(ANALYSIS OF INVESTMENT OPPORTUNITIES IN RELIANCE

MUTUAL FUNDS)
Project Report submitted in Partial fulfillment of the requirement for the

Award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Of

BANGALORE UNIVERSITY

By

Ajit Raj Panta

Register No: 172FCMD034

Under the guidance of

Ms. S. Nagalakshmi

Assistant Professor

IFIM COLLEGE

Electronic city, Bengaluru

2018
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Content
Sl. No Report particulars Page No.
1. Introduction 3
2. Background and Objectives 16
3. Training Methods and Activities 19
4. Learning Outcomes 23
5. Data Analysis using analytical tools 25
6. Key findings and conclusions 41
7. Recommendations 46
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CHAPTER-1

INTRODUCTION
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1.1 COMPANY INTRODUCTION

RELIANCE Nippon LIFE quality MANAGEMENT LTD.

Reliance mutual fund (RMF) is India‟s one among the leading mutual funds, having
Average Assets below Management (AAUM) of Rs a pair of,40,445.37 Crores (April
2018 - June 2018 Quarter Q1) and eighty three.99 lakhs folios (as on June thirty, 2018).

Reliance mutual fund is an element of the Reliance Anil Dhirubhai Ambani (ADA)
cluster. it's one among the quickest growing mutual funds in Asian country|Bharat|Asian
country|Asian nation} that provides capitalists a comprehensive portfolio of product to
fulfill variable investor necessities and has presence in a hundred and sixty cities in India.
RMF perpetually endeavors to launch innovative product, schemes and client service
initiatives to extend worth for the investors.

Reliance Nippon Life quality Management restricted (formerly Reliance Capital quality
Management limited) (RNLAM) is that the quality manager of Reliance mutual fund
(RMF). RNLAM could be a subsidiary of Reliance capital restricted (RCL). Presently,
RCL holds 61%Rof its total issued and paid up equity share capital of RNLAM.

RNLAM has been appointed because the quality Management Company (AMC) of
Reliance mutual fund (RMF) by the trustees of RMF wide investment Management
Agreement (IMA) dated could twelve, 1995 amended on August twelve,1997, January
20,2004 and Feb seventeen,2011 in line with SEBI (Mutual Funds) rules,1996.

SUBSIDIARIES OF RNLAM

From time to time, RNLAM has started subsidiary firms when seeking the required
approvals and registrations, as applicable, as well as that from SEBI. Presently, RNLAM
has the subsequent subsidiaries:

INDIA

• Reliance Capital Pension Fund restricted, for the management of funds below the
new pension system.

• Reliance AIF Management Company restricted for acting as Investment

Manager/Advisor of different investment.

Overseas
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• Reliance quality management (Singapore) restricted, in Singapore.

• Reliance quality Management (Mauritius) restricted, in Mauritius.

Objectives:

1. To hold out the activities of a mutual fund as allowable by law, and formulate and
implement numerous collective and innovative schemes of savings and investments
for individuals in Republic of India and abroad, and conjointly guarantee liquidity of
investments for the investors.

2. To deploy funds so raised thus on facilitate the unit holders earn cheap returns on
their savings; and

3. To require such steps as could also be necessary from time to time to appreciate the
results with none limitation.

Reliance mutual fund has been established as a trust below the ITA (Indian Trusts Act),
1882 with Reliance Capital Trustee Co. restricted (RCTC), because the Trustee and
Reliance Capital restricted (RCL), because the Settler/Sponsor.

Reliance mutual fund is registered with the Securities & Exchange Board of Republic of
India (SEBI) vide identification number MF/022/95/1 dated June thirty, 1995. Vide
SEBI's letter no. IMD/PSP/4958/2004 dated March eleven,2004 the name Reliance
Capital mutual fund (RCMF) was modified to Reliance mutual fund (RMF) effective
from March eleven,2004. Reliance mutual fund (RMF) was fashioned to launch
numerous innovative schemes below that units are issued to the final public with a read to
contribute to the capital market investments and to produce investors the opportunities to
form investments in heterogeneous segments of securities,

Key Information:
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Mutual Fund Reliance Mutual Fund

Setup Date Jun-30-1995

Incorporation Date Feb-24-1995

Sponsor Nippon Life Insurance Company / Reliance Capital

Limited

Trustee Reliance Capital Trustee Co. Ltd.

Chairman N.A

CEO / MD Mr. Sundeep Sikka

CIO Mr. Amit Tripathi (D) / Mr. Manish Gunwani (E)

Compliance Officer Mr. Muneesh Sud

Investor Service
Mr. Bhalchandra Joshi
Officer

Assets Managed Rs. 240445.37 crore (Jun-30-2018)

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Other Details:

Auditors Haribhakti & Co LLP, Chartered Accountants

Custodians Deutsche Bank AG & CITIBANK NA

Registrars Karvy Computershare Pvt. Ltd.

