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Submitted to: Mr. K.K.Patel
Faculty member of
S.K.School of Business Management Hemchandracharya North Gujarat University Patan On Date: In partial fulfillment of the academic project in Semester II of Post Graduation Diploma in Financial Management Services. Year 2006-07. Submitted by:
Rafik piprani R.M.Thakkar Kiran raval
’’Post Graduate Diploma In Financial Services” Theory of any subject is important but without its practical knowledge it becomes unless particularly for the Management Students. As a student of the Business Administreeation, we have studied many theories and concepts in the classroom, but only after taking up this project work we have experienced & understood these Management theories & practices in its fullest sense, which plays a very vital role in business field today. The knowledge of management is incomplete without knowing the practical application of the theories studied. This training provides golden opportunity for all students, especially when the management student does not have prefect understanding of the working of a unit. Hence, this report is designed with the objective to know the Mutual Fund’s concept and get poetical knowledge of this field.
I am glad to express my profound sentiments of gratitude to all who rendered their valuable help for the successful completion of this project report titled, “Comparison of Mutual Fund among Financial Advisors” I would also like to express my deep gratitude to Mr. Maulik shah, Mr.Narendra Nayi (Assistant Manager Of India Info line In Patan), Mr. Manoj Patel, and Mr.Jatin Pandya (Investor Relationship Officer) Tank at Reliance Capital Ltd, branch for giving me this valuable guidance, deep insight into the Mutual Fund industry and help me in each & every phase of this project. I would also like to give special thanks to Dr.Ashvin Modi who has also helped me in the preparation of the project. My genuine sense of gratitude goes to the respective universities that gave me a chance to brighten my academic
7 lakhs. 4 . The economy is highly influenced by the Financial System of the country. patan. Economic well being in the long run depends significantly on how wise he invests. An investor has a wide array of investment avenues available. It is Unit Trust of India. Right now there are 38 AMCs and they have lunched more then 300 schemes.610. The Indian Financial System has been broadly divided into two segments: the organized and unorganized. In the starting of Mutual Concept in India only one AMC was in the resistance. In USA it is called Mutual Fund and in Britain it was called Unit Trust. Originally name of the Mutual fund was investment trusts. EXECUTIVE SUMMARY Mutual Funds were started in the year 1822 at Netherlands. it has started since 1964. In India. Indian AMCs are managing assets of Rs.School Of Business Management.qualification that provided me this opportunity to have a practical knowledge of relevant fields and Dr.Ashvin Modi – Faculty of S. 20798. since end of month of January 2006.K. Who is be my guide in real sense in this project and without whose guidelines I can be perfect. As per the record of the Association of Mutual Fund in India.
There is one apex body that regulates and promotes mutual fund in India. form traditional bank deposits to downright shady money-multiples schemes. income tax consultant.In present financial scenario where gold has lost its investment value. Due to uncertainty in share market and low return in the inflationary economy. The study uses convenient sampling for Financial Advisers. liquidity. The data is contained form insurance advisors. So it is necessary for investor to find the answer and way of capital growth with better return than uncertain share market and other low yield investment avenues. since last two decade and also there is no attractive return in the bank FD. 5 . convenience and tax efficiency. contacting personally and interviewing them collect the data: questionnaire is used as the instrument for research. AMFI also regulates advisers of mutual fund. They are also backed by through research. KVP. safety. When investors are confronted with an outstanding range of products. investor are puzzled. PPF. They provide the services of experienced and skilled professionals who determine this risk and monitor them on going basis. Mutual fund is indeed of great benefit in this respect. that where to invest their money from which they can get better return with flexibility. and other Post saving sachems. So the basic objective of the study was to test the potentiality and develop the business of mutual funds by obtaining the data form Independent financial advisors. NSC. tax benefit and as well as capital appreciation. and stockbroker. AMFI conduct the test that is compulsory for all the mutual fund advisers. MIS. post office agent. This apex body is AMFI (Association of Mutual Fund in India). it has to be judged on the yardsticks of returns. The sample size is 102. An important question facing many investors across the country today is whether one should invest in a bank fixed deposit the amount with a debt-oriented Mutual Fund.
1 SBI mutual fund company 3.3 Management 2 Chapter-2 3 Chapter-3 4 Chapter-4 6 .2 Our Corporate Governance Policy 4.6 Net Asset Value (NAV) 2.3 Types of Mutual funds Schemes 2.2 Mutual fund -Concept 2.1 Global Scenario 1.5 Benefit of Mutual fund invest 2.8 Regulatory Aspect of Mutual funds Comparison of other Mutual fund to Reliance Mutual fund 3.4 How to invest Mutual fund 2.1 The Mutual fund 4.3 History of Mutual funds in India 1.1 Introduction 2.3 UTI Mutual fund company About The RELIANCE Mutual fund Company 4.5 Classification of mutual funds Companies About Mutual fund 2.2 HDFC Mutual fund company 3.2 Indian Scenario 1.7 Entry and Exit Lord 2.CONTENTS Sr No 1 Chapter -1 Particulars Profile of mutual funds 1.4 Growth of Mutual funds in India 1.
7 The Register 4.1 Problem Discription 5.5 Benefit of this Report Analysis of Data Test of Hypothesis Conclusions Recommendations and Suggestion Bibliography Annexure 7 .13 How to invest Mutual fund Research Methodology 5.5 About RELIANCE Capital Asset 4.1 Schemes 4.2 Research Methodology 5.12 Our Service Providers 4.5 Chapter-5 6 Chapter-6 7 Chapter-7 8 Chapter-8 4.9 Registered Office 4.6 Auditors 4.4 Employee 4.3 Sampling 5.11 NAVs 4.4 Sources of India 5.8 Management Team 4.
In India fund managers do not have such leeway. In the U.75 % of the total assets. 72% of the core customer bases of mutual funds in the top 50-broking firms in the U. 8 .48 trillion in the U. In the U. mutual funds are allowed to go short. against a corpus of $ 100 million in India. but it is true that this aspect of technology could and will change the way financial sectors function.S. Many have debated about the success of e. such a facility is not yet of avail in India. eight are bank.S.7 million households will manage their assets on-line by the year 2003. the total number of schemes is higher than that of the listed companies while in India they have just 277 schemes Internationally. about 9. (Source: The Financial Express September 99) Internationally. Only Fidelity and Capital are non-bank mutual funds in this group. On.CHAPTER 1: PROFILE OF MUTUAL FUND Global Scenario Basic facts: The money market mutual fund segment has a total corpus of $ 1.line trading is a great idea to reduce management expenses from the current 2 % of total assets to about 0.sponsored. Out of the top 10 mutual funds worldwide.S.S. They have realized the potential of the Internet and are equipping themselves to perform better. are expected to trade on-line by 2003.commerce and its breakthroughs. on-line investing continues its meteoric rise. mutual funds cannot be left far behind. However.
while in India the Net is used as a source of Information.sell transactions have already begun on the net. since servicing them would be easier on the Net. Better advice: Mutual funds could provide better advice to their investors through the Net rather than through the traditional investment routes where there is an additional channel to deal with the Brokers. lower intermediation costs and better services for all. A research agency that specializes in internet technology estimates that over the next four years Mutual Fund Assets traded on. Mutual funds could bring down their administrative costs to 0. 9 . In India. Such increases in volumes are expected to bring about large changes in the way Mutual Funds conduct their business. Therefore if the administrative costs are low.5% as administrative fees. Here are some of the basic changes that have taken place since the advent of the Net.In fact in advanced countries like the U. the benefits are passed down and hence Mutual Funds are able to attract mire investors and increase their asset base.A. Such changes could facilitate easy access. Lower Costs: Distribution of funds will fall in the online trading regime by 2003.line will grow ten folds from $ 128 billion to $ 1.561 billion. bond funds can charge a maximum of 2. brokers could get more Net savvy than investors and could help the investors with the knowledge through get from the Net.line. mutual funds buy. New investors would prefer online: Mutual funds can target investors who are young individuals and who are Net savvy. As per SEBI regulations. whereas equity assets traded on-line will increase during the period from $ 246 billion to $ 1.S.25% and equity funds can charge 2.227 billion.75% if trading is done on. Direct dealing with the fund could help the investor with their financial planning. This will increase the share of mutual funds from 34% to 40% during the period.
Crore) Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Mar. The Internet users are going to increase dramatically and mutual funds are going to be the best beneficiary.Sep-04 04 Deposits 60541 85159 98914 113118 128085 156725 0 3 1 8 3 1 Change in % 15 14 13 12 18 over last yr Source – RBI 4-Dec 1622579 3 10 .000 crore. With smaller administrative costs more funds would be mobilized .4% during the rest of the decade. It is stimated that by 2010 March-end.A fund manager must be ready to tackle the volatility and will have to maintain sufficient amount of investments which are high liquidity and low yielding investments to honor redemption.6 million net users who are prime target for these funds and this could just be the beginning. the total assets of all scheduled commercial banks should be Rs 40. by year 2010. a is witnessing a genesis in this area.S. mutual fund assets will be double. In the last 5 years we have seen annual growth rate of 9%. According to the current growth rate. In the U. Indian mutual fund industry reached Rs 1.537 crore. The annual composite rate of growth is expected 13. Indian Scenario By December 2004. sites like AOL offer detailed research and financial details about the functioning of different funds and their performance statistics. Discuss with the following table: Aggregate deposits of Scheduled Com Banks in India (Rs. Net based advertisements: There will be more sites involved in ads and promotion of mutual funds.50. India has around 1.90.
Introduction of Financial Planners who can provide need based advice. Emphasis on better corporate governance. Soon they will find scope in the growing cities. 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the 'A' class cities. Only canalizing these savings in mutual funds sector is required. Our saving rate is over 23%. Mutual fund can penetrate rural like the Indian insurance industry with simple and limited products. US based. There is a big scope for expansion. We have approximately 29 mutual funds that are much less than US having more than 800. SEBI allowing the MF's to launch commodity mutual funds. with over US$1trillion assets under management worldwide.Mutual Fund AUM’s Growth Month/Year Mar-98 Mar00 MF AUM's 68984 93717 Change in % over last yr 26 Mar01 83131 13 Mar02 9401 7 12 Mar03 75306 25 Mar-04 Sep-04 13762 6 45 15114 1 9 4-Dec 149300 1 Facts for the Growth of Mutual Funds In India 100% growth in the last 6 years. Trying to curb the late trading practices. Center’s compensation for VAT to be below Rs 5000 Cr in FY06 11 . highest in the world. Number of foreign AMC's are in the que to enter the Indian markets like Fidelity Investments.
The impetus for establishing a formal institution came from the desire to increase the propensity of the middle and lower groups to save and to invest.” Unemployment grew. While some are for mutual funds others are against it.In the 1960's there was a phenomenal rise in aggressive growth funds (with very high risk). People became disillusioned with stocks and mutual funds. and even among them as far as possible. A severe bear market began in the autumn of 1969. UTI came into existence during a period marked by great political and economic uncertainty in India. History of Mutual Funds in India The end of millennium marks 36 years of existence of mutual funds in this country. In 1968 and 1969. The then Finance Minister. to those whose means are small. Panicked investors echoed it’ll never get back to where it was. The ride through these 36 years is not been smooth. entrepreneurs were hesitant to enter capital market. UTI commenced its operations from July 1964 . They should have hung in there! Many funds have risen 9." 12 . T. they received the majority of the billions of dollars flowing into mutual funds at that time. "The market's toast. However. Sometimes called "go-go" or "hot-shot" funds.T. as investors did not respond adequately to new issues. over 100 of these new aggressive growth funds were established. Krishnamachari set up the idea of a unit trust that would be "open to any person or institution to purchase the units offered by the trust. is intended to cater to the needs of individual investors. this institution as they see it. With war on the borders and economic turmoil that depressed the financial market. inflation went crazy.000% since then. Earnest efforts were required to canalize savings of the community into productive uses in order to speed up the process of industrial growth. and investors pulled billions back out of the funds. Investor opinion is still divided. The already existing companies found it difficult to raise fresh capital.
" Different provisions of the UTI Act laid down the structure of management. the stock market was booming. an intermediary that would help fulfill the twin objectives of mobilizing retail savings and investing those savings in the capital market and passing on the benefits so accrued to the small investors. This 13 . 25 crore in 1964 the industry has grown at a compounded average growth rate of 27% to its current size of Rs. From one player in 1985 the number increased to 8 in 1993. JP Morgan. UTI commenced its operations from July 1964 “with a view to encouraging savings and investment and participation in the income. GIC. The period 1986-1993 can be termed as the period of public sector mutual funds (PMFs). etc. The opening up of the asset management business to private sector in 1993 saw international players like Morgan Stanley. sponsored by public sector banks. The party did not last long. When the private sector made its debut in 1993-94. disclosures and regulatory requirements for the Trust. scope of business. But for the equity funds. Jardine Fleming. This was followed by the entry of others like BOI. The industry was oneentity show till 1986 when the UTI monopoly was broken when SBI and Canbank mutual fund entered the arena. powers and functions of the Trust as well as accounting. the period of 1994-96 was one of the worst in the history of Indian Mutual Funds.90000 crore. One thing is certain – the fund industry is here to stay. 1999—YEAR OF THE FUNDS Mutual funds have been around for a long period of time to be precise for 36 yrs but the year 1999 saw immense future potential and developments in this sector. profits and gains accruing to the Corporation from the acquisition. George Soros and Capital International along with the host of domestic players joins the party. LIC. management and disposal of securities.His ideas took the form of the Unit Trust of India. Starting with an asset base of Rs. holding.
and to get asset base and investor base they had to be fully armed with a whole lot of schemes for every investor . This time around all the participants are involved in the revival of the funds ----. both at the hands of the investor as well as the mutual fund. Growth of Mutual Funds in India The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. An insight of the Union Budget on mutual funds taxation benefits is provided later. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. the industry is maturing and the investors and funds are frankly and openly discussing difficulties opportunities and compulsions.So new schemes for new IPO’s were inevitable. 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. made them more attractive and provides acceptability among the investors.the AMC’s. at the initiative of the Government of India and Reserve Bank the. The Union Budget exempted mutual fund dividend given out by equity-oriented schemes from tax. The budget brought about a large number of changes in one stroke. The first scheme launched by UTI was Unit 14 . The quest to attract investors extended beyond just new schemes. The funds started to regulate themselves and were all out on winning the trust and confidence of the investors under the aegis of the Association of Mutual Funds of India (AMFI) One cam say that the industry is moving from infancy to adolescence. the other related parties. It provided centre stage to the mutual funds. The history of mutual funds in India can be broadly divided into four distinct phases First Phase – 1964-87 An Act of Parliament established Unit Trust of India (UTI) on 1963. No longer were the mutual funds interested in selling the concept of mutual funds they wanted to talk business which would mean to increase asset base. the unit holders.year signaled the year of resurgence of mutual funds and the regaining of investor confidence in these MF’s. However the sole factor that gave lifer to the revival of the funds was the Union Budget.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The Unit Trust of India with Rs. Bank of Baroda Mutual Fund (Oct 92). public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). BOB and LIC. Third Phase – 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993. there were 29 funds.000 crores of assets under management and with the setting up of a UTI Mutual Fund. a new era started in the Indian mutual fund industry. the mutual fund industry has entered its current phase of consolidation and growth. giving the Indian investors a wider choice of fund families. Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non. the mutual fund industry had assets under management of Rs. As at the end of January 2003. SBI Mutual Fund was the first non.153108 crores under 421 schemes. representing broadly. Also. 15 . Bank of India (Jun 90).Scheme 1964. conforming to the SEBI Mutual Fund Regulations. The graph indicates the growth of assets over the years.6. 1.805 crores. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. except UTI were to be registered and governed.21.UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87). PNB. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 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.44. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. the assets of US 64 scheme. It is registered with SEBI and functions under the Mutual Fund Regulations.UTI. At the end of 1988 UTI had Rs. there were 33 mutual funds with total assets of Rs. As at the end of September. 1993 was the year in which the first Mutual Fund Regulations came into being. Punjab National Bank Mutual Fund (Aug 89). with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. assured return and certain other schemes. Indian Bank Mutual Fund (Nov 89). Fourth Phase – since February 2003 In February 2003. At the end of 1993.29. sponsored by SBI. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. The Specified Undertaking of Unit Trust of India. under which all mutual funds. and with recent mergers taking place among different private sector funds.700 crores of assets under management. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.004 crores.541 crores of assets under management was way ahead of other mutual funds. which manage assets of Rs.835 crores as at the end of January 2003. The second is the UTI Mutual Fund Ltd. The number of mutual fund houses went on increasing.76. 2004. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.47.
