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A PROJECT REPORT ON

RELIANCE MUTUAL FUND & COMPETITIVE ANALYSIS WITH SBI MUTUAL FUND

Submitted To

(Approved by Aicte, ministry of hrd government of india)

POST GRADUATE DIPLOMA IN MANAGEMENT SESSION-2009-2011 BY BIKRAM KUMAR SAHOO
UNDER THE SUPERVISION OF

Mr. Ujjwal Chakrabarty Asst.Manager (Finance)

Mr. Kiran Behera Asst. Manager (F&Ac.)

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PREFACE
The seminar project which is part of our PGDM course would help us a lot in our real life. It was period when I struggled hard to get the project done & learnt. This analysis of financial risks and reward helps us knowing about financial decision making process need so that this can be fulfilled by strong effort.

A lot of new things about analysis financial risks are gained that would help me in future……

Bikram Kumar Sahoo PGDM (2009-11)

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ACKNOWLEDGEMENT
I sincerely feel that the credit of the project work could not be narrowed down to only one individual. This work is an integrated effort of all those concerned with it, without cooperation & effective guidance I would not achieved its completion. I express my deep felt gratitude to Mr. Kiran Behera, Asst. Manager (Finance), Reliance Communication for giving me the opportunity to undergo my project in their organization, and I am also very grateful to them for their valuable device and encouragement. Words at my command are not adequate to convey my feelings of my internal guide Mr. Ujjwal Chakrabarty, Asst. Manager (F & Ac) Reliance Mutual fund for his professional guidance, his constructive and helpful criticism and inspiration during the entire process of the work. I would like to extend my thanks to the employee of R.com for their kind cooperation. Especially, I would like to give to my thanks to the almighty and my parents for their constant support and encouragement enable me to complete this work.

Bikram Kumar Sahoo PGDM (2009-11)

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I further states that this project is authentic and genuine and has not been submitted earlier in this university or other University or Institution. No part of this report has been reproduced earlier elsewhere for any purpose. Fortune Tower. Bhubaneswar for partial fulfillment of the PGDM programme Approved by AICTE.DECLARATION I hereby declare that the Summer Internship Project entitled “Reliance Mutual Fund & Competitive Analysis with SBI Mutual Fund” is record of independent research work carried out by me at Reliance Web Store. Bikram Kumar Sahoo PGDM (2009-11) 4 .

He has successfully completed his project report work. a student of PGDM 3rd semester.CERTIFICATE from the guide This is to certify that the project entitled “Reliance Mutual Fund & Its competitive Analysis with SBI Mutual Fund” by Reliance Mutual Fund . in partial fulfillment for the award of the degree of Post Graduate Diploma in Management (PGDM). Utter Pradesh under my guidance & supervision. Greater NOIDA. Anant Jyoti (HOD) (Name of the Guide) 5 . From the institute Centre for Management Technology. This is his original work o its own and has not been carried out by anyone earlier. is bonafied work done by Mr. in Orissa. Bikram Kumar Sahoo . Date: Mr.

Bikram Kumar Sahoo PGDM (2009-11) 6 . The project given to me is completed after completing the company surveys and I have successfully arrived at conclusion and have also given useful suggestions. Gathering information and finally analyzing the data so for doing this project successfully first I have gathered information about the company from different peoples. For this purpose I have visited customers and have gathered information from them as well to prepare this project. After that I have talked personally with the Managers and Senior Executives and have gathered information about the customers and getting feedback from them. For this I have used questionnaire method. My goal of this project is to find out the processes by which this was done.ABSTRACT This project is to investigate the Reliance Mutual Fund.

CONTENTS  Objective of the study  Introduction of the Project  Importance of Study  Scope of study  Reliance Industry Profile  Introduction to Mutual Fund  Mutual fund Industry in India  Guidelines of the SEBI for Mutual Fund Companies  Types of Funds  Mutual Fund Classification  Advantages of Mutual Fund  Disadvantages of Mutual Fund  Top 10 Mutual Fund companies in India  Reliance Mutual Fund  SBI MUTUAL FUND  RELIANCE MUTUAL FUND & ITS COMPETITIVE ANALYSIS WITH SBI MUTUAL FUND  Research Methodology  Analysis & Interpretation of the data  Findings  Conclusions  Suggestions & recommendations  Bibliography  QUESTIONNIRE FOR THE CUSTOMER 7 .

The second part of the Project consists of data and its analysis collected through survey done on 200 people. One can have a brief knowledge about Mutual Fund and its basics through the Project. I also taken interview of many People those who were coming at the Reliance Mutual Fund Office where I done my Project. the number who decide to invest in mutual funds increases to as many as one in five people. This Project covers the Topic “RELIANCE MUTUAL FUND & COMPETITIVE ANALYSIS WITH SBI MUTUAL FUND. Which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan). This Report will help to know about the investors‟ Preferences in Mutual Fund means Are they prefer any particular Asset Management Company (AMC). Objectives of the study.EXECUTIVE SUMMERY In few years Mutual Fund has emerged as a tool for ensuring one‟s financial well being. 8 . The first part gives an insight about Mutual Fund and its various aspects. The analysis and advice presented in this Project Report is based on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds exist. I studied about the products and strategies of other AMCs in Bhubaneswar to know why people prefer to invest in those AMCs. This Project as a Whole can be divided into two parts. I visited other AMCs in Bhubaneswar to get some knowledge related to my topic. the Company Profile.” The data collected has been well organized and presented. For the collection of Primary data I made a questionnaire and surveyed of 200 people. This Project gave me a great learning experience and at the same time it gave m enough scope to implement my analytical ability. But once people are aware of mutual fund investment opportunities. Which type of Product they prefer. Research Methodology. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision. As information and awareness is rising more and more people are enjoying the benefits of investing in mutual funds. Mutual Funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. I hope the research findings and conclusion will be of use.

 To find out the most preferred channel.OBJECTIVE OF THE STUDY  To ascertain the position & performance of the company with physical and financial.  To study the profitability ratio of the company. The main purpose of analysis of risks and reward is the evaluation of strengths and weakness of a business and to analyze the environment.  To know why one has invested or not invested in Reliance Mutual fund. 9 . This analysis also helpful to other groups like share holders/debenture holders to judge their investment in the company.  To evaluate the current and long term financial position of Reliance. INTRODUCTION OF THE PROJECT The study of “RELIANCE MUTUAL FUND & ITS COMPETITIVE ANALYSIS” is important in the present circumstances because of changing business environment and adoption of policies of liberalization in India. This analysis can be used by different interest groups like management of the company to plan future financial requirements by means of forecasting and budgeting procedures.  To know the Preferences for the portfolios.  To know whether the firm is able to meets its current maturing obligations. Environment Industry and company analysis is done thoroughly to understand the external factors influencing the company.  To find out the Preferences of the investors for Asset Management.  To provides reliable financial information about economic resources and obligation.  To find out what should do to boost Mutual Fund Industry.  To find out debt-equity proportion of the organization.  To evaluate the efficiency with which the firm manager utilizes its assets.

Analysis of risk and reward of Reliance mutual fund because of the reason this is one of the leading private company or being a star trading house. portfolio. We selected this topic. revenues. mode of investment. “NET ASSET VALUE” shows the company‟s performance. This project report may help the company to make further planning and strategy. Therefore all the students pursuing management studies should go through the project to better equip themselves in finance. It provides ample scope for analysis and interpretation of its financial statement. standard deviation etc. Bhubaneswar where I completed my Project work. 10 . SCOPE OF THE STUDY A big boom has been witnessed in Mutual Fund Industry in resent times. it becomes very difficult to manage and also know the earning capacity and real position of the firm. “Analysis of risks and reward of Reliance Mutual Fund” involves like measurement of risks. and option for getting return and so on they prefer. Ratio act as a barometer to show the real position of the firm. I surveyed on my Project Topic “Reliance Mutual Fund & its competitive analysis with SBI Mutual Fund” on the visiting customers of the Reliance Mutual Fund office Bhubaneswar. different type of funds/schemes. The study will help to know the preferences of the customers. I had been sent at one of the branch of Reliance Mutual Fund. the possibility of getting higher wages and bonus security analyst take the help of financial analyst to learn and advice their clients whether it is line to buy to hold or to sale the securities of the company.The trade union/employee to know. A large number of new players have entered the market and trying to gain market share in this rapidly improving market. The research was carried on in Bhubaneswar. It is only through the analysis of the financial ratio. On the other hand. which company. the true position both of operation and financial position can be known or predicted with a high degree of accuracy. expenses and profits for a particular period or a day or a month. IMPORTANCE OF STUDY With increasing in the size of the organization.

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000crores (US$ 29 billion) and net worth to the tune of Rs. with a market capitalization of Rs. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.textiles. petroleum refining and marketing. plastics and chemicals). Through its products and services. The interests of the Group range from communications (Reliance Communications) and financial services (Reliance Capital Ltd.000crores (US$ 14 billion) Across different companies. 115. being the largest polyester yarn and fiber producer in the world and among the top five to ten producers in the world in major petrochemical products. Reliance pursued a strategy of backward vertical integration. petroleum refining and oil and gas explorations and production – to be fully integrated along the materials and energy value chain.) to generation transmission and distribution of power (Reliance Energy) infrastructure and entertainment. 12 . Major Group companies are Reliance Industry Limited (including main subsidiary Reliance Retail limited) and Reliance Industrial Infrastructure Limited. petrochemicals (polyester. the group has a customer base of over 100 million the largest in India and a shareholder base of over 12 million.55. 325. net assets in excess of Rs. fiber intermediates.in polyester.5lakhs villages in India and 5 continents across the world. plastics. The Group‟s activities span exploration and production of oil and gas. Starting with textiles in the late seventies. retail and special economic zones. among the largest in the world.The Reliance – Anil Dhirubhai Ambani Group is among India‟s top three private sector business houses on all major financial parameter. fiber intermediates. It has a business presence that extends to over 20000 towns and 4. the Reliance –ADA Group touches the life of 1 in 10 Indians every single day.RIL features in the Forbes global list of world‟s 400 best companies and in FT Global 500 list of world‟s largest companies. Reliance enjoys global leadership in its businesses. petrochemicals.000crores (US$ 81 billion).