Address Reliance Centre, 7th Floor South Wing, Off Western Express
Highway, Santacruz (E), Mumbai-400055

Telephone Nos. 022-33031000 / Touch base 30301111

Fax Nos. 022-33037662

E-mail customer_care@reliancemutual.com

SCHEMES IN RNLAM

Reliance mutual fund offered many schemes such as equity with growth schemes, debt
with income schemes and sector focused schemes.

Schemes under Reliance mutual fund (RMF) by formation:

• Open ended scheme

• Close ended scheme

• Interval scheme
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1.2 PROJECT INTRODUCTION

Through this chapter i would like to introduce my report. This chapter has been divided
into: two parts. The first part talked about various investment opportunities available
among investors and their brief introduction. It also talked about awareness level of
various investment, why household invest and most preferred investment option. The
second part talks about mutual fund. It started with introduction and then history across
world and then came to India, types of mutual fund. This part also throws light on
different phases of mutual fund.

If after independence somebody wrote a future. Finance story of India, they may not have
predicted the market that faces a retail consumer today. Till 1990s, savings and investing
decisions were dependent on the government. No wonder India‟s household chose gold
and real estate as saving sumps. The financial sector was a reflection of the overall
direction of the nation economy. Costs were high, service poor in state-owned and run
finance. But post 1991, when India chose to open its economy for world change came
suddenly. Some seventy fifth of Indian saving is completed by households. Some sixty
six of that's into assets and gold.

The savings and investment patterns in Asian nation have seen some changes gap up our
economy has crystal rectifier to variations in our lifestyles and in our consumption habits.
This successively has influenced however folks save and invest their cash. All of this has
contributed to a series of continuous ups and downs within the economy.

In the last decade and a 0.5 ending March 2016, because the GDP grew from Bureau of
Intelligence and Research zero.23 hundred thousand large integer to Bureau of
Intelligence and Research one.36 hundred thousand large integer, social unit savings as a
quantitative relation of GDP had fallen from twenty two % to nineteen %. At constant
time, money savings as a share of social unit savings has fallen from forty five to forty %.
Thus, not solely had social unit savings been falling, the speed of economic savings as a
proportion of overall savings was additionally returning down. Looking at some of the
investment opportunities:-

1. Saving Account/Fixed Deposit/Recurring Deposit: Since 1990, Bank deposit

was the most popular form of savings. It‟s still one of the popular forms of
investment option. People living in rural or semi urban area still prefer to invest in
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fixed deposit or keep money in saving account as this would easily fetch them
return of 6% with risk is low. More than 95% Indian households prefer to park
their money in bank deposit.

2. REAL ESTATE: - This investment considered as low risk and being a

developing country, it is very lucrative and high return investment but it‟s out of
reach with almost majority of population.

3. GOLD IN ANY FORM: - There are various investment options in gold

including gold Exchange-Traded fund, gold bar, gold mutual fund, gold deposit
scheme etc. India affair with gold is century old. Majority of household prefer to
keep gold in home so that in their bad time they can exchange it with hard cash.

4. DEBT FUNDS, COMPANY FD & TAX SAVING FD:- Debt fund can provide
higher return than normal FDs. For short term liquid fund can help one earn up to
10% interest whereas for long term, smart investing can yield up to 15% interest.
Company FDs can also provide higher return than normal FDs can go as high as
12% per annum but one need to invest safely as withdrawal only possible once it
reach maturity. Considered as high risk investment as one need to see track record
of company tax saving FDs can yield anything between 7-9% and it serve dual
purpose of safe investment while also saving on tax.

5. MUTUAL FUND & SYSTEMATIC INVESTMENT PLAN: - Mutual fund

investment option with a long-time systematic investment plan can be a good
balance of risk and return for investor who can invest from 5 to 10 years. Mid-cap
& small -cap have great potential of growth in short to medium term.

6. INVESTMENT IN STOCK: - It can also yield high return based on the

company one chooses in.

7. PUBLIC PROVIDENT FUND (PPF) & EQUITY LINKED SAVING

SCHEME (ELSS):- PPF & ELSS are both low risk high return investment
option. PPF can fetch 7.9% returns whereas ELSS can fetch as high as 12%
returns. Both are tax saving option.
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8. INITIAL PUBLIC OFFERING: - If proper research is conducted before

investing IPOs could be a very good deal. When company gets listed, stock value
guaranteed to rise. One can earn decent return in short term and good in long term.

