EXECUTIVE SUMMARY

The study aimed at Relationship Building through Activation of Banking Channels

and Empanelment of Agents, for the sale of Reliance Mutual Funds. The study
also aims at understanding the perception of the customers regarding the various
fund schemes the company undertakes.

The areas undertaken included Sunam, Dhuri and Sangrur. In these areas various
banks were administered which included CBOP, HDFC, Kotak Mahindra, UTI
and ICICI. Moreover a structured and unbiased questionnaire helped in knowing
customers perception regarding Mutual Funds and personal interviews helped in
customer satisfaction. The data gathered in the above process was analyzed using
statistical methods.

As per the survey the area undertaken by me was unaware about the Mutual Funds
especially of Reliance. The market there was almost captured by UTI only. In this
regard a drive was undertaken for making a place for Reliance Mutual Funds in
the market. By the end this drive was fruitful as during the NFO period (Reliance
Equity Advantage Fund) the business for Reliance Mutual Fund rose to 20 lacs.
Along with this for the existing schemes Reliance showed a great response.

Moreover from these areas agents were empanelled for selling of Reliance Mutual
Funds and hence showed good results. Hence by the end the overall response for
Reliance from these areas grew many folds.

For this, research has been conducted taking the advantage of Primary Data. For
the primary data collection, a presentation was prepared which was shown in
various banks and also to the agents of these areas. In addition to this personal
interviews have also been conducted. All the analysis and findings on the basis of
data collected are provided in the project. The project is being concluded by
conclusion, recommendations and limitations on the basis of learning and analysis
done.
 Review of Literature

Introduction

This study examines the performance of 93 fund managers over the 10 year
period 1986 through 1995 using relative percentile ranks based on quarterly
compounded, annual total returns measured against funds with the same
investment objective. On average, managers with 10-year track records at the
same fund do not perform better than managers with shorter track records. Also,
for these experienced managers, superior performance in one-five-year period is
not predictive of superior performance over the next five years. However,
inferior performance persists, particularly for funds with above average expense
ratios.

Conclusion

A number of recent studies have examined the issue of performance persistence

in mutual funds. Grinblatt and Titman (1992) analyze performance of 279 funds
over the period of 1975 to 1984 using a benchmark technique and find evidence
that performance differences between funds persists over time. Hendricks, Patel,
and Zeckhauser (1993) study 165 no-load growth-oriented funds over the period
1974 to 1988 and obtain similar results. In a study of 728 mutual fund returns
over the period 1976 to 1988, Goetzman and Ibbotson (1994) find that two-year
performance is predictive of performance over the successive two years.
Volkman and Wohar (1995) extend this analysis to examine factors that impact
performance persistence. Their data consists of 322 funds over the period 1980
to 1989, and shows performance persistence is negatively related to size and
negatively related to levels of management fees.

Studies of performance persistence in mutual funds are not without contrary

evidence. Carhart (1997) shows that expenses and common factors in stock
returns such as beta, market capitalization, one-year return momentum, and
whether the portfolio is value or growth oriented "almost completely" explain
short term persistence in risk-adjusted returns. He concludes that his evidence
does not "support the existence of skilled or informed mutual fund portfolio
managers" (Carhart, 1997, p. 57). In the Kahn and Rudd 1995 study of 300
equity funds and 195 bond funds between 1983 and 1993, only the bond funds
show evidence of persistence. In an article in this issue, Detzel and Weigand
(1998) use a regression residual technique to control for the effects of investment
style, size and expense ratios. They find, after controlling for these variables, no
evidence of performance persistence.

Two other studies have used performance ranks. Dunn and Theisen (1983) rank
the annual performance of 201 institutional portfolios for the period 1973
through 1982 without controlling for fund risk. They found no evidence that
funds performed within the same quartile over the ten-year period. They also
found that ranks of individual managers based on 5-year compound returns
revealed no consistency. Bauman and Miller (1995) studied the persistence of
pension and investment fund performance by type of investment organization
and investment style. They employed a quartile ranking technique because they
noted that "investors pay particular attention to consultants' and financial
periodicals' investment performance rankings of mutual funds and pension
funds" (Bauman & Miller, 1995, p. 79). They found that portfolios managed by
investment advisors showed more consistent performance (measured by quartile
rankings) over market cycles and that funds managed by banks and insurance
companies showed the least consistency. They suggest that this result may be
caused by a higher turnover in the decision-making structure in these less
consistent funds..

Using relative annual performance ranks, this study finds no evidence that
experienced mutual fund managers outperform their less experienced peers.
Also, the superior relative performance of experienced managers measured over
the five-year period 1986-1990 was not predictive of superior performance over
the subsequent five years. While superior performance is not persistent, there is
evidence that inferior performance does persist. Poorly performing managers
tend to improve their rankings in the next period, but their performance remains
below that of superior managers. One reason for this appears to be differences in
expense ratios. Managers with inferior performance and greater than average
expense ratios during 1986-1990 perform more poorly during 1991-1995 than
funds with below average expense ratios. The results hold after controlling the
systematic risk of the fund and risk exposure related to individual management
styles defined by Morningstar.

The results of this study are consistent with those of Detzel and Weigand (also in
this issue). Using a regression residual approach, they also find no persistence in
fund performance after controlling for investment objective and other common
portfolio factors. Explicit control for investment objective and style category, as
well as longer performance periods, is key facets of the methodologies of our
two studies. Though each employs unique methodologies relative to recent work
in this area, these studies provide further evidence that neither expertise nor past
performance is indicative of future, long-run, superior mutual fund performance.

Acknowledgment: The authors thank Editor Karen Eilers Lahey and the
anonymous referees for their valuable contributions. Thanks also to Qingsheng
Mou and Neil Monaghan for their research assistance and Jim Gilkeson and Stan
Atkinson for their helpful comments. We also appreciate the comments
generated by a presentation to UCF faculty, particularly, Stan Smith, Shawn
Phelps, John Cheney, and Ronnie Clayton.
 Mutual Funds Concept

A Mutual Fund is a trust that pools the savings of a number of investors

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

There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund:
 Mutual Funds Industry in India

The origin of mutual fund industry in India is with the introduction of the concept
of mutual fund by UTI in the year 1963. Though the growth was slow, but it
accelerated from the year 1987 when non-UTI players entered the industry.

In the past decade, Indian mutual fund industry had seen a dramatic
imporvements, both qualitywise as well as quantitywise. Before, the monopoly of
the market had seen an ending phase, the Assets Under Management (AUM) was
Rs. 67bn. The private sector entry to the fund family rose the AUM to Rs. 470 bn
in March 1993 and till April 2004, it reached the height of 1,540 bn.

Putting the AUM of the Indian Mutual Funds Industry into comparison, the total
of it is less than the deposits of SBI alone, constitute less than 11% of the total
deposits held by the Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new
in the country. Large sections of Indian investors are yet to be intellectuated with
the concept. Hence, it is the prime responsibility of all mutual fund companies, to
market the product correctly abreast of selling.