The company has interest in asset management and mutual funds. was how Dhirubhai.ADA Group. 13 . spelt out Reliance Info com mission in late 1999. in terms of net worth. first since his sad demise on July 6. Reliance Info com Reliance Info com is the outcome of late Dhirubhai Ambani‟s dream of bringing about a digital revolution in India that will bring to every Indian‟s doorstep an affordable means of information and communication.The backbone was commissioned on December 28. as he was fondly called. These include mobile and fixed line telephony broadband national and international long distance services data services and a wide range of value added services and applications aimed at enhancing the productivity of enterprises and individuals. Reliance Communication Limited The flagship company of the Reliance. “Makes the tools of Info com available to people at an affordable cost. They will overcome the handicaps of literacy and lack of mobility”. He firmly believes that the country could use information and communication technology to overcome its backwardness and underdevelopment. Reliance Communication Limited is the realization of our founder‟s dream of bringing about a digital revolution that will provide every Indian with affordable means of communication and a ready access to information. stock broking and other activities in financial services.2002. life and general insurance private equity and proprietary investments. The company began operations in 1999 and has over 50 million subscribers today.OVERVIEW OF RELIANCE Reliance Capital Reliance Capital is one of India‟s leading and fastest growing private sector financial services companies and ranks among the top 3 private sector financial services and banking companies. It offers a complete range of integrated telecom services.000 route kilometers of pan-India fiber optic backbone in 1999.2002 Dhirubhai‟s 70th birth anniversary. It was with this belief that Reliance Info com began laying its 60.

music broadcast. The company strives to create converged services and platforms for masses to access innovative. Reliance Big Entertainment has evolved out of the group‟s vision of meeting young India‟s aspirations and assuming a leadership position in communication media and entertainment. In the infrastructure space the company is focused on roads. Reliance Big Entertainment India is standing on the threshold of an experience and entertainment economy. Reliance Health In a country where healthcare is fast becoming a booming industry. Internet. Reliance Big Entertainment is geared to create a significant presence in business across various vectors of content. movies.Reliance infrastructure Limited Reliance Infrastructure Ltd is not only India‟s largest private sector enterprise in power utility but also the largest private sector player in many other infrastructure sectors of India. The company aims at providing integrated health services that will compete with the best in the world. cutting-edge content. Sea link and Airports. Reliance Health is a focused healthcare services company enabling the provision of solution to Indians. at affordable prices. Urban infrastructure which includes MRTS. It is at the cross roads of an exciting phase that will shape its cultural and social framework forever. broadcast and retail services and platforms for distribution. Key content initiatives include production and strategic collaboration in area such as gaming. amongst others. Specialty Real Estate which includes business districts Trade tower. Reliance Health aims at revolutionizing healthcare in India by enabling a healthcare environment that is both affordable and accessible through partnership with government and private businesses. convention centre and SEZ which includes IT & ITES SEZ and non IT SEZ as well as free trade zones. 14 . DTH and user-generated content. It also plans to venture into diversified fields like Insurance Administration. distribution and trading of electricity and constructing power plants as EPC partners. animation. In the power sector we are involved in generation transmission. Health care Delivery and Integrated Health Informatics and information Management and Consumer Health.

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the fund belongs to all investors. The money thus collected is then invested in capital market instruments such as shares. or government securities. 16 . the basic understanding of stocks and bonds. Bonds : Bonds are basically the money which you lend to the government or a company. and precious metals). A single investor‟s ownership of the fund is in the same proportion as the amount of the contribution made by him or her bears to the total amount of the fund. ONGC and Infosys. This pool of money is invested in accordance with a stated objective. Thus. bonds.Before we understand what is mutual fund. Bonds are considered to be the most common lending investment traded on the market. It is these assets which are owned by the investors in the same proportion as their contribution bears to the total contributions of all investors put to get. Mutual Fund A mutual fund is a common pool of money into which investors places their contributions that are to be invested in accordance with a stated objective. which is back over predetermined amounts of time.e. an equity fund would buy mainly equity assets-ordinary shares. preference shares. it‟s very important to know the area in which mutual funds works. real estate. The joint ownership of the fund is thus “Mutual”. i. debentures and other securities. A bond fund would mainly buy debt instruments such as debentures. There are many other types of investments other than stocks and bonds (including annuities. A mutual fund uses the money collected from investors to buy those assets which are specifically permitted by its stated investment objective. Examples of public companies include Reliance. warrants etc. the fund belongs to all investors. but the majority of mutual funds invest in stocks and/or bonds. Stocks : Stocks represent shares of ownership in a public company. The ownership of the fund is thus joint or “mutual”. Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. Stocks are considered to be the most common owned investment traded on the market. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. and in return you can receive interest on your invested amount.

professionally managed basket of securities at a relatively low cost. Each shareholder participates in the gain or loss of the fund. bonds and other securities. A Mutual Fund is an investment tool that allows small investors access to a well diversified portfolio of equities. 17 . The funds Net Asset value (NAV) is determined each day. Investments in securities are spread across a wide cross-section of industries a sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Investors of mutual funds are known as unit holders.Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. Units are issued and can be redeemed as needed. Mutual fund issues units to the investors in accordance with quantum of money invested b them. The flow chart below describes broadly the working of a mutual fund.

18 . Any change in the value of the investments made into capital market instruments (such as shares. he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). debentures etc) is reflected in the Net Asset Value (NAV) of the scheme.When an investor subscribes for the units of a mutual fund. Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.

Punjab National Bank Mutual Fund (Aug 89). Bank of Baroda Mutual Fund (Oct 92). The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. Indian Bank Mutual Fund (Nov 89). except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. giving the Indian investors a wider choice of fund families. Also.UTI.HISTORY OF MUTUAL FUND The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. SBI Mutual Fund was the first non. As at the end of January 2003. 1987 marked the entry of non. the mutual fund industry had assets under management of Rs. With the entry of private sector funds in 1993. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. The number of mutual fund houses went on increasing. under which all mutual funds. 12180crores. there were 33 mutual funds with total assets of Rs. at the initiative of the Government of India and Reserve Bank of India. 1993 was the year in which the first Mutual Fund Regulations came into being.UTI Mutual Fund established in June 1987 followed by Canara Bank Mutual Fund (Dec 87). At the end of 1993. with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. a new era started in the Indian mutual fund industry. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. 004 crores. Bank of India (Jun 90).47. 19 . public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to the development of the sector.805 crores. 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. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87).29. 1. public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).UTI. assured return and certain other schemes. Third Phase (1993-2003)--Entry of Private Sector Funds 1993 was the year in which the first Mutual Fund Regulations came into being. As at the end of January 2003. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. representing broadly. The first scheme launched by UTI was Unit Scheme 1964. Second Phase (1987-1993) ---Entry of Public Sector Funds 1987 marked the entry of non. there were 33 Mutual funds with total assets of Rs. Bank of Baroda Mutual Fund (Oct 92). 700 crores of assets under management. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. At the end of 1988 UTI had Rs. Each phase is briefly described as under. 835 crores as at the end of January 2003. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996.At the end of 1993. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. SBI Mutual Fund was the first non. Indian Bank Mutual Fund (Nov 89). 20 . under which all mutual funds. Punjab National Bank Mutual Fund (Aug 89). Fourth Phase (since February 2003) In February 2003. First Phase (1964-87) Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. except UTI were to be registered and governed. Bank of India (Jun 90).6.47. the assets of US 64 scheme. 004 crores. 21. the mutual fund industry had assets under management of Rs.

he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). BOB and LIC.The second is the UTI Mutual Fund Ltd. The following graph indicated the growth of assets over the year: When an investor subscribes for the units of a mutual fund. sponsored by SBI. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. PNB.153108 crores under 421 schemes. Any change in the value of the investments made into capital market instruments (such as shares. Consolidation and growth. 21 . It is registered with SEBI and functions under the Mutual Fund Regulations. which manage assets of Rs. debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. 2004. As at the end of September. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors. there were 29 funds.

Characteristics of Mutual Fund  A mutual Fund actually belongs to the investors who have pooled their funds. growth. safety.  The value of portfolio is update everyday.  The investment portfolio of the mutual fund is created according to the stated investment objectives of the fund.  The investors‟ share in the fund is denominated by “units”. If you'll be investing less than $15. 22 .  A mutual Fund is managed by investment professional and other service providers.Decide whether you'll deal directly with the fund manager or use a broker. liquidity. Three to five funds is generally considered an adequate amount of diversification. How to select a Good Mutual Fund Steps 1. tax advantage. many investors advise that all of your investments should be in mutual funds.Decide what percentage of Your Money you will allocate to mutual funds.000 overall. Objectives of a Mutual Fund  To provide an opportunity for lower income groups to acquire without much difficulty.Determine how many mutual funds you will invest in. Step 3. from the funds. The ownership of the mutual fund is in the hands of the investors. Step 2. professional management and diversification. everyday.  To cater mainly of the need of individual investors.  The pool of funds is invested in a portfolio of marketable investments. The value of the units changes with change in the portfolio value. property in the form of shares. whose means are small?  To manage investor‟s portfolio that provides regular income.000 to $20. The value of one unit of investment is called Net Asset Value. who earn a fee for their services.

Government securities. 470 in March 1993 and till April 2004. bonds. Bonds... both qualities wise as well as quantity wise.Choose high-performance funds by using Internet resources and newspapers to pick those funds that have had the best performance over at least the last three years. the total of it is less than the deposits of SBI alone. Before. Step 5. and distributes the profits. Though the growth was slow. Putting the AUM of the Indian Mutual Funds Industry into comparison..UTI players entered the industry.. in equity shares. the monopoly of the market had seen an ending phase.... all expenses are deducted and the resultant value divided by the number of units in the fund is the fund‟s NAV. of shares currently issued and outstanding 23 . it reached the height of 1. is mostly calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding. In other words we can say that A Mutual Fund is a trust registered with the Securities and Exchange Board of India (SEBI). Call money markets etc.. constitute less than 11% of the total deposits held by the Indian banking industry. Large sections of Indian investors are yet to be intellectuated with the concept. but it accelerated from the year 1987 when non....540 bn.. and/or other securities..Diversify the funds you buy in terms of the size of the companies in their portfolios and the businesses that those companies are in.Step 4. The private sector entry to the fund family rose the AUM to Rs.. short-term money market instruments. the Assets under Management (AUM) were Rs.. known as the net asset value (NAV). The main reason of its poor growth is that the mutual fund industry in India is new in the country.... A mutual fund is a professionally-managed firm of collective investments that pools money from many investors and invests it in stocks. it is the prime responsibility of all mutual fund companies. Hence. to market the product correctly abreast of selling. NAV = Total value of the fund. Indian mutual fund industry had seen a dramatic improvement.... Mutual Funds Industry in India The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. No.. In the past decade.... The mutual fund industry can be broadly put into four phases according to the development of the sector. From this. 67bn. which pools up the money from individual / corporate investors and invests the same on behalf of the investors /unit holders. The value of all the securities in the portfolio in calculated daily. The value of each unit of the mutual fund.