In the year of 2005 Mutual funds had collected 24000 Crores and in this year Mutual funds has collected 9000 crores in January. Growth in Assets under Management 16 .
17 .Note: Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit Trust of India effective from February 2003. The Assets under management of the Specified Undertaking of the Unit Trust of India has therefore been excluded from the total assets of the industry as a whole from February 2003 onwards.
Jeevan Bima Sahayog Asset Management Co. Pvt.Classification of Mutual Funds Companies The Mutual Funds Organization can be classified as below: BANK SPONSORED BOB Asset Management Co. PRIVATE SECTOR Benchmark Asset Management Co. Ltd.1 Introduction “A mutual fund is a pool of money that is invested in various securities and professionally managed by an investment manager…” Definition of Mutual Fund A mutual fund is a pool of assets invested on behalf of investors. Ltd. INSTITUTIONS GIC Asset Management Co. Credit Capital Asset Management Co. debt securities (such as bonds and debentures) and other financial 18 . J. Kotak Mahindra Asset Management Co. JOINT VENTURES. Ltd. Escorts Asset Management Ltd. Tata Asset Management Private Ltd. Mutual funds invest in a diversified portfolio of securities. Ltd.PREDOMINANTLY INDIAN Birla Sun Life Asset Management Co. Ltd. SBI Funds Management Ltd. which can include equity securities (such as common and preferred shares). Ltd. Ltd. UTI Asset Management Company Pvt. Ltd. Ltd. Capital Management Pvt. CHAPTER 2: ABOUT MUTUAL FUNDS 2. Pvt. Ltd. HDFC Asset Management Co.M. Ltd Sundaram Asset Management Company Ltd. Sahara Asset Management Co. Cholamandalam Asset Management Co. Canbank Investment Management Services Ltd. Ltd. Reliance Capital Asset Management Ltd. Ltd. DSP Merrill Lynch Fund Managers Ltd. IL & FS Asset Management Co.
Like most developed and developing countries the mutual fund cult has been catching on in India.to invest in a variety of different securities. A mutual fund. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. professionally managed basket of securities at a relatively low cost. but subject to any losses in value as well. Individual investors own a percentage of the value of the fund as represented by the number of units they purchase. And in addition to this a mutual fund brings the benefits of diversification and money management to the individual investor. The flow chart below describes broadly the working of a mutual fund: 19 . debentures and other securities. 2. and each investor holds a pro rata share of the portfolio entitled to any profits when the securities are sold. and capital gains and dividend reinvestment. money market securities or some combination of these. Mutual funds make it easy and less costly for investors to satisfy their need for capital growth. by its very nature. There are various reasons for this. professional money management. The benefits to investors in buying shares of mutual funds come primarily from diversification. there are many different types of mutual funds with different objectives and levels of growth potential. The money thus collected is then invested in capital market instruments such as shares.its assets are invested in many different securities. is diversified -. Understanding Mutual funds is easy as it's such a simple concept: a mutual fund is a company that pools the money of many investors -.instruments issued by corporations and governments. Investments may be in stocks. providing an opportunity for financial success that was once available only to a select few.its shareholders -. A collection of money invested in a group of assets and managed by an investment company (a mutual fund company or other). Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. income and/or income preservation.2 Mutual Fund – Concept A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money comes from investors who want to buy shares in the fund. furthering investor’s chances to diversify. bonds. according to the stated investment objectives of the funds. Beyond that. Those securities are professionally managed on behalf of the shareholders.
Mutual Fund Operation Flow Chart Pooled their money with Passed back to Investor Returns Fund Manager Generates Securities Invest in 20 .
Organization of Mutual Fund 2.3 Types of Mutual Fund’s Schemes: - 21 .
2] Fixed-Income Funds invest in government or corporate securities that offer fixed rates of return are 3] While funds that invest in a combination of both stocks and bonds are called Balanced Funds. investors’ expectations and other market factors Classification According To Investment Objectives Mutual funds can be further classified based on their specific investment objective such as growth of capital. An open-ended fund allows one to enter the fund at any time and even to invest at regular intervals. safety of principal. you can buy or sell units of the scheme on the stock exchanges where they are listed. Open-ended schemes are preferred for their liquidity. Open-ended schemes Open-ended schemes do not have a fixed maturity period. This provides ready liquidity to the investors and avoids reliance on transfer deeds. current income or tax-exempt income. unit capital of open-ended funds can fluctuate on a daily basis. In general mutual funds fall into three general categories: 1] Equity Funds are those that invest in shares or equity of companies. These schemes have unlimited capitalization. These funds are not generally listed on any exchange. Investors can buy or sell units at NAV-related prices from and to the mutual fund on any business day. The advantages of open-ended funds over closeended are as follows: Any time exit option. Investors can buy into these funds during the period when these funds are open in the initial issue. The market price of the units could vary from the NAV of the scheme due to demand and supply factors. Any time entry option. after the initial issue. the issuing company directly takes the responsibility of providing an entry and an exit. signature verifications and bad deliveries. After that such scheme cannot issue new units except in case of bonus or rights issue? However. Close-ended schemes Close-ended schemes have fixed maturity periods. Hence. open-ended schemes do not have a fixed maturity. 22 . Such funds can issue and redeem units any time during the life of a scheme. there is no cap on the amount you can buy from the fund and the unit capital can keep growing.
They are suitable for investors who can assume some risk to achieve growth of capital but who also want to maintain a moderate level of current income. These funds invest in corporate bonds or government-backed mortgage securities that have a fixed rate of return. High-yield funds. They are not suitable for investors who must conserve their principal or who must maximize current income. The investment strategies used to reach these goals vary among funds. Some invest in a dual portfolio consisting of growth stocks and income stocks. Some fixed-income funds seek to minimize risk by investing exclusively in securities whose timely payment of interest and principal is backed by the full faith and credit of 23 . preferred stocks. convertible securities or fixedincome securities such as corporate bonds and money market instruments. Within the fixed-income category. entail less stability of principal than fixed-income funds that invest in higherrated but lower-yielding securities. Growth funds generally incur higher risks than income funds in an effort to secure more pronounced growth. funds vary greatly in their stability of principal and in their dividend yields. Fixed-Income Funds Fixed income funds primarily look to provide current income consistent with the preservation of capital. Growth funds are suitable for investors who can afford to assume the risk of potential loss in value of their investment in the hope of achieving substantial and rapid gains. Growth Funds Growth funds primarily look for growth of capital with secondary emphasis on dividend. Growth and income funds have low to moderate stability of principal and moderate potential for current income and growth. and hence growth funds provide low current income. Such funds invest in shares with a potential for growth and capital appreciation. which seek to maximize yield by investing in lower-rated bonds of longer maturities. or a combination of growth stocks. stocks paying high dividends. Others may invest in growth stocks and earn current income by selling covered call options on their portfolio stocks. Some growth funds concentrate on one or more industry sectors and also invest in a broad range of industries. They invest in well-established companies where the company itself and the industry in which it operates are thought to have good long-term growth potential. Growth and Income Funds Growth and income funds seek long-term growth of capital as well as current income.
4 How to Invest In Mutual Fund These are steps given below to invest in Mutual Funds. lifestyle. Step Two . thus bringing down investor’s average cost per unit. and level of income and expenses among many other factors.Start early 24 .the Indian Government. based on investor’s age.Invest regularly The best approach is to invest a fixed amount at specific intervals. By investing a fixed sum each month. 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. the quantum of risk you are willing to take and investor’s cash flow requirements. You can begin by defining investor’s investment objectives and needs which could be regular income. the first step is to assess investor’s needs. Step Four . This is called rupee cost averaging and do investors all over the world follow a disciplined investment strategy. you buy fewer units when the price is higher and more units when the price is low. say every month. These funds invest in both shares and fixed income securities in the proportion indicated in their offer documents Ideal for investors. Fixed-income funds are suitable for investors who want to maximize current income and who can assume a degree of capital risk in order to do so. 2. You may consider investing in a combination of schemes to achieve investor’s specific goals.Select the ideal mix of Schemes Investing in just one Mutual Fund scheme may not meet all investor’s investment needs. who are looking for a combination of income and moderate growth. 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. Balanced The Balanced fund aims to provide both growth and income. Other factors could be the portfolio allocation. Step Five. the dividend yield and the degree of transparency as reflected in the frequency and quality of their communications.Choose the right Mutual Fund The important thing is to choose the right mutual fund scheme. Therefore. You can also avail the systematic investment plan facility offered by many open-end funds. Step one . buying a home or finance a wedding or educate investor’s children or a combination of all these needs. which suits investor’s requirements. financial independence. family commitments. Step Three .Identify investor’s Investment needs Investor’s financial goals will vary.
Each unit of any scheme represents the proportion of pool owned by the unit holder (investor). Many more international Mutual Fund giants are expected to come into Indian markets in the near future.It is desirable to start investing early and stick to a regular investment plan. You may reap the rewards in the years to come. either alone or in collaboration with reputed international firms.com for online application forms of various mutual fund schemes and start investing. Mutual Funds are suitable for every kind of investor . The power of compounding lets you earn income on income and investor’s money multiplies at a compounded rate of return. Appreciation or reduction in value of investments is reflected in net asset value (NAV) of the concerned scheme.The final step All you need to do then visit to www. which is declared by the fund from time to time. growth oriented or income seeking 2. conservative or risk taking. Step Six . you will make more than if you wait and invest later.njindia. Different business groups/ financial institutions/ banks have sponsored these AMCs. Several international funds like Alliance and Templeton are also operating independently in India. If you start now. The benefits on offer are many with good post-tax returns and reasonable safety being the hallmark that they normally associate with them. Some of the other major benefits of investing in them are: 25 .whether starting a career or retiring. Respective Asset Management Companies (AMC) manages mutual fund schemes.5 Benefits of Mutual Fund Investment:Mutual Funds are essentially investment vehicles where people with similar investment objective come together to pool their money and then invest accordingly.
The only pertinent factor here is that the fund has to be selected keeping the risk profile of the investor in mind because the products listed above have different risks associated with them. They use intensive research techniques to analyze each investment option for the potential of returns along with their risk levels to come up with the figures for performance that determine the suitability of any potential investment. 3. debt funds offer the kind of security that is aimed for at the time of making investments. Diversification Investments are spread across a wide cross-section of industries and sectors and so the risk is reduced. Number of Available Options Mutual funds invest according to the underlying investment objective as specified at the time of launching a scheme. While equity funds can be as risky as the stock markets themselves. 2. gilt funds and many others that cater to the different needs of the investor. debt funds. 26 . The availability of these options makes them a good option. So. Money market funds offer the liquidity that is desired by big investors who wish to park surplus funds for very short-term periods. Balance Funds faster to the investors having an appetite for risk greater than the debt funds but less than the equity funds. Professional Management Mutual Funds employ the services of skilled professionals who have years of experience to back them up.1. while equity funds are a good bet for a long term. they may not find favor with corporate or High Net worth Individuals (HNIs) who have short-term needs. One can achieve this diversification through a Mutual Fund with far less money than one can on his own. they have equity funds. Diversification reduces the risk because all stocks don’t move in the same direction at the same time. So.
It is calculated simply by dividing the net asset value of the fund by the number of units. 5. Liquidity Fixed deposits with companies or in banks are usually not withdrawn premature because there is a penal clause attached to it. So it recovers part of these regular expenses from the investor. charge exit loads for withdrawal within a period linked to a specific scheme. 2. if the fund is dissolved or liquidated. the units can be transacted at the prevailing market price on a stock exchange. In other words. An entry load is also called the sales load.4. represented by the ownership of one unit in the fund. Loads normally apply to only open-ended schemes.6 Net Asset Value (NAV):The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. Assets Value 2. It is broken into two parts: annual management fee (up to 1. Mutual funds also provide the facility of direct repurchase at NAV related prices. most people refer loosely to the NAV per unit as NAV. People can pick their investment horizon and stay put in the chosen fund for the duration. this is the amount that the shareholders would collectively own. Though they are affected by the interest rate risk in general. In closed-end schemes. This means that the money can be withdrawn anytime. without much reduction in yield.25 per cent for funds less than Rs 100 crore and one per cent for funds above Rs 100 crore) and entry & exit loads. which is the value. The market prices of these schemes are dependent on the NAVs of funds and may trade at more than NAV (known as Premium) or less than NAV (known as Discount) depending on the expected future trend of NAV. The NAV of the units of the Scheme(s) will be computed by dividing the net assets of the Scheme(s) by the number of Units outstanding on the valuation date. the returns generated are more as they pick securities with different duration that have different yields and so are able to increase the overall returns from the portfolio. ignoring the "per unit". which is mainly to help the AMC recover expenses relating to 27 . Some mutual funds however. However. Potential of Returns Returns in the mutual funds are generally better than any other option in any other avenue over a reasonable period of time. The debt funds too will outperform other options such as banks. Bullish market may result in schemes trading at Premium while in bearish markets the funds usually trade at Discount. Equity funds can outperform most other investments over long periods by placing long-term calls on fundamentally good stocks. by selling off all the assets in the fund. which in turn is linked to general market conditions.7 Entry and Exit Lord Entry Load The AMC that manages investor’s mutual fund cannot also afford to bear all its expenses. for whom it is doing this big favor. This gives rise to the concept of net asset value per unit. The investors can withdraw or redeem money at the Net Asset Value related prices in the open-end schemes. We also abide by the same convention.