The mutual fund industry can be broadly put into four phases according to the
development of the sector. Each phase is briefly described as under.
First Phase - 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was
set up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked
from the RBI and the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first scheme launched
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)

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by
Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda
Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked
Rs.47,004 as assets under management.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund families.
Also, 1993 was the year in which the first Mutual Fund Regulations came into
being, under which all mutual funds, except UTI were to be registered and
governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton)
was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.

The number 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 acquisitions. As at the end of January 2003, there were 33 mutual funds with
total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores
of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003

This phase had bitter experience for UTI. It was bifurcated into two separate
entities. One is the Specified Undertaking of the Unit Trust of India with AUM of
Rs.29,835 crores (as on January 2003). The Specified Undertaking of Unit Trust
of India, functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund
Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.
It is registered with SEBI and functions under the Mutual Fund Regulations. With
the bifurcation of the erstwhile UTI which had in March 2000 more than
Rs.76,000 crores of AUM and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered
its current phase of consolidation and growth. As at the end of September, 2004,
there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.
The major players in the Indian Mutual Fund Industry are:
 Performance of Mutual Funds in India

Let us start the discussion of the performance of mutual funds in India from the
day the concept of mutual fund took birth in India. The year was 1963. Unit Trust
of India invited investors or rather to those who believed in savings, to park their
money in UTI Mutual Fund.

For 30 years it goaled without a single second player. Though the 1988 year saw
some new mutual fund companies, but UTI remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer
to satisfactory level. People rarely understood, and of course investing was out of
question. But yes, some 24 million shareholders was accustomed with guaranteed
high returns by the begining of liberalization of the industry in 1992. This good
record of UTI became marketing tool for new entrants. The expectations of
investors touched the sky in profitability factor. However, people were miles away
from the praparedness of risks factor after the liberalization.

The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me
concentrate about the performance of mutual funds in India through figures. From
Rs. 67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and
the figure had a three times higher performance by April 2004. It rose as high as
Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices
started falling in the year 1992. Those days, the market regulations did not allow
portfolio shifts into alternative investments. There were rather no choice apart
from holding the cash or to further continue investing in shares. One more thing to
be noted, since only closed-end funds were floated in the market, the investors
disinvested by selling at a loss in the secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock
market scandal, the losses by disinvestments and of course the lack of transparent
rules in the whereabout rocked confidence among the investors. Partly owing to a
relatively weak stock market performance, mutual funds have not yet recovered,
with funds trading at an average discount of 1020 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and

competitve environment in mutual funds. Some of them were like relaxing
investment restrictions into the market, introduction of open-ended funds, and
paving the gateway for mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term
saving. The more the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower
risks and higher profitability within a short span of time, more and more people
will be inclined to invest until and unless they are fully educated with the dos and
donts of mutual funds.
 Mutual Fund Companies in India

The concept of mutual funds in India dates back to the year 1963. The era between
1963 and 1987 marked the existance of only one mutual fund company in India
with Rs. 67bn assets under management (AUM), by the end of its monopoly era,
the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund
companies in India took their position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund,
Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual
Fund, Bank of India Mutual Fund.

The succeeding decade showed a new horizon in indian mutual fund industry. By
the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private
sector funds started penetrating the fund families. In the same year the first Mutual
Fund Regulations came into existance with re-registering all mutual funds except
UTI. The regulations were further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India which
has now merged with Franklin Templeton. Just after ten years with private sector
players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33
mutual fund companies in India.
Major Mutual Fund Companies in India

ABN AMRO Mutual Fuud

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee
(India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset
Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank
A G is the custodian of ABN AMRO Mutual Fund.

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun
Life Financial. Sun Life Financial is a golbal organisation evolved in 1871 and is
being represented in Canada, the US, the Philippines, Japan, Indonesia and
Bermuda apart from India. Birla Sun Life Mutual Fund follows a conservative
long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores.

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30,
1992 under the sponsorship of Bank of Baroda. BOB Asset Management
Company Limited is the AMC of BOB Mutual Fund and was incorporated on
November 5, 1992. Deutsche Bank AG is the custodian.
HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers nemely
Housing Development Finance Corporation Limited and Standard Life
Investments Limited.

HSBC Mutual Fund

HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital
Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual
Fund acts as the Trustee Company of HSBC Mutual Fund.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named
Trustee Company. It is a joint venture of Vysya and ING. The AMC, ING
Investment Management (India) Pvt. Ltd. was incorporated on April 6, 1998.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one
of the largest life insurance companies in the US of A. Prudential ICICI Mutual
Fund was setup on 13th of October, 1993 with two sponsorers, Prudential Plc. and
ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust Ltd. and the
AMC is Prudential ICICI Asset Management Company Limited incorporated on
22nd of June, 1993.
Sahara Mutual Fund

Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial
Corporation Ltd. as the sponsor. Sahara Asset Management Company Private
Limited incorporated on August 31, 1995 works as the AMC of Sahara Mutual
Fund. The paid-up capital of the AMC stands at Rs 25.8 crore.

State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to
launch offshor fund, the India Magnum Fund with a corpus of Rs. 225 cr.
approximately. Today it is the largest Bank sponsored Mutual Fund in India. They
have already launched 35 Schemes out of which 15 have already yielded
handsome returns to investors. State Bank of India Mutual Fund has more than Rs.
5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs spread over 18
schemes.

Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The
sponsorers for Tata Mutual Fund are Tata Sons Ltd., and Tata Investment
Corporation Ltd. The investment manager is Tata Asset Management Limited and
its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is one
of the fastest in the country with more than Rs. 7,703 crores (as on April 30, 2005)
of AUM.
Kotak Mahindra Mutual Fund

Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of

KMBL. It is presently having more than 1,99,818 investors in its various schemes.
KMAMC started its operations in December 1998. Kotak Mahindra Mutual Fund
offers schemes catering to investors with varying risk - return profiles. It was the
first company to launch dedicated gilt scheme investing only in government
securities.

Unit Trust of India Mutual Fund

UTI Asset Management Company Private Limited, established in Jan 14, 2003,
manages the UTI Mutual Fund with the support of UTI Trustee Company Privete
Limited. UTI Asset Management Company presently manages a corpus of over
Rs.20000 Crore. The sponsorers of UTI Mutual Fund are Bank of Baroda (BOB),
Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance
Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds,
Income Funds, Asset Management Funds, Index Funds, Equity Funds and Balance
Funds.

Reliance Mutual Fund

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act,
1882. The sponsor of RMF is Reliance Capital Limited and Reliance Capital
Trustee Co. Limited is the Trustee. It was registered on June 30, 1995 as Reliance
Capital Mutual Fund which was changed on March 11, 2004. Reliance Mutual
Fund was formed for launching of various schemes under which units are issued to
the Public with a view to contribute to the capital market and to provide investors
the opportunities to make investments in diversified securities.

Standard Chartered Mutual Fund

Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by
Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company
Pvt. Ltd. Standard Chartered Asset Management Company Pvt. Ltd. is the AMC
which was incorporated with SEBI on December 20,1999.

Franklin Templeton India Mutual Fund

The group, Frnaklin Templeton Investments is a California (USA) based company

with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest
financial services groups in the world. Investors can buy or sell the Mutual Fund
through their financial advisor or through mail or through their website. They have
Open end Diversified Equity schemes, Open end Sector Equity schemes, Open
end Hybrid schemes, Open end Tax Saving schemes, Open end Income and Liquid
schemes, Closed end Income schemes and Open end Fund of Funds schemes to
offer.