9. POST OFFICE MONTHLY INCOME SCHEME: - For fixed return in the

form of monthly income, one can invest in this scheme. Currently provide 7.6%
interest per annum. This currently provides 7.6% interest per annum. This is zero
risk form of investment.

FACTS & FIGURES: -

➢
Total Estimated Households investor is 3.37 cr. in India.

➢
Out of this 2.37 cr. inhabit in Urban part of the country while other 1 cr. in
rural part.

Awareness Levels of financial & Investment Instruments: -

Source: SEBI report 2015

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Most Preferred Investment option among Households

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1.2.1 MUTUAL FUND

A mutual fund is a professionally-managed style of collective investments that pools cash
from several investors and invests it in stocks, bonds, short market instruments, and/or
different securities. Here, the fund manager is additionally referred to as the portfolio
manager, trades the fund's underlying securities, realizing capital gains or losses, and collects
the dividend or interest financial gain. The investment yield square measure then passed on to
the individual investors. the worth of a share of the mutual investment company, referred to
as Infobahn quality price per share (NAV) is calculated daily supported the entire price of the
fund divided by the amount of shares presently issued and outstanding. Mutual investment
company may be a trust that pools the savings of variety of investors United Nations agency
share a typical monetary goal. This pool of cash is endowed in accordance with a declared
objective. The joint possession of the fund is so “Mutual”, i.e. the fund belongs to any or all
investors. The money so collected is then endowed in capital market instruments like shares,
debentures and different securities. The financial gain earned through these investments and
also the capital appreciations accomplished square measure shared by its unit holders in
proportion the amount of units owned by them. Thus, a mutual investment company is that
the best suited investment for the common person because it offers a chance to take a position
during a heterogeneous, professionally managed basket of securities at a comparatively low
price.

Source: Association of Mutual Funds in India (AMFI)

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1.2.2 HISTORY IN INDIA


Started in 1963 with the formation of Unit Trust of India.

Initiative of Govt. of India & Reserve Bank of India.

Much later, in 1987, SBI Mutual fund became the first non – UTI mutual fund in India.

Phases of Mutual fund:-

First Phase. 1964-1987

 Established UTI by Act of Parliament in 1963.

 Set up by RBI and functioned under regulatory and administrative control of RBI.
 De-linked UTI from RBI and IDBI took over the regulatory and administrative
control.
 Launched first scheme by UTI “Unit Scheme 1964”
 AUM of 6700 crores under UTI at the end of 1988.

Second Phase. 1987-1993 (Entry of Public Sector funds)

 Entry of non-UTI, public sector mutual fund in 1987 set up by public sector banks
and LIC and GIC.
 First non-UTI Mutual Fund was SBI Mutual Fund established in june 1987.
 Followed by Canara Bank mutual fund in December 1987, Punjab national bank
mutual fund in august 1989, Indian bank mutual fund in November 1989, Bank of
India in june 1990, Bank of baroda in October 1992.
 LIC mutual fund established in 1989 and GIC mutual fund in 1990.
 AUM of 47,004 crore at the end of 1993.

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

 Entry of private sector funds in 1993.

 Establishment of mutual fund regulations in 1993.
 Erstwhile Kothari Pioneer first private sector mutual fund established on july, 1993.
 SEBI (Mutual fund) regulations revised in 1996 functioning till date.
 Entry of foreign mutual funds in India with increasing merges and acquisitions.
 33 mutual funds at the end of January 2003 with AUM of 1,21,805 crores excluding
UTI with AUM of 44,541 crores.
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Fourth Phase. Feb 2003- 7th Nov 2016

 UTI divided into two separate entities in February 2003

 Undertaking of UTI with AUM of Rs. 29835 crores till January end, 2003
with assets if US 64 scheme.
 UTI mutual fund, sponsored by LIC, BOB, PNB and SBI.
 Registered and functions inside the rules and regulations of SEBI.
 Erstwhile UTI had AUM of more than Rs.76, 000 crores after bifurcation.
 Mergers contributing to consolidation and growth of mutual fund.

