematic
(Systemic) risk and
(Unsystemic) risk.
Systematic risk is that risk which exists in the system. Some of the
systematic
biggest examples risk of
are inflation, recession, war, political
situation etc.
Inflation erodes returns generated from all investments e.g. If return
from8 per cent
fixed and ifisinflation is 6 per cent then real rate of return from
deposit
reduced
fixed by 6 is
deposit per
cent.
Similarly if returns generated from equity market is 18 per cent and
cent then
inflation equity
is still 6 perreturns will be lesser by the rate of inflation. Since
system
inflation existsisin
there nothe
way one can stay away from the
risk of inflation.
Economic cycles, war and political situations have effects on all forms of
Also these exist in the system and there is no way to stay away from
investments.
learning
them. It istolike
walk.
Anyone who wants to learn to walk has to first fall; you cannot learn to
walkfalling. Similarly anyone who wants to invest has to first face
without
never make
systematic risk; any there
kind of investment without
can
systematic risk.
Another form of risk is unsystematic risk. This risk does not exist in the
hence
system is not applicable to all forms of investment. Unsystematic risk is
and
particular
associatedform withof
investment.
 P a g e | 35

Suppose we invest in stock market and the market falls, then only our
equity gets
investment in affected OR if we have placed a fixed deposit in particular
goes
bank and bank than we only lose money placed
bankrupt,
in that bank.
While there is no way to keep away from risk, we can always reduce the
Diversification
impact of risk. helps in reducing the impact of unsystematic risk. If our
distributed
investment is across various asset classes the impact of
unsystematic risk is reduced.
If we have placed fixed deposit in several banks, then even if one of the
banksbankrupt
goes our entire fixed deposit
investment is not lost.
Similarly if our equity investment is in Tata Motors, HLL, Infosys, adverse
news Infosys
aboutwill only impact investment in Infosys, all other stocks will not
have any impact.
To reduce the impact of systematic risk, we should invest regularly. By
regularly we average out the
investing
impact of risk.
Mutual fund, as an investment vehicle gives us benefit of both
averagi
diversification and
ng.
Portfolio of mutual funds consists of multiple securities and hence
singlenews
adverse security will have nominal impact on
about
overall portfolio.
By systematically investing in mutual fund we get benefit of rupee
cost averaging.
Mutual fund as an investment vehicle helps reduce, both, systematic as
wellunsystematic
as
risk.
P a g e | 36
 P a g e | 37

SNAPSHOT OF INDIA INFOLINE

LTD.
Date of October
Establishment
Reven 1995
Rs. 4,257.2 million (year ended
ue
Market March, 2007)(April 21
Rs. 5110.71
Cap
Corporate 2008)
84, Nariman Bhavan, Nariman Point, Mumbai
Address Maharashtra,
- 400021,
Branch India
Indi
es
Management a
Nirmal Jain -
Team R Venkataraman - Co-promoter and
Founder
Sat Pal Khattar
Executive - Non Executive
Director
Nilesh
DirectorVikamsey - Independent
Kranti Sinha - Independent
Director
Overvi Director
India Infoline Limited provides the entire
ew financial
gamut ofservices entailing equity research,
derivatives
equities andtrading, commodities
management services, mutual funds, life
trading, portfolio
deposits, GoI
insurance, bonds and investment
fixed
proficient in
banking. It is equities broking, wealth
and portfolio
advisory management services. The
services
member
company is a and NSE. It is a depository
of BSE
National
member Securities
of Depository Limited
Depository
and CentralSecurities Ltd. The parent
Infoline
company Group
Indiaalso contains India Infoline
Media and
 P a g e | 38

Research Services Limited, India Infoline

Limited, India Infoline Marketing &
Commodities
Infoline
Services,Investment
India Services Limited and
Private
IIFL (Asia)
Limited

INTRODUCTIO
N.

India Infoline originally incorporated on October 18, 1995 as PROBITY

SERVICES PVT
RESEARCH AND LTD. at Mumbai under the Companies Act, 1956 with
1193797.and
Registration No. became a public limited company on April 28, 2000. The name
was
of thechanged
Company to India Infoline.com Limited on May 23, 2000 and later to India
on March 23,
Infoline Limited 2001. It is the first Company in India to foray into the
Mutual
online distribution ofone-stop financial services shop, most respected for
Funds It is a
personalized
quality service and cutting-edge technology. The No.1Corporate agent
of its advice,
Life Insurance Company. Research acknowledged by Forbes as Must Read
for ICICI Prudential
Asia
for Listed in
investor onSouth
Bombay and National Stock Exchange with a net worth of INR
market cap
200 crore and aof over INR 1970 crore. The company has a network of 976
(brancheslocations
business and sub-brokers) spread across 365 cities and towns. It has more
customers.
than 800,000 It is registered with NSDL as well as CDSL as a depository
one-step solution
participant. Providingfor clients
a trading in the
equities market.
 P a g e | 39

OUR UNIQUE
APPROACHES:
 P a g e | 40

PILLARS OF THE
ORGANIZATION
Unlike others, India Infoline has the concept of an
Investment Team.
The brains behind all the investment strategies and decisions regarding
ServicesManagement
Wealth
are:
 P a g e | 41