Morgan Stanley Mutual Fund India

Morgan Stanley is a worldwide financial services company and its leading in the
market in securities, investmenty management and credit services. Morgan Stanley
Investment Management (MISM) was established in the year 1975. It provides
customized asset management services and products to governments, corporations,
pension funds and non-profit organisations. Its services are also extended to high
net worth individuals and retail investors. In India it is known as Morgan Stanley
Investment Management Private Limited (MSIM India) and its AMC is Morgan
Stanley Mutual Fund (MSMF). This is the first close end diversified equity
scheme serving the needs of Indian retail investors focussing on a long-term
capital appreciation.

Escorts Mutual Fund

Escorts Mutual Fund was setup on April 15, 1996 with Excorts Finance Limited as
its sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC
was incorporated on December 1, 1995 with the name Escorts Asset Management
Limited.

Alliance Capital Mutual Fund

Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance
Capital Management Corp. of Delaware (USA) as sponsorer. The Trustee is
ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asset
Management India (Pvt) Ltd. with the corporate office in Mumbai.

Benchmark Mutual Fund

Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial
Services Pvt. Ltd. as the sponsorer and Benchmark Trustee Company Pvt. Ltd. as
the Trustee Company. Incorporated on October 16, 2000 and headquartered in
Mumbai, Benchmark Asset Management Company Pvt. Ltd. is the AMC.
Canbank Mutual Fund

Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting
as the sponsor. Canbank Investment Management Services Ltd. incorporated on
March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai.

Chola Mutual Fund

Chola Mutual Fund under the sponsorship of Cholamandalam Investment &

Finance Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co.
Ltd. is the Trustee Company and AMC is Cholamandalam AMC Limited.

LIC Mutual Fund

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It
contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was
constituted as a Trust in accordance with the provisions of the Indian Trust Act,
1882. . The Company started its business on 29th April 1994. The Trustees of LIC
Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company
Ltd as the Investment Managers for LIC Mutual Fund.

GIC Mutual Fund

GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a

Government of India undertaking and the four Public Sector General Insurance
Companies, viz. National Insurance Co. Ltd (NIC), The New India Assurance Co.
Ltd. (NIA), The Oriental Insurance Co. Ltd (OIC) and United India Insurance Co.
Ltd. (UII) and is constituted as a Trust in accordance with the provisions of the
Indian Trusts Act, 1882.
 Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exist to cater to the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an
overview into the existing types of schemes in the Industry.

BY STRUCTURE

Open Ended Schemes

Close Ended schemes
Interval Schemes

BY INVESTMENT OBJECTIVES

Growth Schemes
Income Schemes
Balanced Schemes
Money Market Schemes

OTHER SCHEMES

Tax Saving Schemes

Special schemes
Index schemes
Sector specific schemes
BY STRUCTURE

Open-ended Funds

An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity. Investors can conveniently buy and sell units at
Net Asset Value ("NAV") related prices. The key feature of open-end schemes is
liquidity.

Closed-ended Funds

A closed-end fund has a stipulated maturity period which generally ranging from 3 to
15 years. The fund is open for subscription only during a specified period. Investors
can invest in the scheme at the time of the initial public issue and thereafter they can
buy or sell the units of the scheme on the stock exchanges where they are listed. In
order to provide an exit route to the investors, some close-ended funds give an option
of selling back the units to the Mutual Fund through periodic repurchase at NAV
related prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor.

Interval Funds

Interval funds combine the features of open-ended and close-ended schemes. They
are open for sale or redemption during pre-determined intervals at NAV related
prices.

BY INVESTMENT OBJECTIVES

Growth Funds

The aim of growth funds is to provide capital appreciation over the medium
to long- term. Such schemes normally invest a majority of their corpus in equities.
It has been proven that returns from stocks, have outperformed most other kind of
investments held over the long term. Growth schemes are ideal for investors
having a long-term outlook seeking growth over a period of time.

Income Funds

The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporate
debentures and Government securities. Income Funds are ideal for capital stability
and regular income.

Balanced Funds

The aim of balanced funds is to provide both growth and regular income.
Such schemes periodically distribute a part of their earning and invest both in
equities and fixed income securities in the proportion indicated in their offer
documents. In a rising stock market, the NAV of these schemes may not normally
keep pace, or fall equally when the market falls. These are ideal for investors
looking for a combination of income and moderate growth.

Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of

capital and moderate income. These schemes generally invest in safer short-term
instruments such as treasury bills, certificates of deposit, commercial paper and
inter-bank call money. Returns on these schemes may fluctuate depending upon
the interest rates prevailing in the market. These are ideal for Corporate and
individual investors as a means to park their surplus funds for short periods.

Load Funds

A Load Fund is one that charges a commission for entry or exit. That is,
each time you buy or sell units in the fund, a commission will be payable.
Typically entry and exit loads range from 1% to 2%. It could be worth paying the
load, if the fund has a good performance history.

No-Load Funds

A No-Load Fund is one that does not charge a commission for entry or exit.
That is, no commission is payable on purchase or sale of units in the fund. The
advantage of a no load fund is that the entire corpus is put to work.

OTHER SCHEMES

Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of
the Indian Income Tax laws as the Government offers tax incentives for
investment in specified avenues. Investments made in Equity Linked Savings
Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the
Income Tax Act, 1961. The Act also provides opportunities to investors to save
capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the
capital asset has been sold prior to April 1, 2000 and the amount is invested before
September 30, 2000.

Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the offer
document. The investment of these funds is limited to specific industries like
InfoTech, FMCG, Pharmaceuticals etc.

Index Schemes

Index Funds attempt to replicate the performance of a particular index such as the
BSE Sensex or the NSE 50.

Sectoral Schemes

Sectoral Funds are those, which invest exclusively in a specified industry or a

group of industries or various segments such as 'A' Group shares or initial public
offerings
 Advantages of Mutual Funds

The advantages of investing in a Mutual Fund are:

Diversification: The best mutual funds design their portfolios so individual

investments will react differently to the same economic conditions. For
example, economic conditions like a rise in interest rates may cause certain
securities in a diversified portfolio to decrease in value. Other securities in
the portfolio will respond to the same economic conditions by increasing in
value. When a portfolio is balanced in this way, the value of the overall
portfolio should gradually increase over time, even if some securities lose
value.

Professional Management:Most mutual funds pay topflight professionals

to manage their investments. These managers decide what securities the
fund will buy and sell.

Regulatory oversight: Mutual funds are subject to many government

regulations that protect investors from fraud.

Liquidity: It's easy to get your money out of a mutual fund. Write a check,
make a call, and you've got the cash.

Convenience: You can usually buy mutual fund shares by mail, phone, or
over the Internet.