Fifth Phase. Since 8th Nov. 2016

 Announced the demonetization of 500 and 100 rupees notes by government on 8th
November 2016.
 Increased rush to deposit cash in the bank accounts with increasing flood of funds in
bank.
 Reduction on rate of fixed deposits by banks and decreasing returns from real state
and gold flooded funds in mutual fund.
 SIP came in picture and became buzz phrase increasing the collection by 60% from
3434 crore in October 2016 to Rs 5516 crore in September 2017
 Received inflow of 1.35 lakh crore in equity funds and 74000 crore in balanced funds.
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Source AMFI: Growth of mutual fund over the years

1.2.3 TYPES OF MUTUAL FUND SCHEMES IN INDIA

According to the category the investors have luxury to choose from different available mutual
fund schemes in accordance to return expectations, risk, and financial position etc. Over
hundreds of mutual funds schemes are available for the investors making it easy for them to
pick the desired one according to their objectives. The categories are mentioned below:-

Fig: Classification of Mutual Fund

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CHAPTER-2

BACKGROUND AND OBEJCTIVES

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Title: “Analysis of Investment Opportunities in Reliance Mutual Fund”.

2.1 STATEMENT OF PROBLEM:

Problem identified here are people or investor are well aware of reliance mutual fund but that
awareness couldn‟t convert into investment. This is mainly because of lack of knowledge or
having wrong perception of it. Talks like money will go in vein, which product to choose,
can‟t track of your invested money made investor to think twice before investing it.

2.2 OBJECTIVE

The objectives of the study are:-

 To identify the investors‟ purpose to invest in mutual fund and the performance of
current investment.

 To identify the awareness of Reliance mutual fund and its awareness among the
investors.

 To identify the purpose of investment in other financial instruments and their

performance.

 To compare the relationship between risk and return is accordance with reliance
mutual fund and other investment instruments available

2.3 METHODOLOGY

This report carries both primary and secondary data source. A set of questionnaires has been
prepared and then circulated among investors for their response to capture and later analyzed
for the primary source. Meanwhile for secondary source, it was collected from various
journals, research papers, website, and my own finding.

2.4 DURATION OF STUDY:

The study was conducted for 45 days.

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2.5 SAMPLING:

 Sampling procedure:

For Primary source the existing customers of Axis Bank, Bangalore Koramangala cluster‟s
branches as well as apart from the axis bank those whose are investors are taken.

 Sample Size

The sample size of 100 respondents is taken for the study which consists of investors only.

 Sample design:

Data collected has been depicted with the pie charts.

2.6 DATA ANALYSIS:

For primary source, Quantitative research has been done which turn raw number into
meaningful data through the application of rational and critical thinking.
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CHAPTER-3

TRAINING METHODS AND ACTIVITIES

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During the tenure of the IIP following operations were assigned to me:

1. Increase number of follow up in all the branches.

2. Identify few key branches where there were a lot of potential of sales and focused on
that.
3. Rectify past concerned of client which were became the reason of bad relations in few
branches.
4. Establish a proper channel of communication which ensured a better result in future.
5. Educate bank employee why this is good and where our products stand in market.
Benefit of investing in our products.
6. Engage in hurdle to create more awareness of our products and why it is better than
our competitors.
7. Direct conversation with client on few occasions to invest in our product.
Therefore, the operations assigned were to be done during the SIP, Lumpsum drive and NFO
drive. The drives are explained below:-
 A national level SIP and Lumpsum contest was launched from 6th August to 22nd
of August within Axis Bank- a registered distributor in which 6 registered
products were included out of which 4 were open ended schemes and 2 were close
ended schemes such as:
 Reliance Large Cap Fund
 Reliance Equity Hybrid Fund
 Reliance Equity Saving Fund
 Reliance Balance Advantage Fund
 Reliance Retirement Fund – Wealth Creation
 Reliance Retirement Fund- Income Generation
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Fig: SIP and Lumpsum Contest Poster

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 NFO drive was launched from 7th September 2018 to 21st September 2018 named
Reliance India Opportunity Fund within the Axis Bank. It was a close ended
equity-oriented scheme launched taking advantage of the market polarization.

Fig: NFO Drive ‘Reliance India Opportunity Fund’ Poster

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CHAPTER-4

LEARNING OUTCOMES
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Following are the learning outcomes from the study:-

 Ability to apply theoretical knowledge to real-world experiences.

 Ability to collect process and analyze investor data.
 Improved communication skills.
 Ability to sale the products.
 Ability to pitch for own products in tough competitions.
 Ability to manage time.
 Ability to negotiate.
 Increased my own knowledge of mutual fund.
 Acquired corporate culture
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CHAPTER-5

DATA ANALYSIS AND INTERPRETATION

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5.1 PRIMARY SOURCE:

Demographics factor of the respondents

Respondent are classified based on their age. The data are shown in pie chart. 81% of the
respondents belong to the categories of 20-30 years It shows a healthy trend for the market as
young generation started investing as soon as they started to earn rather than saving in as
liquid asset.