volatility and liquidity. life insurance. fixed income bonds. bank deposits. all these investment options could be judged on the basis of various parameters such asreturn. The only role of bank and post office is to help in distribution of mutual fund schemes to the investors. The investment is generally preferred for the business men who are able to pay at one time. The minimum amount is Rs. 6000 and maximum as per their choice. corporate debentures. The investor has to pay the whole amount at once. 500 monthly for tax saver schemes like that for 12 months. Investors should not be carried away by commission/gifts given by agents/distributors for investing in a particular scheme. This type of investment is generally preferred for the salaried persons. Forms can be deposited with mutual funds through the agents and distributors who provide such services. However. Measuring these investment options on the basis of the mentioned parameters. we get this in a tabular form 24 . Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. One time Investment The amount that has to be invested in onetime is known as onetime investment. real estate etc. safety convenience. company fixed deposits. gold. On the other hand they must consider the track record of the mutual fund and should take objective decision. The investor has to pay the minimum amount of Rs. PPF. the post offices and banks also distribute the units of mutual funds. 5000 and maximum is as per the investor‟s choice. 1000 monthly for all equity and balanced schemes like that for 6 months and Rs. the investors may please note that the mutual funds schemes being marketed by banks and post offices should not be taken as their own schemes and no assurance of return is given by them.The way to invest in mutual funds Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of new schemes. Why has it become one of the largest financial instruments? If we take a look at the recent scenario in the Indian financial market then we can find the market flooded with a variety of investment options which includes mutual funds. equities. Now days. Systematic Investment Plan(SIP) The amount that has to be invested through same monthly instalment is known as Systematic Investment Plan. The minimum amount that the investor has to invest is Rs.

25 . Similarly the other investment options are not at par with mutual funds and serve the needs of only a specific customer group.appetite. even the liquidity and convenience involved are too low. Although it ensures high safety but the returns generated and liquidity are moderate. Even the convenience involved with investing in equities is just moderate. so it‟s not an happening option for person who can afford to take risks for higher return. Now looking at bank deposits. The other option offering high return is real estate but that even comes with high volatility and moderate safety level. On three parameters it scores high whereas it‟s moderate at one. it scores better than equities at all fronts but lags badly in the parameter of utmost important ie. Gold have always been a favourite among Indians but when we look at it as an investment option then it definitely doesn‟t gives a very bright picture. we can say that mutual fund emerges as a clear winner among all the options available. it scores low on return . Straightforward.We can very well see that mutual funds outperform every other investment option. we find that equities gives us high returns with high liquidity but its volatility too is high with low safety which doesn‟t makes it favourite among persons who have low risk. comparing it with the other options.

500 through SIPs and even Rs.likewise. Of course the investors can save their money by going the direct route i. there exists no single option which can fit to the need of everybody. 100. Now everybody can choose their fund according to their investment objectives  Returns get adjusted for the market movements: as the mutual funds are managed by experts so they are ready to switch to the profitable option along with the market movement. just by investing in it.e. Now the tough task for investors start. it‟s a very tough job for the investors to choose the best fund for them.  Dispense the shortcomings of the other options: every other investment option has more or les some shortcomings. But mutual funds have definitely sorted out this problem. if some are safe then either they have low liquidity or low safety or both…. The mf advisors‟ thoughts go beyond just investment objectives and rate of return. Some of the basic tools which an investor may ignore but an mf advisor will always look for are as follow: 26 . How do investors choose between funds? When the market is flooded with mutual funds. they may carry on the further process themselves or can go for advisors like SBI . the investor can enjoy the best investment option as per the investment objective. Such as if some are good at return then they are not safe.  Flexibility of invested amount: Other then the above mentioned reasons. Then the investors sort out the funds whose investment objective matches with that of the investor‟s. Whenever an investor thinks of investing in mutual funds. One can start investing in mutual funds with amount as low as Rs. he must look at the investment objective of the fund. there exists one more reason which has established mutual funds as one of the largest financial intermediary and that is the flexibility that mutual funds offer regarding the investment amount. Suppose they predict that market is going to fall then they can sell some of their shares and book profit and can reinvest the amount again in money market instruments.25% (entry load) but could cost the investors in terms of returns if the investor is not an expert. Its principle of diversification allows the investors to taste all the fruits in one plate. So it is always advisable to go for MF advisors.The reasons for this being:  Mutual funds combine the advantage of each of the investment products: mutual fund is one such option which can invest in all other investment options. through the AMCs directly but it will only save 1-2.

level of capital appreciation. The trigger could be the value of the investment. For example. Rebalancing: Rebalancing involves booking profit in the fund class that has gone up and investing in the asset class that is down. level of the market indices or even a date. depending on the MF's policy.1. the dividends from debt funds may be transferred to equity schemes. Diversification: Diversification involves investing the amount into different options. Investors can also benefit by increasing the SIP amount during market downturns. Whereas STP allows investors who have lump sums to park the funds in a low-risk fund like liquid funds and make periodic transfers to another fund to take advantage of rupee cost averaging. greater the chances of benefiting from lower prices. the investor needs to specify the event. The investors gain through either 27 . The funds redeemed can be switched to other specified schemes within the same fund house. The investor needs to decide on the investment amount and the frequency. This gives the investor a small exposure to a new asset class without risk to the principal amount. More frequent the investment interval. To use the trigger and switch facility. like Rs 5. This results in the average cost per unit for the investor being lower than the average price per unit over time. 3. Such transfers may be done with or without entry loads. the dividend is reinvested not into the same scheme but into another scheme of the investor's choice. the investor is always at a profit. 4. 100. In this case. Rupee cost averaging: The investors going for Systematic Investment Plans(SIP) and Systematic Transfer Plans(STP) may enjoy the benefits of RCA (Rupee Cost Averaging). This ensures that the investor books some profits and maintains the asset allocation in the portfolio. 2.000 a month and nowadays even as low as Rs. Trigger facilities allow automatic redemption or switch if a specified event occurs. 500 or Rs. Rupee cost averaging allows an investor to bring down the average cost of buying a scheme by making a fixed investment periodically. the investor may enjoy it afterwards also through dividend transfer option. the amount or the number of units to be redeemed and the scheme into which the switch has to be made. Under this. Tax efficiency: Tax factor acts as the “x-factor” for mutual funds. Tax efficiency affects the final decision of any investor before investing. In case if the NAV of fund falls the investors can get more number of units and vice-versa. Some fund houses allow such switches without charging an entry load. Trigger and switching are tools that can be used to rebalance a portfolio. which will result in reducing the average cost and enhancing returns. In case of mutual funds. the net asset value of the scheme. even if the market falls.

50 per cent (plus surcharge and education cess) on dividends paid out.  Mutual funds are regulated by SEBI ( Mutual Funds) registrations.  Listed mutual funds are subject to the listing regulations of stock exchange. then the SWP is suitable only for investors in the 10-per-cent-tax bracket. If the capital gain is longterm (where the investment has been held for more than one year).  RBI regulates money & government securities markets.dividends or capital appreciation but if they haven‟t considered the tax factor then they may end loosing. Investors who need a regular stream of income have to choose between the dividend option and a systematic withdrawal plan that allows them to redeem units periodically. tax implications and minimum applicable investment amounts before com Guidelines of the SEBI & AMFI for Mutual Fund Companies Regulatory Aspects of Mutual Funds In the year of 1992.50 per cent DDT paid by the MF on dividends All the tools discussed over here are used by all the advisors and have helped investors in reducing risk. the growth option is more tax efficient for all investors.  Bank sponsored mutual funds are jointly regulated by SEBI & RBI  The bank sponsored funds can‟t provide a guarantee without RBI permission. The objectives of SEBI are –to protect the interest of investors in securities and to promote the development of and to regulate the securities market. Debt funds have to pay a dividend distribution tax of 12. SWP implies capital gains for the investor. Securities and Exchange Board of India (SEBI) Act was passed. 1996  SEBI is regulator of all funds. This is because investors can redeem units using the SWP where they will have to pay 10 per cent as longterm capital gains tax against the 12. If it is short-term. in which mutual funds are invested. simplicity and affordability. Investors in higher tax brackets will end up paying a higher rate as short-term capital gains and should choose the dividend option. 28 . except off shore funds. SEBI formulates policies and regulates the mutual funds to protect the interest of investors. Even then an investor needs to examine costs.

1963 and is voluntarily under SEBI regulations.  Only AMFI certified agents can sell Mutual Fund units. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time.  Mutual Funds Company is required to update the NAV of the scheme on the AMFI website on a daily basis in case of open-ended scheme.  UTI is governed by UTI Act. transparency etc.  UTI can borrow as well as lend also engage in other financial services activities. the department of company affairs regulate them. SEBI issues guidelines for all mutual funds operations-investments. They have to send periodic reports to the ROC (Registrar Of Companies) and the CLB (Company Law Board) is the appellate authority. as they are the same as the Trusts & can‟t sue them. Custodian. holds the securities of various schemes of the fund in its custody. disclosure. SEBI formulates policies and regulates the mutual funds. Recently. accounts. SEBI requires all mutual funds to be registered with them. AMFI also is engaged in upgrading professional standards and in promoting best industry practices in diverse areas such as valuation.  UTI doesn‟t have a separate sponsor and AMC. expenses etc. According to SEBI Regulations. SEBI approved Asset Management Company (AMC) manages the funds by making investments in various types of securities. REGULATORY OF MUTUAL FUND IN INDIA  SEBI The capital market regulates the mutual funds in India. two thirds of the directors of Trustee Company or board of trustees must be independent.  Investors can‟t sue the trust. Its objective is to increase public awareness of the mutual fund industry. registered with SEBI. Since the AMC & Trustee companies are companies. it has been decided that Money market Mutual Funds of registered mutual 29 . The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual funds that the mutual funds function within the strict regulatory framework. To protect the interest of the investors.

 COMPANY LAW BOARD Registrar of companies is called company Law Board. In case of non-photo PAN card in addition to copy of PAN card any one of the following: Driving license/passport copy/ voter id/ bank photo pass book. AMC of Mutual Funds is companies registered under the companies Act. 1956 and therefore answerable to regulatory attributes empowered by the companies Act. driving License. banks owned funds to be under supervision of RBI & SEBI. Documents required (PAN mandatory) Proof of identity: 1. Latest bank passbook/bank account statement. voter id.  RBI RBI. a supervisor of Banks owned mutual funds as banks in India come under the regulatory jurisdiction of RBI. rent agreement. ration card. Proof of address (any of the following): latest telephone bill.  OFFICE OF THE PUBLIC TRUSTEE Mutual Fund being public trust is governed by the Indian Trust Act. 1882. Many closed ended funds of AMCs are listed as stock exchanges and are traded like shares. RBI has supervisory responsibility over all entities that operate in the money markets. Photo PAN Card 2.  STOCK EXCHANGE Stock Exchanges are self-regulatory organizations supervised by SEBI. 1996. Passport. which in turn reports to the charity commissioner. latest electricity bill.  MINISTRY OF FINANCE Ministry of Finance ultimately supervises both the RBI and the SBI and plays the role of apex authority for any major disputes over SEBI guidelines. latest Demat account statement. 30 . The Board of Trustee or the Trustees company is accountable to the office of Public trustee.funds will be regulated by SEBI through mutual funds Regulation Act.