Low cost: Mutual fund expenses are often no more than 1.5 percent of your
investment. Expenses for Index Funds are less than that, because index
funds are not actively managed. Instead, they automatically buy stock in
companies that are listed on a specific index
 Transparency

Flexibility

Choice of schemes

Tax benefits

Well regulated
 Drawbacks of Mutual Funds

Mutual funds have their drawbacks and may not be for everyone:

No Guarantees: No investment is risk free. If the entire stock market

declines in value, the value of mutual fund shares will go down as well, no
matter how balanced the portfolio. Investors encounter fewer risks when
they invest in mutual funds than when they buy and sell stocks on their
own. However, anyone who invests through a mutual fund runs the risk of
losing money.

Fees and commissions: All funds charge administrative fees to cover their
day-to-day expenses. Some funds also charge sales commissions or "loads"
to compensate brokers, financial consultants, or financial planners. Even if
you don't use a broker or other financial adviser, you will pay a sales
commission if you buy shares in a Load Fund.

Taxes: During a typical year, most actively managed mutual funds sell
anywhere from 20 to 70 percent of the securities in their portfolios. If your
fund makes a profit on its sales, you will pay taxes on the income you
receive, even if you reinvest the money you made.

Management risk: When you invest in a mutual fund, you depend on the
fund's manager to make the right decisions regarding the fund's portfolio. If
the manager does not perform as well as you had hoped, you might not
make as much money on your investment as you expected. Of course, if
you invest in Index Funds, you forego management risk, because these
funds do not employ managers.
 Frequently Used Terms In Mutual Fund

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its
liabilities. The per unit NAV is the net asset value of the scheme divided by the
number of units outstanding on the Valuation Date.

Sale Price

Is the price you pay when you invest in a scheme. Also called Offer Price. It may
include a sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and it may
include a back-end load. This is also called Bid Price.

Redemption Price

Is the price at which open-ended schemes repurchase their units and close-ended
schemes redeem their units on maturity. Such prices are NAV related.
Sales Load

Is a charge collected by a scheme when it sells the units. Also called, Front-end
load. Schemes that do not charge a load are called No Load schemes.

Repurchase or Back-end Load

Is a charge collected by a scheme when it buys back the units from the unit
holders?
 RECENT GROWTH OF THE INDUSTRY

The Indian mutual fund industry is one of the fastest growing sectors in the
Indian capital and financial markets. The mutual fund industry in India has seen
dramatic improvements in quantity as well as quality of product and service
offerings in recent years. Mutual funds assets under management grew by 96%
between the end of 1997 and June 2003 and as a result it rose from 8% of GDP to
15%. The industry has grown in size and manages total assets of more than
$30351 million. Of the various sectors, the private sector accounts for nearly 91%
of the resources mobilised showing their overwhelming dominance in the market.
Individuals constitute 98.04% of the total number of investors and contribute US
$12062 million, which is 55.16% of the net assets under management.

By December 2004, Indian mutual fund industry reached Rs 1,50,537

crore. It is estimated that by 2010 March-end, the total assets of all scheduled
commercial banks should be Rs 40,90,000 crore.

The annual composite rate of growth is expected 13.4% during the rest of
the decade. In the last 5 years we have seen annual growth rate of 9%. According
to the current growth rate, by year 2010, mutual fund assets will be double.
Let us discuss with the following table:

Aggregate deposits of Scheduled Com Banks in India (Rs.Crore)

Mar-
Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Sep-04 4-Dec
04

Deposits 605410 851593 989141 1131188 1280853 - 1567251 1622579

Change in
% over last 15 14 13 12 - 18 3
yr

Aggregate deposits of schdeuled com banks in India(Rs.crore)

1800000

1600000

1400000

1200000
Deposits 605410 851593 989141
deposits

1000000 1131188 1280853 -

800000 Change in % over last yr 15 14
13 12 -
600000

400000

200000

0
2004 2005 2006 2007
years
Mutual Fund AUMs Growth

Mar- Mar- Mar- Mar- Mar-

Month/Year Mar-04 Sep-04 4-Dec
98 00 01 02 03

MF AUM's 68984 93717 83131 94017 75306 137626 151141 149300

Change in %
26 13 12 25 45 9 1
over last yr

Mutual Fund AUM's Growth

160000

140000

120000

100000
MF AUM's

MF AUM's
80000
Change in % over last yr
60000

40000

20000

0
Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Sep-04 4-Dec
years
Some facts for the growth of mutual funds in India

100% growth in the last 6 years.

Number of foreign AMC's are in the que to enter the Indian markets like
Fidelity Investments, US based, with over US$1trillion assets under
management worldwide.

Our saving rate is over 23%, highest in the world. Only channelizing these
savings in mutual funds sector is required.

We have approximately 29 mutual funds which is much less than US

having more than 800. There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of the mutual funds
are concentrating on the 'A' class cities. Soon they will find scope in the
growing cities.

Mutual fund can penetrate rurals like the Indian insurance industry with
simple and limited products.

SEBI allowing the MF's to launch commodity mutual funds.

Emphasis on better corporate governance.

Trying to curb the late trading practices.

Introduction of Financial Planners who can provide need based advice.

 Scope of mutual fund Industry in India

Mutual fund assets have grown more than twelve-fold from 1980 to mid-1993
and by half in the last two years of that period. Most of this growth has come
from net purchases of fund shares by the public, rather than from price
appreciation, and it has lately reflected a choice by investors to move funds out
of depository institutions. In 1992, the public made net purchases of $206 billion
of mutual fund shares, while making net withdrawals from their deposits at banks
and thrift institutions. In turn, mutual funds supplied about one-fourth of funds
raised by the domestic nonfinancial sectors of the economy last year, while
depository institutions provided only about one-tenth. In short, mutual funds are
now a significant competitor of depository institutions for household savings
and, with more than $1.8 trillion in assets, they are a major source of funds in the
capital markets.

Several factors underlie the recent surge in mutual funds. One is the drop in rates
on deposits--especially short-term deposits--to relatively low levels at a time
when rising stock and bond prices have been generating higher returns. As a
result, households seeking to maintain satisfactory returns on their savings have
been drawn to capital market instruments, especially mutual funds, whose
diversification and liquidity offer advantages over direct investments in
securities. In addition, the benefits of economies of scale in the mutual fund
industry have been shared with investors through a widening array of services
provided by fund families. Finally, many funds have eliminated or substantially
reduced the sales commissions, or loads, they charge to investors.

Corporations with access to the capital markets, including firms with lower credit
ratings, have benefited from the expanded supply of investment dollars
represented by the surge in mutual funds. State and local governments also have
benefited, with inflows to tax-exempt mutual funds running at a record pace
since the end of 1992. Moreover, in recent years, smaller corporations raising
equity through initial public offerings, as well as established firms, have seen
mutual funds purchase a significant portion of the new equity they have sold.

In response to the growth of the funds industry, banks have increased their
participation in the provision of mutual fund services. For example, many banks
sell mutual fund shares to their retail customers and, in some cases, act as an
investment adviser to mutual funds and provide other related services. The
increased involvement of banks has brought attention to their role in the sale of
mutual fund shares, including their responsibility for ensuring that customers are
made aware of the differences between mutual fund shares and insured deposits.