Mr. Nirmal
Jain
Chairman & Managing
Director
India Infoline
Ltd.
Nirmal Jain, MBA (IIM, Ahmedabad) and a Chartered and Cost Accountant,
leading financial
founded Indias services company India Infoline Ltd. in 1995, providing
financial services in equities and commodities broking, life insurance and
globally acclaimed
distribution,
mutual fundsamong others. Mr. Jain began his career in 1989 with Hindustan
export
Leversbusiness,
commodity contributing tremendously to its growth. He was also
Indian
associated with Inquire- which he co-founded in 1994 to set new standards in
Equity Research,
Indi
equity research in
a.
Mr. R
Venkataraman
Executive
Director
India Infoline
Ltd.
R Venkataraman, co-promoter and Executive Director of India Infoline Ltd., is
(Electronics
a B. Tech and Electrical Communications Engineering, IIT Kharagpur) and
Bangalore).
an MBA (IIM He joined the India Infoline board in July 1999. He previously held
managerial positions in ICICI Limited, including ICICI Securities Limited, their
senior
banking
investmentjoint venture with J P Morgan of USA and with BZW and Taib Capital
Limited. He was also Assistant Vice President with G E Capital Services India
Corporation
private
Limited equity
in theirdivision, possessing a varied experience of more than 16 years
services
in the financial
sector.
The Board of
Directors

Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India
compris Ltd.
Infoline
es:
Mr Nilesh
Vikamsey
Independent
Director
India Infoline
Ltd.
Mr. Vikamsey, Board member since February 2005 - a practising Chartered
partner (Khimji
Accountant andKunverji & Co., Chartered Accountants), a member firm of
headed the audit department till 1990 and thereafter also handles financial
HLB International,
investigations, mergers and acquisitions, valuations etc; an ICAI study group
services, consultancy,
Proposed
member for Accounting Standard 30 on Financial Instruments Recognition
and Management,
 P a g e | 42

Finance Committee of The Chamber of Tax Consultants (CTC), Law Review,

Rationalization
Reforms and Committee and Infotainment and Media Committee of Indian
Chamber
Merchants (IMC) and Insurance Committee and Legal Affairs Committee of
Commerce
Bombay and Industry
Chamber of
Mr. Vikamsey
(BCCI). is a director of Miloni Consultants Private Limited, HLB
Private Limited
Technologies and Chairman of
(Mumbai)
HLB India.
Mr Sat Pal
Khattar
Non Executive
Director
India Infoline
Ltd.
Mr Sat Pal Khattar, - Board member since April 2001 - Presidential Council of
member,Rights
Minority Chairman of the Board of Trustee of Singapore Business Federation,
trustee of SINDA, a non profit body, helping the under-privileged Indians in
is also a life
joined the India
Singapore. He Infoline board in April 2001. Mr Khattar is a Director of public
companies
and privatein Singapore, India and Hong Kong; Chairman of Guocoland
Singapore
Limited andinits parent Guoco Group Ltd listed in Hong Kong, a leading
listed
Singapore, China and
property company of Malaysia. A Board member of India Infoline Ltd,
both listed and
Gateway Distriparks Ltd a number of other companies he is also the Chairman of
Holding
the Group of Companies with investments in Singapore, India, UK and
Khattar
across the world.
Mr Kranti
Sinha
Independent
Director
India Infoline
Ltd.
Mr. Kranti Sinha Board member since January 2005 completed his
University
masters from andthestarted
Agra his career as a Class I officer with Life Insurance
served as the Director
Corporation of India. He and Chief Executive of LIC Housing Finance Limited
to December
from August 19982002 and concurrently as the Managing Director of LICHFL Care
owned
Homes (a wholly of LIC Housing Finance Limited). He retired from the
subsidiary
Executive Director
permanent cadre ofoftheLIC; served as the Deputy President of the Governing
Insurance
Council of Institute of India and as a member of the Governing Council of
Academy,Insurance
National Pune apart from various other such bodies. Mr. Sinha is also on the
of Hindustan Motors Limited, Larsen & Toubro Limited, LICHFL Care Homes
Board of Directors
Gremach Infrastructure Equipments and Projects Limited and
Limited,
Cinemax (India) Limited.
Mr Arun K.
Purvar
Independent
Director
India Infoline
Ltd.
 P a g e | 43

Mr. A.K. Purvar Board member since March 2008 completed his Masters
commerce
degree in from Allahabad University in 1966 and a diploma in Business
1967. Mr. Purwar
Administration in joined the State Bank of India as a probationary officer in
severalwhere
1968, important
he heldand critical positions in retail, corporate and international
almost the entire
banking, covering range of commercial banking operations in his illustrious
a key role
career. He in co-coordinating
also played the work for the Bank's entry into the field of
retiring from
insurance. After the Bank at end May 2006, Mr. Purwar is now working as
Governors
Member of of IIM-Lucknow,
Board of joined IIMIndore as a visiting professor, joined as
Professor
a Hon.- in NMIMS and he is also a member of Advisory Board for Institute of
Economic
Indian Studies (IIES), Waseda University, Tokyo, Japan. He has now taken
of IndiaVenture
over as Chairman Advisors Pvt. Ltd., as well as IL & FS Renewable Energy
working as Independent
Limited. He is also Director in leading companyies in Telecom, Steel,
Engineering
Textiles, and
Autoparts,
Consultancy.