The asset management company shall issue to the applicant whose application has been accepted.(i) If the mutual fund fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1).77). 2.085 units (10. Smart investors have to recognize this tactic used by an AMC. if the funds NAV is Rs 12 and the applicable sales load is 6 per cent. shortterm investors are charged an exit load. This happens when the fund has done poorly against the benchmark index. Exit load If you withdraw within a specified period is charged while redeeming investor’s units.9 Regulatory Aspects of Mutual Funds: Schemes of a Mutual Fund The asset management company shall launch no scheme unless the trustees approve such scheme and a copy of the offer document has been filed with the Board. if it wants to prevent unit holders from selling their units. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor The mutual fund and asset management company shall be liable to refund the application money to the applicants. An established fund can also manipulate investor entry into a fund by charging or not charging a sales load. If the investor applied for Rs 10.000 worth of units he would receive 783.000/12. the AMC welcomes investors by advertisements screaming "no load" if invested within a certain time frame. (ii) If the moneys received from the applicants for units are in excess of subscription as referred to in clause (b) of sub-regulation (1).06)). distribution. An AMC can charge a stiff entry load if it wants to prevent more investor from pouring money into its schemes. However. The price at which an investor buys into the fund is a function of both the NAV and sales load. advertising and agent/broker commissions. The latter is for more logical reasons.sales literature. Every mutual fund shall along with the offer document of each scheme pay filing fees. unit certificates or a statement of accounts specifying the number of units allotted to the applicant as soon as possible but not later than six weeks from the date of 28 . But an exit load can also be applied by the AMC. More often. For instance.77 (12/(1-0. So to ensure that longer-term investors are not penalized. that rarely happens. especially with income or money market funds. 5. where a quick withdrawal by too many investors can put pressure on the fund's asset maturity profile. investor’s cost of entry is Rs 12.
Investment Objectives and Valuation Policies: The price at which the units may be subscribed or sold and the price at which such units may at any time be repurchased by the mutual fund shall be made available to the investors. Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management company. trustees or asset management company. which are incorrect or false. relating to its activities as mutual fund. which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the Act.closure of the initial subscription list and or from the date of receipt of the request from the unit holders in any open ended scheme. 29 . during the period of suspension. No mutual fund under all its schemes should own more than ten per cent of any company's paid up capital carrying voting rights. shall cease to carry on any activity as a mutual fund. as the case may be. trustee or asset management company. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of Asset Management Company. documents. Rules Regarding Advertisement: The offer document and advertisement materials shall not be misleading or contain any statement or opinion. trustees or asset management company. and shall be subject to the directions of the Board with regard to any records. Restrictions on Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer. General Obligations: Every asset management company for each scheme shall keep and maintain proper books of accounts. The financial year for all the schemes shall end as of March 31 of each year. Such transfers are done at the prevailing market price for quoted instruments on spot basis. records and documents are maintained. Procedure for Action In Case Of Default: On and from the date of the suspension of the certificate or the approval. the mutual fund. A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. for each scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the fund and intimate to the Board the place where such books of accounts. All such investments shall be made with the prior approval of the Board of Trustees and the Board of Asset Management Company. records and documents. or securities that may be in its custody or control.
wherever investments are intended to be of long-term nature. From the above definitions we can say that main intention of investment any financial return. deliver the securities and shall in no case put itself in a position whereby it has to make short sale or carry forward transaction or engage in badla finance. get the securities purchased or transferred in the name of the mutual fund on account of the concerned scheme. No mutual fund scheme shall make any investment in. Investments in these form are call ‘Financial Investments’. Pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. Financial experts and economists have further categorized investment. provided that aggregate inter scheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund.1 Investment Investment is the employment of funds with the aim of achieving additional income or growth in value. The initial issue expenses in respect of any scheme may not exceed six per cent of the funds raised under that scheme. These assets range from safe investments to risky investments. Investment is the allocation of monetary resources to assets that are expected to yield some gain or positive return over a given period of time. 30 . Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases. or Any security issued by way of private placement by an associate or group company of the sponsor CHAPTER 3: COMPARISON OF OTHER MUTUAL FUND TO RELIANCE MUTUAL FUNDS 3. The essential quality of an investment is that it involves ‘waiting’ for a reward. The term ‘Investment. Any unlisted security of an associate or group company of the sponsor. which have been saved or put away from currant consumption in the hope that some benefits will accrue in future. It involves the commitment of resources. take delivery of relative securities and in all cases of sale. A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees.The securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made. Every mutual fund shall. does not appear to be as simple as it has been defined.
The nature of investment in the financial sense differs from its use in the economic sense. These may vary between risky and safe investments. and services that are used in production of other goods and services. Some factors that have made investment decisions increasingly important are: Longer life expectancy: Investment decisions have become significant as most people in India retire between the ages of 55 to 60 years. Also. Increasing in the working population. In this book however. National Savings Certificates. Life Insurance. The importance of investment decisions is further enhanced by the fact that there are an increasing number of women working in organizations. which flow into the capital market directly or through institutions. investment will be used in its ‘financial sense’ and investment will include those instruments and institutional media into which savings are placed. Savings by themselves do not increase wealth. proper planning for life span and longevity have ensured the need for balanced investments Increasing Rate of Taxation: Taxation is one of crucial factors in any country. To the economist. Some examples. Interest Rate: Another aspect. 3. These aspects must be considered before actually allocating any 31 . Investor as ‘suppliers’ and investors as ‘users’ of long-term funds find a meeting place in the market. These women will be responsible for planning their own investments during their working in organizations. ‘Investment’ means the net additions to the economy’s capital stock. Interest rates vary between one investment and another. which consists of goods. Unit Linked Insurance Plan. which is necessary for a sound investment plan. these must be invested in such a way that the principal and income will be adequate for a greater number of retirement years.1. may be cited hare. however. Development Bonds. These will be discussed in greater detail under availability of investment Options later in the chapter. they are able to have a stable income. dividend in ‘new’ and secondhand capital financing. they may also differ due to different benefit schemes offered by the investments. These women will be responsible for planning their own investments during their working life so that after retirement. and Post Office Cumulative Deposit Schemes etc. is the level of interest rates. the trend shows longer life expectancy. Benefits in tax accrue out of investment in Equity Link Savings Scheme (ELSS). The financial and economic meanings of investment are related to each other because investment is a part of the savings of individuals. The earning from employment should. therefore be calculated in such a manner that a portion should be put away as a savings. There are various forms of savings outlets in our country in the form of investments which helps in bring down the tax level by offering deductions in personal income. which introduces an element of compulsion in a person’s savings.1 Reasons for Investments Investments are both important and useful in the context of present-day conditions.
provident fund. Mutual fund Schemes and so on. expansion in the Private Corporate Sector. More incomes and more avenues of investment have led to the ability and willingness of working people to save and investments have led to the ability and willingness of working people to save and invest their funds. an investor also has to always bear in mind the taxation burden. Public Sector Enterprises.some are simple and direct. Inflation: Inflation has become continues problem since the last decade. several problems are associated coupled with a falling standard of living. Besides high rate of Interest and safety of principal. life insurance. This book is concerned with determining whether the investor is getting an acceptable return commensurate with the risks that are taken. In these years of rising prices. investors have the choice of a variety of instruments. Stability of interest is as important as receiving a high rate of interest. 32 . a number of new organizations and services were formed. Apart from putting aside savings in savings in savings banks where interest is low. Investment Options are of several kinds. The question to reason out is which is the most suitable channel? Which Options will give a balanced growth and stability of return? The investor in his choice of investment will have to try and achieve a proper mix between high rate of return and stability of return to reap the benefits of both. with the stages of development in the country. Otherwise. These will be discussed in greater detail in the head of Investment Options. fixed deposit in the corporate sector. Investment Channels: The growth and development of the country leading to greater economic activity has led to the introduction of a vast array of investment outlets. the Indian Administrative Services. erosion of the resources will have to be carefully considered in odder to make the right choice of investor will try and search an outlet which will give him a high rate of return in the form of interest or return will be continuous or there is a likelihood of irregularity. A high rate of interest may not be the only factor favoring the outlets for investment. Before funds are invested. Tourism. A sound investment program can be constructed if the investor familiarizes himself with the various alternative investments available. he will have to find outlets. Investment Options Many types of investment Options or channels for making investment are available. The Banking Recruitment Services. the benefit derived from interest will be offset by an increase in taxation. which will ensure safety of principal. establishing of Financial Institutions. and Education are some examples. After independence. The employment opportunities gave rise to both male and female working force. Coupled with high rate of interest.amount. The investor has to include in his portfolio several kinds of investments. other present complex problems of analysis and investigation. Some of the instruments available are corporate stock. Income: Another reason why investment decisions have assumed importance is the general increase in employment opportunities in India. Hotels.
SBI Mutual Fund is a joint venture between the State Bank of India and Société Générale Asset Management. He has to choose the security. In the process it has rewarded it’s investors handsomely with consistently high returns. another investor would not mi9nd risk because he dose not have financial problems but he would like a high return. one investor may face a situation when he requires extreme liquidity.India’s largest banking enterprise. Therefore. one of the world’s leading fund management companies that manages over US$ 330 Billion worldwide. For instance. The ultimate objective of the investor is to derive a variety of investments that meet this preference for risk and expected return. others are relatively new and unidentified. The institution has grown immensely since its inception and today it is India's largest bank. He may also want safety of securities. The fund traces its lineage to SBI . Exploiting expertise. From this board spectrum. as he is willing to accept risk. the investor will have to select those securities that maximize his utility. Security presents a wide range of risk from risk-free instruments to highly speculative shares and debentures. It is not only the construction of a portfolio that will promise the highest expected return but also it is the satisfaction of the need of the investor. in other words. Another important consideration is the temperament and psychology of the investor. compounding growth In eighteen years of operation. Some investments are appropriate for one type of investor and another may be suitable to another person. which will maximize his utility.Some are familiar. which will maximize his expected returns subject to certain considerations. Some investors are temperamentally suited to take risks. One investor may prefer safe government bonds whereas another may be willing to invest in blue chip equity shares of a company. SBI MUTUAL FUND COMPANY CORPORATE PROFILE SBI Mutual Fund is India’s largest bank sponsored mutual fund and has an enviable track record in judicious investments and consistent wealth creation. there is other who is not willing to invest in risky securities even if the return to take risks. he will have to choose a security with low returns. Such an investor can put his savings in growth shares. The investor will select the portfolio. The investment decision is an optimization problem but the objective function varies from investor to investor. 33 . there are others who are not willing to invest in risky securities even if the return is high. patronised by over 80% of the top corporate houses of the country. The investor. has a optimization problems. the fund has launched thirty-two schemes and successfully redeemed fifteen of them.
Sinha joined SBI Mutual Fund as the Head of Equities in November 2005 and has managed the largest number of funds in SBI MF covering the entire spectrum of equity funds – from index funds. Sanjay Sinha has taken over as Chief Investment Officer with effect from June 1. 26 investor service centres. Prior to joining SBI MF. Sanjay Sinha has a rich experience in managing funds.8 million investors have reposed their faith in the wealth generation expertise of the Mutual Fund. Sinha worked as Senior Fund Manager with UTI Mutual Fund and was managing a corpus of over Rs 28 billion (over US$600 million). 2007. SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent India Opportunities Fund . Growth through innovation and stable investment policies is the SBI MF credo.A total of over 3. He worked 7 years as equity portfolio manager at SGAM before joining SBI Funds Management Pvt. Mr. in May 2005 handling institutional and mutual 34 . Ltd. Mr. Mr. 33 investor service desks and 52 district organisers. He has over 18 years of experience in the Mutual Fund Industry. Head Investment Risk & Process Control : Eric Bramoull é . 20000 crores of assets and has a diverse profile of investors actively parking their investments across 40 active schemes. Today. MANAGEMENT TEAM Chief Investment Officer : Sanjay Sinha Mr. the fund manages over Rs. The fund serves this vast family of investors by reaching out to them through network of over 100 points of acceptance.Head Investment Risk & Process Control Eric post-graduated from La Sorbonne University with a DESS in Bank & Finance. A Post Graduate from IIM Kolkatta. Schemes of the Mutual fund have consistently outperformed benchmark indices and have emerged as the preferred investment for millions of investors and HNI’s. diversified equity funds to sector funds.
He has more than 12 years of experience in capital markets ranging from institutional equities. are riskier than Diversified Equity Funds. he was responsible for advising the offshore fund Deutsche India Equity Fund. India and TD Bank Financial Group. Sectoral Funds and Index Funds. Head Portfolio Management Services / Fund Manager : Nipa Ladiwala After obtaining a post graduate degree in Business Management and Law. Eric specialized in the commodity sector and the use of derivatives. Magnum COMMA Fund Magnum Equity Fund 35 . Equity : Aashish Wakankar (Vice President & Fund Manager) Aashish Wakankar is a Bachelor of Science from University of Mumbai and holds Post Graduate Diploma in Management Studies from Jamnalal Bajaj Institute of Management Studies.part of Deutsche Bank Group. She was head of Research at UTI Securities before joining SBI Funds Management Pvt. However they are also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such investors who have high risk taking capacities and are willing to think long term. Index Funds invest passively only in the stocks of a particular index and the performance of such funds move with the movements of the index. Deutsche Asset Management . which was listed on NYSE. Ltd since October 2005. equity research and fund management. Diversified Equity Funds invest in various stocks across different sectors while sectoral funds which are specialized Equity Funds restrict their investments only to shares of a particular sector and hence. Nipa worked as an equity analyst. Eric is also a post-graduate of SFAF (diploma from European Federation of Financial Analysts Societies). She has a total of 15 years experience and has been with SBI Funds Management Pvt. At Deutsche Asset Management. Subsequently she was appointed as Fund Manager for India Growth Fund. he has worked with Kotak Mahindra Asset Management. Japan and MetLife Insurance. Equity Funds include diversified Equity Funds. Debt / Fixed Income : EQUITY SCHEME The investments of these schemes will predominantly be in the stock markets and endeavor will be to provide investors the opportunity to benefit from the higher returns which stock markets can provide. as Head of PMS. and dealer for the offshore Funds of UTI. University of Mumbai.funds invested in European and International markets. Prior to joining SBI Funds Management. and TATA TD Waterhouse Securities . Canada. Nipa has 6 years experience as Fund Manager. Ltd. He is associated with SBI Funds Management from December 2005.a joint venture between the TATA Group.