The expanding role of mutual funds has had at least two important implications for
the performance and structure of the financial markets. By offering households
more diversified investment opportunities and corporations a greater market for
their financial instruments, mutual funds have improved the efficiency of financial
intermediation by reducing transaction costs. And as intermediaries competing
with banks and thrift institutions, mutual funds have contributed to the reduction
of the role of these depositories as providers of credit in the intermediation process
and consequently have affected the relationship between money and economic
activity.
 Reliance Mutual Fund

Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with
Assets Under Management (AUM) of Rs. 48,828 crore (AUM as on 30th Apr
2007) and an investor base of over 3.1 million.

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group,
is one of the fastest growing mutual funds in the country.
RMF offers investors a well-rounded portfolio of products to meet varying
investor requirements and has presence in 115 cities across the country.

Reliance Mutual Fund constantly endeavors to launch innovative products and

customer service initiatives to increase value to investors.

Reliance Mutual Fund schemes are managed by Reliance Capital Asset

Management Ltd., a wholly owned subsidiary of Reliance Capital Ltd.

Reliance Capital Ltd. is one of Indias leading and fastest growing private sector
financial services companies, and ranks among the top 3 private sector financial
services and banking companies, in terms of net worth.

Reliance Capital Ltd. has interests in asset management, life and general
insurance, private equity and proprietary investments, stock broking and other
financial services.
Reliance Mutual Fund (RMF) has been established as a trust under the Indian
Trusts Act, 1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor
and Reliance Capital Trustee Co. Limited (RCTCL), as the Trustee.
 RMF has been registered with the Securities & Exchange Board of India (SEBI)
vide registration number MF/022/95/1 dated June 30, 1995. The name of
Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund
effective 11th. March 2004 vide SEBI's letter no. IMD/PSP/4958/2004 date
11th. March 2004. Reliance Mutual Fund was formed to launch various
schemes under which units are issued to the Public with a view to contribute to
the capital market and to provide investors the opportunities to make
investments in diversified securities.

The main objectives of theTrust are:

To carry on the activity of a Mutual Fund as may be permitted at law and

formulate and devise various collective Schemes of savings and
investments for people in India and abroad and also ensure liquidity of
investments for the Unit holders;
To deploy Funds thus raised so as to help the Unit holders earn
reasonable returns on their savings and
To take such steps as may be necessary from time to time to realise the
effects without any limitation.

The Custodian

Deutsche Bank, AG
The Trustee has appointed Deutsche Bank, AG located at Kodak House, Ground
Floor, 222 Dr. D.N.Road, Mumbai-400 001, as the Custodian of the securities
that are bought and sold under the Scheme. A Custody Agreement has been
entered with Deutsche Bank in accordance with SEBI Regulations. The
Custodian is approved by SEBI under registration no. IN/CUS/003 to act as
Custodian for the Fund. Deutsche Bank AG, the Custodian shall, inter alia:
 Provide post-trading and custodial services to the Mutual Fund.

Keep Securities and other instruments belonging to the Scheme in safe

custody.

Ensure smooth inflow/outflow of securities and such other instruments as

and when necessary, in the best interests of the unitholders.

Ensure that the benefits due to the holdings of the Mutual Fund are
recovered and

Be responsible for loss of or damage to the securities due to negligence

on its part on the part of its approved agents.

The Registrar

Reliance Capital Asset Management Limited has appointed M/s. Karvy

Computershare Pvt. Limited to act as the Registrar and Transfer Agent to
the Schemes of Reliance Mutual Fund. M/s. Karvy Computershare Pvt.
Limited (KCL) having their office at No.21, Avenue 4, Street No.1, Adjacent
to Rainbow Hospital, Banjara Hills, Hyderabad - 500 034, is a Registrar and
Transfer Agent registered with SEBI under registration no. INR000000221.
Reliance Capital Asset Management Ltd. and the Trustee have satisfied
themselves, after undertaking appropriate due diligence measures, that they
can provide the services required and have adequate facilities, including
systems facilities and back up, to do so. The Trustee has also laid down broad
parameters for supervision of the Registrar. As Registrar to the Schemes,
KCL will accept and process investor's applications, handle communications
with investors, perform data entry services, despatch Account Statements and
also perform such other functions as agreed, on an ongoing basis.
 The Registrar is responsible for carrying out diligently the functions of a
Registrar and Transfer Agent and will be paid fees as set out in the agreement
entered into with it and as per any modification made thereof from time to
time.

Trustees

Reliance Capital Trustee Co. Limited

Regd. Office : EO1, Reliance Greens, Village Motikhavdi, P.O. Digvijaygram,

District Jamnagar - 361 140,
Gujarat. Tel: 0288 3011556, Fax: 02880 3011598.

Corporate Office : Express Building, 4th & 6th Floor, 14-'E' - Road, Above
Satkar Hotel, Opp. Churchgate Station, Churchgate, Mumbai 400 020.

Reliance Capital Trustee Co. Limited (RCTC), a company incorporated under

the Companies
Act, 1956, has been appointed as the Trustee to the Fund vide the Trust Deed
dated April 25, 1995
executed between the Sponsor and the Trustee.

The Directors
The Directors of RCTC
 Management Team

Board of Directors

Amitabh Chaturvedi

Kanu Doshi

Manu Chadha

Sushil Tripathi

Management Team

President
Vikrant Gugnani

Chief Investment Officer

K.Rajagopal

Head Equity Investments

Madhusudan Kela

Equity Fund Managers

Equity Fund Manager Sunil B. Singhania

Equity Fund Manager Ashwani Kumar

Equity Fund Manager Shailesh Raj Bhan

Debt Fund Managers

Head Fixed Income Amitabh Mohanty

Debt Fund Manager Amit Tripathi

Debt Fund Manager Prashant Pimple

 Head Of Departments

Brand and Communication Abraham Alapatt

Finance and Accounts Amit Bapna

Human Resource Development Rajesh Derhgawen

Information Technology Vinay Nigudkar

Legal & Compliance Balkrishna Kini

Risk Management Lav Chaturvedi

Operations & Settlement Geeta Chandran

Infrastructure & Administration Pradeep Andrade

R&T operations Prashanth D Pereira

Sales and Distribution Sundeep Sikka

Zonal Heads

Northern Zone Head Aashwin Dugal

Western Zone Head Devendra Daga

Southern Zone Head Gurbir Chopra

Here is a list of mutual funds of Reliance:

Debt/Income Funds
Reliance Income Fund
Reliance Monthly Income Plan
Reliance Fixed Term Scheme
Reliance Gilt Securities Fund
Reliance Liquid Fund
Reliance Medium Term Fund
Reliance Short Term Fund
Reliance Floating Rate Fund
Reliance NRI Income Fund
Reliance Fixed Maturity Fund Series - I
Reliance Fixed Maturity Fund Series - II
Reliance Liquidity Fund
Reliance Regular Savings Fund
Reliance Fixed Tenor Fund
Reliance Fixed Tenor Fund Plan B
Reliance Fixed Horizon Fund Plan A & B

Equity Funds
Reliance Growth Fund
Reliance Vision Fund
NRI Equity Fund
Reliance Index Fund
Reliance Equity Opportunities Fund
Reliance Tax Saver (ELSS) Fund
Reliance Equity Fund
Sector Specific Funds
Reliance Banking Fund
Reliance Diversified Power Sector Fund
Reliance Pharma Fund
Reliance Media & Entertainment Fund
 Schemes

Equity/Growth Schemes

The aim of growth funds is to provide capital appreciation over the medium
to long- term. Such schemes normally invest a major part of their corpus in
equities. Such funds have comparatively high risks. These schemes provide
different options to the investors like dividend option, capital appreciation,
etc. and the investors may choose an option depending on their preferences.
The investors must indicate the option in the application form. The mutual
funds also allow the investors to change the options at a later date. Growth
schemes are good for investors having a long-term outlook seeking
appreciation over a period of time

Equity Schemes :

Reliance Equity Fund :

(An open-ended diversified Equity Scheme.) The primary investment objective of
the scheme is to seek to generate capital appreciation & provide long-term growth
opportunities by investing in a portfolio constituted of equity & equity related
securities of top 100 companies by market capitalization & of companies which
are available in the derivatives segment from time to time and the secondary
objective is to generate consistent returns by investing in debt and money market
securities.