Age
8% 1%
10%
20-30
30-40

81% 40-50
50 & above

Occupations

Another factor on which respondent are classified is based on occupation. 64% of the
respondents belong to private employee. This shows that investment cultures are higher in
among private employee than any other. This also states that investment culture is low among
government employee which is a worry sign as vast population is in that occupation.

Occupation
10%

21% Private
Government
64%
Self Employed
5% Others
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Investment objective

This is the key question as this clarifies the investor thinking before making investment in
any of the available asset like liquid, physical or financial institutions. Majority of them
i.e.34% had objective of Tax saving as the prime fascia for investment followed by capital
gain i.e.31%.

What's your investment objective?

4%
7%
20% Divident Gain
28% Capital Gain
11% Tax Saving
Life Insurance
30% Fixed Deposit
Others

Investment made

On being asked what all investment you have made? Majority have them made in life
insurance i.e.31% followed by mutual fund 27% and fixed deposit 24%. This shows recent
trend change in investment pattern being observed all over the nation. There is shift from
physical asset to financial institutions.

What are the investment that you have made?

8%
27%
24% Mutual Fund
Real Estate
10% Life Insurance
Fixed Deposits
31% Others
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Inception of Investment

On being asked since when you are investing in financial instrument? Most of them are fall
into 0-3 month‟s category i.e. 27% followed by 9-12 months i.e. 24%. This shows that on
being asked on their age most of them are 20-30 group and in this age group they are termed
as new investor.

Since when you are investing in financial

instruments?

10%
27% 0-3 months
24%
3-6 months
6-9 months
19%
20% 9-12 months
12 months and above

Types of Investor

On being asked what best describes you? As this will clarify most probable where they will
invest? Preservers are investors who put a strong emphasis on financial security and
preserving their wealth. Their risk level is on lower side.

Accumulators are investors who are interesting in accumulating wealth. Their risk level is
high to very high. Independent are investors who are analytical and critical thinker. They will
understand investment and make proper plan even in doing so they miss one or two
opportunities. Their risk level is above average. Followers are investors who are more
passive. They follow the lead of their surrounding like friends, relatives & family. They also
follow current investing fad. Risk level is generally lower than average.

51% of our respondents are followers and this is bound to happen as most of them are already
in early age of their investment and just now started investing.
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What best describes you as and investor?

9% 20%
Preserver

20% Accumulator
51% Independent
Follower

Awareness of Mutual fund

On being asked have you heard of mutual fund? 90% respondents say yes. It shows they
heard about it but this doesn‟t imply into investment or having knowledge about it. This only
implies that awareness level is high of mutual fund.

Have you heard of mutual fund?

10%

Yes
No
90%

Opinion on Mutual fund

On being asked what do you think of mutual fund? Mostly 33% said lack of knowledge. This
implies investors are aware of mutual fund but lack proper knowledge. Thus this might
become the factor of not investing in it. 31% said “High on risk & return”. This might be the
other factor of not becoming hot spot for investment. Those who are follower & preserver
will avoid investing in it.
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What do you think of mutual fund?

33% 31%
High risk and return
High risk and low return
Low risk and return
10%
low risk and high return
16%
10%
lack of knowledge

Investment on Mutual fund

On being asked do you invest in mutual fund? only 41% respondent said yes. This figure is
just less than half when we asked about awareness of it. It can also see like this out of 90%
only 41% turned a mutual fund investor. This low conversion could be of many factors either
lack of knowledge or due to high risk associated with it as said by respondent in earlier
question.

Do you invest in mutual fund?

41%

Yes
59%
No

Other Preferable option to invest

On being asked if not, then what other option do you prefer to invest? The hot spot option for
investor is fixed deposit with approx. 30% & real estate with 19%. Both these investments
are under liquid asset which investor find safe place to invest. Liquid asset is an asset that can
be readily converted to cash.
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If not, then what other options do you prefer to

invest?

13% Fixed deposits

30%
12% Real estate
Gold
14%
Insurance
19%
12%
Post office
Government Bonds

Best Option

When asked best option according to one? This implies means given the chance to invest
where would they like to invest? Majority respondent i.e. 27% said Mutual fund followed by
real estate & bank deposit. This can be seen as huge change from the investment point of
view. It shows slowly & slowly investor is willing to invest in financial institutions which
will be increasing in coming years.

Which of the following investment option is

best according to you?

7%
11% 23% Bank Deposit
6% Real Estate
Mutual Fund

27% 26% Gold

Life Insurance
Government Bonds
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Consideration of factor

On being asked which factor you considered before investing in mutual fund or other
investment? Majority said i.e. 41% high return followed by safety of principal i.e. 31%. This
trend shows that investor slowly and slowly keeping behind traditional thinking and thinking
about high return which is purely market based. As the respondent major age group 20-30 , it
can also been seen as new investor looking toward high return rather than old conventional
thinking of safety of principal.