FMCG Fund MSFU .Pharma Fund MSFU .Emerging Businesses Fund MSFU .Emerging Businesses Fund MSFU .IT Fund MSFU .Series I SBI Magnum Taxgain Scheme 1993 SBI ONE India Fund DEBTS SCHEMES Magnum COMMA Fund Magnum Equity Fund Magnum Global Fund Magnum Index Fund Magnum MidCap Fund Magnum Multicap Fund Magnum Multiplier Plus 1993 Magnum Sector Funds Umbrella MSFU .Contra Fund SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI Infrastructure Fund .Pharma Fund 36 .IT Fund MSFU .FMCG Fund MSFU .Magnum Global Fund Magnum Index Fund Magnum MidCap Fund Magnum Multicap Fund Magnum Multiplier Plus 1993 Magnum Sector Funds Umbrella MSFU .
HDFC MUTUAL FUND COMPANY Vision To be a dominant player in the Indian mutual fund space. Hence they are less risky than equity funds. They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets.Series I SBI Magnum Taxgain Scheme 1993 SBI ONE India Fund BALANCED SCHEMES Magnum Balanced Fund invest in a mix of equity and debt investments.MSFU . but is looking for higher returns than those provided by debt funds. recognized for its high levels of ethical and professional conduct and a commitment towards enhancing investor interests. subject to tracking errors Basic Scheme Information 37 . but at the same time provide commensurately lower returns.Contra Fund SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI Infrastructure Fund . investment Objective Nifty Plan: The objective of this Plan is to generate returns that are commensurate with the performance of the Nifty.
For new investors :Rs. 100 thereafter. A small portion of the net assets will be invested in money market instruments permitted by SEBI / RBI including call money market or in alternative investment for the call money market as may be provided by the RBI.Nature of Scheme Inception Date Option/Plan Entry Load (as a % of the Applicable NAV) Exit Load (as a % of the Applicable NAV) Open Ended Index Linked Scheme July 17.00% is payable if Units are redeemed within one year from the date of allotment.5000 and in multiples of Rs. Normally despatched within 3 Business days Investment Pattern The net assets of the Plan will be invested predominantly in stocks constituting the S&P CNX Nifty and / or in exchange traded derivatives on the S&P CNX Nifty. an Exit Load of 1. This would be done by investing in almost all the stocks comprising the S&P CNX Nifty in approximately the same weightage that they represent in the S&P CNX Nifty Index and / or investing in derivatives including futures contracts and options contracts on the S&P CNX Nifty Index. no Exit Load is payable. Nil In respect of each purchase / switch-in of Units upto and including Rs. 5 lakh in value. 2002 Growth Plan. In respect of each purchase / switch-in of Units greater than Rs. to meet the liquidity requirements of the Plan. Minimum Application Amount For existing investors : Rs.100 thereafter . Investment Strategy & Risk Control 38 . Lock-In-Period Net Asset Value Periodicity Redemption Proceeds Tax Benefits (As per present Laws) Nil Every Business Day.5 lakh in value. 1000 and in multiples of Rs.
proactive follow-up with the service providers for daily change in weights in the respective indices as well as monitor daily inflows and outflows to and from the Fund closely. 1999. In terms of the Investment Management Agreement. 2000. 1956.T. amongst others. Backbay Reclamation. H. taking into account the change in weights of stocks in the indices as well as the incremental collections / redemptions from these Plans. for potential investment. Management : HDFC Trustee Company Limited: a company incorporated under the Companies Act. RISK CONTROL For the SENSEX Plan. as amended from time to time. Churchgate. 1956 is the Trustee to the Mutual Fund vide the Trust deed dated June 8. The investment strategy would revolve around reducing the tracking error to the least possible through regular rebalancing of the portfolio. HDFC Trustee Company Limited is a wholly owned subsidiary of HDFC Limited. The actively managed portion of 10-20% of net assets of the Plan would be invested in stocks that have been identified as having high probability to outperform the SENSEX. The registered office of the AMC is situated at Ramon House. risks would be the impact cost on securities.400 020. and was approved to act as an Asset Management Company for the Mutual Fund by SEBI on July 3. 2000. Risk control for the actively managed portion of the SENSEX Plus Plan would entail setting limits for single stock and single industry exposures by the Investment committee for this portion. subject to SEBI Regulations. While these measures are expected to mitigate the above risks to a large extent. Mumbai . It is proposed to manage the risks by placing limit orders for basket trades and other trades. 169. HDFC Asset Management Company Limited (AMC): was incorporated under the Companies Act. for this component. 3rd Floor. Parekh Marg. the Nifty Plan and the proportion of the SENSEX Plus Plan that would be managed similar to the SENSEX Plan.The SENSEX Plan and the Nifty Plan will be managed passively with investments in stocks in a proportion that is as close as possible to the weightages of these stocks in the respective indices. on December 10. the Trustee has appointed HDFC Asset 39 . there can be no assurance that these risks would be completely eliminated. the delayed communication of weightage changes by the index service providers and the delayed calculation of net change in assets of each of the Plans. The SENSEX Plus Plan will be passively managed to the extent of 80-90% of the net assets of the Plan and would follow similar investment strategy as for the SENSEX and the Nifty Plan. The Investment Manager would follow the process of in-depth research to identify such candidates from stocks other than those comprising the SENSEX.
The AMC is managing 18 open-ended schemes of the Mutual Fund viz. The AMC had entered into an agreement with ZIC to acquire the said business. HDFC has 40 . HDFC Gilt Fund (HGILT). 75. HDFC Prudence Fund (HPF). HDFC Capital Builder Fund (HCBF). The Certificate of Registration is valid from January 1. around 1 million depositors. HDFC Short Term Plan (HSTP).10 Standard Life Investments 49. The paid up capital of the AMC is Rs. HDFC Tax Plan 2000 (HTP). over 91. 2000 to act as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations. HDFC Growth Fund (HGF). HDFC Floating Rate Income Fund (HFRIF). HDFC Liquid Fund (HLF). subject to necessary regulatory approvals.161 crore. The AMC is also providing portfolio management / advisory services and such activities are not in conflict with the activities of the Mutual Fund.5 lac borrowers. had decided to divest its Asset Management business in India. HDFC Top 200 Fund. corporates and developers for the purchase or construction of residential housing. HDFC Index Fund. HDFC High Interest Fund (HHIF). HDFC provides financial assistance to individuals. sales services and valuation). HDFC Equity Fund (HEF). HDFC Sovereign Gilt Fund (HSGF) and HDFC Cash Management Fund (HCMF). HDFC Children's Gift Fund (HDFC CGF). 2007.g. It also provides property related services (e. HDFC Income Fund (HIF). the Schemes of Zurich India Mutual Fund has now migrated to HDFC Mutual Fund on June 19.PM / INP000000506 dated December 22. The AMC has obtained registration from SEBI vide Registration No. Of these activities. the Sponsor of Zurich India Mutual Fund. The AMC is also managing the respective Plans of HDFC Fixed Investment Plan. 2001 to December 31.000 shareholders and 50.90 Limited Zurich Insurance Company (ZIC). 2003. . following a review of its overall strategy.Management Company Limited to manage the Mutual Fund. Sponsors Housing Development Finance Corporation Limited (HDFC) HDFC was incorporated in 1977 as the first specialised mortgage company in India. 2003. property identification. HDFC has a client base of around 9.000 deposit agents as at March 31. a closed ended Income Scheme. On obtaining the regulatory approvals. 1993. (HT200). training and consultancy. HDFC TaxSaver (HTS). The present share holding pattern of the AMC is as follows: PARTICULARS HDFC % OF THE PAID UP SHARE CAPITAL 50. housing finance remains the dominant activity. HDFC Balanced Fund (HBF).
government and company bonds. At a Special General Meeting held in May voting members overwhelmingly voted in favour of this. Standard Life Investments Limited The Standard Life Assurance Company was established in 1825 and has considerable experience in global financial markets. 2007. Standard Life Investments is a leading asset management company. On April 2006. which includes a range of private and public equities. The Court of Session in Scotland approved this in June and Standard Life plc floated on the London Stock Exchange on 10 July 2006. China. Canada. Ireland and the USA to ensure it is able to form a truly global investment view. when an agreement was signed with HDFC to launch an insurance joint venture. The company operates in the UK. of assets under management. international syndicated loans. USAID.8% of the market capitalisation of the London Stock Exchange. The company's current holdings in UK equities account for approximately 1. promoted by HDFC was the first life insurance company in the private sector to be granted a Certificate of Registration (on October 23. DEG. 2000) by the Insurance Regulatory and Development Authority to transact life insurance business in India. UTI MUTUAL FUND COMPANY INTRODUCTION UTI Mutual Fund is managed by UTI Asset Management Company Private Limited (Estb: Jan 14. It is a wholly owned subsidiary of Standard Life Investments (Holdings) Limited. HDFC has received the highest rating for its bonds and deposits program for the twelfth year in succession.raised funds from international agencies such as the World Bank. with approximately US$ 269 billion as at March 30. 2003) who has been appointed by the UTI Trustee Company Private Limited for managing the schemes of UTI Mutual Fund and the schemes transferred / migrated from UTI Mutual Fund. Standard Life Investments was launched as an investment management company in 1998. The company re-entered the Indian market in 1995. 41 . In order to meet the different needs and risk profiles of its clients. Korea. ADB and KfW. HDFC Standard Life Insurance Company Limited. Standard Life Investments Limited manages a diverse portfolio covering all of the major markets world-wide. domestic term loans from banks and insurance companies. Hong Kong. which in turn is a wholly owned subsidiary of Standard Life plc. the Board of The Standard Life Assurance Company recommended that it should demutualise and Standard Life plc float on the London Stock Exchange. bonds and deposits. IFC (Washington). The company was present in the Indian life insurance market from 1847 to 1938 when agencies were set up in Kolkata and Mumbai. property investments and various derivative instruments.
State-of-the-art systems and communications are in place to ensure a seamless flow across the various activities undertaken by UTI AMC. UTI Mutual Fund has come into existence with effect from 1st February 2003. It has a track record of uninterrupted profits since inception in 1908.Sir Sayajirao Gaikwad III. Dubai and Bahrain. UTI International Limited.The UTI Asset Management Company has its registered office at : UTI Tower. UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizenry. Bandra (East). It has reset and upgraded transparency standards for the mutual funds industry. efficient. During the period since inception. All the branches. UTI Asset Management Company presently manages a corpus of over Rs. The fund managers are also ably supported with a strong in-house equity research department. The financial strength of the Bank and its long tradition of efficient customer service are 42 . 1993 on February 3 2004. 4 satellite offices have also been opened in select towns and districts. UFCs and registrar offices are connected on a robust IT network to ensure cost effective quick and efficient service. the largest public financial investment institution and life insurer in India have entered into an agreement with the Government of India as Sponsors of the UTI Mutual Fund. Gn Block. professional fund management team. restructured. who have been highly empowered to manage funds with greater efficiency and accountability in the sole interest of unit holders. a risk management department is also in operation. Bank of Baroda Bank of Baroda was established in July 1908 by Maharaja .Kurla Complex. and transparent and SEBI compliant entity. for undertaking portfolio management services and also acts as the manager and marketer to offshore funds through its 100 % subsidiary.400 051 will provide professionally managed back office support for all business services of UTI Mutual Fund (excluding fund management) in accordance with the provisions of the Investment Management Agreement. registered in Guernsey. Mumbai . it has always maintained its practice of sound value based banking to emerge as one of the premier public sector Banks of the country today. 34500 Crore. the SEBI (Mutual Funds) Regulations and the objectives of the schemes. UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers) Regulations. With a view to reach to common investors at district level. Channel Islands. To ensure better management of funds. It has a well-qualified. Bandra . responsive. the Trust Deed. SPONSORS Three leading public sector banks – Bank of Baroda (BOB). All these have evolved UTI Mutual Fund to position as a dynamic. It has a nationwide network consisting 70 UTI Financial Centers (UFCs) and UTI International offices in London. Punjab National Bank (PNB) and State Bank of India (SBI) and Life Insurance Corporation of India (LIC).
managing a Fund of over Rs. These could include shares.715 strong branch network (as of 31. based on the investment objective of a particular scheme. The pool offices in 28 countries worldwide. convertibles.03.in the world.2003. The amount of transfer under STP will be considered as redemption and will be made at the applicable redemption price on the day of transfer and at the applicable load.10.03. largest various schemes in address different needs of diversified portfolioof India is the throughpublic sector bankthatIndia with 9033 branches in India and 48 of money thus collected is then invested by the this. A mutual Bankis a India It pools money from like-minded shareholders and invests in The State Bank of securities. State fund of trust. Such objective is clearly laid down in the offer document for that scheme. The Bank is also one of the few Indian Banks with a formidable presence overseas with 38 branches. This is shared by unit holders in proportion to the number of units they own. In addition toAsset SBI also has 17 subsidiaries. STP can be modified/terminated by the unitholder by submitting a written request 5 days in advance 43 . the total branch network is 2. debentures. Company (AMC) in different types of securities.000/Life Insurance Corporation of India (LIC) is amongst the largest insurance companies made by them towards setting 10 crore policyMutual Fund. STP of Capital Appreciation is available only under the Growth plan and not under Dividend Plan. Management investors.drawn substantially from the extensive reach of its 2. Thus. TheLife Insurance Corporationnor India for any loss resulting from the operation of sponsors are not responsible of liable all the schemes of UTI Mutual Fund beyond the contribution of an amount of Rs. bonds. if any.753 as at 31. The fund adds value to the investment in two ways: income earned and any capital appreciation realised through sale. An investor can opt for systematic transfer of fixed amount or of the Capital Appreciation on investment in the scheme to any desired scheme on a monthly or quarterly basis. money market instruments or other securities. of every Month/ Quarter based on the NAV of that day.2003) covering almost every State and Union Territory in the Country. serving over up of the UTI holders and 186000 Investment Plan (SIP) Systematic crores.