Reliance Tax Saver (ELSS) Fund :

(An Open-ended Equity Linked Savings Scheme.) The primary objective of the
scheme is to generate long-term capital appreciation from a portfolio that is
invested predominantly in equity and equity related instruments.
Reliance Equity Opportunities Fund :
(An Open-Ended Diversified Equity Scheme.) The primary investment objective
of the scheme is to seek to generate capital appreciation & provide long-term
growth opportunities by investing in a portfolio constituted of equity securities &
equity related securities and the secondary objective is to generate consistent
returns by investing in debt and money market securities.

Reliance Vision Fund :

(An Open-ended Equity Growth Scheme.) The primary investment objective of
the Scheme is to achieve long term growth of capital by investment in equity and
equity related securities through a research based investment approach.

Reliance Growth Fund :

(An Open-ended Equity Growth Scheme.) The primary investment objective of
the Scheme is to achieve long term growth of capital by investment in equity and
equity related securities through a research based investment approach.

Reliance Index Fund :

(An Open Ended Index Linked Scheme.) The Investment Objective under the
Nifty Plan is to replicate the composition of the Nifty, with a view to endeavor to
generate returns, which could approximately be the same as that of Nifty. The
Investment Objective under the Sensex plan is to replicate the composition of the
Sensex, with a view to endeavor to generate returns, which could approximately
be the same as that of Sensex.

Reliance NRI Equity Fund :

(An open-ended Diversified Equity Scheme.) The Primary investment objective of
the scheme is to generate optimal returns by investing in equity or equity related
instruments primarily drawn from the Companies in the BSE 200 Index.
 RELIANCE EQUITY ADVANTAGE FUND

(An open-ended Diversified Equity Scheme.) The primary investment objective of

the scheme is to seek to generate capital appreciation & provide long-term growth
opportunities by investing in a portfolio predominantly of equity & equity related
instruments with investments generally in S & P CNX Nifty stocks and the
secondary objective is to generate consistent returns by investing in debt and
money market securities

Reliance Equity Advantage Fund is an open-ended diversified equity scheme,

which proposes to invest in line with the sector ratio of S&P CNX Nifty. At least,
70-100% of corpus will be invested in equity & equity related instruments and the
balance 0-30% in Debt & Money market instruments.

Strategy to be followed

The broad investment strategy of the scheme will be to invest in a portfolio

predominantly of equity & equity related instruments with investments
predominantly in S&P CNX Nifty stocks.

The fund proposes to invest 100% of the net equity investments in line with
the sector ratio of S&P CNX Nifty. The fund will endeavor to replicate the
sector allocation of the S&P CNX Nifty on a monthly basis.

At least 80% of the equity investments will be in S&P CNX Nifty stocks
and the balance exposure in other stocks. This means that investment gamut
will mainly be stocks in S&P CNX Nifty index and to a small extent in
other stocks of belonging to any/all sectors. The fund will also use various
hedging techniques whenever the fund manager considers that there exist
any opportunity to generate additional returns in accordance with SEBI
guidelines.
In a Nutshell Reliance Equity Advantage Fund will be

A Diversified Equity Fund with 70-100% of corpus in equities.

100% of the net equity investments will be in line with the sector ratio of
S&P CNX Nifty on a monthly basis.

A maximum of 20% of the equity investment will be invested in

stocks other than S&P CNX Nifty.

Endeavor to provide index plus returns.

Investment Objective of Reliance Equity Advantage Fund

The primary investment objective of the scheme is to seek to generate capital

appreciation & provide long-term growth opportunities by investing in a portfolio
predominantly of equity & equity related instruments with investments generally
in S&P CNX Nifty stocks and the secondary objective is to generate consistent
returns by investing in debt and money market securities.

Asset Allocation/Investment pattern

Under normal circumstances, the anticipated asset allocation would be

Instrument Indicative asset allocation Risk Profile

Medium to
Equity and Equity related Securities 70% to 100%
High

Debt and Money market securities Low to

0% to 30%
(including investments in securitised Medium
*Including up to 25% of the corpus in Securitised Debt. An overall limit of 100%
of the portfolio value (i.e. net assets including cash) has been introduced for the
purpose of equity derivatives in the scheme, however the same is the notional
value and it will be seen that, the notional value of the net exposure to derivatives
will not exceed the fund corpus at any point of time. Notional value shall mean
value of Futures or notional value of the Options.

Options Available :

Retail Plan

Institutional Plan

Each of the above Plans will have Growth & Dividend Plans respectively as
specified below

Growth Plan : Growth Option & Bonus Option

Dividend Plan : Dividend Payout Option & Dividend Reinvestment

Option

Benchmark Index : S&P CNX Nifty

Application Amount :

Retail Plan - Rs. 5000 per plan per option and in multiples of Re. 1
thereafter

Institutional Plan - Rs. 5 crore per plan per option and in multiples of Re.
1 thereafter

Additional Purchase Amount

Retail Plan - Rs. 1000 per plan per option and in the multiples of Re.
1thereafter
 Institutional Plan - Rs. 100,000 per plan per option and in the multiples of
Re. 1 thereafter

Load Structure (During the New Fund Offer and continuous offer including SIP)

Entry Load

Plans Entry Load

Retail Plan 2.25%

Institutional Plan Nil

Exit Load

Retail Plan

1% if redeemed/switched on or before completion of 6 months from the

date of allotment

0.5% if redeemed/switched between 6 months & before completion of 1

year from the date of allotment

Nil if redeemed/switched after completion of 1 year from the date of

allotment.

Institutional Plan : Nil

SIP/Trigger/ STP/ SWP/ DTP/Switch/ Nomination : Available

Reliance Any Time Money Card : It shall be issued only to investors

subscribing in this fund through Self Cheque
 Debt/Income Schemes

The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate
debentures, Government securities and money market instruments. Such funds are
less risky compared to equity schemes. These funds are not affected because of
fluctuations in equity markets. However, opportunities of capital appreciation are
also limited in such funds. The NAVs of such funds are affected because of change
in interest rates in the country. If the interest rates fall, NAVs of such funds are
likely to increase in the short run and vice versa. However, long term investors may
not bother about these fluctuations.