Which factor do you consider before investing

in mutual fund or other investment?

11%
31%
17% Safety of Principal
High Return
Low Risk
41%
Maturity

When being asked most important factor while choosing an investment option? Majority i.e
41% pointed the factor as „how quickly one is able to increase wealth‟ followed by amount of
monthly income the investment will generate i.e.25%

which factor do you consider most while

chosing and investment option?

15% How quickly will I be able to

increase wealth
43%
17% Amount of monthly income the
investment will generate
Safety of investment principal
25%
Opportunity for steady growth
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Awareness of Reliance mutual fund

Awareness of the product is high among the customers with 82% of the consumers agreeing
to it.

Are you aware of Reliance mutual fund?

18%

Yes
No
82%

Knowledge of Reliance mutual fund schemes

When it comes to knowledge about the reliance mutual fund products 34% responded as
neutral and 19% responded as having low on knowledge and 18% having no knowledge at
all. The facts denotes that the need of aware.

How knowledegable are you in terms of

reliance mutual fund schemes?

18% 11%
Highly knowledgeable
18%
Knowledgeable
19%
Neutral
Heard but low on knowledge
34%
Not knowledgeable

Investment in Reliance mutual fund

Out of 90% who have knowledge about the mutual fund only 36% are currently investing
while 64% of the respondents are currently not investing in Reliance mutual schemes.
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Do you invest in Reliance mutual fund?

36%

Yes
64%
No

Investment in Reliance mutual fund schemes

Among those who invest in Reliance mutual, they were further segmented depending upon
their awareness about different schemes. Large Cap fund, Reliance balanced advantage fund
and Reliance hybrid fund are best know to the investors.

If yes, what are the schemes of reliance mutual

fund that you aware of?

Reliance Hybrid Fund

Reliance balanced Advantage fund

Reliance retirement fund

Reliance ELSS fund

Reliance Large Cap fund

0 5 10 15 20 25 30 35

Satisfaction from the investment

About 22% of the customers were satisfied and above with the returns from the schemes of
Reliance mutual fund whereas 7% of the total respondents were not happy with the returns
they get from the schemes provided by the Reliance Mutual fund. There was a neutral
reaction by 7% of the customers.
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How satisfied are you with the returns from

schemes of reliance mutual fund?
6%
14%
Highly Dissatisfied
22%
Dissatisfied
19%
Neutral
39%
Satisfied
Highly Dissatisfied

Willingness to invest in future

25% of the respondents are willing to invest often with Reliance mutual fund in future.
Respondents who will never invest are 22% and are a huge concern. 34% would sometimes
opt for the same.

Are you willing to invest in future with Reliance

mutual fund

13%
22%

Never
25% 6%
Rarely
Sometimes
Often
34%
Always
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Correlation between knowledge of reliance mutual fund and willingness of the

respondents to invest in future

The correlation between knowledge of reliance mutual fund and willingness of the
respondents is 0.93 which shows that there is strong and positive correlation between two
variables.

Correlation between knowledge of reliance

mutual fund schemes and willingness to invest in
Willingness to invest in future

future.
6
5
4
3
2
1
0
0 1 2 3 4 5 6
Knowledge of Reliance Mutual fund
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5.2 SECONDARY SOURCE

During my tenure of internship one part is also to analysis various investment opportunities
with mutual fund. Today for an investor they have maximum option of investing and the
options are wide open. We have also seen that traditional approach of investment being given
up by investor and they are moving toward new and emerging one.

To reach any point data is the ultimate thing. Through this chapter we will come to know
how much better investment in mutual fund than other investment.

We will compare all other popular investment option with mutual fund and see how much
one earn through a period.

Saving account vs Reliance Mutual fund:

Investment House Investment Return Return% Return% Total

Made Amount % 1st 2nd year 5th year Amount

year After 5 y

Saving Kotak 1,00,000 5.50 5.50 5.50 1,27,500

Account Mahindra

Reliance
Mutual Fund Liquid fund 1,00,000 6.91 7.04 8.12 1,47,751

• Saving interest vary from bank to bank. Many bank offers between 3-4%.

• Mutual fund returns also vary from company to company and even scheme to scheme.
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Fixed deposit vs Reliance Mutual fund:

Scheme Amount Return% Amount Amount Amount

after1st after 3rd after 5th

Year Year Year

Fixed 1,00,000 6.8 106800 121818 138949

Deposit

Reliance
Mutual
fund (Short
term fund) 1,00,000 10.82 110820 136098 167143

• Industry average taken into consideration in return %.