Dividend policy 9. Key Information Memorandum: A key information memorandum. popularly known as KIM. recurring expenses 11. Performance of the scheme (scheme return v/s. An Offer document consists of the following: Standard Offer Document for Mutual Funds (SEBI Format) Summary Information Glossary of Defined Terms Risk Disclosures Legal and Regulatory Compliance Expenses Condensed Financial Information of Schemes Constitution of the Mutual Fund Investment Objectives and Policies Management of the Fund Offer Related Information. Is attached along with the mutual fund form. It‟s advisable to every investor to ask for the offer document and read it before investing. Expenses of the scheme: load structure. benchmark return) 12. Year. Tax Benefits of Mutual Fund ELSS (Equity linked saving scheme ) 3 year lock in period Minimum investment of 90% in equity markets at all times So ELSS investment automatically leads to investment in equity shares Open or closed ended 31 . Name of the fund manager(s) 10. Minimum application amount/ no. Risk profile of the scheme 5. Plans & options 6. And thus every investor gets to read it. Asset allocation pattern of the scheme. of units 7. Name of the fund.Offer document: An offer document is issued when the AMCs make New Fund Offer (NFO). Investment objective 3.wise return for the last 5 financial years. 2. Benchmark index 8. 4. Its contents are: 1.

Huge investments assure liquidity and reflects appositive picture whereas tight investment policy reflects crunch and investors may look forward for a gloomy picture. So we can have looked at most lucrative sectors to know about the recent trends: From the above data collected we can say that engineering & capital goods sector has emerged as the hottest as most of the funds are betting on it.1 Lakh allowed Dividends are tax free Benefit of Long term Capital gain taxation What are the most lucrative sectors for mutual fund managers? This is a question of utmost interest for all the investors even for those who don‟t invest in mutual funds. Because the investments done by the MFs acts as trendsetters. We can 32 . The investments made by the fund managers are used for prediction. The expert management of the funds will always look for profitable and high paying sectors.Eligible under Section 80 C up to Rs. Their investments show that which sector is hot? And will set the market trends.

say that this sector is on boom and presents a bright picture. Other than it other sectors on height are oil & gas, telecom, metals &mining and information technology. Sectors performing average are automotive, cement & construction, chemicals, media & entertainment, manufacturing, miscellaneous, pharmaceuticals and utility. The sectors which are not so favourite are banking & financial services, conglomerates, consumer non- durables, food & beverages, services and tobacco. And the sector which failed to attract the fund managers is consumer durables with just 51 funds betting on it. Thus this analysis not only gives a picture of the mindset of fund managers rather it also reflects the liquidity existing in each of the sectors. It is not only useful for investors of mutual funds rather the investors of equity and debt too could take a hint from it. Asset allocation by fund managers are based on several researches carried on so, it is always advisable for other investors too take a look on it. It can be further presented in the form of a graph as follow:

Causes for the Irrelevant of Ratings
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1. Mutual fund ratings are based on the returns generated, that is, appreciation of net asset value, based on the historical performance. So they rely more on the past, rather than the current scenario. 2. As returns play a key role in deciding the ratings, any change in returns will lead to rerating of the mutual fund. If you choose your mutual fund only on the basis of rating, it will be a nuisance to keep realigning your investment in line with the revision of the ratings. 3. The ratings don‟t value the investment processes followed by the mutual fund. As a result, a fund following a certain process may lose out to a fund that has given superior returns only because it has a star fund manager. But there is a higher risk associated with a star fund manager that the ratings don‟t reflect. If the star fund manager quits, it can throw the working of a mutual fund out of gear and thus affect its performance. 4. The ratings don‟t show the level of ethics followed by the fund. A fund or fund manager that is involved in a scam or financial irregularities won‟t get poor ratings on the basis of ethics. As the star ratings look at just returns, any wrongdoing carried out by the fund or fund manager will be completely ignored. 5. Ratings also don‟t consider two very important factors: transparency and keepin investors informed. There are no negative ratings awarded to the fund for being investor-unfriendly. 6. Ratings don‟t match the investor‟s risk-appetite with their portfolio. As a matter of fact, investments should be done only after considering the risk appetite of the investor. For example, equities may not be the best investment vehicle for a very conservative investor. However ratings fail to take that into account. Ratings should be the starting point for making an investment decision. They are not the be all and end all of mutual fund investments. There are other important factors like portfolio management, age of funds and more, which should be taken into account before making an investment.

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THEORITICAL OVERVIEW:

TYPES OF FUNDS:

There are many types of mutual funds available to the investors. However, these different types of funds can be grouped into certain classifications for better understanding. From the investor’s perspective, we would follow three basic classifications. Firstly, funds are usually classified in terms of their constitution-as closed–end or open-end. The distinction depends upon whether they give the investors the option to redeem and buy units at any time from the fund itself(open end) or whether the investors have to await a given maturity before they can redeem they collect from investors any charges at the time of entry or exit or both, thus reducing the investible amount or the redemption proceeds. Funds that make these charges are classified as load funds, and funds that do not their units to the fund (close end). Funds can also be grouped in terms of whether make any of these charges are termed no-load funds.
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Finally, funds can also be classified as being tax-exempt or non-tax-exempt, depending on whether they invest in securities that give tax-exempt returns or not. Currently in India, this classification may be somewhat less important, given the recent tax exemptions given to investors receiving any dividends from all mutual funds. Under each board classification, we may then distinguish between several types of funds on the basis of the nature of their portfolios, meaning whether they invest in equities or fixed income securities or some combination of both. Every type of fund has a unique risk profile that is determined by its portfolio, for which reason funds are often separated into more or less risk bearing .We first look at the fund classifications and then understand the various types of funds under them.

MUTUAL FUND CLASSIFICATIONS

(A) BY STRUCTURE
Open Ended Schemes An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. Close Ended Schemes A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI
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Regulations stipulate that at least one of the two exit routes is provided to the investor. Interval Schemes Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

(B) BY NATURE
1. Equity fund: These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund manager‟s outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows: · Diversified Equity Funds · Mid-Cap Funds · Sector Specific Funds · Tax Savings Funds (ELSS) Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix. 2. Debt funds: The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as: (a)Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government. (b)Income Funds: Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.
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It gets benefit of both equity and debt market. (e) FMPs: Fixed Monthly Plans invest in debt papers whose maturity is in line with that of the fund. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. CPs and CDs. Some portion of the corpus is also invested in corporate debentures. Higher proportion (around 75%) is put in money markets. 2. (d)Short Term Plans (STPs): Meant for investment horizon for three to six months. Funds are allocated to equities. (h) Arbitrage fund: They generate income through arbitrage opportunities due to mispricing between cash market and derivatives market. These schemes invest in short-term instruments like Treasury Bills. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). such funds invest a major portion of the portfolio in long-term debt papers. derivatives and money markets. inter-bank call money market. Liquid Funds: Also known as Money Market Schemes. in the absence of arbitrage opportunities. (f) Income funds LT: Typically. These funds provides easy liquidity and preservation of capital. (g) Gilt funds LT: They invest 100% of their portfolio in long-term government securities.(c)MIPs: Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds. 38 .

short-term instruments. These schemes generally invest in safer. They invest in both equities and fixed income securities. The aim of these schemes is to provide regular and steady income to investors. Balanced Schemes: Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. The investor can align his own investment needs with the funds objective and invest accordingly. in the proportion indicated in their offer documents (normally 50:50). 39 . These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation. These schemes generally invest in fixed income securities such as bonds and corporate debentures. certificates of deposit. These schemes invest in both shares and fixed income securities. Balanced funds: As the name suggest they. These schemes aim to provide investors with the best of both the worlds. Further the mutual funds can be broadly classified on the basis of investment parameter viz. Each category of funds is backed by an investment philosophy. Income Schemes: Income Schemes are also known as debt schemes. which are in line with pre-defined investment objective of the scheme. The aim of these schemes is to provide capital appreciation over medium to long term. BY INVESTMENT OBJECTIVE Growth Schemes: Growth Schemes are also known as equity schemes. Equity part provides growth and the debt part provides stability in returns. preservation of capital and moderate income. Money Market Schemes: Money Market Schemes aim to provide easy liquidity.3. such as treasury bills. Capital appreciation in such schemes may be limited. are a mix of both equity and debt funds. commercial paper and inter-bank call money. which is predefined in the objectives of the fund.

the fund has a capital gain. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earning and get more shares.g. Types of returns There are three ways. one must keep in mind about the Pros and cons o investments in mutual fund.OTHER SCHEMES Tax Saving Schemes: Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. The percentage of each stock to the total holding will be identical to the stocks index weightage. where the total returns provided by mutual funds can be enjoyed by investors:  Income is earned from dividends on stocks and interest on bonds. Petroleum stocks. You can then sell your mutual fund shares for a profit. And hence.  If fund holdings increase in price but are not sold by the fund manager. Most funds also pass on these gains to investors in a distribution. etc. Index Schemes: Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. While these funds may give higher returns. Pros & cons of investing in mutual funds: For investments in mutual fund. Software. 40 . A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution.  If the fund sells securities that have increased in price.88 of the Income Tax Act. Under Sec. contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate. The returns in these funds are dependent on the performance of the respective sectors/industries. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. Sector Specific Schemes: These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents e. they are more risky compared to diversified funds. The portfolio of these schemes will consist of only those stocks that constitute the index. Fast Moving Consumer Goods (FMCG). Pharmaceuticals. the returns from such schemes would be more or less equivalent to those of the Index. the fund's shares increase in price.

3. to an equity scheme of the same mutual fund. Payment is made through post dated cheques or direct debit facilities. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month. The ownership of the fund is thus joint or “mutual”. This is called as the benefit of Rupee Cost Averaging (RCA) 2. RISK VS RETURN ADVANTAGES & DISADVANTAGES OF MUTUAL FUND: A mutual fund is a common pool of money into which investors places their contributions that are to be invested in accordance with a stated objective. the fund belongs to all 41 .INVESTMENT STRATEGIES 1. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum. at a fixed interval. The investor gets fewer units when the NAV is high and more units when the NAV is low. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month.