IMD/PSP/4958/2004 date 11th. Reliance Mutual Fund was formed to launch various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. 1995. Limited (RCTCL). However.. March 2004 vide SEBI's letter no. The name of Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund effective 11th. RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30. March 2004.CHAPTER:4 ABOUT THE RELIANCE MUTUAL FUND COMPANY The Mutual Fund About Reliance Mutual Fund Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act. 1882 with Reliance Capital Limited (RCL). The main objectives of the Trust are : To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and investments for people in India and abroad and also ensure liquidity of investments for the Unit holders. the implementation and observance of ethical processes and policies has helped us in standing up to the scrutiny of our domestic and international investors. is committed to good 44 . Corporate Governance Our Corporate Governance Policy : Reliance Capital Asset Management Ltd. has a vision of being a leading player in the Mutual Fund business and has achieved significant success and visibility in the market. as the Settlor/Sponsor and Reliance Capital Trustee Co. an imperative part of growth and visibility is adherence to Good Conduct in the marketplace. Management : The management at Reliance Capital Asset Management Ltd. To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings and To take such steps as may be necessary from time to time to realise the effects without any limitation. as the Trustee. At Reliance Capital Asset Management Ltd.
gives top priority to compliance in true letter and spirit. making proper and adequate disclosures. RCAM is authorised to act as Investment Manager of Reliance Mutual Fund.Corporate Governance. a company registered under the Companies Act. information security. Reliance NRI Equity Fund (October 2004). The management believes in the principles of propriety and utmost care is taken while handling public money. The entire paid-up capital (100%) of Reliance Capital Asset Management Limited is held by Reliance Capital Limited. They are taken through a well-designed HR program. Employees : Reliance Capital Asset Management Ltd. It has a clearly defined prohibition on insider trading policy and regulations. Reliance Floating Rate Fund (August 2004). 1996. Reliance Banking Fund (May 2003). Reliance Capital Asset Management Limited (RCAM). The networth of the Asset Management Company including preference shares as on March 31. the Code of Conduct.30. namely: Reliance Vision Fund (September 1995). The Reliance Capital Asset Management Limited Board is a professional body. The Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM dated May 12. 1995. Reliance Gilt Securities Fund (July 2003). including well-experienced and knowledgeable Independent Directors. Reliance Fixed Term Scheme (March 2003). fully understanding its fiduciary responsibilities. One of the core objectives of Reliance Capital Asset Management Ltd.13 crores. 1997 in line with SEBI (Mutual Funds) Regulations. The AMC About Reliance Capital Asset Management Ltd. and implement policies/guidelines in conformity with the best practices as an ongoing process. Reliance Media & Entertainment Fund (September 2004). Reliance Growth Fund (September 1995) Reliance Income Fund (December 1997). has a preset code of conduct for all its officers. are made aware of the dos and donts as part of the Dealing policy laid down by the Securities and Exchange Board of India (SEBI). Regular Audit Committee meetings are conducted to review the operations and performance of the company. the sponsor. Reliance Liquid Fund (March 1998). conducted to impart work ethics. 2005 is Rs. Reliance Short Term Fund (December 2002). is to identify issues considered sensitive by global corporate standards. Reliance Monthly Income Plan (December 2003). All personnel at Reliance Capital Asset Management Ltd. Internet and e-mail usage and a host of other issues. 45 . 1995 and was amended on August 12. Reliance Capital Asset Management Limited is a wholly owned subsidiary of Reliance Capital Limited. 1956 was appointed to act as the Investment Manager of Reliance Mutual Fund. Reliance Medium Term Fund (August 2000). which includes transparency and timely dissemination of information to its investors and unitholders. Pursuant to this IMA. Reliance Capital Asset Management Limited was approved as the Asset Management Company for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95 dated June 30. Reliance Diversified Power Sector Fund (March 2004) Reliance Pharma Fund ( May 2004). Reliance Capital Asset Management Ltd. Reliance Mutual Fund has launched twenty five Schemes till date.
bank and securities accounts are segregated activity wise and there exists systems to prohibit access to inside information of various activities. Reliance Infoinvestments Limited. Reliance Asset Management (Mauritius) Limited. Reliance Liquidity Fund (June 2005). Mr. if any. As per SEBI Regulations. New Delhi . Kanu Doshi 102. RCAM has commenced these activities. Reliance Equity Opportunities Fund (February 2005). GIC Housing Finance Limited. the systems. Chartered Accountant Chairman : Matrix Advisors (India) Private Limited Director : BOB Capital Markets Limited. 2003.400 005. Reliance Tax Saver (ELSS) Fund (July 2005). separately for each such activity. Shivala. Khatau Road. 1201/1202. Reliance Regular Saving Fund (May 2005). Financial Planning Standards Board of India Mr. INP000000423 and renewed effective 1st August. Reliance Index Fund (January 2005). it will further ensure that AMC meets the capital adequacy requirements.110 021. Reliance Fixed Maturity Fund Series I (March 2005). Amitabh Chaturvedi * Raheja Empress.IN/VCF/05-06/062 dated June 16. RCAM has been registered as a portfolio manager vide SEBI Registration No. Flat No. Chankyapuri. Reliance Fixed Maturity Fund . Senior Corporate Executive Other Directorships Director : Reliance Asset Management (Singapore) Pte Limited. back office. Peoples Financial Services Limited Alphaplus Investment Management Private Limited.Series II (April 2005). Siddhi Vinayak Temple. Reliance Fixed Tenor Fund (November 2005) and Reliance Equity Fund (Feb 2006). TRC Corporate Consulting (P) Limited Brady Air Limited. a Venture Capital Fund registered with SEBI vide Registration no. Prabhadevi. Himalayan Crest Power Limited. It has been ensured that key personnel of the AMC. 12th Floor. Chartered Accountant 46 .400 025.Reliance NRI Income Fund (October 2004). Ispat Industries Limited. Mumbai . 2005 but this activity is yet to commence. Mumbai . Director : TRC Financial Services Limited. RCAM has been appointed as the Investment Manager of "Reliance India Power Fund". Manu Chadha C-35. Opp. Cuffe Parade. Malcha Marg. Veer Savarkar Marg. Kotla Hydro Power Limited. Name and Address Mr.
National Library Road. (Retd. Internal Auditor to the Schemes of Reliance Mutual Fund : Price Waterhouse Coopers. Dadar. NOIDA . Ministry of Petroleum & Natural Gas / Ministry of Education) Director : IL&FS Infrastructure Development Corporation Limited Auditors Statutory Auditor to the Schemes of Reliance Mutual Fund : Haribhakti & Co.400 021. Chartered Accountants Mr. 11. Limited to act as the Registrar and Transfer Agent to the Schemes of Reliance 47 . Malpani & Associates Chartered Accountants 307.) 27. Tripathi. Free Press House.R.A. Shivaji Park. Sushil C.400 050. Chadha & Co. Mumbai . Mumbai .400 028. C. Bandra (W).H. Veer Savarkar Marg. Statutory Auditors to the Trustee Company M/s.. Karvy Computershare Pvt. Chartered Accountants 252.201 301(UP) (Former Secretary to Government of India. Dr.Partner : M/s T. Statutory Auditors to the Asset Management Company Dalal & Shah Chartered Accountants 'The Regency'. Street. Chartered Accountants 42. Office No. Mumbai .400 002.. The Registrar Reliance Capital Asset Management Limited has appointed M/s. Chartered House. 1st Floor. Mumbai . Nariman Point. Sector 15A. I.S.Near Marine Lines Church.
The Trustee has also laid down broad parameters for supervision of the Registrar. and the Trustee have satisfied themselves. including systems facilities and back up. Limited (KCL) having their office at No. Avenue 4. to do so. after undertaking appropriate due diligence measures. KCL will accept and process investor's applications. Karvy Computershare Pvt. The Registrar is responsible for carrying out diligently the functions of a Registrar and Transfer Agent and will be paid fees as set out in the agreement entered into with it and as per any modification made thereof from time to time. INR000000221. M/s. Banjara Hills. on an ongoing basis.Mutual Fund. that they can provide the services required and have adequate facilities. despatch Account Statements and also perform such other functions as agreed. Adjacent to Rainbow Hospital. Street No. is a Registrar and Transfer Agent registered with SEBI under registration no. As Registrar to the Schemes. Singhania Ashwani Kumar Shailesh Raj Bhan 48 . Management Team Board of Directors Amitabh Chaturvedi Kanu Doshi Manu Chadha Sushil Tripathi Management Team President Vikrant Gugnani Chief Investment Officer K. handle communications with investors. Reliance Capital Asset Management Ltd.Rajagopal Head Equity Investments Madhusudan Kela Equity Fund Managers Equity Fund Manager Equity Fund Manager Equity Fund Manager Debt Fund Managers Sunil B. perform data entry services. Hyderabad 500 034.21.1.
Nr. Mardia Plaza. Aashwin Dugal Devendra Daga Gurbir Chopra Prashanth D Pereira Sundeep Sikka 49 .Road. Road. Off.: +91 22 3041 4800. Churchgate Station.Head Fixed Income Debt Fund Manager Debt Fund Manager Head Of Departments Brand and Communication Finance and Accounts Amitabh Mohanty Amit Tripathi Prashant Pimple Abraham Alapatt Amit Bapna Human Resource Development Rajesh Derhgawen Information Technology Legal & Compliance Risk Management Operations & Settlement Vinay Nigudkar Balkrishna Kini Lav Chaturvedi Geeta Chandran Infrastructure & Administration Pradeep Andrade R&T operations Sales and Distribution Zonal Heads Northern Zone Head Western Zone Head Southern Zone Head Our Branches REGISTERED OFFICE CORPORATE OFFICE Reliance Capital Asset Management Limited Reliance House. Opp. Ahmedabad 380 006 Reliance Capital Asset Management Limited Express Building. Tel No. Above Satkar Hotel.G. Mumbai 400 020. 14-'E' . 4th & 6th Floor. Churchgate. C.
Fax No.:+91 22 3041 4818 / 3041 4899. Email : email@example.com Our Presence In Other Cities AGRA Reliance Capital Asset Management Limited Shop No.110, Ground Floor, Block No.28 / 2, Sanjay Place, LIC Road, Agra 282 002. Tel No.: 0562-3264881 Contact Person : Anupam Sharma Email : firstname.lastname@example.org Reliance Capital Asset Management Limited 401 4TH Floor MEGHA HOUSE OPP Kotak Mahindra Bank Mithakhali Six Roads Navrangpura, Ahmedabad 380009 Tel No.: 079 - 26460550 / 551 / 552. Contact Person : Vikash Rathie, Bhadresh Bhatt Email : email@example.com Reliance Capital Asset Management Limited Unit No 7, 6-3-1093, 6 th Floor, V V Vintage Boulevard, Above Food World, Rajbhavan Road, Hyderabad - 500082. Tel No. : 040-30620001/ 2 / 3. Contact Person : Mahesh Natrajan Email : firstname.lastname@example.org Reliance Capital Asset Management Limited 303 & 304, D M Tower, Race Course Road, Indore Tel No.: 0731 - 3015989/90 Contact Person : Srajan Tiwari Reliance Capital Asset Management Limited Shop No. G4 Ground Floor, Brij Anukampa Complex, Ashok Marg, C Scheme, Jaipur - 302016.
Tel No.: 0141 - 3293185 Contact Person : Ashish Purohit Email : email@example.com JALANDHAR Reliance Capital Asset Management Limited 1st Floor, Gobind Mall, 25, G.T.Road,Jalandhar - 144 001. Tel. No.: 0181-3246677 Contact Person : Amit Dhir Email : firstname.lastname@example.org Reliance Capital Asset Management Limited Shop No:4-5, "Shilp" Building, Indira Gandhi Marg, Jamnagar - 361 001. Tel No.: 0288-2663574. Telefax : 0288-2671234 . Contact Person : Devang Lakhani Email : email@example.com
Equity Schemes :
Reliance Equity Fund : (An open-ended diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities. Reliance Equity Opportunities Fund : (An Open-Ended Diversified Equity Scheme.) The primary investment objective of the cheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity securities & equity related securities and the secondary objective is to generate consistent returns by investing in debt and money market securities. Reliance Vision Fund : (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach. Reliance Growth Fund : (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach. Reliance Index Fund : 51
(An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Plan is to replicate the composition of the Nifty, with a view to endeavor to generate returns, which could approximately be the same as that of Nifty. The Investment Objective under the Sensex plan is to replicate the composition of the Sensex, with a view to endeavor to generate returns, which could approximately be the same as that of Sensex. Reliance NRI Equity Fund : (An open-ended Diversified Equity Scheme.) The Primary investment objective of the scheme is to generate optimal returns by investing in equity or equity related instruments primarily drawn from the Companies in the BSE 200 Index. Debt Schemes : Reliance Monthly Income Plan : (An Open Ended Fund. Monthly Income is not assured & is subject to the availability of distributable surplus ) The Primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unitholders and the secondary objective is growth of capital.Primarily the investment shall be made in debt and money market securities (i.e. 80%) with a small exposure (i.e. upto 20%) in equity. Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan : Open-ended Government Securities Scheme) The primary objective of the Scheme is to generate Optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the central Government and State Government Reliance Income Fund : (An Open-ended Income Scheme) The primary objective of the scheme is to generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt & Money Instruments. Reliance Medium Term Fund : (An Open End Income Scheme with no assured returns.) The primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unitholders and the secondary objective is growth of capital Reliance Short Term Fund : (An Open End Income Scheme) The primary investment objective of the scheme is to generate stable returns for investors with a short investment horizon by investing in Fixed Income Securities of short term maturity. Reliance Liquid Fund : (Open-ended Liquid Scheme). The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments. Reliance Fixed Term Scheme : (Close-ended Income Scheme) The primary objective of the Scheme is to seek to achieve
ended Liquid Scheme) The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Here the portfolio is dispersed or spread across the stocks in that particular sector. This income may be complemented by capital appreciation of the portfolio. investments shall predominantly be made in debt Instruments.regular returns / growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the plan with the objective of limiting interest rate volatility. Accordingly.Series I : (A Close Ended Income Scheme) The primary investment objective of the Scheme is to seek to achieve regular returns / growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the Plan with the objective of limiting interest rate volatility. Equity Option : The primary investment objective is to seek capital appreciation and or consistent returns by actively investing in equity / equity related securities. investments shall predominantly be made in Debt and Money Market Instruments. This income may be complimented by capital appreciation of the portfolio. Money Market Instruments and Floating Rate Debt Instruments swapped for fixed returns Reliance NRI Income Fund : (An Open-ended Income scheme) The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risks. Sector Specific Schemes Sector Funds are specialty funds that invest in stocks falling into a certain sector of the economy. Accordingly. Reliance Regular Savings Fund : (An Open .Series II : (A closed ended Income Scheme) The primary investment objective of the Scheme is to seek to achieve growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the respective plans. The scheme shall also invest in Fixed rate debt Securities (including fixed rate securitised debt. Reliance Floating Rate Fund : (An Open End Income Scheme) The primary objective of the scheme is to generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitised debt and Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns). Hybrid Option : The primary investment objective is to generate consistent return by investing a major portion in debt & money market securities and a small portion in equity & equity related instruments. Accordingly investments shall predominantly be made in Debt & Money Market Instruments. Reliance Liquidity Fund : (An Open . This type of scheme is ideal for investors who have already made up their mind to 53 .ended scheme) The Investment Objectives : Debt Option : The primary investment objective of this plan is to generate optimal returns consistent with moderate level of risk. Reliance Fixed Maturity Fund . Reliance Fixed Maturity Fund .
confine risk and return to a particular sector. Reliance Banking Fund Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the primary investment objective to generate continuous returns by actively investing in equity / equity related or fixed income securities of banks. Reliance Diversified Power Sector Fund Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme. The primary investment objective of the Scheme is to seek to generate consistent returns by actively investing in equity / equity related or fixed income securities of Power and other associated companies. Reliance Pharma Fund Reliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of Pharma and other associated companies. Reliance Media & Entertainment Fund Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme. The The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of media & entertainment and other associated companies.