• In mutual fund it has been chosen debt fund as investor who invest in FD generally
invest in debt fund in mutual fund.

• It has been assumed that investor didn‟t move fund in between and one invested for 5
years.

PPF vs Reliance Mutual fund :

Public provident fund (PPF) is a saving as well as tax saving scheme.

• Duration of scheme: 15 years & can be extended 5 more years.

• Accounts per person: 1

• Amount lock in time: 15 years

• Very safe, backed by government.

• Fixed return of 7.80% annually

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On similar basis Reliance mutual fund has ELSS (Equity linked saving scheme).

• Duration: no such limit

• Lock in period: 3 years

• Expected return: 12% or more (industry average)

• Volatile and risk by nature

Stocks vs Reliance Mutual fund

• Stock happens to be more risky than mutual fund.

• Extensive research before investing.

• Not suitable for new investor with little knowledge.

• Regular monitoring and tracking required.

• Vulnerable to market condition.

• Liable to pay 15% short term capital gain if one sell stock within a span of one year.

• Less diversification for a small investor as it will be a huge ask to invest in 25 to 30

stocks.

• Can get quick and good returns if invest in right stock and sell it on right time.

Reliance Mutual fund

• Risk is spread across and hence reduced with the pooling in of diversified stock.

• Totally managed by experienced fund managers.

• Totally perfect for new investor.

• Reduced risk by diversifying the portfolio.

• No tax on capital gain on stock that are sold by fund.

• Need to pay fee to mutual fund manager.

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Real Estate vs. Reliance Mutual fund

Being a developing country, real estate was in peak from last one decade and it will continue
to do so in coming decades too. No doubt it is considered as one of the safest.

Reason behind it is favored more are as:

• Only asset that can be largely funded by long term debt, 75% by bank.

• Loan funded real estate comes with tax saving.

• Easy money once invested, in the form of rental income.

• High return expectation.

Real estate is still not everyone cup of tea. Small investor can‟t think of it. Not accessible to
every investor. More than that real estate is basically location-based investment, it will yield
maximum return if invested in T15 cities and as goes lower the return will also take a hit.
Whereas mutual fund is accessible to everyone and it doesn‟t depend on location. Comparing
with real estate it is a bit riskier

Ex:

For instance, Land was bought in Thane in 2005 at Rs.20 lakhs has now worth of Rs 100
lakhs at this present date. Growth of Rs 80 lakhs is achieved in just matter of 12 years,
knowing the fact the bank deposit provides - 9% per annum ( that time) later reduced to 7%
and currently at 5% by using compounded annually growth rate. The valuation of the
property increased at the rate of 13.17% during the tenure of January 2005 to January 2017.
Taking an assumption, same amount of 20lacs was invested in Reliance Large Cap fund
(Equity fund) for the same period. He would have made Rs 1.39 crs at a rate of 18 %
(approx).
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CHAPTER-6

KEY FINDINGS AND CONCLUSIONS

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6.1 FINDINGS

6.1.1 FINDING FROM PRIMARY SOURCE:

 Millennials are largest and fastest growing adult segment that will drive the
investment industry.
 Private employees followed by self-employees are more inclined toward
investment.
 Tax saving still remains the main objective for investor.
 Almost all investors heard of mutual fund.
 Among investors there was lack of knowledge on mutual fund more than anything
else which was not a good sign.
 From being awareness to investment, conversion ratio was very low for mutual
fund.
 Real estate and fixed deposit were more popular among investors.
 On being asked best option to invest, mutual fund tops the list.
 High return followed by safety of principal is key factor before investing in
mutual fund.
 How quickly i will increase my wealth lead the way for investor to investments.
 Investors are willing to invest in reliance mutual fund that provides company an
opportunity to reach them.
 Only 36% of the investors are currently investing in Reliance mutual fund
schemes that points to the inability to communicate with the possible investors.

6.1.2 FINDING FROM SECONDARY SOURCE:

 Reliance Mutual fund schemes yields much higher return than saving accounts.
 Fixed deposit returns were calculated on compounded annually basis just like
mutual fund‟s scheme of Reliance mutual fund.
 Reliance Mutual fund scheme yields much higher return than fixed deposit.
 PPF considered being very safe as it is backed by government.
 Investing in stocks is much more-riskier than investing in actively managed
schemes of mutual fund.

 Real estate investment was based on geographically for better yields whereas
reliance mutual fund‟s schemes can be invested from anywhere and still yields
same for all
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 It‟s wisely advisable for new-fangled investors to invest in mutual fund rather
than in stocks
 Real estate is most favored among investors just because it can be funded by
banks up to ¾ of the investments with long term debts.

