STUDENT DECLARATION

I Shiv Kumar student MBA here by declared that the research report entitled ‘A

Study On Analysis Of Different Investment Plan Of Reliance Mutual Fund” is

completed and submitted under the guidance of Mr. Abhineet Sharma is my

original work. The imperial finding in this report is based on the data collected by

me. I have not submitted this project report to BDSIM, Meerut or any other

University for the purpose of compliance of any requirement of any examination or

degree.

DATE: SHIV KUMAR

PLACE: MBA III SEM

ROLL NO. 0814670068

 ACKNOWLEDGEMENT

I take this opportunity to express my deep sense of gratitude to all those who have contributed

significantly by sharing their knowledge and experience in the completion of this project work.

I am greatly obliged to, for providing me with the right kind of opportunity and facilities to

complete these venture.

My first word of gratitude is due to Mr. Rahul Saxena (Sales Manager) & Mr. Abhinav Tyagi

(centre manager-household vertical) RELIANCE MONEY, GHAZIABAD, my corporate

guide, for his kind help and support and valuable guidance throughout my project. I am thankful

to him for providing me with necessary insights and helping me out in every single step.

I am highly thankful to Ms. Sakshi Sharma (Head of the department) & Mr. Abhineet

Sharma ( Faculty, Management) my internal faculty guide ,under whose guidance this project

work was carried out. I thank her for continuous support and mentoring during the tenure of the

project.

I also would like to thank all the staff members for their support and co-operation during my

summer training.

(SHIV KUMAR)
2
 EXECUTIVE SUMMARY

Mutual fund is a trust that pools money from a group of investors (sharing common financial

goals) and invests the money thus collected into asset classes that match the stated investment

objectives of the schemes. Since the stated investment objectives of a mutual fund scheme

genrally forms the basis for an investor’s decision to contribute money to the pool, a mutual fund

can not deviate from its stated objective at any point of time.

Every mutual fund is managed by a fund manager, who using his investment management skills

and necessary research works ensures much better return than what an investor can manage on

his own. The capital appreciation and other incomes earned from these investments are passed on

to the investor (also known as unit holders) in proportion of the number of units they own. Every

Asset Management Company (AMC) sells its product with the help of distributor .The distributor

gets the fixed commission in return. Each Asset Management Company adopt different ways to

promote their mutual fund so that they can attract more and more money.

The project focus on different ways of promoting and selling mutual funds. The project also

focuses on the core basic of mutual funds, their types, their promotional schemes and my

experiences of promoting and selling mutual funds.

Financial products are those products which have values in monetary terms. The Financial

products are intangible in nature that means the customer cannot even touch, smell or feel it.

In this manner, it becomes a challenge for the sales personnel in financial sector to convince

the customer to invest in it. The sales personnel can only guarantee for the benefit that the

customer will get after a certain period of time span.

3
 The evaluation of financial planning has been increased through decades, which is

best seen in customer rise. Now a day’s investment of saving has assumed great importance.

According to the study of the Market, it is being observed that markets are doing well

in investments like, Mutual funds. In near future a proper financial planning is required to

invest money in (mutual fund) type of financial product because there is good potential in

market to invest.

The main objective of this project is to know the Perception of Customers Preferences

towards Life Insurance, Mutual Fund and Share Trading and the people’s awareness of

various instruments available for Tax planning and Personal Financial Advising facility

provided by RELIANCE MONEY LTD.

Table of Content

BUSINESS OVERVIEW
RELIANCE MONEY
BOARD OF DIRECTORS
RELIANCE MUTUAL FUND
TRAINING PROCESS

4
CHANGING TREND (INDIA)
MF INTRODUCTION
TYPES OF MF
BENEFITS OF MF
HOW TO INVEST IN MF
LIST OF MF COMPANIES IN INDIA
MANAGEMENT OF EQUITY PORTFOLIO
FACTS AND FINDINGS
SWOT
CONCLUSION
RECOMMENDATION & SUGGESTION
SOME OTHER LEARNING
BIBLIOGRAPHY

5
 INTRODUCTION

There are a lot of investment avenues available today in the financial market for an investor with

an invest able surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where

there is low risk but low return. He may invest in Stock of companies where the risk is high and

the returns are also proportionately high. The recent trends in the Stock Market have shown that

an average retail investor always lost with periodic bearish tends. People began opting for

portfolio managers with expertise in stock markets who would invest on their behalf. Thus we

had wealth management services provided by many institutions. However they proved too costly

for a small investor. These investors have found a good shelter with the mutual funds.

Like most developed and developing countries the mutual

fund cult has been catching on in India. The reasons for this interesting occurrence are:

1. Mutual funds make it easy and less costly for investors to satisfy their need for capital

growth, income and/or income preservation.

2. Mutual fund brings the benefits of diversification and money management to the individual

investor, providing a

Opportunity for financial success that was once available only to a select few.

6
 HISTORY

 Unit Trust of India is the first Mutual Fund set up under a separate act, UTI Act in 1963, and

started its operations in 1964 with the issue of units under the scheme US-641. In 1978 UTI was

delinked from the RBI and Industrial Development Bank of India (IDBI) took over the

Regulatory and administrative control in place of RBI.

 In the year 1987 Public Sector banks like State Bank of India, Punjab National Bank, Indian

Bank, Bank of India, and Bank of Baroda have set up mutual funds.

 Apart from these above mentioned banks Life Insurance Corporation [LIC] and General

Insurance Corporation [GIC] too have set up mutual fund. LIC established its mutual fund in

June 1989.while GIC had set up its mutual fund in December 1990.The mutual fund industry

had assest under management of Rs. 47,004 crores.

 With the entry of Private Sector Funds a new era has started in Mutual Fund Industry [e.g:-

Principal Mutual Fund.]

7
 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 assets under management

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.

8
 Types of MutualFunds Scheme 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

o Open - Ended Schemes

o Close - Ended Schemes

o Interval Schemes

 By Investment Objective

o Growth Schemes

o Income Schemes

o Balanced Schemes

o Money Market Schemes

 Other Schemes

o Tax Saving Schemes

o Special Schemes

 Index Schemes

 Sector Specfic

9
 ADVANTAGES OF MUTUAL FUNDS

There are numerous benefits of investing in mutual funds and one of the key reasons for its

phenomenal success in the developed markets like US and UK is the range of benefits they offer,

which are unmatched by most other investment avenues.

Diversification

The nuclear weapon in your arsenal for your fight against Risk. It simply means that you

must spread your investment across different securities (stocks, bonds, money market

instruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information

technology etc.).

Tax Benefits

Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit

holders. However, as a measure of concession to Unit holders of open-ended equity-oriented

funds, income distributions for the year ending March 31, 2003, will be taxed at a concessional

rate of 10.5%.

Regulations

Securities Exchange Board of India (“SEBI”), the mutual funds regulator has clearly

defined rules, which govern mutual funds. These rules relate to the formation, administration and

management of mutual funds and also prescribe disclosure and accounting requirements. Such a

high level of regulation seeks to protect the interest of investors

10
Affordability

A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the

investment objective of the scheme. Azn investor can buy in to a portfolio of equities, which

would otherwise be extremely expensive.

11
 Features related mutual funds

 Reliance was the first fund house to launch sector funds with flexibility to invest in a

range of 0% to 100% in either equity or debt instruments.

 Mutual fund investments linked to an ATM/debit card a Reliance innovation

India’s first long-short fund comes from Reliance Mutual Fund .

 As at 31st May 2008, more than 6.6 million people had invested in Reliance Mutual

Fund;the investments comprised 16% of the country’s entire mutual fund.

RELIANCE CAPITAL

Business overview

Reliance Capital is one of India’s leading 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 has interests

in asset management and mutual funds, stock broking , life and general insurance , proprietary investments,

private equity and other activities in financial services .

Reliance Capital sees immense potential in the rapidly growing financial services sector in India and

aims to become a dominant player in this industry and offer fully integrated financial services .

12
Reliance Life Insurance is an associate company of Reliance Capital Ltd. , a part of Reliance -

Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading 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 has interests in asset

management and mutual funds, stock broking, life and general nsurance, proprietary

investments, private equity and other activities in financial services. Reliance - Anil Dhirubhai

Ambani Group also has presence in Communications, Energy, Natural Resources, Media,

Entertainment, Healthcare and Infrastructure

Setting global benchmarks…

 The largest private sector group in India accounting for 9% of the government’s indirect tax

revenues, about 2.3% of country’s capital formation and 5% of country’s exports.

 The company that set up the world’s largest grassroots refinery at Jamnagar in just under 36 months

at a cost 30-50% less than that of global undertakings.

 The company that set up the world’s largest grassroots multi-feed cracker complex.

 The world’s second largest producer of polyester staple fiber and polyester filament yarn.

13
 The world’s largest shareholder family of 5 million.

 The only Indian company in Business Week's 1994 listing of the 50 largest companies from

developing countries

 Distinction of becoming India’s first private sector company to achieve a ranking in Fortune

Global.

 Among the world's top 425 companies by turnover, among world's top 300 companies by net

worth, among world's top 225 companies by net profits

Reliance group's business activities encompass all major growth

sectors of the Indian economy:

 Oil and gas exploration

 Refining and marketing

 Petrochemicals including intermediates

 Textiles

 Power

 Telecom

 Communication

 Insurance

 Financial services

 Assets and finance management.