Thus. it is because of the many advantages they have over other forms and avenues of investing. along with the needed research into available investment options. an equity fund would buy mainly equity assetsordinary shares. preference shares. The investment management skills. he benefits from the professional management skills brought in by the fund in the management of the investor‟s portfolio. This enables him to hold a diversified investment portfolio even with a small amount of investment that would otherwise require big capital.  Professional management: Even if an investor has a big amount of capital available to him. particularly for the investor who has limited resources available in terms of capital and ability to carry out detailed research and market monitoring. or government securities. ensure a much better return than what an investor can manage on his own. A mutual fund uses the money collected from investors to buy those assets which are specifically permitted by its stated investment objective. Few investors have the 42 . ADVANTAGES OF MUTUAL FUND: If mutual funds are emerging as the favorite investment vehicle. bonds. A bond fund would mainly buy debt instruments such as debentures. Each investor in a fund is a part owner of all of the fund‟s assets. A single investor’s ownership of the fund is in the same proportion as the amount of the contribution made by him or her bears to the total amount of the fund. It is these assets which are owned by the investors in the same proportion as their contribution bears to the total contributions of all investors put together.investors. The following are the major advantages offered by mutual funds to all investors:  Portfolio diversification: Mutual funds normally invest in a well diversified portfolio or securities. warrants etc.

is more liquid. When going through a fund. This risk reduction is one of the most important benefits of a collective investment vehicle like the mutual fund. all the risk of potential loss is his own. he has the benefit of economies of scale. While investing in the pool of funds with other investors. easily and quickly sell. 43 . Diversification reduces the risk of loss.skills and resources of their own to succeed in today‟s fast moving. When an investor invests directly. investors hold shares or bonds they cannot directly. Fund investors also reduce his risk in another way.  Convenience and flexibility: Mutual fund management companies offer many investor services that a direct market investor cannot get. and collect funds at the end of a period specified by the mutual fund or the stock market. a benefit passed on to its investors. on the other hand. A direct investor bears all the costs of investing such as brokerage or custody of securities. by selling the units to the fund if open end. Investment in a mutual fund. any loss on one or two securities is also shared with other investors.  Liquidity: Often. no matter how small his investment. An investor can liquidate the investment.  Reduction/Diversification of risk: An investor in a mutual fund acquires a diversified portfolio. as compared to investing directly in one or two shares or debentures or other instruments. global and sophisticated markets. the fund pay lesser costs because of larger volumes. or selling them in the market if the fund is closed end.  Reduction of transaction costs: What is true of risk is also true of the transaction costs.

 Managing a portfolio of funds: Availability of a large number of funds can actually mean too much choice for the investor . DISADVANTAGES OF INVESTING THROUGH MUTUAL FUNDS: While the benefits of investing through mutual funds far outweigh the disadvantages. an investor and his advisor will do well to be aware of a few shortcomings of using the mutual funds as investment vehicles. bonds and other securities. whether the fund value is rising or declining. which he would not incur in direct investing. A mutual fund investor also pays fund distribution costs.  No tailor-made portfolios: Investors who invest on their own can build their own portfolios of shares.He may again need advice on how to select a fund to achieve his objectives. quite 44 . However. Investing through funds means he delegates this decision to the fund managers.  No control over costs: an investor in a mutual fund has any control over the overall cost of investing.Investors can easily transfer their holdings from one scheme to the other. However. this shortcoming only means that there is a cost to obtain benefits of a mutual fund services. and so on. He pays investment management fees as long as he remains with the fund.within the same fund. However. albeit in return for the professional management and research. this cost is often less than the cost of direct investing by the investors. An investor can choose from different investment plans and construct a portfolio of his choice. get updated market information. The very high net worth individuals or large corporate investors may find this to be a constraint in achieving their objectives. Fees are usually payable as a percentage of the value of his investments. most mutual funds help investors overcome this constraint by offering families of schemes-a large number of different schemes.

11 Cr) + Magnum Multiplier Plus (687. Top Performing Schemes-AUM as on 30th April 09 +Magnum Contra (1. HDFC Mutual Fund Inception Date. Tata Mutual Fund Inception Date-June 30th 1995 Trustee-Tata Trustee Company Pvt.15 Cr) 45 . Ltd.June 30th 2000 Trustee-HDFC Trustee Company Ltd.30 cr) +HDFC MIP Long-term (887.50 Cr) + Magnum Balanced (333.90 cr) 2. Top Performing Schemes-AUM as on 30th April 09 +Tata Pure Equity (269. SBI Mutual Fund Inception Date-June 29th 1987 Trustee-SBI Mutual Fund Trustee Company Pvt.77 Cr) +Tata short-term Bond (292. TOP 10 MUTUAL FUND COMPANIES IN INDIA 1. Ltd.08 Cr) 3.similar to the situation when he has to select individual shares or bonds to invest in.958. Top Performing Schemes-AUM as on 30th April 2009 +HDFC Top 200(2338 cr) +HDFC Equity (2759.95Cr) +Tata Index Nifty (6.

69 Cr) +Kotak 30 (688. Ltd. Top Performing Schemes-AUM as on 30th April 09 +Reliance MIP (168. Ltd.08 Cr) +DSPBR Equity (919.81 Cr) 46 . DSP Blackrock Mutual Fund Inception Date-December 16th 1996 Trustee-DSP Merrill Lynch Trustee Company Pvt.25 Cr) +Reliance Diversified Power Sector Fund(3809. Reliance Mutual Fund Inception Date-June 30th 1995 Trustee-Reliance Capital Trustee Company Ltd.50 Cr) 7.67 Cr) 6. Pvt. Top performing Schemes-AUM as on 30th April 09 +Principal Child Benefit (19. Top Performing Schemes-AUM as on 30th April 09 +DSPBR top 100 Equity (1167.77 Cr) +DSPBR GSF Longer Duration (425. Kotak Mutual Fund Inception Date-June 23rd 1998 Trustee-Kotak Mahindra Trustee Company Ltd.14 Cr) +Kotak opportunities (658.52 Cr) +Reliance Banking retail (681. Top performing Schemes-AUM as on 30th April 09 +Kotak Bond reular (445.57 Cr) 5.4. Principal Mutual Fund Inception Date-November 25th 1994 Trustee-Principal Trustee Co.

Ltd. Birla Sun Life Mutual Fund Inception Date-December 24th 1994 Trustee-Birla Sun Life Trustee Co. Top Performing Schemes-AUM as on 30th April 09 +Sundaram BNP Paribas Tax Saver (703.88 Cr) +Principal personal Tax Saver (332.12 Cr) 47 . Franklin Templeton Mutual Fund Inception Date-February 19th 1996 Trustee.20 Cr) 10.+Principal Index (21.12 Cr) 9. Top Performing Schemes-AUM as on 30th April 09 +Franklin India Blue Chip Fund (1642.78 Cr) +Sundaram BNP Paribas Bond Saver (59. Ltd.14 Cr) +Birla‟95(127.87 Cr) +Templeton IGSF PF (32.48 Cr) +Birla Frontline Equity (481. Sundaram BNP paribas Mutual Fund Inception Date-August 24th 1996 Trustee-Sundaram BNP Paribas Trustee Company Ltd. Top Performing Schemes-AUM as on 30th April 09 +Birla GSF Long Term (10.53 Cr) 8.Franklin Templeton Trustee Services Pvt.68 Cr) +Franklin India Prima Plus (1153.54 Cr) +Sundaram BNP Paribas Select Focus Fund (880.

48 .

How to purchase Reliance Mutual Fund You can purchase the reliance mutual fund by enclosing the demand draft or local cheque payable at par at the place where you can submit the application. Reliance Mutual Fund dividend Policy The dividends are distributed for these mutual funds from the surplus amount after the deduction of all applicable taxes and surcharges. Reliance Mutual Fund scheme Annual returns Reliance Mutual Fund has different plans & schemes for different investor groups and the compounded annual returns have demonstrated a decent return percentage up to 40 %. This stands valid if the application id received before 3 pm. 49 . Tax benefits to the mutual fund Reliance mutual fund is as a mutual fund registered with SEBI (Securities Exchange Board Of India) and hence the entire income from the mutual fund is exempt from Income Tax in accordance with the provisions of Section 10(23D) of the Income tax Act 1961. though the returns may vary based on investment plan you have chosen.Reliance Mutual Fund The Money invested by investors in reliance Mutual Fund is further invested in the equity market or fixed income securities of various sectors and companies to generate a regular income for the investors. the closing NAV of the next business day would be applicable. In case if the application is received after 3 pm. Applicable NAV (Net Asset value) of Reliance Mutual Fund The closing NAV of the day on which the application is received would be applicable.

Reliance Mutual Fund Products EQUITY SCHEMES:-  RELIANCE EQUITY FUND (An open-ended diversified Equity Scheme.  RELIANCE TAX SAVER (ELSS) FUND (An Open-ended Equity Linked Savings 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.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity securities & equity related securities and the secondary objective is to generate consistent returns by investing in debt and money market securities.  RELIANCE VISION FUND (An Open-ended Equity Growth Scheme.) The primary investment objective of the scheme is to 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.) The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments.  RELIANCE EQUITY OPPORTUNITIES FUND (An Open-Ended Diversified Equity Scheme. 50 .

 RELIANCE GROWTH FUND (An Open-ended Equity Growth Scheme. 80%) with a small exposure (i. up to 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 51 . DEBT SCHEMES: RELIANCE MONTHLY INCOME PLAN (An Open Ended Fund.  RELIANCE INDEX FUND (An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Plan is to replicate the composition of the Nifty.  RELIANCE NRI EQUITY FUND (An open-ended Diversified Equity Scheme. The Investment Objective under the Sensex plan is to replicate the composition of the Sensex. with a view to endeavor to generate returns.) 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. which could approximately be the same as that of Sensex.) 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. Primarily the investment shall be made in debt and money market securities (i. with a view to endeavor to generate returns.e. which could approximately be the same as that of Nifty.e. 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 unit holders and the secondary objective is growth of capital.

Accordingly.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. The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. This income may be complemented by capital appreciation of the portfolio. investments shall predominantly be made in Debt and Money Market Instruments. 52 .  RELIANCE FIXED TERM SCHEME (Close-ended Income Scheme) The primary 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.  RELIANCE MEDIUM TERM FUND (An Open End Income Scheme with no assured returns. Accordingly.) The primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unit holders 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). investments shall predominantly be made in Debt & Money Instruments.