MILESTONES
KEY:-

Incorporated on 18 October 1995 as probity

research and services.
Launched internet portal wwwindiainfoline.com
in may 1999.
Commenced distribution of personal financial products like
Bond
MFs andinRBIs
April
2000.
Launched online trading in shares branded as
www.5paisa.com in July 2000.
Started life-insurance agency business in Dec. 2000 as
corporate agent.
Became a depository participant of NSDL in
September 2001.
Launched stock messaging services in
May 2003.
Acquired commodities broking license in
March 2004.
 P a g e | 44

History of India
Infoline ltd.
We were originally incorporated on October 18, 1995 as Probity Research and
Services Private Limited at Mumbai under the Companies Act, 1956 with
Registration No. 11 93797. We commenced our operations as an independent
provider of information, analysis and research covering Indian businesses, financial
markets and economy, to institutional customers. We became a public limited
company on April 28, 2000 and the name of the Company was changed to Probity
Research and Services Limited. The name of the Company was changed to India
Infoline.com Limited on May 23, 2000 and later to India Infoline Limited on March
23,
2001.
In 1999, we identified the potential of the Internet to cater to a mass retail segment
and transformed our business model from providing information services to
institutional customers to retail customers. Hence we launched our Internet portal,
www.indiainfoline.com in May 1999 and started providing news and market
information, independent research, interviews with business leaders and other
specialized features.

In May 2000, the name of our Company was changed to India Infoline.com
to reflect the transformation of our business. Over a period of time, we have
Limited
emerged as one of the leading business and financial information services provider
in
India.
In the year 2000, we leveraged our position as a provider of financial information
and analysis by diversifying into transactional services, primarily for online trading
in shares and securities and online as well as offline distribution of personal
financial products, like mutual funds and RBI Bonds. These activities were carried on
by our wholly owned
subsidiaries.
Our broking services was launched under the brand name of 5paisa.com through
our subsidiary, India Infoline Securities Private Limited and www.5paisa.com, the e-
broking portal, was launched for online trading in July 2000. It combined
competitive brokerage rates and research, supported by Internet technology
Besides investment advice from an experienced team of research analysts, we also
 P a g e | 45

offer real time stock quotes, market news and price charts with multiple tools for
technical
analysis.
Acquisition of Agri Marketing Services Limited ("Agri")

In March 2000, we acquired 100% of the equity shares of Agri Marketing Services
Limited, from their owners in exchange for the issuance of 508,482 of our equity
shares. Agri was a direct selling agent of personal financial products including
mutual funds, fixed deposits, corporate bonds and post-office instruments. At the
time of our acquisition, Agri operated 32 branches in South and West India serving
more than 30,000 customers with a staff of, approximately 180 employees. After
the acquisition, we changed the company name to India Infoline.com
Company Limited.
Distribution

Facilities
Our main offices are located in approximately 4,000 square feet of office space
located in Mumbai, India. Our India Infoline Branches collectively occupy
additional 10,000 square feet of office space located throughout India, As on March
an
31, 2005, we have 73 branches across 36 locations in India.

The table below shows the changes in the

Registered Office of the Company since
Incorporation:
Previous Address New Address Date
Change of

208-C, Agarwal Market, 1, Snehdeep, Gokhale Road, August

1999 6,

Vile Pane (East), Vile Parle (East),

Mumbai - 400 057. Mumbai - 400

057,
1, Snehdeep, Gokhale Road, Building No. 24, 1st floor, Jan.,15
2001 ,

Vile Parle (East), Nirlon Complex,

Mumbai - 400 057. Off Western Express Highway,

 P a g e | 46

Goregaon (E),

Mumbai - 400 0063.

Reason for Change

Requirement of more floor space. Requirement of more floor space.

The instances when the name of the Company was changed are cited below:

Previous Name New

Name
Probity Research and Probity Research and

Services Private-Limited Services

Limited
Probity Research and India Infoline.com
Limited
Services
Limited

India Infoline.com India Infoline

Limited Limited
Date of Change Reason for Change

April 28, 2000 Conversion from Private Limited to

Public Limited Company

May 23, 2000 To focus on the retail financial

intermediary business through an

online set-
up.
March 23, 2001 To focus on the retail financial

intermediary business through offline

as well as online set-up.

MARCH 2005
- India Infoline fixes a price band between Rs 70 and Rs 80 for its forthcoming public
issue. The company is coming out with public issue of 1.18 crore shares with a face
value of Rs 10 through the book building route. The issue is slated to open on April
21 and close on April 27. Enam Financial Consultants Private Ltd would be the sole
 P a g e | 47

book running lead manager to the issue while Intime Spectrum Registry Ltd is the
registrar to the issue.