 Brokerage firm (Online trade services)

14
Reliance Money Ltd., an Anil Dhirubhai Ambani Enterprises group company, it’s a part of Reliance

Capital Group. Its India's one of the largest private which provides best services in share trading and

financial services..

The Anil Dhirubhai Ambani Enterprises group, comprising of Reliance Communication, Reliance

Energy and Reliance Capital are part of the Reliance Group, founded by Shri Dhirubhai H. Ambani

(1932-2002).

15
 RELIANCE CAPITAL

Reliance Capital is today India's fastest growing financial services powerhouse, with over 5

million customers. Our customer base is served by one of the most extensive and

technologically advanced distribution networks, comprising over 3,600 outlets in nearly 700

towns and cities across the country.

An integral member of the Reliance ADA Group, Reliance is the bearers of a proud name, and

an even prouder legacy.

Reliance ADA Group, barely two years in the making, now ranks among India's top 3 business

houses.

We have a strong presence across a wide array of high-growth consumer-facing businesses –

from telecom and financial services to energy and power, from media and entertainment to

healthcare.

Across different companies, Reliance ADA group touch the lives of over 100 million customers,

or over 1 in every 10 young and inspirational Indians every single day.

Reliance ADA group enjoys the unparalleled trust, faith and confidence of nearly 7 million

shareowners – the largest such family in India, perhaps even in the world.

Reliance ADA Group is among the largest employers in the country, with a young, highly

trained and motivated workforce approaching 1,00,000-strong.

Reliance have a Group market capitalization of over Rs 1,57,000 crore, having added over Rs

1,42,000 crore or over Rs 300 crore of shareholder wealth creation every single working day

over the past two years.

16
 Reliance ADA group net worth is in excess of Rs 40,000 crore.

It’s cash flows across the Group are approximately Rs 9,000 crore and Net profit is over Rs

5,000 crore.

We have zero net debt at the group level.

It’s current Group net worth and debt structure gives us the capacity to borrow, on a conservative basis,

over Rs 1,00, 000 crore.But Reliance Capital, like the Reliance ADA Group, is not just about scale and

size. It is also the about the pursuit of excellence; of values that embody the spirit of New India — the

new resurgent India of the 21st century.

It’s goal is not just to build a great enterprise for its stakeholders, but also to build a great future for our

country: To give millions of young Indians the power to realize their dreams, the opportunities to shape

their own destiny and the means to realize their true and diverse potential.

Strong Financial Platform

It have created a strong financial platform that will be the bedrock for accelerated future growth.

• It’s net worth now stands at over Reliance Capital has a net worth of Rs. 7,491 crore and total

assets of Rs. 24,260 crore as of March 31, 2009. placing us among the top 3 private sector Indian

companies in the financial services sector, after lClCl and HDFC.

• As before, It’s enjoy the highest credit ratings, of `A1' and `F1+', awarded by ICRA and FITCH,

respectively.

17
ABOUT RELIANCE MONEY

Reliance Money, a Reliance Capital company, is part of the Reliance Anil Dhirubhai Ambani

Group. It is a comprehensive financial services and solution provider providing customers with

access to Equity, Equity and Commodity Derivatives, Portfolio Management Services, Mutual

Funds, IPOs, Life and General Insurance and Gold Coins. Customers can also avail Loans,

Credit Card, Money Transfer and Money Changing services. 

The largest broking house in India with over 2.5 million customers and a wide network of over

10,000 outlets and 20,000 touch points in 5,000+ locations. Reliance Money endeavors to change

the way investors transact in financial markets and avails financial services. The average daily

volume on the stock exchanges is Rs. 2,000 crores, representing approximately 3% of the total

stock exchange volume. 

Reliance Capital is one of India's leading and fastest growing private sector financial services

companies, and ranks among the top 3 private sector financial services and banking groups, in

terms of net worth.

RelMoney can be segregated into 4 main products which include:

1- Reliance Life Insurance Plans

2- Reliance General Insurance policies

3- Reliance Mutul Funds

18
 4- Reliance On line trading facility

Board Of Directors:-

1. Anil Dhirubhai Ambani,Chairman

2. Amitabah Jhunjhunwala,Vice Chairman

3. Rajendra P. Chitale,Director

4. C.P. Jain,Director

Reliance Mutual Fund (RMF)

Reliance Mutual Fund, a part of the Reliance – Anil Dhirubhai Ambani Group (R-ADAG) is one of the fastest

growing mutual funds in the country . Reliance Mutual Fund offers investors a well rounded portfolio of

products of meet varying investor requirements . Reliance Mutual Fund has a presence in over 115 cities across

the country , an investor base of over 3.1 Million and manages assets over Rs. 39019 crore as on 31st Jan 2007.

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 is one of India’s 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 has interests in asset management and mutual funds , life

and general insurance , private equity and proprietary investments , stock broking and other financial services .

There are three types of schemes which are provided to the investors under these mutual funds and

they are as follows.

19
Duration and Area of the Training Process

The overall training process lasted for 8 weeks. In these 8 weeks we were provided with

conceptual knowledge of various investment options (primarily Mutual Funds, IPOs and life

insurance) along with the field training.

Whole 1 week was devoted to building fundamentals of capital market including Mutual Funds,

Secondary Market and DP Operations.

Remaining 7 weeks were spent learning field operations by actually performing them. Here we

met with the potential customers and try to market our products. It is the real training period in

which we were also provided with opportunities to interact with professionals. Various sessions

were conducted to give us an insight on local market and marketing skills using tools like role

playing, web links etc.

Our major area of training was seeling D-MAT accounts, NFO (which is reliance infrastructure

fund) which was newly launched by reliance as a name of RELIANCE INFRASTRUCTURE

FUND and life insurance (of TATA-AIG through bancassurance).

NATURE OF TRAINING

20
On the very first day of my training Mr. Abhinav tyagi, centre manager-household vertical, made

a team of 5 trainees with a very clear vision that all of us need to work in a team as this is the

way to work in real corporate life where every small contribution counts without any great

burden on any individual .

CONTRIBUTION

As the training was done in the financial services arena so the basic contribution towards the

company reliance money is totally related to the same.

Emphasis was laid upon selling of the products that includes following- :

1. Mutual Funds

a) New Fund Offers

b) Existing Funds

2. Initial Public Offerings (IPO’s)

3. Opening NEW D-MAT Accounts

Though it was not an easy task still a fair amount of contribution was made in this regard.

Initially I was encountered with a few difficulties but at the time of end of my training I landed

up with a business of Rs. 50,000 as NFO and more than 2 new customers with D-MAT accounts

are added. I was also exposed to the arena of Equity analysis and portfolio management.

KNOWLEDGE GAINED

21
The knowledge and exposure gained at RELIANCE MONEY was just not limited to how

organizations like them work, but was multi faceted. So I got a good idea about almost all

operations of the company.

Marketing of the financial products require:

 Acute financial knowledge

 Marketing skills

Financial knowledge gained by me is following:

1. Mutual Funds

a) New Fund Offers

b) Existing Funds

2. Initial Public Offerings (IPO’s)

3. Equity analysis

Changing trend in Mutual Fund Industry in INDIA

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the

initiative of the Government of India and the Reserve Bank. The history of mutual funds in India

can be broadly divided into four distinct phases.

First Phase – 1964-87

22
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 Fund)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and

Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 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

established its mutual fund in June 1989 while GIC had set up its mutual fund in December

1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.

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

23
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 (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

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was divided into

two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets

under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the

assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of

24
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 assets under management

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.

25
Mutual Fund - An Introduction

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 invested by the fund manager in different types of

securities depending upon the objective of the scheme. These could range from shares to

debentures to money market instruments. The income earned through these investments and the

capital appreciation realized by the schemes is 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

26
common man as it offers an opportunity to invest in a diversified, professionally managed

portfolio at a relatively low cost. The small savings of all the investors are put together to

increase the buying power and hire a professional manager to invest and monitor the money.

Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual

Funds. Each Mutual Fund scheme has a defined investment objective and strategy.

27
 PRODUCT S : RELIANCE MONEY

The products on offer from Reliance MutualFund fall into four main categories: equity,

debt,sector specific and ETF (Exchange Traded Fund).Each taps into a specific audience profile

fulfilling their varying needs.Under the equity category, Reliance has118 SUPERBRANDS

sixteen schemes with Reliance Growth Fundand Reliance Vision Fund as its flagship

schemes.Reliance Equity Opportunities Fund is a schemewhich operates in the multi-cap/multi-

sectorsegment; Reliance Equity Fund is a long-shortfund, Reliance Quant Plus Fund is a quant

fund.Reliance offers investments in banking, power,media, entertainment and

pharmaceuticals;Reliance Tax Saver Fund and Reliance Equity-Linked Savings Fund – Series 1

are tax saving schemes; an NRI-dedicated equity scheme is

tailored for non-resident Indians. RelianceRegular Savings Fund is an asset-allocation fund with

three options.Under the debt and liquid categories, Reliancehas liquid funds, liquid plus funds,

income funds,an NRI-dedicated debt fund, gilt funds, fixedmaturity plans and an interval fund.In

the hybrid category, Reliance Monthlyincome Plan is a popular option

Reliance understands that investments in mutual fundshare a function of knowledge

dissemination and awareness of products amongst potential investors. In building its ownbase of

assets under management it will necessarily have to carry the entire mutual fund

industry.Towards this end Reliance has launched a t wo-pronged initiative.In the first pincer it

has created aformidable network of 26,000 distributors including some of thebiggest names in

the banking sector.This who’s who of the financial industry comprises such giants asCitibank,

Standard Chartered, HSBC,ICICI, AXIS, Bank of Baroda, Central Bank of India, Allahabad

28
Bank andfund houses such as JM, DSP Merrill Lynch and Karvy in addition to a massive

infrastructure of direct financial investment officers. Thisprodigious effort is supplemented by

thebrands’ captive network of 120 branch offices

and 30 financial centres. In the second prong, Reliance has created a series of informationpacked

presentations which help dispel misinformationGroup.This mega business house dominates this

key area in the financial sector.Figures for March 2008 show that it has emerged as the top

Indian mutual fund with average assets under management of Rs. 90,938 crore (US$ 22.73

billion) and an investor base of over 6.6 million (Source:www.amfiindia.com).