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.  RELIANCE FIXED MATURITY FUND . investments shall predominantly be made in debt Instruments. 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.ended Liquid Scheme) The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high 53 .  RELIANCE LIQUIDITY FUND (An Open . Accordingly. The scheme shall also invest in Fixed rate debt Securities (including fixed rate securitised debt.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.  RELIANCE FIXED MATURITY FUND . 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). This income may be complimented by capital appreciation of the portfolio.

This income may be complemented by capital appreciation of the portfolio. Accordingly investments shall predominantly be made in Debt & Money Market Instruments. THE INVESTMENT OBJECTIVES: Debt Option: The primary investment objective of this plan is to generate optimal returns consistent with moderate level of risk. Here the portfolio is dispersed or spread across the stocks in that particular sector. Equity Option: The primary investment objective is to seek capital appreciation and or consistent returns by actively investing in equity / equity related securities.The primary investment objective of the Scheme is to seek to generate consistent returns by actively investing in equity / equity related or fixed 54 . Accordingly. SECTOR SPECIFIC SCHEMES:Sector Funds are specialty funds that invest in stocks falling into a certain sector of the economy. 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. investments shall predominantly be made in Debt and Money Market Instruments. 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. RELIANCE DIVERSIFIED POWER SECTOR FUND Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme .liquidity. This type of scheme is ideal for investors who have already made up their mind to confine risk and return to a particular sector.

in the Gulf 2007 Lipper Awards. In addition.five of them being outright winners.NDTV profit Awards.income securities of Power and other associated companies. 55 . ACHIEVEMENTS The two successive joints surveys by the Economic Times Brand equity and A C Nielsen. RCAM was awarded the India onshore Fund House 2008instituted by the Asian Investor magazine. 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. It also received the NDTV Business leadership Award 2007 in the mutual fund category and runners‟ up recognition as the Best Fund House in the Outlook Money. 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. The company the company received the coveted CNBC Web 18 Genius of the Web distinction for the Best Mutual Fund Website in the country. Reliance were recognized as India‟s most trusted Mutual Fund. The company also worked away with seven other scheme prizes. These included the Fund House of the Year by Lipper GCC as well as ICRA online and the most improved Fund House by Asia Asset management. The company also won the India Equities award in the 5-year performance category. RELIANCE MEDIA & ENTERTAINMENT FUND (Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme).

WEAKNESS  Emerging markets: since there is more investment demand in the United States. that doesn‟t mean the performance will be stellar. Unlike fixed-income products.  Increasing liberalization of government policies. you need to research the risks involved – just because a professional manager is looking after the fund.SWOT Analysis of Reliance Mutual Fund I. STRENGTHS  Brand strategy: as opposed to some of its competitors (e. 56 . Reliance ADAG operates a multi-brand strategy. HSBC). II. such as bonds and Treasury bills. and this diversity within the group makes the company more flexible and resistant to economic and environmental changes.  Mutual funds are like many other investments without a guaranteed return: there is always the possibility that the value of your mutual fund will depreciate. mutual funds experience price fluctuations along with the stocks that make up the fund. which allows the company to appeal to many different segments of the market.  Distribution channel strategy: Reliance is continuously improving the distribution of its products. especially in view of low global interest rates. Japan and the rest of Asia.  Various sources of income: Reliance has many sources of income throughout the group.  Experienced managers for large number of Generics.  Large pool of skilled and knowledgeable manpower.g.  Large pool of installed capacities. The company operates under numerous well-known brand names. Its online and Internet-based access offers a combination of excellent growth prospects and its retail direct business also saw growth of 27% in 2002 and 15% in 2003. Reliance should concentrate on these markets. When deciding on a particular fund to buy.

 Fees: In mutual funds. A senior official in a one of the leading company says foray into rural India already started and there has been realization that the rural market is both price and quantity conscious. THREATS  Increased Competition: With intense competition by so many local players causing headache to the current marketers. stock or bond market.  Hedge funds: sometimes referred to as „hot money‟. III. The shareholder fees. these fees only magnify losses. in years when the fund doesn‟t make money. OPPORTUNITIES  Potential markets: The Indian rural market has great potential. are also causing a threat for mutual funds have gained worldwide notoriety for bringing the markets down. the fees are classified into two categories: shareholder fees and annual operating fees. in the forms of loads and redemption fees are paid directly by shareholders purchasing or selling the funds. The annual fund operating fees are charged as an annual percentage – usually ranging from 1-3%. usually a hedge fund prominently figures somewhere in the picture. These fees are assessed to mutual fund investors regardless of the performance of the fund. As you can imagine. In addition to this though multinational brands are not yet established but still they will soon hit the mark. 57 .  Entry of MNCs: Due to multinationals are entering into market job opportunities are increasing day by day. IV. All the major market leaders consider the segments and real markets for their products. Be it a crash in the currency. Almost 60 to 70% of the revenue is spending on the management and services. Also India Mutual Fund majors are tie up with other financial institutions.

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. SBI Funds Management Pvt. 46 Investor Service Desks and 56 District Organizers. Growth through innovation and stable investment policies is the SBI MF credo. SBI Funds Management Pvt.6 million and over 20 years of rich Experience in fund management consistently delivering value to its investors. honored us with 15 awards of performance and have emerged as the preferred investment for millions of investors. Today the fund house manages over Rs 28500 crores of assets and has a diverse profile of investors actively parking their investments across 36 active schemes. Sectoral Funds and Index Funds.SBI MUTUAL FUND SBI Funds Management Pvt. the fund has launched 38 schemes and successfully redeemed 15 of them. The trust reposed on us by over 4. 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. and in the process. Schemes of the Mutual Fund have time after time outperformed benchmark indices. In 20 years of operation. 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. Magnum COMMA Fund 58 . Ltd. Ltd.SBI Mutual is the first bank sponsored fund to launch an offshore fund – Resurgent India Opportunities Fund.6 million investors is a genuine tribute to our expertise in fund management. Ltd. SCHEMES OF SBI MUTUAL FUND  Equity schemes 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. are riskier than Diversified Equity Funds. has rewarded our investors with consistent returns. is one of the leading fund houses in the Country with an investor base of over 4. 28 Investor Service Centers. Equity Funds include diversified Equity Funds. serves its vast family of investors through a network of over 130 points of acceptance. is a joint venture between 'The State Banks of India' one of India's largest banking enterprises. and Societe Generale Asset Management (France). one of the world's leading fund management companies that manage over US$ 500 Billion worldwide.

IT Fund MSFU.Floater · Magnum NRI Investment Fund · SBI Premier Liquid Fund 59 . Such investments are advisable for the Risk-averse investor and as a part of the investment portfolio for other investors.Series I SBI Magnum Taxgain Scheme 1993 SBI ONE India Fund SBI TAX ADVANTAGE FUND .Pharma Fund MSFU. Government Securities and Money Market instruments either completely avoiding any investments in the stock markets as in Income Funds or Gilt Funds or having a small exposure to equities as in Monthly Income Plans or Children's Plan. Hence they are safer than equity funds.Emerging Business Fund MSFU. At the same time the expected returns from debt funds would be lower.SERIES I  Debt schemes Debt Funds invest only in debt instruments such as Corporate Bonds. · Magnum Children‟s benefit Plan · Magnum Gilt Fund · Magnum Income Fund · Magnum Insta Cash Fund · Magnum Income Fund.FMCG Fund SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI Infrastructure Fund .Magnum Equity Fund Magnum Global Fund Magnum Index Fund Magnum Midcap Fund Magnum Multicap Fund Magnum Multiplier plus 1993 Magnum Sectoral Funds Umbrella MSFU.Contra Fund MSFU.Floating Rate Plan · Magnum Income Plus Fund · Magnum Insta Cash Fund -Liquid Floater Plan · Magnum Monthly Income Plan · Magnum Monthly Income Plan .

 Magnum Balanced Fund AWARDS AND ACHIEVEMENTS SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award – 8 times. The Lipper Award (Year 2005-2006) and most recently with the CNBC TV . 60 . but at the same time provide commensurately lower returns. They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets. but is looking for higher returns than those provided by debt funds. and hence people show more faith in SBI Mutual Fund.4 Awards. Balanced Schemes Magnum Balanced Fund invests in a mix of equity and debt investments.Mutual Fund Award 2007 CNBC Tv18-CRISIL-Mutual Fund of the Year Award 2007 CNBC.  SBI Mutual Fund is one the oldest AMC‟s in private sector and schemes which are matured enough pull new investors because of high returns.18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes. CNBC TV .The Lipper India Fund awards 2006 CNBC Tv18-CRISIL-Mutual Fund of the Year Awards 2006 ICRA-Mutual Fund Awards 2005 SWOT Analysis of SBI Mutual Fund  Strengths  Being the 7th biggest AMC.               Winner of IRCA Mutual Fund Awards 2009(Magnum Taxgain Schemes) Winner of Lipper Fund Awards 2009 Winner of Outlook Money NDTV Profit Awards 2008 Lipper Award-The Lipper India Fund Awards 2008 ICRA-Mutual Fund Award 2008 Outlook Money-NDTV Profit Awards CNBC-Awaaz Consumers Awards 2007 Lipper Award-The Lipper India Fund Awards 2007 ICRA. Hence they are less risky than equity funds.18 Crisil Award 2006 .Awaaz Consumer Awards 2006 Lipper Award.  Wide variety of funds ranging from debt funds to equity and a mixture of both in various proportions give ample amount of choice of customers. SBI Mutual has a cutting edge over other AMC‟s  The name of SBI is also associated with one of the largest public sector bank in India.

and primary 61 . SBI Mutual Fund offers clear and non over lapping positioning of different funds. One of the most important users of research methodology is that it helps in identifying the problem. dispensers.  Winner of IRCA Mutual Fund Awards 2009(Magnum Taxgain Schemes)  Winner of Lipper Fund Awards 2009  Winner of Outlook Money NDTV Profit Awards 2008  Weakness  Lack of promotional material. analyzing the required information data and providing an alternative solution to the problem . Data sources: Research is totally based on primary data. banners  Proper training not being provided to bank officials  Opprotunitities  Untapped rural market offers huge potentials  More focus on PSU‟s may enhance business  Training provided to investors may lead to more investments  Threats  Competitors like Reliance AMC. however primary data Collection was given more importance since it is overhearing factor in attitude studies. ICICI Prudential are catching up fast on the market share  Share market slump may see downfall in investments  Ongoing recession may impose adverse effects RESEARCH METHODOLOGY This report is based on primary as well secondary data. collecting. Research has been done by primary data collection.It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones. Secondary data can be used only for the reference.