-India Infoline public issue gets 6.6 times

oversubscription
-IIL appoints R Mohan as VP

MARCH 2008

- India Infoline Ltd has informed that the Board of Directors of the Company
resolution passed on March 10, 2008 approved the appointment of
have vide circular
Chairman of
Mr. A K Purwar,theex-
State Bank of India, as an independent director on the
Board of the Company.
- India Infoline Ltd has informed that pursuant to the resignation of
Company
Mr. NimishSecretary
Mehta, and Compliance Officer of the Company. Ms. Falguni
appointed as
Sanghvi has beenthe Company Secretary with effect from
October 07, 2008.
- The Company has splits its face value from
Rs10/- to Rs2/-.
 P a g e | 48

OBJECTIVES OF THE
STUDY

The objective of the research is to study and analyze the awareness

level of investors of
mutual
Tofunds.
measure the satisfaction level of investors regarding
mutual funds.
 P a g e | 49

An attempt has been made to measure various variables playing in the

minds of investors
in terms of safety, liquidity, service, returns,
Toand
gettax saving.
insight knowledge about
mutual funds
Understanding the different ratios & portfolios so as to tell the
distributors
terms, byabout these
this, managing the relationship with
the distributors
To know the mutual funds performance levels in the
present market
To analyze the comparative study between other leading mutual
funds in the present
mark
et.
To know the awareness of mutual funds among different
groups of investors.
Finding out ways and means to improve on the services by INDIA
INFOLINE LTD.

RESEARCH
METHODOLOGY
 P a g e | 50

My research project has a specified framework for collecting the data in an

effective manner.is called RESEARCH DESIGN. The research process which
Such framework
was followed by
me consisted following
steps.
A.
PROBLEM:
The problem at hand was to study and measure the awareness level of
people
funds inregarding
the mutual
city.
B. DEVELOPING THE RESEARCH
PLANThe: development of Research Plan has the
following Steps:
1. DATA SOURCES: Two types of data were taken into consideration i.e.
Secondary
primary data
data.&My major emphasis was on gathering the primary data. The
secondary
been used data has things
to make
more clear.
(i Primary Data: Direct collection of data from the source of
information, technology
) including personal interviewing,
survey etc.
(i Secondary Data: Indirect collection of data from sources containing
past or recent
likepast
i) information Banks Brochures, Annual publications, Books, Fact
sheets of mutual &
funds, Newspaper
Magazines etc.

2. RESEARCH
INSTRUMENT
A close friend questionnaire was constructed for my survey. Questionnaire
consisting
of questionsof made
a set to be filled by various
respondents.

3. SAMPLING
PLAN
The sampling plan calls for three
decisions.
a) Sampling Unit: I have completed my survey in Chandigarh,
Union Territory.
b) Sample Size: The sample consisted of 50 respondents. The sample
wasindrawn from of
customers walk
India Info line Ltd. The selection of the respondents
was
basisdone on the
of simple random
sampling.
 P a g e | 51

c) Contact
Methods
I have contacted the respondents through
personal interviews.

C. COLLECTING THE
INFORMATION
After this, I have collected the information from the respondents with the
help of
questionn
aire
D. ANALYZE THE INFORMATION
The next step is to extract the pertinent findings from the collected data. I
have tabulated
collected data &the
developed frequency distributions. Thus the whole data
was
wise grouped
and was aspect
presented in tabular form. Thus, frequencies & percentages
were
renderprepared to the
impact of
study.

E. PRESENTATIONS OF
FINDINGS
This was the last step of the
survey.
 P a g e | 52

DAT
PRESSENTATIO
A
ANALYSIS
N,
INTERPRETATIO
AND
N

COMPARISON OF FOUR MAJOR MUTUAL

FUNDS

FRANKLIN TEMPLETON INDIA PRIMA

PLUS
 P a g e | 53

Mutual Franklin Templeton Mutual Fund

Fund
Scheme Name Franklin India Prima Plus

Scheme Type Open Ended

Scheme Growt
Category h
Launch 29-Sep-1994
Date

SBI MAGNUM GLOBAL

Mutual SBI Mutual
Fund Fund
Scheme Name SBI MAGNUM GLOBAL FUND 94 - GROWTH

Objective of The Objective of the Scheme is to provide

Scheme investors with maximum growth opportunity.

Scheme Type Open

Ended
Scheme Growt
Category h
Launch 06-Jun-2005
Date
MinimumSubscription Amount 200
0

TATA (GROWTH) FUND

Mutual Fund Tata Mutual Fund

 P a g e | 54

Scheme Name Tata Growth Fund - Growth

The investment objective of the schemes will be

Objective to provide income distribution & / or medium to

Of long term capital gains. The scheme will invest in

Scheme equity and equity related instruments of well

researched growth oriented companies.

Scheme Type Open Ended

Scheme Category Growth

Minimum

Subscription Rs.5000/-

Amount
 P a g e | 55

RELIANCE GROWTH FUND

Mutual Fund Reliance Mutual Fund

Scheme Name Reliance Growth Fund

Objective The primary investment objective is to achieve

of Scheme long term growth of capital by investing in

equity and equity related securities through a

research based investment approach

Scheme Type Open Ended

Scheme Category Growth

Launch Date 25-Sep-1995

Minimum

Subscription 5000

Amount
 P a g e | 56

Investment
needs?

From the above graph it is clear that there are many people who
have
surveyparticipated in the
and the major portion of the survey indicates that the people
are interested
investing in
in mutual funds for the sake o their family financial
security. From
graph it also the above
reveals that the minor portion of the graph that is to
build a corpus
retirement doesfor
not play a major role in the
investment decisions.
 P a g e | 57

These are the findings from the survey which include the number of
type of the participants.
participants and the This survey includes all types of
results for the
participants which may give exact
evaluation
Which of the following do you think as a tax
saving scheme?
 P a g e | 58

Comparison large cap top performing

Mutual funds

This graph represents the scheme assets of the four major

mentioned in
companies. thevalues
The graph are
in crores
 P a g e | 59

This graph represents the latest NAVs values of all the four major
reliance capital
companies is the one with highest NAV and Tata is the one
in which
with the lowest NAV.
 P a g e | 60

This graph stands a symbolic representation of the annual returns

of the four major
companies to their customers for the last 3 months. This
value is of 14may 2009.
 P a g e | 61

This graph stands a symbolic representation of the annual returns

of the four major
companies to their customers for the last 5 years. The
value is of 14may 2009.
 P a g e | 62

This graph is the result of the daily NAVs of the Franklin Templeton
India
schemeprima pluslast one and
for the
half year.