Reliance’s mutual fund schemes are managed by

RelianceCapitalAssetManagementLimited (RCAM), a subsidiary of Reliance Capital

Limited,which holds 93.37% of the paid-up capitalof RCAM.The company notchedup a healthy

growth ofRs. 16,354 crore (US$ 4.09billion)inassetsunder management in February2008 and

helped propelthe total industry-wideAUM to Rs. 565,459 crore(US$ 141.36 billion) (Source:

indiainvestments.com). A sharp rise infixed maturity plans (FMPs)andcollection of Rs. 7000

crore (US$ 1.75 billion) through new fund offers (NFOs) created this surge. InAUMrankings,

Reliance continues to be in thenumber one spot.

Reliance was the first fund house to launch sector funds with flexibility to invest in a range of

0% to 100% in either equity or debt instruments Mutual fund investments linked to anATM/debit

card are a Reliance innovationIndia’s first long-short fund comes from Reliance Mutual Fund

As at 31st May 2008, more than 6.6 million people had invested in Reliance Mutual Fund;the

investments comprised 16% of the country’s entire mutual fund asset base.

29
Types of Mutual Fund Schemes

By Structure

 Open-end 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-end 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 investors.

 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 Objective
30
  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 proved 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 Fund

31
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.

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.

 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

32
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or

the NSE 50. Index schemes are also referred to as unmanaged schemes (since they are passive)

or tracker schemes (since they seek to track a specific index).Passive investment places lower

demands on the time and efforts of the AMG. All that is required is a good system that would

integrate the valuation of securities (from the market) and information of sales and re-purchases

of units (from the registrar) and generate the requisite buy and sell orders. Therefore,

management fees for index funds are lower than for managed schemes.

Alternately, a mutual fund, through its research can identify a basket of securities and / or

derivatives whose movement is similar to that of the index. Schemes that invest in such baskets

can be viewed as active index funds. .

 Sectoral Schemes

Sectoral Funds are those which invest exclusively in a specified sector. This could be an industry

or a group of industries or various segments such as 'A' Group shares or initial public offerings.

 Enhanced Index Funds

The enhanced index fund is a managed index fund that seeks to beat the performance of its

benchmark index by at least 0.1 per cent, but no more than 2 per cent. If the index fund's

performance were to exceed this 2 per cent cap, it would then be considered an equity mutual

fund.

 Exchange Traded Funds (ETFs)

33
Exchange traded funds are open-end funds that trade on the exchange. Like index funds, ETFs

are benchmarked to a stock exchange index.

 ETFs differ from index funds in the following respects:

34
A single NAV is applicable for the day in the case of open-end funds. Therefore, a single price

would be applicable for all investors who buy units of an open-end index fund on any particular

day. Similarly, a single price would be received by all investors who exit from an open-end index

fund on any particular day. .An ETF, on the other hand, is, traded in the market place. Therefore

its unit price keeps changing during the day. This intra-day fluctuation in ETF's unit price

appeals to short-term investors

The AMC of an ETF does not offer sale and re-purchase prices for the units. Instead, it appoints

designated market intermediaries (market makers) who buy or sell units' from the investors. This

constitutes the secondary market for the ETF.Thus, an investor who wants to invest in an ETF

would go to a market maker who is expected to offer two-way quotes at all times. An investor

who chooses to invest in the ETF would thus know precisely how many units in the ETF he will

get against investment. It is as simple as buying or selling a share. The transaction is executed

through the share trading terminal of the market maker. Since these secondary market trades are

between purchasers and sellers in the stock market, the corpus of the scheme is not affected.

A unique feature of ETFs is that besides the secondary market, they also have a primary

market, i.e. a facility for investors to exchange their ETF units for the underlying shares

(redemption) or exchange their investment in shares for units of the ETF (sale). Such sale and

redemption transactions entail change in the corpus of the scheme. The ETF, for administrative

convenience, can set a minimum size for such primary market transactions.

35
 The market maker makes money based on the spread in the two-way quote. Competition

between market makers is expected to keep the bid-ask spread low. This structure also ensures

that the AMC does not need to pay a commission to market intermediaries for bringing investors

into the fund. Similarly, there are no loads recovered by the AMC. Thus, a significant element of

cost is eliminated for the investors. Investors only bear a cost that is implicit in the bid-ask

spread. Low expense ratio is another attraction for an investor in ETFs.

Fixed Maturity Plans I Serial Schemes

An investor in a debt security gets expected yield if he holds a fixed coupon debt security until

maturity. But if he sells security earlier, then what he recovers would depend on the market

situation at the time of sale. He could equally end up with a capital gain or a capital loss.

A fixed maturity plan (FMP) seeks to eliminate the risk of such capital loss by investing

exclusively in a pre-specified debt security. Thus, if an investor is desirous of investing for four

years, he can invest in a fund that will invest in a pre-specified 4-year security. ..

On maturity, the scheme would redeem the security and pay the investor. The investor,

however, can exit earlier. But what would recover in an early exit would depend on the market

situation at her time of exit.

Thus, an investor is assured a fixed return if he stays invested in the scheme for the period

originally envisaged. But he also has an earlier exit option in case he invests in a FMP that is

structured as an open-end scheme.

36
 Normally, an assured returns scheme can be offered only if there is a named guarantor who

offers the guarantee. An FMP is an assured returns scheme through the back door, since the

investor is reasonably assured of the expected-return - (subject to credit risk and re-investment

risk) if she holds the units for the originally envisaged period - but the return is assured without a

named guarantor.

37
Fund of Funds Schemes

Mutual fund schemes generally invest in securities issued by the government or various

companies. Fund of funds schemes, on the other hand, invest in other mutual fund schemes

(which, in turn, invest in the government or companies). The investment could be in mutual fund

schemes promoted by the same AMC, or in schemes promoted by other AMCs

SEBI has recently permitted such schemes. Managers of fund of funds, being professional

investors, are better placed to handle the information complexities arising out of increasing

number of schemes that are available with varying structures. This is a benefit for investors.

The problem is .the cost involved, because investors would effectively be bearing fund

management costs twice; first, at the level of the fund of funds, and second, at the level of the

schemes in which the fund of funds invest

38
Load Fund & No Load Fund:

Marketing of a new mutual fund scheme involves initial expenses. These expenses may be

recovered from the investors in different ways at different times. Three usual ways in which a

fund’s sales expenses may be recovered from the investors from the investors are:

 At the time of investor’s entry into the fund/scheme, by deducting a specific amount

from his initial contribution.

 By charging the fund/scheme with a fixed amount each year, during the stated number

of years.

 At the time of the investor’s exit from the fund/schemes, by deducting a specified

amount from the redemption proceeds payable to the investors

These charges made by the fund managers to the investors to cover distribution/sales/marketing

expenses are often called “Load”. The load charged to the investor at the time of his entry into a

scheme is call a front-end or entry load. This is the first case above. The load amount charged

to the scheme over a period of time is called a “deferred load” This is the second case above.

The load that the investor pays at the time of his exit is called a “back-end or exit load”. This is

39
the third case above. Some fund may also charge different amounts of loads to the investors;

depending upon how many years the investor has stayed with the fund.

The front-end load amount is deducted form the initial contribution/purchase amount paid by the

incoming investor, thus reducing his initial investment amount. Similarly exit loads would

reduce the redemption proceeds paid out to the outgoing investor. If the sales charge is made on

a deferred basis directly to the scheme, the amount of the load may not be apparent to the

investor, as the scheme’s NAV would reflect the net amount after the deferred load. Fund that

charge front-end, back-end or deferred load are called load funds. Funds that make no such

charges or loads for sales expenses are called no-load fund.

40
As an example:

If a open end fund NAV per unit is Rs. 11 with a front-load of 2% the price at which an investors

can buy a unit is Rs. 11.22 .If the redemption price is Rs. 10.70 with a back-end load of 2% the

exit load charged by the fund amount to be Rs. 0.21% so net sales proceeds will be 10.70-

0.21=10.49.

NET ASSET VALUE

Market value of fund invested + accrued income – Fund liability

No. of units

The market value of fund invested means that total value of invested fund in particular securities

and accrued income means interest or dividend which has declared but not received and fund

liability mean any expenditure which incurred but not paid or not adjusted. If the number of unit

goes up/down every time fund issue new unit or repurchase existing unit. The unit capital of

open-end mutual fund is not fixed but variable.