Net Asset Value (NAV) is the actual value of one unit of a given scheme for a given business day.
Units in the schemes are alloted on the basis of the Sale Price, which is calculated as follows : Sale Price= NAV *(1+ Entry Load) Units in the schemes are repurchased on the basis of Repurchase Price, which is calculated as follows : Repurchase Price= NAV *(1- Exit Load) Latest NAVs
Schemes Reliance Equity Fund Dividend Plan Growth Plan Bonus Option Growth Plan Growth Option Reliance Tax Saver (ELSS) Fund Growth Plan Dividend Plan Reliance Growth Fund Growth Plan Bonus Option Growth Plan Growth Option Dividend Plan Reliance Vision Fund Growth Plan Growth Option Dividend Plan Growth Plan Bonus Option Reliance Equity Opportunities Fund Growth Plan Growth Option Dividend Plan Growth Plan Bonus Option Reliance Index Fund Nifty Plan Growth Plan Bonus Option Sensex Plan Dividend Plan
07 Aug 2007
08 Aug 2007
Change % Change
13.0900 13.0900 13.0900
13.2700 13.2700 13.2700
0.18 0.18 0.18
1.36 1.36 1.36
1.17 1.18 1.17
314.7100 318.4800 3.77 58.0400 58.7300 0.69
211.6800 215.2200 3.54 54.0300 35.4800 54.9400 36.0700 0.91 0.59
1.64 1.66 1.64
23.1427 20.1606 23.1427
23.5711 20.5337 23.5711
0.43 0.37 0.43
1.82 1.80 1.82
17.4269 22.4731 22.4731 22.4731
0.38 0.49 0.49 0.49
2.18 2.18 2.18 2.18
Sensex Plan Growth Plan Bonus Option 21.9782 Sensex Plan Growth Plan Growth Option 21.9782
Nifty Plan Growth Plan Growth Option 17.0490 Nifty Plan Dividend Plan NRI Equity Fund Dividend Plan Growth Plan Bonus Option Growth Plan Growth Option Reliance Long Term Equity Fund Growth Option Dividend Option Reliance Regular Savings Fund Equity Plan Growth Option Debt Plan Growth Option BALANCED PLAN - GROWTH OPTION Reliance Banking Fund Growth Plan Growth Option Dividend Plan Growth Plan Bonus Option Reliance Pharma Fund Growth Plan Growth Option Growth Plan Bonus Option Dividend Plan 25.8381 25.8381 22.4048 48.7800 22.6200 48.7800 17.5418 10.7005 12.6903 11.6119 11.6119 23.7422 27.9578 27.9578 17.0490
24.1682 28.4594 28.4594
0.43 0.50 0.50
1.78 1.76 1.76
17.8379 10.7016 12.9332
0.30 0.00 0.24
1.68 0.00 1.86
49.7200 23.0500 49.7200
0.94 0.43 0.94
1.89 1.87 1.89
26.2463 26.2463 22.7588
0.41 0.41 0.36
1.56 1.56 1.58
Reliance Diversified Power Sector Fund Growth Plan Growth Option Growth Plan Bonus Option Dividend Plan 47.2807 47.2807 35.8598 47.9948 47.9948 36.4014 0.71 0.71 0.54 1.48 1.48 1.48
Reliance Media & Entertainment Fund
2377 13.3443 10.Series II .00 -0.00 0.0516 10.00 0.3389 10.00 0.2303 -0.00 0.0216 10.Institutional Dividend Plan Monthly Plan .6847 11.5919 10.00 0.5491 29.0112 10.0535 10.3817 10.08 10.02 0.00 0.6827 11.00 0.54 2.Retail Dividend Plan Quarterly Plan .5718 13.64 0.3836 10.00 57 .3501 Plan Retail Plan Growth Plan Growth Option 16.3514 10.0195 10.Series I .5843 10.54 10.00 0.00 0.5491 25.77 0.00 -0.5659 13.Dividend Plan Growth Plan Bonus Option Growth Plan Growth Option Reliance Interval Fund Monthly Plan .0863 Reliance Short Term Fund Growth Plan Dividend Plan Quarterly Plan Reliance Liquidity Fund Weekly Dividend Reinvestment Option 10.00 0.01 0.07 0.3209 30.00 0.0529 10.5523 0.3490 10.0510 10.00 0.RETAIL DIVIDEND PLAN 24.3212 30.00 0.0031 10.00 0.00 0.Series I .01 -0.00 -0.0700 0.3522 16.0031 10.3209 0.Institutional Gowth Plan Annual Plan Series I .6767 29.Series I .5501 13.0094 Daily Dividend Reinvestment Option Monthly Dividend Option Growth Option 10.12 Monthly Plan .Series I .Retail Growth 10.00 0.Institutional Gowth Plan Monthly Plan .00 0.00 -0.Retail Dividend Plan Monthly Plan .00 0.53 2.00 0.77 2.Series II .
7241 10.5354 10.5311 10.3227 Retail Plan C .3463 10.Series I Institutional Growth Plan Institutional Plan C .01 0.INSTITUTIONAL GROWTH PLAN SERIES II .6607 Plan SERIES III .Dividend Option 10.00 0.Retail Growth 10.Growth Option 10.09 -0.01 -0.4518 Institutional Plan C .00 SERIES III .Series I .Annual Plan I Series I .Series IV .00 -0.RETAIL DIVIDEND PLAN 10.Retail Growth 10.3802 10.RETAIL DIVIDEND PLAN SERIES III .00 0.7968 10.3461 10.00 0.3227 10.3153 10.Series IV .Series I Dividend Option Annual Plan .00 0.Retail Dividend Plan Retail Plan .3894 Retail Plan C .Series I .00 0.09 -0.01 -0.3761 0.4475 10.RETAIL GROWTH PLAN 10.00 -0.6032 Plan Institutional Plan .01 -0.3761 10.00 -0.09 0.Annual Plan I Series I .00 0.6513 10.Reliance Fixed Horizon Fund Plan C SERIES II .00 0.00 -0.09 0.2849 10.3831 Reliance Fixed Horizon fund I (Annual Plan) Annual Plan .2827 10.Retail Dividend 10.00 0.00 0.01 -0.10 -0.10 0.01 0.INSTITUTIONAL GROWTH PLAN 10.00 0.3788 0.00 0.00 0.10 -0.4108 10.01 0.3787 10.7978 10.RETAIL GROWTH PLAN 10.Series I Institutional Dividend Plan 10.Annual Plan I .3752 10.4033 10.00 Annual Plan .3879 Plan SERIES II .3751 58 .6054 10.Institutional Dividend Plan Institutional Plan .Series III .3153 10.7146 10.
00 0.01 0.6139 10.6866 10.01 -0.01 -0.Institutional Growth Plan 10.3610 10.Retail Growth 10.Retail Plan .Series II Dividend Option Retail Plan .Annual Plan I .4746 10.00 0.4693 10.6142 10.10 -0.Retail Dividend Plan Annual Plan .Series IV .3507 10.5747 10.4509 10.6142 Plan Retail Plan .4836 10.10 -0.00 0.01 -0.09 -0.6139 10.00 0.00 Annual Plan .01 0.6054 10.01 -0.7978 10.Series III .Series 10.4329 10.00 0.00 Annual Plan .00 0.00 0.Series II Growth Option Annual Plan .5047 59 .00 0.3503 10.7968 10.3463 10.4230 10.Institutional Growth Plan 10.Series III .6866 II .Retail Growth 10.RETAIL DIVIDEND PLAN Annual Plan .3472 10.4593 10.6862 10.00 0.Growth Option Reliance Fixed Horizon fund II (Annual Plan) Annual Plan Series II .3818 10.Annual Plan .5769 10.Series I Growth Option Annual Plan .09 0.00 0.Institutional Growth Plan Annual Plan Series V INSTITUTIONAL GROWTH PLAN Annual Plan Series V .3734 10.Institutional Dividend Plan Annual Plan Series I .10 0.RETAIL DIVIDEND PLAN Annual Plan .4648 Plan Annual Plan Series II INSTITUTIONAL GROWTH PLAN 10.Annual Plan .10 0.Series III .00 0.Series IV .01 0.6862 0.Series III .10 -0.Annual Plan .RETAIL GROWTH PLAN 10.3461 10.01 -0.6032 Institutional Plan .00 0.00 -0.10 -0.4962 -0.00 0.Series III .
01 -0.4693 10.00 -0.01 -0.10 -0.00 -0.10 Annual Plan .10 0.4535 10.RETAIL DIVIDEND PLAN Annual Plan .4246 10.4329 10.10 -0.RETAIL GROWTH PLAN Annual Plan Series V INSTITUTIONAL DIVIDEND PLAN Annual Plan Series V .RETAIL GROWTH PLAN Annual Plan Series I .10 0.4619 10.10 -0.4230 10.01 -0.2832 10.01 -0.4509 10.10 -0.00 -0.2832 10.3771 10.Annual Plan Series II INSTITUTIONAL DIVIDEND PLAN Annual Plan Series II .4307 10.Retail Dividend Plan Annual Plan .3472 10.4593 10.Institutional Growth Plan Annual Plan Series I INSTITUTIONAL DIVIDEND PLAN Annual Plan Series VI .2854 10.01 -0.Series III .4171 10.RETAIL GROWTH PLAN 10.4397 10.Series IV .10 -0.4648 10.01 0. Ltd Custodians to the schemes of Reliance Capital Asset Managment 60 .4322 10.4171 10.3610 10.Series III .01 -0.10 -0.01 0.4307 -0.10 -0.4397 10.4397 10.4397 Plan Our Service Providers Registrar to the schemes of Reliance Capital Asset Managment: Karvy Computershare Pvt.Retail Dividend Plan Annual Plan Series VI INSTITUTIONAL GROWTH PLAN Annual Plan .Retail Growth 10.01 0.Series IV .10 0.4246 10.RETAIL DIVIDEND PLAN Annual Plan Series VI INSTITUTIONAL DIVIDEND PLAN Annual Plan Series VI .00 -0.3855 10.2854 10.01 -0.10 0.4322 10.01 -0.01 0.
Reliance Income Fund Reliance Liquid Fund Reliance Short Term Fund Reliance Gilt Securities Fund (Long Term) Reliance Gilt Securities Fund (Short Term) Reliance Vision Fund (Dividend & Redemption) Reliance Growth Fund (Dividend & Redemption) Reliance Monthly Income Plan (Redemption) Reliance Medium Term Fund (Redemption) Reliance Banking Fund (Redemption) 61 .Deutsche Bank AG Bankers to the Schemes of Reliance Capital Asset Management HDFC Bank Limited Reliance Fixed Maturity Fund Reliance Monthly Income Plan Reliance Income Fund Reliance Medium Term Fund Reliance Liquid Fund Reliance Short Term Fund Reliance Gilt Securities Fund Reliance Fixed Term Scheme Reliance Floating Rate Fund Reliance NRI Income Fund Reliance Growth Fund Reliance Vision Fund Reliance NRI Equity Fund Reliance Index Fund Reliance Equity Opportunities Fund Reliance Banking Fund Reliance Diversified Power Sector Fund Reliance Pharma Fund Reliance Media & Entertainment Fund ABN Amro Bank Reliance Liquid Fund Reliance Income Fund Reliance Medium Term Fund Reliance Vision Fund Reliance Growth Fund Reliance Short Term Fund Reliance Gilt Securities Fund (Long Term) Reliance Gilt Securities Fund (Short Term) Reliance Fixed Maturity Fund Reliance Fixed Term Scheme Reliance Floating Rate Fund Reliance Fixed Maturity Fund ICICI Bank Limited Reliance Fixed Maturity Fund Reliance Monthly Income Plan Reliance Income Fund Reliance Medium Term Fund Reliance Liquid Fund Reliance Short Term Fund Reliance Gilt Securities Fund Reliance Fixed Term Scheme Reliance Floating Rate Fund Reliance NRI Income Fund Reliance Growth Fund Reliance Vision Fund Reliance NRI Equity Fund Reliance Index Fund Reliance Equity Opportunities Fund Reliance Banking Fund Reliance Diversified Power Sector Fund Reliance Pharma Fund Reliance Media & Entertainment Fund Citibank N. A.
Standard Chartered Bank Reliance Income Fund Reliance Liquid Fund Reliance Short Term Fund Reliance Fixed Term Scheme-IPO A/C. Reliance Floating Rate Fund HSBC Bank Deutsche Bank AG Reliance Liquid Fund UTI Bank Reliance Income Fund Reliance Liquid Fund Reliance Liquid Fund Reliance Short Term Fund Reliance Vision Fund Reliance Growth Fund Reliance Medium Term Fund Reliance Short Term Fund Reliance Banking Fund Reliance Gilt Securities Fund (Long Term) Reliance Gilt Securities Fund (Short Term) Reliance Monthly Income Plan Reliance Income Fund Reliance Medium Term Fund Reliance Gilt Securities Fund (Long Term) Reliance Gilt Securities Fund (Short Term) Reliance Banking Fund Reliance Fixed Term Scheme Reliance Floating Rate Fund Reliance Media & Entertainment Sector Scheme Reliance NRI Equity Fund Reliance NRI Income Fund Reliance Index Fund IDBI Bank Reliance Liquid Fund Reliance Vision Fund Reliance Growth Fund Reliance Short Term Fund Ing Vysya Bank Reliance Liquid Fund Reliance Short Term Fund Reliance Income Fund 62 .