This also represents the trend of the previous years. This data is
collected
NAV valuesbyof
collecting the one and half year their average is taken
the previous
monthly
drawn onand
theabasis
graphofisthe
average values.
P a g e | 63
 P a g e | 64

In the same manner as explained above the remaining three graphs

of
SBITata Growth
Magnum fund,fund, reliance global fund is been drawn. This
Global
graph is the
the daily result
NAVs of Franklin Templeton India prima plus scheme
of the
for
halfthe last
year. onealso
This andrepresents the trend of
the previous years.

This data is collected by collecting the NAV values of the previous

one and half
average yearmonthly
is taken their and a graph is drawn on the basis
of the average values.
 P a g e | 65

This graphical representation shows the percentage of the net

assets the
terms of thecompany holdsand
debt, equity in others. The above graph shows the
graphical
of Franklinrepresentation
India
Prima Plus
 P a g e | 66

This graphical representation shows the percentage of the net

assets
terms ofthe company
the holdsand
debt, equity in others. The above graph shows the
graphical
of Reliancerepresentation
Growth
Fund.
 P a g e | 67

This graphical representation shows the percentage of the net

assets the
terms of company
the holdsand
debt, equity in others. The above graph shows the
graphical representation
of Tata Growth
Fund.
 P a g e | 68

This graphical representation shows the percentage of the net

assets the
terms of company
the holdsand
debt, equity in others. The above graph shows the
graphical representation
of SBI Magnum Global
Fund.
 P a g e | 69

The Graph is based on the income of the consumer and their

investment
schem in various
es.

Income Vs Investment Scheme

100
%
80
% Tax
60 Saving
Money
%
market
Balanc
40
% e
Growt
20 h
Incom
%
e
0
% Below 2 2 lac to 4 lac to 6 lac to Above 8
Lac 4 6 8 la
lac lac lac c

Interpretat
ion
I. Lower income group of below 2 lakh are more attracted towards the
income and
market money as they cannot afford to take too
Schemes
much of risk.
II. Balanced scheme is more popular with the income group of 2 lakh to 6
lakhis. even
This group
inclined towards growth Schemes to
certain with
III. Persons extent .
a salary of 6 lakh and above are fascinated by tax saving
and schem
money market
es.
 P a g e | 70

The Graph is showing the influential factor

among the consumer.

Influential Factor

3
N 3
5
2
0
o.
2
5
of Series
1
0
1 1
5
05
0
Fr T. p B In
ie V a a te
n N p n rn
ds e er n et
/F w /
a M
m a

Interpretat
ion
I. Major chunk are fascinated by the Newspapers/
Magazine.
II. Second best instrument to fascinate the customer is the internet.
Because internet
the easy provide way to get the
and quickest
information.
 P a g e | 71

Which factor influence you most to invest through

India Infoline Ltd?
FACTOR PERCENTAG
S E
Bank 20
Services %
Safe 42
ty %
Word Of 14
Mouth %
Advertisem 6
ent %
Past 18
Experience %

INTERPRETATIO
N
When asked that what factor affect most while investing in Mutual Funds
Ltd than India
through wide Infoline
preference is given to safety. 42% investors choose safety.20%
18% past
bank experience, 14% word of mouth and 6%
services,
advertisement.
 P a g e | 72

To how much extent are you satisfied with the services offered
by India Infoline Ltd?

Extremely 80
Satisfied %
Satisfied To Lesser 10
Extent %
Dissatisfied To Lesser 5
Extent %
Extremely 5
Dissatisfied %

INTERPRETATION

Out of the respondents 80% are extremely satisfied with the services
Ltd 10%by
offered are satisfied
India to lesser extent, 5%are
Infoline
extremely dissatisfied.
 P a g e | 73

INTERPRETATIO
N

As FIIs have entered Indian markets Sensex have crossed 10000 mark
and investors
earned a lot inhave
last financial year. Indians are becoming aware of various
investment
People haveoptions.
started taking risk as they want to book profits. Investors
prefer
schemesmore equity
than debt schemes, around 60% of the investors invest in equity
schemes
balanced and
schemes. Investors want to take risk as they want to yield better
returns.
want highInvestors
returns, liquidity, safety and tax benefit. Among all investors
gives
safetywant to have
for their money. Around 91% of the investors prefer open ended
schemes
close endedrather than as there is flexibility in open
schemes
ended schemes.
Investors prefer both systematic investment plan and lump sum. It
depends upon
availability the that the investor wants to invest in SIP or as lump
of funds
sum. Some
investors of the
invest in both ways i.e. through SIP as well as lump sum.
Basically it depends
the availability upon
of fund. When questions were asked about the
performance
in future 50%of ofmutual funds
investors said strong future, 35% of the investors said
very
15% strong future and
of the investors said
moderate future.