Certain condition of Close ended mutual fund gets them listed on a stock exchange.

Trading through a stock exchange enables the investor to buy or sell unit of a close-ended mutual

fund from each other’s, through a stock broker in the same passion as buying and selling share of

a company. The price may be low or high according to demand/supply or future prospect of the

securities. Thus the Close ended capital remain fixed not variable which as in open ended

schemes.

41
Systematic Investment Plan (SIP), Systematic Withdrawal Plan

(SWP), Systematic Transfer Plan (STP)

The benefits of spreading one's exposure namely, diversification across asset classes, sectors,etc

in any investment activity are well chronicled. What is less highlighted is the benefit arising out

of spreading the timing of one's actions.Rather than investing, disinvesting or switching the

entire portfolio at a single point of time, it is prudent to spread these actions systematically over a

period of time. This also curbs the tendency of an investor to time the market, an investment

style that several researchers have statistically proved as having a poor chance of success. 'This

principle of time diversification has given rise to the concepts of -:

Systematic Investment Plan (SIP)

SIP refers to the practice of investing a constant amount regularly, generally every month. When

the market goes up, then the money invested in that period gets translated into a fewer number of

units for the investor. If the market goes down, then the same money invested gets translated into

more units.

Ilustration -- SIP in three market scenarios, when the investor invests Rs. 1,000 per month over

a 12-month period. The results are summarized below:

Market
Gain / Loss Gain / Loss Point to Acquisition Cost
Scenario
(change each (Rs.) (% to current Point NA V (% to average
month) NAV) Change NAV)

42
Up1% +681 +5.4% + 11.6% 99.99%
Down 1 % -637 -5,6% -10.5% 99.99%
Random +200 + 1.6% 0.0% 98.40%

Thus, it is clear that: When the market gained 11.6% during the year, 'the gain for the investor

was only 5.4%. On the 'other hand, when the market fell 10.5% during the year, the investor's

loss was only 5.6%. SIP, therefore, tempers the gain or loss from investment.

SIP does not offer protection from losses. If the market turns adverse, then you can lose

money even in a SIP but ensures that your acquisition cost approximates the average NAV.

Therefore, this investment style is also called rupee cost averaging.

A related concept is value averaging. Here, the investor operates with a certain target value

for her investment. If the investment appreciates beyond that? target value, he encashes part of

the investment. If the investment depreciates below the target value, the investor brings in fresh

funds to bridge the gap. Value averaging, ensures that the investor books profits in a rising

market and invests in a falling market.

43
Systematic Withdrawal Plan (SWP)

SWP is a mirror image of SIP. Under SWP, the investor would withdraw constant amounts

periodically. The benefits are the same, namely that through. SWP the investor can temper gains

and losses, though it does not prevent losses. SWP also has income tax implications.

Systematic Transfer Plan (STP)

Investors' exposure to different types of securities, whether. debt or equity should flow from their

risk profile or risk appetite which, as seen earlier, is a function of their financial position and

personal position.An investor's exposure to securities changes in two situations:

1)On investment or disinvestment (this is where SIP I SWP are useful);

2)On change in the value of the securities in the market place.

For instance, an investor may start with a 40:60 mix of debt and 'equity, as determined by her

risk profile. But if equity markets boom and debt securities lose value, then the 40:60 mix could

get significantly distorted towards equity. In such a situation, it would be prudent to sell some

equity and re-invest the redeemed amount in debt to re-balance the mix of debt and equity. In the

context of mutual funds, such re-balancing can be achieved by systematically moving moneys

between schemes. Through a systematic transfer of investment between schemes, it is possible to

maintain' a target mix of debt and equity in one's portfolio. Mutual funds make it convenient, and

44
sometimes free of cost, to systematically transfer investments between schemes of the same

mutual fund

45
BENEFITS OF MUTUAL FUNDS

Professional management.

Mutual Funds provide the services of experienced and skilled professionals, backed by a

dedicated investment research team that analyses the performance and prospects of companies

and selects suitable investments to achieve the objectives of the scheme.

Diversification

Mutual Funds invest in a number of companies across a broad cross-section of industries and

sectors. This diversification reduces the risk because seldom do all stocks decline at the same

time and in the same proportion. You achieve this diversification through a Mutual Fund with far

less money than you can do on your own.

Convenient

Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad

deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save

your time and make investing easy and convenient.

Return

Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they

invest in a diversified basket of selected securities.

46
Low Cost Mutual Funds are a relatively less expensive way to invest compared to directly

investing in the capital markets because the benefits of scale in brokerage, custodial and other

fees translate into lower costs for investors.

Liquidity

In open-end schemes, the investor gets the money back promptly at net asset value related prices

from the Mutual Fund. In closed-end schemes, the units can be sold on a stock exchange at the

prevailing market price or the investor can avail of the facility of direct repurchase at NAV

relatedprices by the Mutual Fund.

Transparency

You get regular information on the value of your investment in addition to disclosure on the

specific investments made by your scheme, the proportion invested in each class of assets and

the fund manager's investment strategy and outlook.

Flexibility

Through features such as regular investment plans, regular withdrawal plans and dividend

reinvestment plans, you can systematically invest or withdraw funds according to your needs and

convenience.

Affordability

Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund

47
because of its large corpus allows even a small investor to take the benefit of its investment

strategy.

Well Regulated

All Mutual Funds are registered with SEBI and they function within the provisions of strict

regulations designed to protect the interests of investors. The operations of Mutual Funds are

regularly monitored by SEBI.

48
 Comparison with Other Investment avenues

The mutual fund sector operates under strict regulations as compared to most other investment

avenues. Apart from offering investors tax efficiency and legal comfort how do mutual funds

compare with other products?

Bank Fixed Deposits versus Mutual Funds

Bank fixed deposits are similar to company fixed deposits. The major difference is that banks are

more stringently regulated than are companies. They even operate under stricter requirements

regarding Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) mandated by RBI.

While the above are causes for comfort, bank deposits too are subject to default risk.

However, given the political and economic impact of "bank defaults, the government as well as

Reserve Bank of India (RBI) try to ensure that banks do not fail, Further, bank deposits up to Rs.

100,000 are protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC), so

long as the bank has paid the required insurance premium of 5 paise per annum for every Rs.

100. of deposits. The monetary ceiling of Rs. 100,000 is for all the deposits in an the branches of

a bank, held by the depositor in the same capacity and right.

Bonds and Debentures versus Mutual Funds

49
As in the case of fixed deposits, credit rating of a bond or debenture is an indication of the

inherent default risk in the investment. However, unlike fixed deposits, bonds and debentures are

transferable securities The value that the investor would realize in an early exit is subject to

market risk. The investor could have a capital Gain or a capital loss. This aspect is similar to a

mutual fund scheme. It is possible for an astute investor to earn attractive returns by directly

investing in the debt market, and actively managing the positions. Given the market realities in

India, however, it is difficult for most investors to actively manage their debt portfolio. Further,

at times it is difficult to execute trades in the debt market even when the transaction size is as

high as Rs. 1 crofe. In this respect, investment in a debt scheme would be beneficial. Debt

securities could be backed by a hypothecation or mortgage of identified fixed and / or current

assets, e.g. secured bonds or debentures. In such a case, if there is a default, the identified assets

become available for meeting redemption requirements. An unsecured bond or debenture is for

all practical purposes like a fixed deposit, as far as access to assets is concerned.

Equity versus Mutual Funds

Investment in both equity and mutual funds are subject to market risk.

An investor holding an equity security that is not traded in the market place has a problem in

realizing value from it. But investment in an open-end mutual fund eliminates this direct risk of

not being able to sell the investment in the market. An indirect risk remains, because the scheme

has to realise its investments to pay investors. The AMC is however in a: better position to

handle the situation. Further, on account of various SEBI regulations such illiquid securities are

likely to be only a part of the scheme's portfolio. Another benefit of equity mutual fund schemes

is that they give investors the benefit of portfolio diversification through a small investment. For

50
instance, an investor can take an exposure to the index by investing a mere Rs. 5,000 in an index

fund.

Life Insurance versus Mutual Fund

Life insurance is a hedge against risk - and not really an investment option. So, it would be

wrong to compare life insurance against any other financial product.

Occasionally on account of market inefficiencies or mis-pricing of products "in India, life

insurance products have offered a return that is higher than a comparable "safe" fixed return

security - thus, you are effectively paid for getting insured! Such opportunities are not

sustainable in the long run. .

51
 COMPARATIVE STUDY OF MUTUAL FUND

Major competitior of Reliance Money

Company Profile of HDFC

HDFC BANK is one of the leading Depository Participant (DP) in the country with over 8 Lac

demat accounts.

HDFC Bank Demat services offers you a secure and convenient way to keep track of your

securities and investments, over a period of time, without the hassle of handling physical

documents that get mutilated or lost in transit.

HDFC BANK is Depository particpant both with -National Securities Depositories Limited

(NSDL) and Central Depository Services Limited (CDSL).

Features & Benefits

As opposed to the earlier form of dealing in physical certificates with delays in transaction,

holding and trading in Demat form has the following benefits :

 Settlement of Securities traded on the exchanges as well as off market transactions.