organized and collected previously. which were already developed. There are 2 types of data were required for our consumer research. Primary Data The data from the customer or public relating to the investment schemes of the Bank were collected with the help of direct interview schedule or direct interaction with people. Bhubaneswar. The primary data were collected from the 62 .com o Articles o Leaflets o Journal o Newspaper o Company Both primary and secondary data were acquired for the successful and smooth completion of this study. After that many relevant information were collected through filling up of questionnaires contained ten questions. The secondary data has been collected through various journals and websites. Secondary Data These were the data collected from existing sources of from those sources. from 15th of June to 30th of July. or from those sources. Apart from this primary data and information were collected by the way of specially designed questionnaire.data has been collected by interacting with various people. Duration of Study: The study was carried out for a period of one & half months. Secondary data were collected from Company Website-www.ucobank. The activities and information regarding this project were carried out in the Reliance Communication located at Fortune tower.

the secondary data were collected from the annual report of Reliance mutual fund for analyzing the data comparative financial statement.e. DATA PROCESSING After the completion of the interview and questionnaire schedule a through check-up data was made. On the other hand.Finance Department of Reliance Communication were full freedom and cooperation was extended to me. The research is based on the customers i. 63 . promotion & advertisement. managing and implementing the data collection process. The missing data were collected immediately. charts and tables. analyses the result and communicated the findings and their implication. Research design is a method for collecting. RESEARCH DESIGN It includes data on the characteristics. an extension of marketing research. define and enable marketing action monitor marketing process. The data were processed with the help of some statistical tools like percentage. Market research defined as a function that links the customer and the public to market through information to identify and define market opportunities problems to generate. This research is conducted with a view to understand prospective customers better. to introduce and modify the products and services of carrier. Marketing research specifies the information needed to address marketing issues. Some of the activities in carrying this research are-:  To form a basis of sale  Planning. graphs. profile and perception of the consumer in accessing the credit to the Bank. funds flow analysis and ratio analysis which are most useful and common methods are adopted.

SAMPLING: Sampling procedure: The sample was selected of them who are the customers/visitors of Reliance Mutual Fund Office. Limitation: Some of the persons were not so responsive. Other 80 people did not have invested in Mutual Fund.  To determine market characteristics. The data has been analyzed by using mathematical/Statistical tool. It enables to identify the customer needs in relation to the product category and develop potential markets. pie charts. Bhubaneswar. Out of which only 120 people had invested in Mutual Fund. by formal and informal talks and through filling up the questionnaire prepared.  To help the management to determine persuasive advertisement appeals and identify appropriate media choices to reach selected targeted markets. Some respondents were reluctant to divulge personal information which can affect the validity of all responses. Sample design: Data has been presented with the help of bar graph. line graphs etc. The research is confined to a certain part of Bhubaneswar. The sample Size may not adequately represent the whole market. Sample size: The sample size of my project is limited to 200 people only. Sample size is limited to 200 visitors of Reliance Mutual Fund. 64 . It was also collected through personal visits to persons. irrespective of them being investors or not or availing the services or not. potentials and share of its competitors. Possibility of error in data collection because many of investors may have not given actual answers of my questionnaire. Bhubaneswar out of these only 120 had invested in Mutual Fund.

By using some of the portfolio analysis tools. we should look at the beta against a bank index. It is used as a short term decision making tool. so the easiest available option for investors is to choose the best performing funds in terms of “returns” which have yielded maximum returns. Beta analysis: Beta is used to measure the risk. For example if we are considering a banking fund. alpha. sharpe ratio. There are many financial tools to analyze mutual funds. he can become more equipped to make a well informed choice. total expense ratio etc. Therefore. But if we look deeply to it. R-squared. which determines the volatility of a fund. the returns fluctuate everyday.Portfolio analysis tools: With the increasing number of mutual fund schemes. It basically indicates the level of volatility associated with the fund as compared to the market. So before going into details. Since the markets are volatile. treynor measure. beta would indicate the volatility against the benchmark index. we can find that the returns are important but it is also important to look at the „quality‟ of the returns. sharpe ratio. 65 . In case of funds. portfolio turnover ratio and total expense ratio. lets have a look at these ratios: Standard deviation: In simple terms standard deviation is one of the commonly used statistical parameter to measure risk. as compared to the market. Thus. Deviation is defined as any variation from a mean value (upward & downward). beta. while a beta of less than 1 means that the fund is more volatile than the benchmark index. High standard deviation of a fund implies high volatility and a low standard deviation implies low volatility. R-squared. A fund with a beta very close to 1 means the fund‟s performance closely matches the index or benchmark. Now I have compared two funds of SBI on the basis of standard deviation. The present market has become very volatile and buoyant. Each has their unique strengths and limitations as well. One can make a judgment on the quality of a fund from various ratios such as standard deviation. A beta that is greater than 1 means that the fund is more volatile than the benchmark index. The success of beta is heavily dependent on the correlation between correlation between a fund and its benchmark. beta. it becomes very difficult for an investor to choose the type of funds for investment. portfolio turnover ratio. if the fund‟s portfolio doesn‟t have a relevant benchmark index then a beta would be grossly inappropriate. so it is getting difficult for the investors to take right investing decision. one needs to use a combination of these tools to make a thorough analysis of the funds. In case of funds. „Quality‟ determines how much risk a fund is taking to generate those returns.

they don‟t intrastate in share market. maximum people known. It describes the level of association between the fun‟s market volatility and market risk.squared (more than 0. it is 60%.e.squared ranges from0 to1. 72% people known what is mutual fund because they aware about share market. it is clear. Youngsters have so aware about mutual fund. According to business men. what is mutual fund.R-Squared (R2): R squared is the square of „R‟ (i. peoples are not aware about mutual fund because they were not educated. 40% peoples know what is mutual fund. we talk about private Employees. A high R. 80% youngsters known. coefficient of correlation). what is mutual fund? Now. The value of R. According to government employees. Beta should be ignored when the r-squared is low as it indicates that the fund performance is affected by factors other than the markets. ANALYSIS & INTERPRETATION OF THE DATA Result:From the above graph.80) indicates that beta can be used as a reliable measure to analyze the performance of a fund. 66 ..

40% government employees want to invest your money into the mutual fund. maximum customers want to invest our money into the mutual fund because their interest decreased in equity market they know that in this field. risk is low compare to share market. they also know it is not always risk free. 56% youngsters and 40% private employees want to invest money into the mutual fund. According to the customers who know what is mutual fund. Result: We know that mutual fund is not always risk free.28% 67 . Problem has that maximum people are not aware about mutual fund.Result: As shown above chart 60% business men want to invest money into the mutual fund because they have interest in mutual fund.

20% private employees like to invest money into the mutual fund. Result: From the above graph. 20% youngsters and private employees don‟t know it is risk free or not. according to customers. 60% government employees. the purchased gold.business men don‟t know. if risk is high then return may be high.16% government employees. mostly customers want to invest your money into the gold. 28% business men. they like to take risk because they know that. 40% youngsters. 68 . price of gold always increase and this is always profitable in future. Youngsters and business men have interest in mutual fund.

69 . which is according to the primary data collected. Result: From the above graph. clearly shows that investors have two types mutual fund. These customers want to increase number of units and also invest other plan like saving plan. liquidity and growth of fund” i. Birla Sun life Mutual Fund having 15% preferred.Result: From the above graph. They want earn maximum profit from mutual fund. which is according to the primary data collected. it is 18%. other‟s mutual fund having 28% preferred. investors give their preferences to that fund which gives them high return. clearly shows that “Preference of investors are based on high return.e. Kotak Mahindra mutual fund having 17% preferred. 26% customers like to the Reliance Mutual Fund. 14% Customer‟s belief HDFC Mutual Fund.

70 . almost everyone heard about the reliance and their companies.Result: The result of the primary data shows that investors of reliance mutual fund who invested in other mutual fund having the higher percentage prudential ICICI Mutual fund but it may be right or wrong. Brand management is also required to increase the product perceived value to the customer. the company has good reputation in the market. That‟s the reason behind 37% of the people choosing reliance. As reliance is the brand name in India.

Customers of today are better educated. more sophisticated and are more individualistic. which is according to the primary data collection. Result: 74% customers of reliance are satisfied with the services provided by Reliance Mutual fund and the rest 26% are not satisfied. more discriminating. It is fine compare to others.Result: From the above graph. 71 . better informed. clearly shows that the investors are satisfy with the services providing by the reliance AMC. What they value in a mutual fund transaction has dramatically changed. 37% belief on Reliance Mutual Fund.

e. i.1. (b). 20% and the least investors are in the age group of below 30 yrs. Of Investers <=30 12 31-35 18 36-40 30 41-45 24 46-50 20 >50 16 Age Group of Investors Interpretation: According to this chart out of 120 Mutual Fund investors of Bhubaneswar the most are in the age group of 36-40 yrs. (a) Age distribution of the Investors of Bhubaneswar Age Group No. Of Investors 88 25 7 120 72 . 25%.e. the second most investors are in the age group of 41-45yrs i. Educational Qualification of investors of Bhubaneswar Educational Qualification Graduate/ Post Graduate Under Graduate Others Total No.

25% are Businessman. 73 . Occupation of the investors of Bhubaneswar Occupation Govt. 3% are in Agriculture and 5% are in Others. 29% are Govt. 38% are Pvt. Employees. 23% are Under Graduate and 6% are others (under HSC). Service Private Service Business Agriculture Others No. Employees.Interpretation: Out of 120 Mutual Fund investors 71% of the investors in Bhubaneswar are Graduate/Post Graduate. c). Of Investors 30 45 35 4 6 Interpretation: In Occupation group out of 120 investors.

Monthly Family Income of the Investors of Bhubaneswar Income Group <=10.e. 30.001 to Rs. 20. Kind of Investments Saving A/C Fixed deposits Insurance Mutual Fund Post office (NSC) Shares/Debentures Gold/Silver Real Estate No. 27% investors are in the monthly income group of more than Rs. of Respondents 195 148 152 120 75 50 30 65 74 .e.000 15.000.000 10. out of 120 investors. 36% investors that is the maximum investors are in the monthly income group Rs.001-30.000.(d).000 No. Of Investors 5 12 28 43 32 Interpretation: In the Income Group of the investors of Bhubaneswar.001-15. 30.000 and the minimum investors i.000 20. 10. (2) Investors invested in different kind of investments. 4% are in the monthly income group of below Rs. Second one i.001-20.000 >30.