RECOMMENDATIONS AND
SUGGESTIONS:
 P a g e | 74

Customer education of the salaried class individuals is far below

standard. Thus
Asset Management Companys need to create awareness so that
the salaried
people class
become the prospective customer
of the
Early andfuture.
mid earners bring most of the business for the Asset
Management
Companys. Asset Management Companys thus needed to
educate
schemesand develop
for the persons who are at the late earning or
retirement
the market stage to gain
share. record must be focused by the sales executives while
Returns
explaining
schemesthe
to the customer. Pointing out the brand name of the
company repeatedly
may not too
fruitful.
The target market of salaried class individual has a lot of scope to
gain
asbusiness,
they are more fascinated to Mutual Funds than the
self employed.
Schemes with high equity level need to be targeted towards self
employed and as they require high returns and are
professionals
readyclass
Salary to bear risk.
individuals are risk averse and thus they must be
assured of theof risk diversification in
advantage
Mutual
There Funds.
should be given more time & concentration on the Tier-
3 distributors.
The resolution of the queries should be fast enough to satisfy
the distributors.
Time to time presentation/training classes about the products
should be there.
There should be more number of Relationship Managers in
because
different one RM can handle a maximum of 125 distributors
Regions
cover untapped
efficiently and also to
market.
Regular activities like canopy should be done so as to get more
the
interaction with
distributors.
Regular session should be organized on the handling of the india
so assoftware
infoline to resolve the account
statement problem.
All the persons who have cleared the AMFI exam should be
Mutual Fund
empanelled withso as to be largest
distributor base.
 P a g e | 75

Should have to provide more advertisements, canopies in the

markets
shopping because
mall, main no. of people visiting these places are mostly
and
of they have
service to save tax, hence there is more opportunity of
classes
applicatio
getting more no. of
ns.

CONCLUSIO
N
These were my objectives of
my project
To get an insight knowledge about
mutual funds
Understanding the different ratios & portfolios so as to tell the
terms, byabout
distributors this, managing
these the relationship with
the distributors
To know the mutual funds performance levels in the
present market
To analyze the comparative study between other leading mutual
mark
funds in the present
et.
To know the awareness of mutual funds among different
groups of investors.
To evaluate consumer feedback on
mutual funds
Finding out ways and means to improve on the services by
india infoline ltd.
I satisfied my objectives of the project in the
following manner
1. Complete insight knowledge about the mutual funds were
mentioned in the project
2. Different ratios with complete graphical representation were
explained in the project
3. To know the performance levels of the project I have done the
project using analysis
comparative the four of
major
the leading mutual fund companies using
different parameters.
4. To know the consumer awareness I have done the survey using
analyse the
different views about
customers so asthe
to mutual funds and perception of the customer in
the present scenario.
5. To evaluate the ways and means to improve india infoline ltd. I have
suggestions that are
mentioned various
listed above
 P a g e | 76

APPENDI
X
 P a g e | 77

QUESTIONNAI
RE
PERSONAL
DETAILS:
Name:

Mobile Number:

Adress:_______________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_______________________________

Occupation: _____________________

Age: ____________________________

1. Of the following what at present are your

investment needs?
a. To build a corpus for
b. To save for children education/
retirement
c. To provide for medical
marriage
d. To provide for family financial
emergencies
e. To create
security
f. All of the
wealth
above

2. Which of the following you think as investment

for tax- saving?
a. Mutual
b. Fixed
funds
c.
deposit
d.
Insuranc
e. All of the
Ppf
above
 P a g e | 78

3. Have you ever been invested in

mutual funds?
a. Yes b.
No

4. If you had Rs 1000/- where you

prefer to invest
a. Mutual
b. Fixed
fund
c. Direct
deposit
d. Life
equity
e. Postal office
insurance
deposit

5. Out of the following in which Mutual Fund you

have ainvested?
)b) Tata Mutual
Fund .
c) Franklin
Templeton .
d) Reliance
.
e) ICICI
Prudential .
f) SBI .
g) Other If any ,Please
Specify

6. To how much extent are you satisfied with the services offered by
india infoline
regarding ltd
mutual
funds?
a) Exteremly
satisfied.
b) Satisfied to the lesser
extent
d) Dissatisfied to lesser
extent
e) Extremely
dissatisfied.
 P a g e | 79

7. Out of the following which option

would you prefer ?
a) Close
ended .
b) Open
ended .

8. Do you prefer SIP (Systematic Investment Plan) or

investing lump sum?
a SI
) P
b Lump
) sum
c) Depends upon the financial
condition
 P a g e | 80