 Shorter settlements thereby enhancing liquidity.

 Pledging of Securities.

 Electronic credit in public issue.

 Auto Credit of Rights / Bonus / Public Issues / Dividend credit through ECS.

52
  Auto Credit of Public Issue refunds to the bank account.

 No stamp duty on transfer of securities held in demat form.

No concept of Market Lots.

Change of address, Signature, Dividend Mandate, registration of power of attorney,

transmission etc. can be effected across companies held in demat form by a single instruction to

the Depository Participant (DP).

Secured & easy transaction processing

HDFC Bank Ltd provides convenient facility called 'SPEED-e' (Internet based transaction)

whereby account holder can submit delivery instructions electronically through SPEED-e

website (https://speed-e.nsdl.com). SPEED-e offers secured means of transaction processing

eliminating preparation of instruction slips and submission of the same across the counter to the

depository participant. The 'IDEAS' facility helps in viewing the current transactions and

balances (holdings) of Demat account on Internet on real time basis.

53
 Company Profile of ICICI

ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock

trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs,

Mutual Funds and Bonds. Trading is available in BSE and NSE

ICICIDirect offers 3 different online trading platforms to its customers

1. Investment Account

Along with stock trading and IPO investing in BSE and NSE, Wise Investment account

also provide options to invest in Mutual Funds and Bonds online.

Online Mutual funds investment allows investor to invest on-line in around 19 Mutual

Fund companies. ICICI Direct offers various options while investing in Mutual Funds

like Purchase Mutual Fund, Redemption and switch between different schemes,

Systematic Investment plans, Systematic withdrawal plan and transferring existing

Mutual Funds in to electronic mode. This account also provides facility to invest in

Government of India Bonds and ICICI Bank Tax Saving Bonds.

ICICIDirect.com website is the primary tool to invest in Mutual Funds, IPOs, Bonds and

stock trading.

54
 Reliance Money

Tax Saving funds Reliance Money:

Tax-saving funds (due to their equity-oriented nature) are capable of clocking far

superior returns their assured return counterparts like National Savings Certificate (NSC) and

Public Provident Fund (PPF). However investors must appreciate that the risk profile of tax-

saving funds tends to be proportionately higher.

Reliance Tax Saver (ELSS) Fund (RTSF) is the latest entrant in the tax-saving funds

segment. Flagship diversified equity funds (Reliance Growth Fund and Reliance Equity Fund)

from Reliance Mutual Fund have emerged as top performers in their segment across time

horizons. However investors should note that these funds are managed aggressively; also they

have displayed an opportunistic streak by moving fluidly across market segments (large caps,

mid caps) to clock superior growth. RTSF is likely to be a similar (high risk - high return)

investment proposition within the tax-saving funds segment.

55
SYSTEM INVESTMENT PLAN

SIP is a way of investing in Mutual Funds. It is designed for those investors who are

willing to invest regularly rather than making a lump sum investment. It is just like a recurring

deposit with the post office or bank where we deposit some amount every month. The difference

here is that the amount is invested in a mutual fund. Mutual Fund makes investment according to

their objective .They collect fund from investor and invests it. Every fund has an objective and

pattern of investing. There are various kinds of mutual funds. There are equity funds and debt

funds. Further equity funds can be divided into equity diversified mutual fund where funds are

invested in shares of different companies , sectoral funds where investment is made in shares of

some particular sector like FMCG, IT, Auto, Oil & Gas, Banking etc. Every fund has a NAV (net

asset value) which is the value per unit. It is calculated as the total asset is divided by the number

of outstanding units. As the value of asset changes, nav also changes.

The best way to invest in stock market is mutual fund through Systematic Investment Plan. But

to get the benefit of an SIP, a long term horizon is must.

56
 How to invest in Mutual Fund

Step one- identify your needs

Your financial goals will vary, based on your age, lifestyle, financial independence, family

commitments, and level of income and expenses among many other factors. Therefore, the first

step is to assess your needs. You can begin by defining your investment objectives and needs

which could be regular income, buying a home or finance a wedding or educate your children or

a combination of all these needs, the quantum of risk you are willing to take and your cash flow

requirements.

Step Two - Choose the right Mutual Fund

The important one identify your needshing is to choose the right mutual fund scheme which suits

your requirements. The offer document of the scheme tells you its objectives and provides

supplementary details like the track record of other schemes managed by the same Fund

Manager. Some factors to evaluate before choosing a particular Mutual Fund are the track record

of the performance of the fund over the last few years in relation to the appropriate yardstick and

similar funds in the same category. Other factors could be the portfolio allocation, the dividend

yield and the degree of transparency as reflected in the frequency and quality of their

communications.

Step Three - Select the ideal mix of Schemes

Investing in just one Mutual Fund scheme may not meet all your investment needs. You may

consider investing in a combination of schemes to achieve your specific goals.

57
Step Four - Invest regularly

The best approach is to invest a fixed amount at specific intervals, say every month. By investing

a fixed sum each month, you buy fewer units when the price is higher and more units when the

price is low, thus bringing down your average cost per unit. This is called rupee cost averaging

and is a disciplined investment strategy followed by investors all over the world. You can also

avail the systematic investment plan facility offered by many open end funds.

Step Five- Start early

It is desirable to start investing early and stick to a regular investment plan. If you start now, you

will make more than if you wait and invest later. The power of compounding lets you earn

income on income and your money multiplies at a compounded rate of return.

Step Six - The final step

58
Need to do now is to go for online application forms of various mutual fund schemes and start

investing. One may reap the rewards in the years to come. Mutual Funds are suitable for every

kind of investor - whether starting a career or retiring, conservative or risk taking, growth

oriented or income seeking.

CHECKLIST FOR AN INVSTOR BEFORE INVESTING IN A

MUTUAL FUND

 There are various mutual funds available in the markets which are further divided in

several schemes and options. Here selecting the right one is the key to success.

 Selection of a fund is subjected to some parameters like risk, cost and time all of

which an investor can control and not the future returns which he cannot control.

 Rights of a Mutual Fund Unit holder A unit holder in a Mutual Fund scheme

governed by the SEBI (Mutual Funds) Regulations is entitled to:

1. Receive unit certificates or statements of accounts confirming the title within 6 weeks

from the date of closure of the subscription or within 6 weeks from the date of request for

a unit certificate is received by the Mutual Fund.

2. Receive information about the investment policies, investment objectives, financial

position and general affairs of the scheme.

3. Receive dividend within 42 days of their declaration and receive the redemption or

repurchase proceeds within 10 days from the date of redemption or repurchase.

4. Vote in accordance with the Regulations -:

59
 a. Approve or disapprove any change in the fundamental investment policies of the

scheme, which are likely to modify the scheme or affect the interest of the unit holder.

The dissenting unit holder has a right to redeem the investment.

b. Change the Asset Management Company.

c. Wind up the schemes.

Inspect the documents of the Mutual Funds specified in the scheme's offer

document. One should read the offer document and key information memo

with due diligence while investing in NFO(New Fund Offer) and not to think

that this is a cheap one than the exiting .

The Role of Dividend (Dividend v/s Growth dilemma)

Whenever a dividend is paid, the NA V goes down because funds flow out of the scheme. The

reduced NA V, immediately after a dividend distribution is referred to as "Ex-Dividend NA V".

If we calculate returns based only on movement in NA V, then it can lead to understatement of

return, whenever a dividend is paid.

However, if a scheme has a growth option, namely an option, i.e. where no dividends are

declared, then the earnings would be fully reflected in the NA V. In such cases, the return can be

calculated based on the opening and closing NA V.

60
Among the investors who subscribe to a scheme’s investment philosophy

,some might prefer a regular income flow (dividend),while others might prefer

their income from the scheme to grow in scheme itself(growth option). SO it is

clear that it is just a facility or you can say two different approaches for two

different types of investors.

 Asset allocation, relative risk levels in different investment avenues should also be

considered before investing

 One should not go for a one best fund and should distribute the money among 3-5

different schemes

 Exit from a scheme is not like getting divorced so do it when it becomes essential.

like-:

A) When one is overweight on a worst performing fund

B) When one gets a handsome and reasonable return

MUTUAL FUND A GLOBALLY PROVEN INVESTMENT

AVENUE

Worldwide, Mutual Fund or Unit Trust as it is referred to in some parts of the world, has a long

and successful history. The popularity of Mutual Funds has increased manifold in developed

61
financial markets, like the United States. As at the end of March 2006, in the US alone there

were 8,002 mutual funds with total assets of over US$ 9.36 trillion (Rs.427Iakh crore).