97. 37.5% in Post Office. 15% in Gold/Silver and 32. 25% in Shares or Debentures. of Respondents (a) Liquidity 40 (b) Low Risk 60 (c) High Return 64 (d) Trust 36 75 . Preference of factors while investing Factors No.5% in Real Estate. 60% in Mutual Fund. 76% in Insurance. 74% in Fixed Deposits.Interpretation: From the above graph it can be inferred that out of 200 people. 3.5% people have invested in Saving A/c.

4. Source of information for customers about Mutual Fund Source of information Advertisement Peer Group Bank Financial Advisors No. 32% People prefer to invest where there is High Return. 30% prefer to invest where there is Low Risk. 20% prefer easy Liquidity and 18% prefer Trust.Interpretation: Out of 200 People. 5. of Respondents Yes 135 No 65 Interpretation: From the above chart it is inferred that 67% People are aware of Mutual Fund and its operations and 33% are not aware of Mutual Fund and its operations. of Respondents 18 25 30 62 76 . Awareness about Mutual Fund and its Operations Response No.

Interpretation: From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. 46% know about Mutual fund Through Financial Advisor. of Respondents 120 80 200 Interpretation: Out of 200 People. 60% have invested in Mutual Fund and 40% do not have invested in Mutual Fund. 6. 77 . Out of 135 Respondents. 19% through Peer Group and 13% through Advertisement. 22% through Bank. Investors invested in Mutual Fund Response YES NO TOTAL No.

Reason for not invested in Mutual Fund Reason Not Aware Higher Risk Not any Specific Reason No. 8. of Respondents 65 5 10 Interpretation: Out of 80 people. Investors invested in different Assets Management Co. 81% are not aware of Mutual Fund. (AMC) Name of AMC SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others No. 13% said there is likely to be higher risk and 6% do not have any specific reason. of Investors 55 75 30 75 56 45 70 78 .7. who have not invested in Mutual Fund.

only 46% have invested in SBIMF.5% have invested in each of them. of Respondents 35 5 15 79 .5% in Kotak and 25% in HDFC. Reason for invested in Reliance Mutual Fund Reasons Associated with SBI Better Return Agents Advice No. 9.Interpretation: In Bhubaneswar most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120 Investors 62. 47% in ICICI Prudential. 37.

10.Interpretation: Out of 55 investors of Reliance Mutual Fund. 11. 27% invested on Agent‟s Advice. 9% invested because of better return. 28% do not have invested due to less return and 34% due to Agent‟s Advice. of Investors 76 45 35 82 80 60 75 80 . of Respondents 25 18 22 Interpretation: Out of 65 people who have not invested in Reliance Mutual Fund. 64% have invested because of its association with Brand Reliance. 38% were not aware with Reliance Mutual Fund. Preference of Investors for future investment in Mutual Fund Name of AMC SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others No. Reason for not invested in SBIMF Reasons Not Aware Less return Agents Advice No.

67% in ICICI Prudential. 68% prefer to invest in Reliance. 62.Interpretation: Out of 120 investors. 63% in SBIMF.5% in UTI and 29% in HDFC Mutual Fund.5% in others. 37. 12. of Respondents Financial Advisor 72 Bank 18 AMC 30 81 . 50% in Kotak. Channel Preferred by the Investors for Mutual Fund Investment Channel No.

Preferred Portfolios by the Investors Portfolio Equity Debt Balanced No.Interpretation: Out of 120 Investors 60% preferred to invest through Financial Advisors. of Investors 56 20 44 82 . 14. 25% through AMC and 15% through Bank. of Respondents One time Investment 78 Systematic Investment Plan (SIP) 42 Interpretation: Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through Systematic Investment Plan. Mode of Investment Preferred by the Investors Mode of Investment No. 13.

21% preferred Dividend Payout and 8% preferred Dividend Reinvestment Option. of Respondents Dividend payout 25 Dividend Reinvestment 10 Growth 85 Interpretation: From the above graph 71% preferred Growth Option. 16. Preference of Investors whether to invest in Sectoral Funds Response Yes No No.Interpretation: From the above graph 46% preferred Equity Portfolio. 37% preferred Balance and 17% preferred Debt portfolio. 15. Option for getting Return Preferred by the Investors Option No. of Respondents 25 95 83 .

30.Interpretation: Out of 120 investors. the second most were in the Income group of more than Rs. Only 67% Respondents were aware about Mutual fund and its operations and 33% were not. 10.30. Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not have invested in Mutual fund. Out of 55 investors of Reliance Mutual Fund 64% have invested due to its 84 . About all the Respondents had a Saving A/c in Bank. the second most preferred Low Risk then liquidity and the least preferred Trust. In Occupation group most of the Investors were Govt. In Bhubaneswar most of the Investors were Graduate or Post Graduate and below HSC there were very few in numbers. the second most Investors were Private employees and the least were associated with Agriculture. Only 60% Respondents invested in Mutual fund.000 were more in numbers. ICICI Prudential has also good Brand Position among investors. 76% Invested in Fixed Deposits. Out of 80 Respondents 81% were not aware of Mutual Fund. 13% told there is not any specific reason for not invested in Mutual Fund and 6% told there is likely to be higher risk in Mutual Fund. 20. Mostly Respondents preferred High Return while investment. FINIDINGS In Bhubaneswar in the Age Group of 36-40 years were more in numbers.000. Most of the Investors had invested in Reliance or UTI Mutual Fund.001. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years.000 and the least were in the group of below Rs. employees. In family Income group. SBIMF places after ICICI Prudential according to the Respondents. 79% investors do not prefer to invest in Sectoral Fund because there is maximum risk and 21% prefer to invest in Sectoral Fund. between Rs.

Maximum Number of Investors Preferred Growth Option for returns. And this too is midst of the scenario where most of the other firms in this industry are suffering huge losses and trying to cope with the challenges ahead with this sector. and becoming stronger. the second most was Balance (mixture of both equity and debt). The investors have shown tremendous faith in the company over the years and Reliance mutual fund has responded with the kind of performances. Most of the Investors did not want to invest in Sectoral Fund. the second most due to Agent‟s advice and rest due to Less Return. 27% Invested because of Advisor‟s Advice and 9% due to better return. and the least preferred Portfolio was Debt portfolio. It reflects on the policies the company has. SBIMF has been preferred after them. in terms of returns on and of the investment and financial performance. only 21% wanted to invest in Sectoral Fund. CONCLUSION The analysis done for Reliance Mutual fund ltd. we see that Reliance mutual fund has been growing. For Future investment the maximum Respondents preferred Reliance Mutual Fund. 85 . 65% preferred One Time Investment and 35% preferred SIP out of both type of Mode of Investment. reflects the strong performance of the company over the past 3 years. the second most preferred ICICI Prudential. Most of the investors who did not invested in Reliance Mutual Fund due to not Aware of Reliance Mutual Fund. From the net profit.Association with the Brand Reliance. 60% Investors preferred to invest through Financial Advisors. The most preferred Portfolio was Equity. and the transactions it has been making over the years. which is fueling the growth and increasing economic growth of the country. the second most preferred Dividend Payout and then Dividend reinvestment. 25% through AMC (means Direct Investment) and 15% through Bank.

The current scenario and the expansion plans it has. By considering these three things they can take the customers into consideration. I got the opportunity during my project to comparatively analyze two funds and give the recommendations also. 86 . What ever I learnt during the completion of my project on behalf of that I am recommending to the Reliance Mutual Funds. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option.  Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. I have learnt so many things also which I can not explain in my report.  Younger people aged fewer than 35 will be a key new customer group into the future. Nobody will invest until and unless he is fully convinced.M.  Mutual funds offer a lot of benefit which no other single option could offer. it makes R. a market leader and trend setter in the Mutual fund sector.  The most vital problem spotted is of ignorance. Reliance mutual fund (R. their need and time (how long they want to invest). and adds to it the efficient selling and distribution channel it commands. Suggestions and Recommendations It was a gratifying experience to be in corporate and work as a trainee with the brand name of Reliance Mutual Fund. So the advisors should try to change their mindsets.The mutual fund sector has its share of opportunities and challenges lying ahead and with the present scenario. so making greater efforts with younger customers who show some interest in investing should pay off. what are the norms of SEBI to regulate the AMCs.F a big force in the reckoning and in the near future. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Investors should be made aware of the benefits.M. The advisors should target for more and more young investors. because they are the main source to influence the investors. During my Project I came to know much more about the mutual funds.F) looks all set to break paths and catapult itself to a position of leadership in the market. how they work.  Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers.

 Mutual und distributors like Reliance Mutual Fund should start a campaign to educate the investors: there is a need of advertisement also to attract the investor. In rural area people are getting wealth gradually and need a guidance to shift their portfolio from old sources to new and modern sources.  Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. Though most of the prospects and potential investors are not aware about the SIP. 87 . Customers with graduate level education are easier to sell to and there is a large untapped market there. There is a large scope for the companies to tap the salaried persons.  AMCs should target rural market as a potential hub of customer.  Sales force should be well educated about every aspect of mutual fund so that they can solve the queries of the investors.  Asset management companies need to proper educate the investor to increase the awareness and break the myths about mutual fund. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. To succeed however. advisors must provide sound advice and high quality.

com  NEWS PAPERS  OUTLOOK MONEY  TELEVISION CHANNEL (CNBC AAWAJ)  MUTUAL FUND HAND BOOK  FACT SHEET AND STATEMENT 88 .moneycontrol.com  www.BIBLIOGRAPHY WEBSITES: www.scribd.com  www.com  www.com  www.bseindia.valueresearchonine.reliancemutual.

Do you know. Is Mutual fund always risk free? a) Yes b) No c) I don‟t know 4. Which AMC (asset Management Company) will you prefer? a) Reliance mutual fund b) HDFC mutual fund c) Birla sun life mutual fund d) SBI Mutual Fund e) Other 6. what is mutual fund? a) Yes b) No 2. How many AMC‟s mutual fund do you have? a) One b) Two c) More than two d) None 89 . Do you want to invest your money into the mutual fund? a) Yes b) No 3. Do you want to invest your money into the given following sector? a) Mutual fund b) Property c) Gold d) Shares e) Insurance 5. If yes.Questionnaire for customer Name: ______________________________________ Age: __________ Address: _____________________________________ Phone No._______________________________________ 1. ___________________________________ Email.

Which AMC provides better service? a) Reliance mutual fund b) HDFC mutual fund c) SBI Mutual Fund d) Other 9. Signature__________________ 90 . According to you which company has more demand in the market? a) Reliance mutual fund b) HDFC mutual fund c) Birla sun life mutual fund d) SBI Mutual Fund e) Other 8. What is your view about reliance mutual fund? ___________________________________________________________ ________ _________________________________________________________. Are you satisfied by the services provided by Reliance Mutual fund? a) Yes b) No 10.7.