Financial statements of india

Balance
infoline ltd.
sheet (Rs.in
Millions)
Particular Mar Mar Mar Mar Mar
s
SOURCES OF FUNDS 2009 2008 2007 2006 2005
+ Share 566.8 571.0 501.6 451.0 316.2
Capital 0 3 7 1 2
Share Warrants & 136.1 668.6 55.1 44.2 0.0
Outstandings
+ Reserves & 7
9778.84 4
9256.60 7
2340.81 0
1238.34 0
207.0
Surplus 5
Shareholder's 10481.8 10496.2 2897.6 1733.5 523.2
Funds
+ Secured 1 17.0 8 0 5446.8 5 15.0 713.6
Loans 4 2 1 9
+ Unsecured 1.0 1305.68 362.7 808.8 2.0
Loans
Total 3
18.0 1305.6 0
809.5 5
823.8 0
15.6
Debts
Total 8
10499.8 8
11801.9 2
3707.1 7
2557.4 8
538.9
Liabilities
APPLICATION OF 9 5 7 2 5
FUNDS(Non
+ Loans : Current 0 0 0 0 0
Assets)
Gross 1436.7 983.1 730.9 87.4 44.7
Block
Less: Accumulated 7449.4 8
350.7 9
243.8 8
52.3 4
37.6
Depreciation
Less: Impairment of 5 0 7 0 5 0.0 1 0 1 0
Assets
Net 987.3 632.4 0
487.1 35.1 7.1
Block
Lease Adjustment 2 0 1 0 4 0.0 7 0 3 0
A/c
Capital Work in 45.1 4.9 0
0.0 0 0
Progress
Pre-operative Expenses 3 0 1 0 0
0.0 0 0
pending
Assets in 0 0 0 0 0 0
+ transit 8693.12 9156.80 1714.50 1002.49 403.0
Investments 9 1.5
Market Value of Quoted 0 0.0 0 0.0
Investements
Current Assets, Loans & 0 0 6
+ Advances 5.6 13.0 0.0 0 0
Inventories 1 9 0
+ Sundry 1035.29 3428.13 1307.23 54.8 14.9
Debtors
+ Cash and 4302.49 2143.71 950.7 8
20.9 0
20.3
Bank
+ Other Current 9 0.0 10.0 30.0
0 0.0
Assets
+ Loans and 2405.91 0
3112.99 0
2197.40 0
1721.63 0
133.8
Advances
Total Current 7749.3 8697.9 4455.4 1797.4 5
169.0
Assets
Less : Current Liabilities and 0 2 2 2 8
Provisions
+ Current 5526.75 5148.54 2445.20 76.6 23.8
Liabilities
+ 9 8
1486.39 1567.44 510.2 202.9 16.4
Provisions 6 9 7
Total Current 7013.1 6715.9 2955.4 279.6 40.3
Liabilities
Net Current 5736.1 8
1981.9 5
1499.9 8
1517.7 5
128.7
Assets
Miscellaneous Expenses not 6 0 4 0 7 0 4 0 3 0
written off Tax
Deferred 38.1 25.8 5.8 2.0 0.0
Assets
Deferred Tax 50.0 90.0 0
0.2 1
0.0 0
0.0
LiabilityTax Assets /
Deferred 0
38.1 0
25.8 5
5.5 0
2.0 0 0
Liabilities
Total 5
10499.8 9
11801.9 6
3707.1 1
2557.4 538.9
Assets 9 5 7 2 5
 P a g e | 81

Contingent 3.4 0 0 0 0
Liabilities 1

Profit and loss

account (Rs.in
Millions)
Particular Mar Mar Mar 2007 Mar 2006 Mar 2005
s
No of Months 2009 1 2008 1 1 1 1
+ Operating 2
5715.35 2
6575.36 2
2828.46 2
449.1 2
213.1
Income
Interest 0 0.0 0.0 2 0.0 7 0.0
income 0 0 0 0
Net 5715.3 6575.3 2828.4 449.1 213.1
Sales
EXPENDITURE 5 6 6 2 7
:
Increase/Decrease in 0 0 0.0 0 0
Stock
Purchase of Shares / 0 0 0
0.0 0 0
Units
Employee 1409.3 1325.4 0
539.9 0.3 0.6
Cost
+ Operating & Establishment 7
1824.72 2
1990.92 6
963.3 8
7.9 6
6.7
Expenses
+ Administrations & Other 9 1 5
590.5 597.6 340.1 41.6 17.8
Expenses 4 1 4 8 3
Provisions and 9.9 21.3 20.6 0.5 1.3
Contigencies
Less: Pre-operative Expenses 0 0 1 0 9 0 3 0 1 0
Capitalised
Total 3834.5 3935.2 1864.1 50.4 26.5
Expenditure
Operating Profit (Excl 2
1880.8 7
2640.0 8964.2 9
398.6 5
186.6
OI)
+ Other 2 1.0 9149.0 838.7 335.5 2 9.1
Income
Operating 1
1881.8 4
2789.1 1
1002.9 5
434.1 9
195.8
+ Profit 4111.47 4228.2 9 83.5 821.9 1 0.4
Interest 2 3 7 3
Depreciati 255.6 194.4 123.2 14.7 5.2
on Before Taxation & Exceptional
Profit 1
1514.7 0
2366.5 7
796.1 0
397.5 4
190.1
Items
Exceptional Income / 6 0 2- 9 0.0 1 0 4 0
Expenses
Profit Before 1514.7 290.4
2076.0 0
796.1 397.5 190.1
Tax
+ Provision for 6456.5 7789.2 9
274.9 1
132.8 415.4
Tax
Profits After 0
1058.2 0
1286.8 7
521.2 1
264.6 0
174.7
+ Tax 5
2287.40 7
1760.99 2
604.6 9
265.4 4 0.7
Appropriations 9 9 9
Equity Dividend 140.0 60.0 30.0 30.0 0
%
Earnings Per 0 3.7 0
22.5 0
10.3 05.8 5.5
Share
Book 1
36.5 4
172.1 9
56.6 7
37.4 3
16.5
Value 1 0 6 6 5
 P a g e | 82