ABOUT AMFI (Association of Mutual Funds in India)

AMFI is the umbrella body of all the Mutual Funds including Unit Trust of India. Incorporated

in August 1995, it is a non-profit organization committed to develop the Indian Mutual Fund

Industry on professional, healthy and ethical lines and to enhance and maintain standards in all

areas with a view to protecting and promoting the interests of mutual funds and their unit

holders. Mutual Fund both conceptually and operationally is different from other savings

instruments. Mutual Funds invest in instruments of capital markets which have different risk

return profile. It is very necessary that the investors understand properly the conceptual

framework of mutual fund and its operational features

62
List of Mutual Fund Companies in INDIA

1. Reliance Mutual Funds

2. HDFC

3. Fidelity

4. Franklin Templeton

5. ABN Amro

6. AIG

7. Bank of Baroda

8. Birla Sun Life

9. Canara Bank

10. DBS Chola Mandalam AMC

11. DSP Merrill Lynch

12. Deutsche Bank

13. Escorts Mutual

14. HSBC

15. ICICI Prudential

16. ING

17. JM Financial

18. JP Morgan

19. Kotak Mahindra

20. LIC

21. Lotus India

63
22. Morgan Stanley

23. Principal

24. Quantum

25. State Bank of India (SBI)

26. Sahara Mutual Funds

27. Standard Chartered

28. Sundaram BNP Paribas

29. Tata

30. Taurus Mutual Funds

31. UTI

32. Benchmark Funds

64
Initial Public Offerings (IPO’s)

Corporate may raise capital in the primary market by way of an initial public offer, rights issue

or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the

primary market. This Initial Public Offering can be made through the fixed price method, book

building mothod or a combination of both.

Book Building - About Book Building

Book Building is basically a capital issuance process used in Initial Public Offer (IPO) which

aids price and demand discovery. It is a process used for marketing a public offer of equity

shares of a company. It is a mechanism where, during the period for which the book for the IPO

is open, bids are collected from investors at various prices, which are above or equal to the floor

price. The process aims at tapping both wholesale and retail investors. The offer/issue price is

then determined after the bid closing date based on certain evaluation criteria.

The Process:

The Issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'.

 The Issuer specifies the number of securities to be issued and the price band for orders.

 The Issuer also appoints syndicate members with whom orders can be placed by the

investors.

 Investors place their order with a syndicate member who inputs the orders into the

'electronic book'. This process is called 'bidding' and is similar to open auction.

65
  A Book should remain open for a minimum of 5 days.

 Bids cannot be entered less than the floor price.

 Bids can be revised by the bidder before the issue closes.

 On the close of the book building period the 'book runner evaluates the bids on the basis

of the evaluation criteria which may include -

o Price Aggression

o Investor quality

o Earliness of bids, etc.

 The book runner and the company conclude the final price at which it is willing to issue

the stock and allocation of securities.

 Generally, the number of shares are fixed, the issue size gets frozen based on the price

per share discovered through the book building process.

 Allocation of securities is made to the successful bidders.

 Book Building is a good concept and represents a capital market which is in the process

of maturing.

Guidelines for Book Building

Rules governing book building is covered in Chapter XI of the Securities and Exchange Board of

India (Disclosure and Investor Protection) Guidelines 2000.

BSE's Book Building System

66
  BSE offers the book building services through the Book Building software that runs on

the BSE Private network.

 This system is one of the largest electronic book building networks anywhere spanning

over 350 Indian cities through over 7000 Trader Work Stations via eased lines, VSATs

and Campus LANS

 The software is operated through book-runners of the issue and by the syndicate member

brokers. Through this book, the syndicate member brokers on behalf of themselves or

their clients' place orders.

 Bids are placed electronically through syndicate members and the information is

collected on line real-time until the bid date ends.

 In order to maintain transparency, the software gives visual graphs displaying price v/s

quantity on the terminals.

In case the issuer chooses to issue securities through the book building route then as per

SEBI guidelines, an issuer company can issue securities in the following manner:

a. 100% of the net offer to the public through the book building route.

b. 75% of the net offer to the public through the book building process and 25% through the

fixed price portion.

Difference between shares offered through book building and offer of shares through

normal public issue:

Features Fixed Price process Book Building process

Pricing Price at which the securities are Price at which securities will be

67
 offered/allotted is known in offered/allotted is not known in advance to

advance to the investor. the investor. Only an indicative price range is

known.
Demand Demand for the securities offered Demand for the securities offered can be

is known only after the closure of known everyday as the book is built.

the issue
Payment Payment if made at the time of Payment only after allocation.

subscription wherein refund is

given after allocation.

Before investing in an IPO one should go for this checklist

 Lead managers and their credibility.

 Growth prospects of the company vis-à-vis the sector.

 Promoter holdings, both pre issue and post issue.

 To find out whether profits projected by company are realistic or not.

 Ultimately what will be the use of the money to be invested in the company?

Do not invest only for the listing gains. Invest in IPO if you believe in that company and

investing for a longer period will fetch u better returns. One should always read the offer

document and prospectus of the issue thoroughly before investing it.

Management of Equity Portfolio

68
Investment and disinvestment decisions are broadly taken based on either of the following two

approaches. .

Technical Analysis

Technical analysis is a review of the movements of the stock price in the market. Based on a

comparison of these movements with past volume and price trends of the stock as well as with

the market movements, technical analysts form a view on whether the market or an individual

stock is over-bought or over-sold, whether a stock is near a support level or resistance level and

accordingly choose to sell or buy the stocks

While the data for a fundamental analysis comes sporadically, for instance when the financial

results are announced or an earnings warning is issued, data for technical analysis gets added

with every day of trading.

Generally, fundamental analysis is seen to help decide on what action to take, namely buy or

sell, when to implement the decision, (the timing) could be determined by technical analysis.

Fundamental Analysis.

Fundamental analysis is a study of the industry scenario, company's financials, management, etc.

collectively known as a company's fundamentals, to determine whether the company's stock is

properly valued. If the view is that it is undervalued, then the portfolio manager may choose to

buy the security. If it is overvalued, the decision would be to sell the existing stock. The value

drivers mentioned below are all examples of fundamental analysis.

Value Drivers in Equity Market

69
EPS and PE Ratio (PRICE EARNING RATIO)

These are easily the most popular tools for determining valuation. For instance, if the aluminum

industry has a PE ratio of 10 times, and if Company Z has an EPS of Rs. 12, then the value of

Company z. stock should, theoretically, be EPS x P/E Ratio, namely Rs. 120 per share.

When the current market price is compared with past earnings, it is referred to as "historical

PIE". When the comparison is with projected earnings, it is referred to as "prospective P/E" or

"projected P/E". .

A high P/E ratio means either of two things:

A) Market views the stock favorably, or

B) The share is over-valued - perhaps being pushed up by manipulators.

A low P/E ratio could mean the reverse. Namely either the market does not view the stock

favorably or that it is undervalued (value stock).

The skill of the analyst is in identifying which of the implications is applicable for any stock.

This is a critical judgment call that determines whether the stock would be bought or sold.

CEPS and PRICE Ratio

70
Earnings are calculated after depreciation, which, in turn, is a function of accounting policy.

Cash earnings (earnings plus depreciation and other non-cash charges) are less affected by

accounting policy.

In the earlier example, if the CEPS of Company Z is Rs. 15, and the PICE ratio of the

industry is 9 times, then the price of each share of Company Z should theoretically be Rs. 15 x 9,

namely Rs. 135.

This measure is particularly useful when a stock has positive cash earnings, but negative

earnings after non-cash charges.

Price to Book Value

In industries such as Banking and Non-banking finance companies, where financial assets are a

significant component of the balance sheet, price to book value of the industry, multiplied by the

book value of the individual stock could give an indication of the value of the stock.'

This measure would be meaningful in all situations where the book value is representative of

realizable values. In the case of companies whose balance sheet is dominated by physical assets,

e.g. cement' manufacturing companies, book value may not be representative of realizable value.

Price to book value may not be a useful ratio ill such situations.

71
Turnover Multiple

This ratio is calculated as sales turnover divided by market capitalization of the company.

Market capitalization is the total number of equity shares issued by the company x market price

of the shares in the market place.Turnover is a surrogate for market share and significance of the

company's role in a sector --particularly in a multi-product set-up.

For instance, if Hindustan Lever were looking at taking over either of two companies, namely

Company Z whose turnover multiple is 20 times or, a Company Y whose turnover multiple is 25

times. If other factors such as fitment in product mix, margins, location advantages, company

culture, etc. are comparable, then Hindustan Lever would prefer Company Y, because, for every

rupee that it spends on the acquisition, it will gain sales of Rs. 25. Comparatively, it will gain

only Rs. 20 of incremental sales for every rupee it invests in acquiring Company Z.

Others

The above are the commonly used tools. But analysts tend to use several creative tools. For

instance, during the height of the dotcom boom, companies were enamored with market

capitalization to eye-balls comparison. Retailers are valued based on stock keeping units (SKU).

Billing rates and mix of offshore and onsite revenues are relevant for software development

companies.

72
 Classification of shares on the basis of market performance

The Companies Act, 1956 does not permit issue of different 'classes of equity shares. Therefore,

all equity shares of a company are pari passu (similar), except to, the extent that dividend

payment could be made on a pro rata basis on new equity shares issued during the year.

Some of them are as follows -:

Growth stocks are shares that are expected to demonstrate earnings growth that is better than

the market. From time to time various promising sectors in the economy emerge, like software

during 1998-2000. Good companies in such sectors are viewed as growth stocks and attract high

level of investment interest.

Ultimately, growth, like beauty, lies in the eyes of the beholder. "For one fund, the paradigm

of a growth stock might be Coca-Cola; for another fund, it might be Amazon.com. In India we

may well be talking of Reliance in a similar vein.

Income stocks are shares that provide a good dividend return on the amount invested. In

accounting terminology, they provide a good dividend yield (Dividend to Market Price ratio).