100 regularly every month into the mutual fund scheme at the then prevailing NAV (Net Asset Value). To see how your average purchase cost per unit is lower than the average NAV see the table along side. It would be lower than the average NAV of your investment over 6 months.) 80.52 Units 1. 100 every month from April 2004 to September 2004 in a diversified equity fund. It’s always prudent to invest with a long term horizon in mind. 100 per month. Now check the average purchase cost per unit of your investments. if you could always pick the right time to buy and sell. However. it eliminates the need to actively track the markets.Rupee Cost Averaging Say you have opted for Reliance Systematic Investment Plan. Welcome to Reliance Mutual Fund Just as drops of water make an ocean. buying fewer units during rising markets and buying more units during falling markets reduces the average cost per unit of your investments . Through disciplined. Illustration . This way you grow step by step. No need to time the markets Imagine. It is an investment technique where you deposit as little as Rs. Lower cost per unit Since your investments are spread regularly over a period of time.00 63 .24 Amount (Rs. small but regular investments can go a long way in building wealth over time. In short. timing the market is a time-consuming and risky task. Date 12/4/04 NAV (Rs. Small but regular investments go a long way in creating wealth over time. investing Rs.this concept is known as Rupee Cost Averaging. Reliance Systematic Investment Plan helps you achieve just that. subject to applicable load. regular investments you can stop worrying about when and how much to invest.) 100.Reliance Medium Term Fund (Redemption) Reliance Monthly Income Plan (Redemption) Reliance Income Fund (Redemption) Reliance Banking Fund (Redemption Reliance Systematic Investment Plan Invest as little as Rs.
14 7.29 Average Cost < Average Price Note: Above table uses historical NAVs for illustration purpose. 2007 64 . Reliance Growth Fund SIP Return as on March 30.a. Past performance may or may not be sustained in future.60 100. 600 / 7. Start early .39 1.60 = Rs.00 100.75 1.430 whereas B’s investment would have grown to approx.00 600. Past NAVs of a scheme are no indicator of future NAVs.The power of compounding Suppose A & B invest Rs.23 1. 34.475 only.91 Average Price = Sum of all NAVs at which you have invested / Number of months of investment = Rs. 74.87 72. A starts at the age of 25 years & B starts at the age of 35 years.74 87. on a monthly compounding basis. A’s investment would have appreciated to approx. A’s investment would have almost doubled by just starting earlier than B. 79.29 Average Cost Average Price Average Cost = Total Cash Outflow / Total Number of units = Rs.38 1. Both of them invest for 5 years (Rs. Rs. 475.91 79.49 71. 6000) & hold their investments till 60 years of age. Rs.10/5/04 10/6/04 12/7/04 10/8/04 10/9/04 Total 81.64 81.00 100. Thus.00 78. 100 every month earning interest @ 8% p.49 475.00 100. 78.75 / 6 = Rs.22 1.00 100.
00 6616. 1/.03 14294.thereafter.77 44630.Monthly SIP Option . 1.500/.54 259.45 23657.You can choose to make your investment on a monthly or quarterly basis.00 13800.69% Present Value in 1286. Quarterly SIP Option .000/. 500/. SIP happens on tenth of every month. you can choose from a range of equity and debt schemes which offer SIP.each or 12 instalments of Rs. 65 .62 44.2. Computations are done on the assumption that all payouts have been reinvested in the units of the scheme at the then prevailing NAV. 100/.thereafter.Period SIP Start Date 1 Year 3 Year 5 Year Since inception 01/04/060 1/04/04 01/04/02 08/10/95 259. How to invest? Select Reliance Mutual Fund schemes of your choice. of units 5.97% 19.2% and from November 2004 .79 32.25% has been considered.each and in multiples of Re.38% 5706.96% 35. The first SIP instalment could be submitted on any working day.12 instalments of Rs.60 instalments of Rs.each or 4 instalments of Rs.00 1305.00 6000.15 259. Minimum investment amount . 1/. Also note that we have assumed a/c opening and first SIP happens in the same month.each and in multiples of Re.16% Past performance may or may not be sustained in future. Investment periodicity .54 on 30/03/2007) Total No.62% 3600.each has been taken into consideration including the first installement. Assumptions : Every SIP has an entry Load : till October 2004 .54 25. Under the Reliance Systematic Investment Plan. 500/. 100/.68% 58. SIP of Rs.54 596.25 17.52 154713. Compounded annualised growth returns.49 91.64% 38.1.11 Current NAV (As 259.30 invested in Index Yield From Index 14.03 accumulated Total Amount Invested Present Value Yield 1200.each or 6 instalments of Rs.
the subsequent instalments can be dated 2nd. Trustee: Reliance Capital Trustee Co. Reliance Capital Birla Mutual Fund HDFC Mutual Fund SBI Mutual Unit Trust Of India 66 . (Rs. Investment method . the Trustee and the Investment Manager are incorporated under the Companies Act 1956. 10th. 18th or 28th of every month/quarter. Investment Objective : Reliance Vision Fund and Reliance Growth Fund aims to achieve long-term growth of capital by investment in equity and equity-related securities through a research-based investment approach. wherein the investor will have to give a debit mandate along with one signed cheque from his Savings Bank account. Limited. However. b) Issuing Post-Dated Cheques (PDCs).However. Sponsor: Reliance Capital Limited.100 SIP can be processed only through Electronic Clearing Service (ECS) or Direct Debit). Investment Manager : Reliance Capital Asset Management Limited Statutory Details : The Sponsor. only one SIP transaction per month/quarter per folio is permitted. You can choose a day convenient for you.The SIP facility can be availed by : a) Electronic Clearing Service (ECS) or Direct Debit mandate.
Since last 5 years mutual fund industry is grooving fast.2 Research Objectives:To study the perception of independent financial advisors about different investment options available in the market. Since this bright future of city every service sector has good chance to get good business in patan. In last two month there was 14 new fund offers are introduced. So we can say that there is good chance for every financial adviser to be Broker of Mutual fund. This is analytical research.CHAPTER 6 RESEARCH METHODOLOGY 6. more adviser of Mutual fund are needed. To understand the investor and to convince them to invest in Mutual fund. The awareness is to be found out after knowing the behavioral study of independent financial advisors they have different options available in the market for investment. In the city there are other companies having their offices. To be Adviser of Mutual Fund is easier for the person who is already dealing with other category of investment e. So in patan city there may be more business and more business brings more people in the city. To find out how many independent financial advisors want to attain the Business Opportunity program arranged by Reliance mutual fund. To know the awareness of Mutual Funds in the market of patan and it’s surrounding areas. tax benefit. 67 . To make them broker fist we have to make aware them with the mutual fund and search their opinion against the mutual fund. 6. Because of they have good cliental base. liquidity. To know priority level between different criteria of investment like safety level.1 Problem Description:To study the awareness about mutual funds among Independent Financial Advisors compare other mutual fund company to reliance mutual fund It has been perceived that there is a huge potential market in the patan city.g. Small savings. patan is well known for its patola business. To study about the different types of services provided by professional Mutual Fund Distributors. patan has good financial service center and other small companies are there. retunes. To study about different type of services provided by independent financial advisors to their clients. To find how many independent financial advisors are AMFI certified and how many are interested to become registered mutual fund advisor. Insurance. maturity of investment. they may be successes in mutual fund selling.
This report may be a motivating tool for investors. 68 . So the sample area is consider as patan as whole. this is of independent financial advisors done by convenient sampling method.4 Sources of data:Primary Data In this research the source of primary data is Individual Financial Advisors. 6. Communication Approach. Postal investment and bank deposits. Reliance capital. Out of them 22 advisers are also advisers in other financial services e. newspaper. form that the segment is used in research. Financial Advisers. Sample Area The survey is done in the central city of patan and its surrounding areas. Secondary Data To know the information about current market scenario making use of internet. In this sample 27 Advisors are security Agent. can know the different instrument of investment One can aware of mutual fund without any queries.Can get a list of persons who want to be Adviser of Mutual Fund under them. Sample size Our total sample size is 50. can get perfect information and procedure from this report. who wants to be adviser of Mutual Fund. Research tool is the questionnaire filled up by the independent financial advisors and informal interview of independent financial advisors conducted by me. Mutual fund.5 Benefits of this Report Persons who have no knowledge about Investment instruments. Taking Addresses and Contact Number from Development Officers and other persons who are ready to give contact of Insurance agents. is stock market Advisors. 6.g. And 1 adviser was share broker.6. periodicals and fact sheets of different Asset Management Companies.3 Sampling:Sampling Method In the context of this project the survey. Assets Management Company can get direction for appointing adviser of Mutual funds. magazines.
CHAPTER 7: ANALYSIS OF DATA There are 12 questions included in questionnaire. Have you using any financial services? Frequencies Statistics Have You Using Any Financial Services? N Valid 50 Missing 0 Have You Using Any Financial Services? Frequency 50 Percent 100.0 Valid yes Have You Using Any Financial Services? yes Pies show counts yes 100.0 Cumulative Percent 100.00% Interpretation: >.0 Valid Percent 100. Most of respondents are using financial services. 69 . 1. Data of all the response presented below and also the answers of the entire questions are interpreted one by one.
>.0 8.Banking services&Stock Market Total 8.0 10.0 86.00% 5. 100% of the people are preferred of that they are using of financial services.0 52.00% 7.00% Mutualfund. 2.insurance& Banking mutualfund. Which Type Financial Services You Are Using? Frequencies Statistics W hich Type Financial Services You Are Using? N Valid 50 Missing 0 Which Type Financial Services You Are Using? Frequency 21 5 5 7 5 3 4 50 Percent 42.0 76.0 100.0 14.0 8.0 10.0 10.00% 5.0 Banking Services 10.0 W h ic h T y p e F in a n c ia l S e rv ic e s Y o u A re U s in g ? mutualfund Insurance Bank ing Services Stock Market m utualfund O ther 42. >.0 10.Banking serv ices&Stock Market Pies show counts O ther 10.0 100.0 100.0 6.insurance&Banking 3.0 14.0 6.0 6.0 10.0 Valid Percent 42. So that in the sense of this era is business era all are people are aware of financial services.00% Mutualfund.0 Interpretation: >.insuranc e&Banking 21.0 Insurance 10.0 Stock Market 14.00% 5.0 Cumulative Percent 42.0 Valid mutualfund Insurance Banking Services Stock Market Other Mutualfund.0 62.00% m utualfund.Banking services&Stock Market 4.0 10. most of people are using mutual fund financial services. 70 .0 92.0 mutualfund.
42%of people are of the opinion of the are of they are using mutual fund financial services .> 50% people spend more than 5% To 10% their income for investment >very few people 12% spend small part 20& To 30% their income for Investment >26 people are more than 10% To 20% their income investment in 71 .0 100.0 12.0 12.0 Interpretation :.0 76. What Part of your income you set a side for investment? Frequencies Statistics What Part of Your Income Would You Set a Side For Investment? N Valid 50 Missing 0 What Part of Your Income Would You Set a Side For Investment? Frequency 5% to 10% 25 10% to 20% 13 20% to 30% 6 Above 30% 6 Total 50 Percent 50.00% 10% to 20% 13.0 Valid Percent 50.0 100.0 12.0 26.00% A b o ve 30% 6.0 Valid 12.they are believe good financial services is mutual fund because of respondents are using that type 3.0 Cumulative Percent 50.0 12.0 W h a t P a rt o f Y o u r In c o m e W o u ld Y o u S e t a S id e F o r In v e 5% to 10% 10% to 20% 20% to 30% Abov e 30% Pies s how c ounts 50.>.0 100.0 12.00% 5% to 10% 25.0 26.00% 20% t o 30% 6.0 88.0 26.
0 0 % C h ild re n E d u ca t io n 22 . 72 .0 18.0 22.00 % 1 1 .Financial sector >that mean income of investors in the population lies between 5% To 10% 4.0 100.For You To Invest? Frequency Valid Housing car and marriage insurance retirement Children Education Total 8 9 11 22 50 Percent 16.0 44.0 Interpretation :.0 18.0 W 6 .F o r Y o u T o In v ret ire m e n t 2 2 .0 Im p o rta n t R e a s o n .0 100.0 34. >Respondents spend nearly half of their income ( 44% ) for children’s Education. which of the most important reason for you to invest ? Frequencies Statistics Which Of This Most Important Reason. For You To Invest? N Valid 50 Missing 0 Which Of This Most Important Reason.0 44.0 0 % in s u ran c e 9 .0 100.0ic h O f T h is M o s t 1 h 0% H o u s in g c a r an d m a rriag e s in g c a r an d m a rr iag e 8H ou .0 in s u r a nc e r e tir em e n t C hild re n E d u c a tio n 44 .0 P ies s ho w c ou n ts 1 8 .0 Valid Percent 16.0 Cumulative Percent 16.0 22.>People spend more than half of their income for investments.0 56.
1 getting return. 5. When investing you will be more concerned about ? (Give the rank) rank tax s aving. >16% people spend their income for also housing car and marriage. 4 tax s aving getting return liqidity diverc ified ris k Interpretation:In the Patan City. As per the Advisers view.>People spend very small part of their income 18% To 22% for retiremen and insurance. This type of 73 . on an average one investor is taking all attribute in mind while investing his savings. Investor wants their investment in liquid form so that when ever they want their money they can easily get at lowest lose of return. Liquidity is also important while taking decision of investment. This class of persons prefers safety first in their investment of their savings. But first he considers safety then return comes. The Financial advisers have also understood it and they give their views in questioners. there are large number of family are middle class. 3 diverc ified ris k . Some investors want to kept some money or save money for any future need. 2 liqidity . Returns on the investment are also important but safety of principle invested is most important then it.
need use to conceder maturity period of investment.0 Cumulative Percent 100.0 Valid yes 74 . 6.0 Valid Percent 100. Are you Aware of Mutual fund ? Frequencies Statistics Are You Aware Of Mutual Fund? N Valid 50 Missing 0 Are You Aware Of Mutual Fund? Frequency 50 Percent 100. Some investor also wants to invest their money in such a security which gives them a tax benefit.
From where you get information about Mutual fund ? Frequencies Statistics From Where You Get Information about Mutual Fund? N Valid 50 Missing 0 75 .A re Y o u A w a re O f M u tu a l F u n d ? yes P ie s s ho w c o un ts ye s 10 0 .0 0 % Interpretation :- Awareness of the Mutual Funds is 100% in our survey because We use only thise respondents who are aware of the mutual funds. 7. Reason behind the fact that investors do prefer to invest in mutual Fund may be due to awareness.