GLOSSARY OF SOME
CONCEPTS
AM
CThe AMC is the corporate entity, which markets and manager and manages
a mutual
scheme andfund
in return receives a management fee from the fund corpus. SEBI
specifies
AMC mustthat an
be separate entity the trust that
manages it.
NA
It is the value of unit of a Mutual Fund scheme and represents its true worth.
V
NAV is arrived
by dividing at value of all investment made under the scheme by number
total
of units ofNAV
scheme. theis critical yardstick of the funds
performance.
UNIT
Units in a mutual fund scheme are similar to shares of a joint company.
S
These are always
denominations of in
Rs. 10 each the sum total of all the units constitutes
corpus of mutual fund.
SPONSO
Sponsor of a mutual fund are those who establish the mutual fund trust and
RS
the AMC they
constitute the shareholders of the AMC and receive dividends on profits
made by the
SEBI rules AMC. that mutual fund trust as well as the AMC must maintain
stipulate
an arms length
relationship with the sponsors to avoid any conflict to interests, which may
affect
holderthe unit
s.
INCOME
These Funds invest largely in fixed income securities like bonds and
FUND
debentures.
returns moreSuch fundsthan
regularly earna growth fund but level of returns over longer
periods normally
behind those lag by growth funds while returns in such funds may be
offered
regular,
fluctuatetheir scale may
depending upon the prevalent interest rates and credit quality
of the debt securities.
GROWTH
Growth funds predominantly invest in stock market securities and carry risks
FUNDS
larger
funds. than
Sinceincome
stock markets travel through a natural cycle of boom and bursts
one should
normally stay invested inequity funds for a longer times to
earn higher returns.
 P a g e | 83

Equity funds may earn higher but they also carry larger risks. For risk taking
investor
best equity are
suited.
BALANCED
A balanced fund is the mixture of income fund and growth fund invested
FUNDS
partly
achievein aequity to between risk
trade-of
and return.
CLOSE
In a close-ended fund an investor is allowed to subscribe only during the
ENDED
period of the initialfunds mature after a
offer. Close-ended
specified period.
OPEN ENDED
Those funds in which investor can invest & withdraw whenever they wish,
FUNDS
after
initialthe close
offer. of
Withdrawals are allowed at NAV minus a
back end load.
LOCK IN
Time period during which investor can neither redeem nor they transfer their
PERIOD
holdings to others.
Lock in period is imposed to allow fund manager to deploy money for an
adequate period
time to earn of
a reasonable return premature withdrawals may destabilize the
fund & areto
beneficial not
the interests of
investors.
MANAGEMENT
An AMC that mangers & markets a mutual fund scheme is entitled to a
FEES
management fee@
25% of the total 1%managed,
funds to it could be charged to the scheme
irrespective
performanceofofthethe
scheme.
REDEMPTIO
Disbursement of unit capital on the maturity of that particular scheme to all
N
its existing unit
holder
s.
MARKET
The price at which units of mutual funds are quoted in stock exchange
PRICE
where they are listed.
REGISTRA
Organization appointed by an AMC to the schemes it is registered,
R
monitored, and regulated
SEBI, it provides by
required services like system capabilities back up, accepts
and processes
investors applications in informs AMC about amounts received/disbursed for
subscription/
 P a g e | 84

purchase/ redemption it also handles communications with investors,

perform data entry
and dispatches services
account
statements.
CUSTODAI
Banking organization that keeps in safe custody all the securities & other
N
instruments belonging
to the fund to insure smooth inflow & outflow of securities. It is also approved
regulated
registered and
with
SEBI.
EXIT
Value of deduction from NAV on the date when one choose to withdraw from
LOAD
a fund, load
imposed is
because withdrawals carry transaction cost to AMC it can not be
more thanas
of corpus 6% of NAV by SEBI many schemes offer redemption facility
prescribed
without exit load.
ENTRY
Charge paid by unit holder when he invests an amount in the scheme.
LOAD
Mutual
expensesfunds incur
during anmany
issue, which are charged to the scheme. Such load
is called entry load.
LIQUIDIT
Ability of investors to change its unit into cash within minimum time as and
Y
when
mone he needs
y.
TRANSPARENC
Basic feature of mutual funds is transparency, their functioning is very
Y
& transparent
efficient, working of AMC is regulated by SEBI it is audited weekly, it has
well monitored
strict
to guidelines
work under issued by SEBI, and its NAV is calculated and published daily
chance of anyisdefault
so that there no in the working of
Mutual Funds.
 P a g e | 85

BIBLIOGRAPH
Y
Book
s
David F, Swensen. 2005. Unconventional Success. A fundamental
Approach to Personal
Investment Free
Press 416
D.C. Anjaria. Dhaivat Anjaria. 2001 AMFIs Mutual Fund Testing
Programme.

Websit
es
WWW.GOOGLE.CO
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WWW.YAHOO.CO
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WWW.WIKIPEDIA.CO
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WWW.INDIAINFOLINE.CO
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WWW.AMFIINDIA.CO
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WWW.MONEYCONTROL.CO
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WWW.5PAISA.CO
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WWW.SHAREMARKETBASICS.CO
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