In the old days, these shares were often called "widow and orphan" stocks a reference to the

once "typical" investors who would buy the stock for the reliability and size of the dividend

payments If we look at power generation companies for instance, once the plant is set up

and it maintains operation, the off take is relatively certain, and so is the price. In such a

situation, the profits are steady, thus giving the company the luxury of declaring stable

dividends. In India, concerns over the financials of most state electricity boards, which buy the

73
power from the power generating company, raise issues of credit risk. Such risks would be

reduced in a situation of direct supply to consumers coupled with right to disconnect power to

consumers who do not pay. In such an event, companies like Tata Electric Companies, for

instance, would qualify as income stocks.

Cyclical stocks are shares that move in tandem with the economy. Basic industries such as

cement, steel, etc. are examples of industries whose performance is closely linked to the

economy. This is why stocks of companies belonging to such industries are cyclical in nature.

Defensive stocks are shares that are relatively protected from economic cycles.

Pharmaceutical stocks are a good example, because consumption of medicine does not vary with

the turns of the economy.

Pivotals or momentum stocks are the shares that move the market. Hindustan Lever,

Reliance Industries and Infosys are examples of such stocks in India.

Value stocks are shares whose current valuation does not reflect some aspect of a company

that could be extremely valuable.

For instance, an investor, who feels that the last mile connectivity that MTNL has in the two

important cities of Mumbai and Delhi is not fully reflected in the price, would be viewing it as a

74
value stock. She would aim to "unlock value" when the market appreciates the value of last mile

connectivity and pushes the stock valuation up.

The "under valuation" is normally viewed through fundamental analysis measures such as

PIE and P/BV ratios.

Above all I got a good learning about various styles of investing and making money and also

luring the money of outsiders in the organization

75
Marketing knowledge gained

The very first thing I learnt is “Selection of particular customer and the segment of

customer is essential to the very purpose of marketing” Identifying and understanding the

different needs of the targeted customer group and offering them schemes accordingly. So

marketing starts for me FROM KNOWING THE INVESTOR.

KNOWING THE INVESTOR

Risk Profiling

A heart patient won a lottery worth Rs. 100 crore. The family wanted to break the good news as

softly as possible. The job was delegated to. the family doctor. The 'conversation went along the

following lines:'

Doctor: What will you do if you win a lottery of Rs. 1,000?

Patient: I will take my family out for dinner.

Doctor: What will you do if you win a lottery ofRs. 1,000,000?

Patient: I will repay my housing and car loans.

Doctor: What will you do if you win a lottery of Rs. 100 crore?

Patient: I will give you 50 per cent of it.

Immediately, the doctor suffered a heart attack!

Depending on the health risk a doctor is in the best position to advise a patient on whether she

should climb the Himalayas, or whether she should satisfy herself up Malabar Hill in Mumbai.

76
Similarly, a financial planner has to advise investors on their finances depending on their risk

profile.

While the investor is dreaming about her financial goals, her guard would be down. The

intermediary needs to look for verbal and non-verbal cues to assess her risk appetite. At one end

of the spectrum would be an aggressive risk taker - and at the other, an impulsive risk avoider.

While risk profiling is a highly subjective exercise, it can safely be said that appetite for risk

reduces with:

 Age;

 Increase in dependents;

 Reduction in earning members;

 Any serious health related issues in the family; and

 Job insecurity.

On the other hand, a person would be inclined to take more risks when:

 Major expenses are taken care of. For instance, when the investor has her own house and

loans are repaid;

 Other major aspirations are met or provided for;

 The investor is a professional whose income streams are on the upswing; and

 The investor has hit a jackpot.

77
 It would be possible to generate a standard list of questions, the answers to which would be

pointers to an investor's risk profile. However, no ready reckoner of questions can substitute the

need for a financial advisor to keenly observe the investor and her behavior.

For instance:

A person who jumps the red signal in a traffic crossing is clearly a person who

is inclined to take risks.

A person who complains for half an hour about the extra one-rupee wrongly

charged by a bus conductor is a difficult equity investor.

If discussions indicate certain submissiveness on an investor's part to the views of her

superior at work, and an obsessive concern about job security, then the person is likely to be risk

averse.

Even the type of dreams mentioned would be an indication of an investor's risk profile. A

Richard Branson who wants to circumnavigate the earth in a hot air balloon would top the chart

in terms of risk preference! Also, in phases of economic uncertainty (layoffs), it would be better

for an investor to tone down the risks taken. A risk profiling exercise would result in suggestions

on how an investor should distribute her portfolio between different asset classes.

78
Asset Classes

As seen earlier, investing the entire portfolio in debt is not necessarily a prudent option. Inflation

and re-investment risks can wreak havoc to the lives of such investors. Prudence, therefore, lies

in investing in a mix of asset classes.

The performance of different asset classes hinges on how the economy performs. Economies

tend to move in cycles - often referred to as business cycles. From a trough, the economy

-expands, then reaches a peak, and then contracts back into a trough.

One categorization of assets would be debt and equity. In India, even gold is an important

asset category. Besides, real estate could be another component of a client's asset portfolio.

'

An asset categorization relevant for a mutual fund distributor is' liquid schemes, gilt schemes,

bond schemes, balanced schemes, index schemes, diversified equity schemes, sectoral or focused

schemes, etc.

Every asset class and mutual fund type implies a risk-return tradeoff. Generally, one has to

take a greater risk for a chance to earn a higher return. The AMFI Mutual Fund Testing

Programme workbook provides a useful comparison of investments alternatives.

Return Safety Volatility Liquidity Convenience

Equity High Low High High or low Moderate
FI Bonds Moderate High Moderate Moderate High
Co. Moderate Moderate Moderate Low Low

Debentures

79
 Co. FDs Moderate Low Low Low Moderate
Bank Low High Low High High

Deposits
PPF Moderate High Low Moderate High
Life Low High Low Low Moderate

Insurance
Gold Moderate High Moderate Moderate Low
Real Estate High Moderate High Low Low
Mutual High High Moderate High High

Funds

A financial planner has to obtain information about the investor's current distribution of

investment between asset classes and investment types. These would determine what is already

available to finance the client's goals, and the risk underlying her investment portfolio. They may

also offer clues to possible needs of re-balancing the portfolio

Asset Allocation

Credit card issuers use a decision support model to decide whether or not to issue a credit card to

the applicant and the exposure limit in case they decide to issue one. It is the same with loan

companies. In all these cases, the back-end of the model synthesizes the information given by the

applicant and throws up a decision. The parameters of this decision support model are based on

statistics of past experiences.

Similarly, it would be possible to have a model that would suggest the mix of (asset categories

for a client. “Optimum asset” allocation for a client would depend on her wealth cycle and life

cycle

80
The Wealth Cycle

People typically go through three wealth cycle phases:

ACCUMULATION /SOWING

Where the person's saving is much more than current needs. So she is in a position to set apart

something for the future.

DISTRIBUTION / REAPING I HARVESTING

Where the person's needs cannot be fully met by current savings the gap would need to be met

out of savings or loans. .

TRANSITION

This is a phase between the accumulation and distribution phases, when the distribution needs

are very clearly in the person's radar, although the harvesting may not have commenced.

WINDFALL

This is a phase that touches people's lives occasionally. It could be winning from a lottery, super-

normal profits booked on investments, inheritance etc.

The risk-based asset allocation will be different for each phase as described previously.

81
Interactions with various customers having different opinions and views gave

me a good overview of the local market and especially of my work area

82
 OBJECTIVES OF THE STUDY

1 .To study and analyze the meaning of financial services.

2. To study the different plans of mutual fund in reliance money.

3. Implementation of concept of service marketing in mutual fund.

4.To study the growth and emergence of mutual fund in India .

5.To study the challenges face by the Indian financial Institutions in marketing of financial

services

6. To analyze the emerging trends of marketing of financial services in India

83
 RESEARCH METHEDOLOGY

Scope of the study:

The research was carried on in the Southern Region of India. It is restricted to

Hyderabad.

I have visited people randomly nearby my locality, different shopping malls, small

retailers etc.

Data sources:

Research is totally based on primary data. Secondary data can be used only for the

reference. Research has been done by primary data collection, and primary data

has been collected by interacting with various people. The secondary data has been

collected through various journals and websites and some special publications of

R-MONEY.

Sampling:

 Sampling procedure:

The sample is selected in a random way, irrespective of them being investor or not

or availing the services or not. It was collected through mails and personal visits to

the known persons, by formal and informal talks and through filling up the

questionnaire prepared. The data has been analyzed by using the measures of

84
central tendencies like Mean, median, mode. The group has been selected and the

analysis has been done on the basis statistical tools available.

 Sample size:

The sample size of my project is limited to 200 only. Out of which only 135 people

attempted all the questions. Other 65 not investing in MFs and don’t have a Life

Insurance policy attempted only 2 questions.

 Sample design:

Data has been presented with the help of bar graph, pie charts, line graphs etc.

Hypothesis:

H0: Targeting and Positioning Strategy based on investment in Mutual Fund and

Life Insurances is significant.

85
 DATA ANALYSIS

Do you know, what is mutual fund?

25

20
NO. OF PEOPLES

15

10

0
BUSINESS MEN GOVT EMP. YOUNGSTER PRIVATE EMP.

Result:-

From the above graph, it is clear, peoples are not aware about mutual fund because they were not

educated. According to business men, 72% people known what is mutual fund because they

aware about share market. According to government employees, 40% peoples know what is

mutual fund; they don’t intrastate in share market. Youngsters have so aware about mutual fund.