Reliance Interval Fund

(A Debt Oriented Interval Scheme) The primary investment objective of the

scheme is to seek to generate regular returns and growth of capital by investing
in a diversified portfolio

Reliance Floating Rate Fund

(An Open-ended Liquid Scheme.) Investment Objective: The primary objective

of the scheme is to generate regular income through investment in a portfolio
comprising substantially of Floating Rate Debt Securities (including floating
rate securitised debt and Money Market Instruments and Fixed Rate Debt
Instruments swapped for floating rate returns). The scheme shall also invest in
fixed rate debt Securities (including fixed rate securitised debt, Money Market
Instruments and Floating Rate Debt Instruments swapped for fixed returns).
Reliance Gilt Securities Fund - Short Term & Long Term Gilt Plans
An Open-ended Government Securities Scheme.) The primary objective of the
Scheme is to generate Optimal credit risk-free returns by investing in a portfolio of
securities issued and guaranteed by the Central Government and State
Government.

Reliance Liquid Plus Fund

(An Open-ended Income Scheme.) The investment objective of the Scheme

is to generate optimal returns consistent with moderate levels of risk and liquidity
by investing in debt securities and money market securities

Reliance Income Fund

(An Open-ended Income Scheme.) The primary objective of the Scheme is to

generate optimal returns consistent with moderate levels of risk. This income may
be complemented by capital appreciation of the portfolio. Accordingly,
investments shall predominantly be made in Debt & Money Market Instruments

Reliance Liquid Fund - Treasury Plan & Cash Plan

An Open-ended Liquid Scheme.) The primary investment objective of the
Scheme is to generate optimal returns consistent with moderate levels of risk and
high liquidity. Accordingly, investments shall predominantly be made in Debt and
Money Market Instruments
Sector Specific Schemes

These are the funds/schemes which invest in the securities of only those
sectors or industries as specified in the offer documents. e.g.
Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG),
Petroleum stocks, etc. The returns in these funds are dependent on the
performance of the respective sectors/industries. While these funds may give
higher returns, they are more risky compared to diversified funds. Investors
need to keep a watch on the performance of those sectors/industries and must
exit at an appropriate time. They may also seek advice of an expert.
 Innovations at reliance mutual fund

Dynamic asset allocation sector funds

o First fund house to launch sector funds-with dynamic asset allocation
having flexibility to invest 0-100% in debt instruments
o Reliance diversified power sector fund
o Reliance media & entertainment fund
o Reliance banking fund
o Reliance pharma fund
o Indias first ATM cum Debit Card linked to mutual fund investments
o An ATM cum debit card that provides MF investors instant access
to their investments anytime any where
o Instant Liquidity 24*7 access to your investments(within the
permissible withdrawal limit) at over a million VISA ENABLED
ATMs across the world
o Avail of cash less transactions at 24* million point of sale terminals
at merchant establishments accepting visa cards across the world
o Indias first long short fund
o Reliance equity fund is the first Diversified Equity Fund in India
which looks to captalise on both Long as well as Short
Opportunities.
o A useful product in every investors portfolio as it intends to reduce
voltality and reduce downside risks by using innovative P/E based
hedging/shorting strategies.
o Reliance equity fund has created history with the highest collection
ever among domestic mutual funds, by raising a record ruppes 5723
cr. And over 9 lakh applications during the NFO.
 o The fund has aimed to perform exceedingly well since launch when
volatility at the highest level in Indian equity market.
o Despite hedging/shorting over 30% of its portfolio, REF has
managed to generate near Nifty returns since inception .

o A continuous process
o Investors in developed countries have more wider choices
 Hedge funds
 Market neutral funds
 International/emerging market funds
 Arbitrage funds convertibles arbitrage, merger arbitrage
 Commodity funds
 Real estate funds
 Ethical funds, green funds, shariah compliant funds.etc
o Indian investors deserve more choices too
o Reliance mutual fund would aim to be at the forefront to lead innovation as
it has tried to achieve in the past
 Various channels of distribution
Most commonly used channels of distribution in Reliance Mutual Fund are as
follow:-
1. Banks
a. Public Sector Banks
i. Bank of Baroda
ii. UCO Bank
iii. J&K Bank
iv. Corporation Bank
v. Federal bank
vi. Saraswat Co-operative Bank
vii. PNB principal financial planners
viii. Dena Bank
ix. Allahabad bank
x. South Indian Bank
xi. Lakshmi Vilas Bank
xii. The Tamilnadu Mercantile Bank ltd
xiii. Union bank of India
b. Private Sector Banks
i. HDFC Bank ltd.
ii. ICICI Bank
iii. Kotak Mohindra bank
iv. UTI Bank
v. Centurion Bank of Punjab
2. R Money
3. Post Office
4. Karvy
5. India Bulls
 Objectives of the study

Keeping in mind the importance of mutual fund industry in economy, the

objectives of study are to know:-
1. Investment trend of savings
2. Scope of MF industry in India
3. Various channel of distribution in mutual fund industry
4. Investors awareness about RELIANCE AMC
5. Investors satisfaction
6. Study about the NFO (Reliance Equity advantage fund)
7. Activation of banking channels and relationship building
 RESEARCH METHODOLOGY

Research Methodology describes the research procedure. This includes the overall

research design, the sampling procedure, the data-collection methods.

1. Research Design

A research using survey method with the help of structure, questionnaire

was used as it best conforms to the objectives of the study.

2. Data Collection Method

In data collection method the primary and secondary data is collected.

a) Primary Data

Structured, questionnaires were administered personally to the sample

respondents, keeping in mind the various aspects intended to achieve objectives of

the project.

A questionnaire method is best method to solve all marketing problems.

Purchase of specific product and customer. Awareness can be studied only through

the questionnaire method. Questioning is usually faster and cheaper than

observing.

b) Secondary data

Method the data is also collected through secondary sources such as

journals, magazines and books.

3. Sampling

In sampling, due to lack of time the area of survey is restricted.

a) Universe

The universe area of survey is Amritsar

b) Sample size

The sample size is 100, respondents. Its a large sample size.

c) Sample unit

The simple random sample method is used.

 Data Analysis

1. Do you invest your savings?

Obj:- To know about the invest of people to invest their savings.

Response %age of respondents

Yes 68%
No 32%

32%

68%

Yes No

Interpretation: The evident from above finding showed that out of 100
respondents, 65 % respondent are invest their savings and rest of the
respondent are not invest their saving.
2. Where all do you invest you savings?
Obj:- To know about the awareness of mutual fund industry.

Response %age of respondents

Shares 8%
Insurance 40%
Govt. Securities 40%
Mutual Funds 12%

12% 8%

40%
40%

Shares Insurance Govt. Securities Mutual Funds

Interpretation: The above figure depict that mostly respondent invest our
saving in Insurance & Govt. Securities i.e. 40%, 12% respondent are invest
in Mutual funds and rest of invest in Shares.
3. Why do you invest in Mutual Fund?
Obj:- To know about the growth rate of Mutual Fund Industry.