6.1.3 FINDING FROM SALES EXPERIENCE:

 Bank contribution played an important role to mutual fund industry as it gave them an
established channel.
 Investment in mutual fund started as low as from Rs.500 in form of SIP but due to
lack of knowledge it became harder to sale.

 With much mutual fund house coming in and racing toward bank for sales of their
product it became over crowded.

 Investors find mutual fund was for those who have extra wealth.

 Revenue was the key factor which driver bank employee for more sales.

 Among investor closing a mutual fund scheme and tracking it were the key issue
which drive them away from it.

 Having not sufficient number of representatives to cover all branches took toll on
sales. This gave competitors an edge.

 There were many investors who didn‟t have much knowledge on mutual fund and in
those cases role of bank employee played a critical role as which product he would
pitch for.

 Investor doesn‟t like lengthy and complex procedure for enrolling and for opting out
from scheme.

 It was much harder to sale a product at the second half of March month due to FY
closing.

 It was easy to convince young investor than an elder investor.

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6.1.4 WHY MUTUAL FUND?

 High return: Based on various kind of investment which may be medium term
investment or long term investment. It has the prospect of higher return on the
investment reason being the diversification of assets without investing much time.

 Diversification: Fund manager helped to mitigate risk by diversifying the assets in

different sectors. It provided investors with limited capital an opportunity to invest by
large.

 Liquidity: If invested in open ended scheme investor had the benefit to withdraw the
amount whenever required.

 Economical: Investors can invest with as minimum as from Rs.500.

 Safe as well as transparent: Every mutual fund is regulated by SEBI, which gave
confidence to investor of their investment in safe hand. Through various portal
investors can track their current portfolio status.

 Convenience: With less time invested and low investment, mutual fund is the ideal
investment option.

 Expertise: In presence of experienced fund manager and backed by dedicated research

team who made decision on the potential market to meet the objectives.

 Manage inflation: It helped investor generate better inflation adjusted return, without
spending much time

6.1.5 WHY RELIANCE MUTUAL FUND?

 Brand Name: strong brand name is a major strength. This gives them liberty to charge
extra for their services & product.
 Distribution channel strategy: constantly improving the distribution of its product.
 Various source of Income: This enable company is more supple & resistant to
external factors such as economic and environmental factors.
 Huge pool of capacity installed.
 Knowledgeable fund managing personnel.
 Products like large cap fund, balanced advantage fund and hybrid fund doing
extremely good as compared to the competitors.
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6.2 CONCLUSION

 Mutual fund industry continues to boost in coming years.

 Need to educate investors on the benefit of investing in right product of mutual fund
so that their misconceptions, wrong belief, will go and they start investing more here.
 Proper and effective distribution channel will lead the company further in term of
sales and market shares.
 Major part of sales was done through bank which results in high indirect costing to
company.
 Need to penetrate more in 2nd & 3rd tier cities as lots of potential investors are yet to
invest.
 One can be a part of this industry just by investing in SIP worth Rs. 500 in any
scheme.
 Millennial on rise and this would favor the investment in mutual fund a lot.
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CHAPTER-7

RECOMMENDATIONS
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Following are the recommendations that can be useful for the company to get more of the
investors.

• Need to educate investors on mutual fund.

This can be achieved by organizing free seminar in prominent places, Tv ad,

channelizing social platforms.

• Need to look beyond

Bank contributed a huge in term of generation of sales but as more mutual fund house
had joined, it became overcrowded. With no dedicated bank employee lot of time had
wasted in it without much sales. it would be better had there been franchise or
company own outlet in various or key places of city in large number to cater the need
of investor. This would also help in more brand awareness.

• More representatives

With majority of sales coming from bank and less number of representative to cover
all branches it created communication gap among them and this led to decline in
sales.

• Penetrate more in 2ND & 3RD TIER Cities:

As majority of sales almost more than half generate from T15 cities, much focused
now given to 2nd & 3rd tier cities as there is lots of potential investor to catch on. This
would also help in expanding company presence and market share.

• Lucrative offers

To lure more sales company must come with exciting offers time to time not only for
sales made through relationship manager but also to individual investor and this must
be highlighted through various platform as this would give an edge.

• Strong back end team

To rectified investor complaint in no time required a strong back end team which can
extract data in quick succession and start working on it. Not only complaint, a new
SIP investment should be clear in less time and also if investor opted out from SIP
must be cleared within prescribed time.
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• To regulate entry and exit loads effectively as it creates a lot of confusion during final
settlement and this left a long-time impression on investors.