80% youngsters known, what is mutual fund. Now, we talk about private employees, maximum

people known, what is mutual fund, it is 60%.

86
 Do you want to invest your money into the mutual fund?

16
14
12
NO. OF PEOPLES

10
8
6
4
2
0
BUSINESS MEN GOVT EMP. YOUNGSTER PRIVATE EMP.

Result:

As shown above chart 60% business men want to invest money into the mutual fund because

they have interest in mutual fund, maximum customers want to invest our money into the mutual

fund because their interest decreased in equity market they know that in this field, risk is low

compare to share market. 40% government employees want to invest your money into the mutual

fund, 56% youngsters and 40% private employees want to invest money into the mutual fund.

87
 Is Mutual fund always risk free?

25

20
NO.OF PEOPLES

15

10

0
BUSINESS MEN GOVT EMP. YOUNGSTER PRIVATE EMP.

Result:

We know that mutual fund is not always risk free. According to the customers who know

what is mutual fund, they also know it is not always risk free. Problem has that maximum people

are not aware about mutual fund.28% business men don’t know, 60% government employees,

20% youngsters and private employees don’t know it is risk free or not.

88
 Do you want to invest your money into the given
following sector ?
12

10

8
No.of people

0
MUTUAL FUND PROPERTY GOLD SHARES INSURANCE

Result:

From the above graph, mostly customers want to invest your money into the gold, they

purchased gold, according to customers, price of gold always increase and this is always

profitable in future. Youngsters and business men have interest in mutual fund; they like to take

risk because they know that, if risk is high then return may be high. 28% business men,16%

government employees, 40% youngsters, 20% private employees like to invest money into the

mutual fund.

89
 if yes,Which AMC (asset Management Company) will you
prefer?

16
14
12
10
8
6
NO. OF PEOPLE

4
2
0
D D D D RS
FUN FUN FUN FUN THE
L L L L O
UA UA UA UA
UT UT UT UT
LM M EM TM
RE EC LIF TA
HD N KO
SU
A
RL
BI

Result:

From the above graph, which is according to the primery data collected, clearly shows that

“Preference of investors are based on high return, liquidity and growth of fund”i.e. investors give

their preferences to that fund which gives them high return. 26% customers like to the Reliance

mutual fund. 14% customer’s belief HDFC mutual fund. Birla sun life mutual fund having 15%

preferred. Kotak Mahindra mutual fund having 17% preferred, other’s mutual fund having 28%

preferred.

90
 How many AMC’s mutual fund do you have?

25

20

15
NO. of pwople

10

0
ONE TWO TWO OR MORE NONE

Result:

From the above graph, which is according to the primery data collected, clearly shows that

investors have two types mutual fund, it is 18%. They want earn maximum profit from mutual

fund. These customer want to increase number of units and also invest other plan like saving

plan.

91
 According to you which company has more demand in the
market?

12
10
8
6
4
NO. OF PEOPLES

2
0
D D D D R
FUN FUN FUN UN THE
L L L L F O
UA UA UA UA
UT UT UT UT
LM M M AM
RE EC IL FE DR
HD N IN
SU AH
A
RL TM
BI TA
KO

Result:

The result of the primary data shows that investors of reliance mutual fund who invested in other

mutual fund having the higher percentage prudential ICICI Mutual fund but it may be right or

wrong. As reliance is the brand name in India, the company has good reputation in the market,

almost everyone heard about the reliance and their companies. Brand management is also

required to increase the product perceived value to the customer. That’s the reason behind 37%

of the people choosing reliance.

92
 Which AMC provides better service?

12
10
8
6
4
NO. OF PEOPLES

2
0
D D D R
UN UN UN HE
L F L F L F OT
UA UA UA
UT UT UT
LM EC
M
RA
M
RE D
HD IN
AH
TM
TA
KO

Result:

From the above graph, which is according to the primary data collection, clearly shows that the

investors are satisfy with the services providing by the reliance AMC. 37% belief on reliance

mutual fund. It is fine compare to other’s.

93
 Are you satisfied by the services provided by Reliance
Mutual fund
25

20
No. of peoples

15

10

0
BUSINESS MEN GOVT EMP. YOUNGSTER PRIVATE EMP.

Result:

74% customers of reliance are satisfied with the services provided by Reliance Mutual fund and

the rest 26% are not satisfied. Customers of today are better educated, better informed, more

discriminating, more sophisticated and are more individualistic. What they value in a mutual

fund transaction has dramatically changed.

94
 SWOT Analysis

STRENGTHS

 Corporate memberships

 Wider product offerings

 Greater reliance on research

 Accessing equity capital markets

 Foreign collaborations and joint ventures

 Specialized services/niche broking

 Online broking

WEAKNESS

The major weakness of the Reliance Company that only 27% customer not satisfied with

Reliance Mutual Fund. Because of there are many problems to the customer’s side. Promotional

activities of the company are not affecting the people of jodhpur.

OPPORTUNITIES:

It can advertise its products in by endorsing it through celebrities in order to fund.

Reliance mutual fund should launch a scheme for their consumer.

THREATS:

95
The company is facing strong competition from other companies like HDFC, Kotak Mahindra

etc.

96
 Conclusion

With the globalize economy and immense competition among countries for faster development

of their respective economies, the significance of Mutual Funds and Foreign investment has

taken manifold. With a buoyant vibrant and experienced stock market, India today is looking

ahead to surpass China in terms of foreign Investment and growth prospects. Stock exchange

being the barometer of the economy plays a vital role in showcasing growth of an economy and

luring investment. While studying the role of Mutual fund and FIIs in Stock Market, I discussed

with a few persons who are into stock broking business. And the information they have provided

shows that though the investment and participation of domestic investors are rising, still, they

have not been able to prove themselves to be as influential as mutual funds and FIIs.

Importance and the role of Mutual funds and FIIs play in the Indian stock market can be seen

from the fact that the recent surge in Sensex and NIFTY is attributed to the active participation

of FIIs in the Stock Market. Despite being aware of the Asian economic crisis where FIIs role

was of a major concern, the importance of foreign capital in the development of economy can

not be undermined in anyway so the people more emphasis on mutual fund to earn more return

increasing our benefit .

97
 Recommendation and suggestions

1. The most vital problem spotted is of ignorance. Investors should be made aware of the

benefits. Nobody will invest until and unless he is fully convinced. Investors should be

made to realize that ignorance is no longer bliss and what they are losing by not

investing.

2. Mutual funds offer a lot of benefit which no other single option could offer. But most of

the people are not even aware of what actually a mutual fund is? They only see it as just

another investment option. So the advisors should try to change their mindsets. The

advisors should target for more and more young investors. Young investors as well as

persons at the height of their career would like to go for advisors due to lack of expertise

and time.

3. The advisors may try to highlight some of the value added benefits of Mutual funds such

as tax benefit, rupee cost averaging, and systematic transfer plan, rebalancing etc. these

benefits are not offered by other options single-handedly. So these are enough to drive

the investors towards mutual funds. Investors could also try to increase the spectrum of

services offered.

4. Now the most important reason for not availing the services of advisors was spotted was

being expensive. The advisors should try to charge a nominal fee at the beginning. But if

not possible then they could go for offering more services and benefits at the existing

rate. They should also maintain their decency and follow the code of ethics so that the

investors could trust upon them. Thus the advisors should try to attract more and more

persons and turn them into investors and finally their clients.

98
Some other learnings

 Working in a team helps to improve individually and scale up the performance which in

turn improves performance of the team as whole.

 Regular meetings with seniors and the industry professionals made the training process

interesting one and also encouraged us to learn more.

 Regular reporting to the superiors (daily/weekly) made me more accountable because it

shows how I’m performing.

99
 Questionnaire for customer

Name: ______________________________________

Age: __________

Address: _____________________________________

Phone no. ___________________________________

Email._______________________________________

1. Do you know, what is mutual fund?

a) Yes b) no

2. Do you want to invest your money into the mutual fund?

a) Yes b) no

3. Is Mutual fund always risk free?

a) yes

b) No

c) I don’t know

4. Do you want to invest your money into the given following sector?

a) Mutual fund

100
b) Property

c) Gold

d) Shares

e) Insurance

5. If yes, Which AMC (asset Management Company) will you prefer?

a) Reliance mutual fund

b) HDFC mutual fund

c) Birla sun life mutual fund

d) Kotak Mahindra mutual fund

e)other

6. How many AMC’s mutual fund do you have?

a) One

b) Two

c) More than two

d) None

101
7. According to you which company has more demand in the market?

a) Reliance mutual fund

b) HDFC mutual fund

c) Birla sun life mutual fund

d) Kotak Mahindra mutual fund

e) other

8. Which AMC provides better service?

a) Reliance mutual fund

b) HDFC mutual fund

c) Kotak Mahindra mutual fund

d) other

9. Are you satisfied by the services provided by reliance mutual fund?

a) Yes b) No

10. What is your view about reliance mutual fund?

Signature________

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BIBLIOGRAPHY

http://www.reliancecapital.co.in/

http://www.google.co.in/

http://www.reliancemutual.com

http://www.amfiindia.com/

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