0 100.0 26.0 100.0 22.0 78.0 22.0 52.0 2 8 .0 0 % O th er 1 1 .0 Cumulative Percent 24.0 26.0 0 % N ew sp ap er 1 4 . According to you which is the best from of investment.0 0 % A g en t 1 2 .0 28.0 100. 8. >Television and Others are creating 22% to 26% of awareness.0 Valid Percent 24.0 0 % T e le v is io n 1 3 .0 2 4 . taking risk factor return in to consideration (Give the rank) 76 .0 28.>awareness created by Agent is Maximum 24%. >Maximum awareness is created by Newspaper with 28%.0 Agent N ew spaper T e le v is io n O th e r P ie s s h o w c o u n ts 2 6 .From Where You Get Information about Mutual Fund? Frequency 12 14 13 11 50 Percent 24.0 Valid Agent Newspaper Television Other Total F r o m W h e r e Y o u G e t In f o r m a t io n a b o u t M u t u a l F u 2 2 .0 Interpretation :.
Because most of people is interested to investment but more people has not good knowledge of stock market. third rank is life insurance. 264. 20% Interpretation:We give first rank is fixed deposit . 9. 26% total. fifth rank is Real estate and sixth rank is Gold and other commodity In the sample of this survey Most of people give the fist rank of Mutual fund. The most valuable reason behind this is the Mutual fund covers Life Risk of the prospect and also giving the return as a bonus to their client. 14% total. 10% total. 200. 14% Fixed Deposite Mutual fund Life insurance equity Real Estate Gold & Other Commodity total. This is not available in any other investment avenues. Now Mutual fund companies also offers different types of scheme in which investor can get higher return with life protection facilities. The Mutual fund also gives the tax benefits. 16% total.second rank is mutual fund. In which mutual fund that you like to invest your money ? Frequencies Statistics In which mutual fund that you like to invest your money? N Valid 50 Missing 0 77 . 107. 150. and people prefer it because it is the safer than others. forth rank is equity. 169. 150.Best form of investment total.
0 Valid Percent 50.0 100.0 62.0 In w h ich m u tu a l fu n d th at y o u lik e to in v e s t y o u r m o n e y ? R elianc e SBI U TI ICICI H DF C Kotak Reliance 50.0 90. >Only 10% respondents prefer to make an investment in Kotak Mutual Fund which is very low.0 14.00% Pies s how c ounts 25.0 12.0 10.00% 7.0 84. 10.0 6.00% 5.0 Valid Reliance SBI UTI ICICI HDFC Kotak Total Kotak HDF C 6.0 IC ICI 14. Which type scheme you are using ? Frequencies Statistics Which Type scheme you are using? N Valid 50 Missing 0 78 .00% 4.0 6.0 14.0 70.0 10.0 12.0 100.0 8. >Most of the respondents like to make an investment in RELIANCE And ICICI Mutual Fund.0 10.In which mutual fund that you like to invest your money? Frequency 25 6 4 7 3 5 50 Percent 50.0 UTI 8.0 12.00% 3. >People like to make an investment in ICICI Mutual Fund ( 14% ) Which is healthy percentage.0 SBI Interpretation :->People prefer most to make an investment in RELIANCE Mutual Fund The percentage of invest in Reliance Mutual Fund is 50%.0 100.0 Cumulative Percent 50.00% 6.0 8.
0 Valid open ended close ended Total W h ich T yp e sch em e yo u are u sin g ? open ended close ended 36.0 Interpretation :. >36% Respondent are using Close ended scheme.0 100.>People prefer most to make an investment in SIPs of Reliance Mutual Fund.0 Cumulative Percent 64.Which Type scheme you are using? Frequency 32 18 50 Percent 64.0 100. 11.00% 32. >Likelyness of the respondents to make an investment In Open ended scheme Or Close ended scheme of Reliance Mutual Fund >64% Respondent are using Open ended scheme. Scheme of Reliance Mutual Fund give good return or not ? Frequencies Statistics Scheme of Reliance Mutual Fund gives good return or not? N Valid 50 79 .0 36.0 100.0 Valid Percent 64.0 Pies s how counts close ended open ended 64.00% 18.0 36.
0 very good 16.00% 28.0 10.0 56.0 34.0 Valid Percent 16.0 18.0 good 56.0 Valid poor 10.0 100.0 Interpretation :> Most of the respondent are of the opinion that scheme of Reliance Mutual Fund gives good return.0 10.00% 9.0 18.00% 5.0 Cumulative Percent 16.0 56.00% 8.Missing 0 Scheme of Reliance Mutual Fund gives good return or not? Frequency very good 8 fair 9 good 28 poor 5 Total 50 Percent 16.0 Schem e o f R elian ce Mu tu al F un d g ives go od retu rn or not? very good fair good poor Pies show counts fair 18.0 100. 12.0 90. Are you agree to people should invest in Mutual fund ? Frequencies Statistics Are You Agree to people should invest in mutual fund? N Valid 50 Missing 0 80 .0 100. > 56% of the people are of the opinion that scheme of Reliance Mutual Fund gives good return. > 16% of the people are of the opinion that scheme of Reliance Mutual Fund gives very good return.
00% 2.00% 48.Are You Agree to people should invest in mutual fund? Frequency 48 2 50 Percent 96. Liquidity are the most reason to people Invest money in Mutual Fund. >Tax benefit.0 Interpretation :> Most of the people are of the opinion that Mutual Fund Company Gives good return >Most of the people are satisfied the mutual fund company.0 100. Good returns.0 Valid Percent 96.0 Cumulative Percent 96.0 A re Y o u A g re e to p e o p le s h o u ld in v e s t in m u tu a l fu n d ? agree disagree Pies s how c ounts ag ree 96.0 100.0 100.0 Valid agree disagree Total disagree 4. HYPOTHESIS TESTING 81 .0 4. >That’s way 96% people are agree to other people will invest his/her Money in Mutual Fund.0 4.
70 qHo=0.96) = 0.572 Rejection region acceptance region Rejection region 0.Test-1 Whether 70% of peoples are using Financial services. So Ho and H1 is rejected.(0.70 0.30)/ 50] = . 82 . the sample mean P1=1 which lie on rejedted region so we reject the null hypothesis and reject the alternatative hypothesis.70. H1= 70% of people are not using financial services.05 P1=50/50=1 σ^x=√ (Pho*Qho/N) = √ [(0. pHo=0.0648 Upper limit =P + σ *z =0.σ *z =0.30 n=50 α =0.70) (0.827 Lower limit =P .70 + (0.572 0.0648) (1. Ho= 70% of people are using financial services.827 p1= 1 Conclusion: Here.96) = 0. Test-2 Whether 50% of peoples are using Mutual Fund Financial services. So More than 70% of people like to using financial services.0648) (1.
482 p1= 0.(0. So Ho is accepted and H1 is rejected.217 Rejection region acceptance region Rejection region 0. 83 .65)/ 50] = .35 qHo=0.217 0.0674) (1. the sample mean P1=0.35 + (0.35.35 0.482 Lower limit =P .96) = 0. H1= 35% of people are not using Mutual Fund financial services. pHo=0.42 Conclusion: Here.35 which lie on accepted region so we accept the null hypothesis and reject the alternatative hypothesis. So More than 35% of people like to using financial services.0674 Upper limit =P + σ *z =0.65 n=50 α =0.35) (0.96) = 0. .05 P1=21/50=0.Ho= 35% of people are using Mutual Fund financial services.σ *z =0.42 σ^x=√ (Pho*Qho/N) = √ [(0. Test-3 Whether 50% of peoples are invest 5% to 10% his part of income.0674) (1.
0707) (1. pHo=0.50 Conclusion: Here.50 which lie on accepted region so we accept the null hypothesis and accept the alternatative hypothesis.361 Rejection region acceptance region Rejection region 0.σ *z =0.0707 Upper limit =P + σ *z =0. So Ho is accepted and H1 is accepted.50) (0. Test-4 Whether 60% of peoples are invest money because the most important reason is Retirement.96) = 0.50)/ 50] = .05 P1=25/50=0.50 σ^x=√ (Pho*Qho/N) = √ [(0.638 p1= 0.Ho= 50% of people are invest 5% to 10% his part of income.50 n=50 α =0. 84 . H1= 50% of people are not invest 5% to 10% his part of income.50 0.50.361 0.0707) (1.50 qHo=0.638 Lower limit =P . So 50% of people are invest 5% to 10% his part of income.96) = 0. the sample mean P1=0.50 + (0.and also 50%of people are not invest 5% to10% his part of income.(0.
So Ho is rejected.96) = 0.(0.40)/ 50] = .464 0.Ho= 60% of people are invest money because the most important reason is Retirement. H1=60% of people are not invest money because the most important reason isRetirement.736 Lower limit =P .60.60 + (0.96) = 0. Test-5 Whether 20% of peoples are getting information about mutual fund through news paper.60) (0.σ *z =0.0692) (1.22 σ^x=√ (Pho*Qho/N) = √ [(0.0692) (1.05 P1=11/50=0. Ho= 20% of people are getting information about mutual fund through news paper.22 Conclusion: Here.60 qHo=0. pHo=0.736 p1= 0.0692 Upper limit =P + σ *z =0.40 n=50 α =0. So 22% of people are invest money because the most important reason is retirement.60 which lie on rejected region so we reject the null hypothesis and accept the alternatative hypothesis.60 0. 85 .464 Rejection region acceptance region Rejection region 0. the sample mean P1=0.
(0.189 Rejection region acceptance region Rejection region 0.0056) (1. Test-6 Whether 60% of peoples are like to invest in reliance mutual fund.24 Conclusion: Here. pHo=0.96) = 0.20.210 Lower limit =P .0056) (1.189 0.05 P1=12/50=0.80 n=50 α =0.24 which lie on rejected region so we reject the null hypothesis and accept the alternatative hypothesis.σ *z =0. the sample mean P1=0.210 p1= 0.0056 Upper limit =P + σ *z =0.20 qHo=0.24 σ^x=√ (Pho*Qho/N) = √ [(0.80)/ 50] = . So Ho is rejected.H1=20% of people are not getting information about mutual fund through news paper.20+ (0. because 24% of people are getting information about mutual fund through news paper.96) = 0. 86 .20 0.20) (0.
96) = 0.60 qHo=0.40)/ 50] = .0692 Upper limit =P + σ *z =0.σ *z =0.60+ (0. pHo=0.(0. .0692) (1.60.464 0.60) (0. because 50% people are like to invest in reliance mutual fund.736 p1= 0. the sample mean P1=0.Ho= 60% of people are like to invest in reliance mutual fund. So Ho is accepted Test-7Whether 65% of respondent prefer of Reliance Mutual Fund gives good return.464 Rejection region acceptance region Rejection region 0. Ho= 65% of respondent prefer of Reliance Mutual Fund gives good return.96) = 0.60 0.50 Conclusion: Here.736 Lower limit =P .50 σ^x=√ (Pho*Qho/N) = √ [(0. 87 . H1=60% of people are not like to invest in reliance mutual fund.0692) (1.40 n=50 α =0.50 which lie on accepted region so we accept the null hypothesis and reject alternatative hypothesis.05 P1=25/50=0.
782 Lower limit =P .65(0.65 qHo=0.56 Conclusion: Here.96) =0.65 which lie on accepted region so we accept the null hypothesis and reject alternatative hypothesis.0648)(1.0675 Upper limit =P + σ *z =0. the sample mean P1=0.65-(0. pHo=0.H1=65% of respondent are not prefer of Reliance Mutual Fund gives good return.σ *z =0.517 0. because 56% of respondent are prefer of Reliance Mutual Fund gives good return.65+(.56 σ^x=√ (Pho*Qho/N) = √ [(0.05 P1=28/50=0.517 Rejection region acceptance region Rejection region 0.35 n=50 α =0. So Ho is accepted CONCLUSION 88 .35 )/50] = .0675)(1.782 p1= 0.65 0.96) = 0.
And their researches allow them to suggest Mutual Fund as Investment Avenue. Still some advisers have not suggested the Mutual funds as investment instrument. And stock is least advisable according to their view. 89 . Most of Advisers now suggesting mutual fund. maturity and liquidity. which is followed by high risk and unasserted returns. The basic reason behind that is. Some of the Advisers are follow their clients and provide postinvestment advisory services also. Mutual Fund is good concept of investment with collects the savings and invests in different sector and different market in such a way that investment get highest return. Safety is at the peak of all attributes list of investment products in the mindset of Advisers. which is followed by tax benefit. returns. Today Advisers are kept them selves full of knowledge of all investment instruments. Sharing of brokerage and online valuation report providing is very less in a practice. There is very poor awareness of asset management companies among independent financial advisors. This return will be paid back to Unit holder. lack of knowledge about mutual funds. The perception of Independent Financial Advisor is that insurance is a best investment option among all investment products and then other options are coming into consideration. Advisers are highly providing pre-investment advisory services and doorstep collection services.
Reliance Mutual Fund should reduce the risk compare to equity because only 10% respondents are opinion of good investment reduce risk in mutual fund. • • • • By providing better service Reliance capital should try to switch the Independent Financial Advisors who are directly working with AMC to join with them. Reliance Mutual Fund has to come up with an excellent advertisement with news paper segments. So Reliance capital should highlight tax benefits in mutual funds. So Reliance capital should arrange mutual fund awareness Program of Independent Financial Advisors on regular basis. Reliance capital should arrange special mutual fund awareness program for general public. Majority of the Government employees take into consideration tax benefits before making any investment. Reliance Mutual Fund should give more return rather than another because only 16% respondents are opinion of very good return. 90 .RECOMMENDATIONS • Give more stress on safety attributes because Independent Financial Advisors are more concern about safety of the investments of their clients. So they can directly work with Reliance capital as direct client. Suggestion Reliance Mutual Fund should reduce the Entry charges. • Reliance capital should launch its brand awareness campaign to be number one in Mutual fund advisory service provider. Reliance Mutual Fund should try to launch new schemes so reliance mutual fund will become a market leader. 30 % of Independent Financial Advisors who are not suggesting their clients to invest in mutual funds due to their lack of knowledge of mutual funds.
com 91 .com. www. Tata McGraw hill. new Delhi. www.com. Periodical / News paper 1) The Economic Times 2) The business standard 3) DNA Websites 1) 2) 3) 4) www.BIBLIOGRAPHY Books 1) AMFI Module of mutual fund. Financial management.hdfcmutualfund. 2) Prasanna Chandra .sbimutualfund.reliancemutualfund.amfi.com. www.