Response %age of respondents

Diversification 10%
Return Potential 60%
Flexibility 20%
Well regulated 10%

10% 10%

20%

60%

Diversification Return Potential Flexibility Well regulated

Interpretation: The above figure depict that mostly respondent invest

Mutual Fund 60% return potential, 20% Flexibility and 10% Diversification
& well regulated.
4. How do you evaluate schemes of Mutual Fund?
Obj:- To know about the perception of people at time of evaluation of
Mutual Funds Schemes.

Response %age of respondents

On the basis of NAV 20%
Advertisement 16%
Past Performance 44%
Any other 20%

20% 20%

16%

44%

On the basis of NAV Advertisement Past Performance Any other

Interpretation: The above figure depict that mostly respondent evaluate the
mutual funds schemes for past performance i.e. 44%, 20% respondent in the
basis of NAV and 16% advertisement.
5. In which scheme do you pike to invest?
Obj:- To know about the trend of popular schemes in Mutual Funds.

Response %age of respondents

Growth 60%
Balanced 10%
Specific 30%

30%

60%
10%

Growth Balanced Specific

Interpretation: The above figure depict that 60% respondent growth, 30%
specific, 10% in Balanced.
6. What factors do you consider while investing in any scheme?
Obj:- To know about the factor which are commonly consider at the tie of
investment.
Response %age of respondents
Return 36%
Risk 30%
Tax benefit 30%
Any other 4%

4%

30% 36%

30%

Return Risk Tax benefit Any other

Interpretation: The above figure depict that mostly respondent Investing in

Mutual Fund for better return, and rest of Tax benefits.
7. Have you ever faced problem while investing money in Mutual Fund ?
Obj:- To know about the general problems at time of investment.

Response %age of respondents

Yes 10%
No 90%

10%

90%

Yes No

Interpretation: The evident from above finding showed that out of 100
respondents, 90% respondent are invest their money in Mutual Fund without
faced any problem
8. Are you aware of SIP?
Obj:- To know about the awareness of SIP Plan.

Response %age of respondents

Yes 50%
No 50%

50% 50%

Yes No

Interpretation: The evident from above finding showed that out of 100
respondents, 50% respondent are awareness of SIP Plan and 50% are not
aware.
9. Tick the most professional Mutual Fund companies according to
you?
Obj:- To know about the awareness of Reliance.

Response %age of respondents

UTI 60%
HDFC 5%
TATA 5%
Reliance 10%
Franklin 20%

20%

10%
60%
5%
5%

UTI HDFC TATA Reliance Franklin

Interpretation: The evident from above finding showed that out of 100
respondents, 60% respondent are awareness UTI Mutual Fund Companies,
20% respondent are aware Franklin, 10% reliance, 5% HDFC & TATA
both.
 FINDINGS

Findings

 Most of the people like to invest their savings.

 UTI has captured the major market share in mutual funds.

 People are not very much aware about the Reliance Mutual Fund.

 Private banks such as ICICI, HDFC, CBOP, KOTAK MOHINDRA,

are very much aware about RELIANCE MUTUAL FUND.

 Return potential and previous performance is the strength of RMF.

 Mutual fund Industry gives the equal competition to the insurance

sector.
 Suggestions

 For the awareness in people seminars should be conduct by the Reliance

Mutual Fund.
 There should be regular visit by the executive.
 Promotional offers should be introduced.
 Brokerage also must be increased.
 Periodic meetings must be held.
 Proper communication channel must be ensure.
 More emphasis should be given to advertisement.
 CONCLUSION
As per the surveys conducted by me during my training period, in the areas
of Sunam, Dhuri and Sangrur, following is all what can be concluded

Basically in these areas market was captured by UTI but for creating
awareness for Reliance Mutual Fund a drive was undertaken for making its
place in the market and this all was done by meeting officials of various
banks
(viz- ICICI, CBOP, HDFC, UTI and Kotak Mahindra) and agents of these
areas who were dealing in investments.

By the end, this drive was really fruitful as during the NFO period
(Reliance Equity Advantage Fund) the business for Reliance Mutual Fund
in the above mentioned areas rose to 20 lacs. Along with this for the
existing schemes Reliance showed a great response.

Moreover from these areas agents were empanelled for selling of Reliance
Mutual Funds and hence showed good results. Thus the channel grew
stronger with time.

Customer satisfaction and awareness was done by taking the queries. A

questionnaire was also filled from the customers so as to know about there
perception and attitude about reliance mutual funds

According to the survey more than 60% people invest their savings. People
prefer to invest in insurance sector and govt. securities as compare to the
mutual fund. Only 12% people like to invest in mutual fund. People was
not very much aware about reliance mutual fund. Return potent ional is the
positive point of RMF and people like to invest in RMF.
 APPENDIX
Dear Sir/Madam

I am the student of MBA, Lovely Institute of Management, Phagwara,

conducting a project Activation & Relationship building of banking

channels, please co-operate to fill this questionnaire.

1. Do you invest your savings

Yes No
If yes please proceed

2. Where all do you invest

Share Insurance
Govt. Securities Mutual Fund
If Mutual Fund please proceed

3. Why do you invest in Mutual Fund

Diversification Flexibility
Return Potential Well regulated
All of above
4. How do you evaluate schemes of Mutual Fund?
On the basis of NAV Advertisement
Past performance Any other

5. In which scheme do you pike to invest

Growth Balanced Sector Specific

6. What factors do you consider while investing in any scheme?

Return Risk
Tax benefit Any other

7. Have you ever faced problem while investing money in Mutual Fund?
Yes No
If yes what problem have you faced payment problem
No Control over cast
Procedure Problem
Any other

8. How do you think these problems can be overcome ?

.

9. How much return do you except while investing in Mutual Fund ?

..

10. Are you aware of SIP?

Yes No
 If yes what according to you are its benefits
Low risk No need to work
No Load at market
Monthly investment Easy entry

11. What according to you soul be lock in period?

1 Yr 1-2 Yr
2-3 Yr No Locking period

12. Tick the most professional Mutual Fund companies according to you
UTI TATA
HDFC Reliance
Franklin
 BACKGROUND DATA

1. Name ____________________________________________________

2. Sex a) Yes
b) No

3. Age a) Below 18
b) 18-35

c) 35-50
d) Above 50

4. Education a) Under Graduate
b) Graduate

c) Post Graduate

5. Occupation a) Service
b) Profession

c) Business
d) Others

6. Income a) Less than Rs. 50,000

b) Rs. 50,000 to 1,50.000

c) Rs. 1,50,000 to 3,00,000

d) Rs. 3,00,000 & above

7. Address _________________________________________________

_________________________________________________

_________________________________________________

8. Phone No. ________________________________________________

* Thanks for your valuable time and co-operation*

 BIBLIOGRAPHY

BOOKS

Kothari, C.R., Research Mythology: Methods & Techniques,

(Wishwa Publications, Delhi, 1990).

Harper W. Boyd, Jr.; Ralph Westfall; Stanley F. Stasch,

Marketing Research (A.I.T.B.S. Publisher, Delhi, 2003).

Latest fact sheet of Reliance Mutual Funds.

Reliance Equity Advantage (Nfo) handout

WEB SITES

www.reliancemutual.com

www.amfiindia.com

www.sherkhan.com

www.moneycontrol.com