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In the partial fulfillment of the requirement for M.B.A (Full Time) Submitted By




M. H. Gardi School of Management

M. H. Gardi School of Management

Certificate from Company

M. H. Gardi School of Management

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts and consultants including agents and distributors of Mutual Funds schemes while making investment decisions. The investors in proportion to their investments share the profits or losses. The Mutual Funds normally come out with a number of schemes with different investment objectives, which are launched from time to time. A Mutual Fund is required to be registered with Securities and Exchange Board of India (SEBI), which regulates securities markets before it can collect funds from the public.

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The successful and timely completion of this training would have not been possible without the kind co-operation and support of my guide Mr. Chirag Patel, Mr. Mehul Shah. I avail this opportunity to convey my sincere thanks to all the staff members of Birla Sun Life Mutual Fund for there painstaking effort in bringing out this project in such an excellent form. I would also like to thank Mr. Bhaven Modi for their guidance and co-operation for giving me his valuable knowledge about the mega project report. I am also indebted to Gujarat Technical University and hence I forward my gratitude for compulsion of this most wonderful aspect of our M.B.A. curriculum without which knowledge of management is incomplete and futile.

Date : 15/7/2011

Darshan Vadodaria

M. H. Gardi School of Management


I certify that a. The work contained in the report is original and has been done by myself under the general supervision of my supervisor(s). b. The work has not been submitted to any other Institute for any degree or diploma, c. I have followed the guidelines provided by the Institute in writing the report. d. I have conformed to the norms and guidelines given in the Ethical code of conduct of the Institute. e. Whenever I have used materials (data, theoretical analysis, and text)from other sources, I have given due credit to them by citing them in the text of the report and giving their details in the references. f. Whenever I have quoted written materials from other sources, I have put them under quotation marks and given due credit to the sources by citing them and giving required details in the references.

___________ Student's Name: - Darshan Vadodaria Date : 15/7/2011

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Particulars EXICUTIVE SUMMERY CHAPTER I 1 2 CHAPTER II 3 4 CHAPTER III 5 CHAPTER IV 6 CHAPTER V 7 8 9 10 11 Findings Conclusions Limitations of Project Bibliography Appendix Data Analysis, Result & Interpretation Research Methodology Review of Literature Objectives Introduction Company overview

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This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. This project as a whole can be divided into two parts: The first part gives an insight about the mutual funds and its various aspects. It is purely based on whatever I learned at Birla Sun Life Mutual Fund. One can have a brief knowledge about mutual funds and all its basics through the project. Other than that the real servings come when one moves ahead. Some of the most interesting questions regarding mutual funds have been covered. Some of them are: why has it become one of the largest financial intermediaries? How investors do chose between funds? Most popular stocks among fund managers, most lucrative sectors for fund managers, a special report on Systematic Investment Plan, does fund performance persists and the topping of all the servings in the form of portfolio analysis tool and its application.

All the topics have been covered in a very systematic way. The language has been kept simple so that even a layman could understand. All the data have been well analyzed with the help of charts and graphs. The second part consists of data and their analysis, collected through a survey done on 100 people. Awareness of Customer about Mutual Fund and Perception towards Birla Mutual Fund. The data collected has been well organized and presented. Hope the research findings and conclusions will be of use.


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A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is invested by a fund manager in different types of securities / financial instruments depending upon the objective of the scheme. These investments could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciation realized by the scheme is shared by the unit holders on proportion to the number of units hold by them. Thus a mutual fund is the most suitable investment for a common man as it offers an opportunity to invest in diversified, professionally managed portfolio at a relatively low cost. The small savings of all the investors are put together to increase the buying power and hire a professional manager to invest and monitor the money. Anybody with an investible surplus of a few thousand rupees can invest in mutual Funds. Each Mutual Fund scheme has a defined investment vehicle for todays complex and modern financial scenario. Markets for equity shares, bonds and other fixed income instruments, real estate, derivatives and other assets are driven by global events occurring in far away places, an individual is unlikely to have the knowledge, skills, information and the time to keep track of events, understand their implications and act speedily. An individual also finds difficult to keep track of ownership of assets, investments, brokerage dues and bank transactions etc. Mutual Fund is the answer to all these situations. It appoints professionally qualified experienced staff that manages each of these functions fully. The large pool of money collected in the fund allows it to hire such a professional staff at a very low cost to each investor; in effect Mutual Fund vehicle exploits economies of scale in all three areas--- research, investment and transaction processing.

While the concept of individuals coming together to invest money collectively is not new, the Mutual Fund in its present form is a 20th century phenomenon. In fact Mutual Funds gained popularity only after the Second World War. Globally there are thousands of firms offering ten of thousands of mutual funds with different investment objectives. Today Mutual Funds

M. H. Gardi School of Management

collectively manage almost as much as more money as compared to the banks. A drafts offer document is prepared at the time of launching of the funds. It prespecifies an investment objectives of the fund, the risk factor associated, the cost involved in the process and the board rules for the entry and the exit from the fund and other areas of operations. In India as in the most countries, the sponsors need approval from a regulator, (SEBI). SEBI looks to track records of the sponsors and financial strengths in granting approval to the fund commencing operations. A sponsors then hires an ASSET MANAGEMENT COMPANY to invest fund according to investment objective, it also hires another entity to be the custodian of assets of funds and perhaps a third one to handle registry work for the unit holders of the funds. In Indian context, the sponsors promote the asset management company also, in which it holds a majority stake in many cases a sponsor can hold a 100% stake in AMC e.g. Birla Global Finance is the sponsor of Birla Sun Life Asset Management Company Ltd. which has floated different Mutual Fund schemes and also acts as an asset manager for the funds allocated under the schemes.

IMPORTANT PHASES OF MUTUAL FUND:The history of Mutual Funds in India can be divided into 5 important phases:-

Phase 1(1963-1987):M. H. Gardi School of Management 10

The Unit Trust of India was the sole player in industry. Created by an Act of parliament in 1963, BIRLA launched its first product, the Unit Scheme 1964, which is even today the single largest Mutual Fund scheme. BIRLA created a number of products such as monthly income plans, childrens plans, equity-oriented scheme and offshore funds during this period. BIRLA managed assets of Rs.6700 crore at the end of this phase. Phase 2(1987-1993):In 1987 public sector banks and financial institutions entered the Mutual Fund industry. SBI mutual fund was the first non-BIRLA fund to be set up in 1987. Significant shift of investors from deposits to Mutual Fund industry happened during this period. Most funds were growthoriented closed-ended funds. By the end of this period, assets under BIRLAs management grew to Rs.38,247 crores and public sectors funds managed Rs.8750 crore. Phase 3(1993-1996):In 1993, Mutual Fund industry was open to private sector players, both Indian and foreign. SEBIs first set of regulation for the industry were formulated in 1993, and substantially revised in 1996. Significance innovations in servicing, product design and information disclosure happened in this phase, mostly initiated by private sector players. INVESTORS Phase 4(1996-1999):-

Passed Backed of the new SEBI regulations and restructuring of the Mutual Fund industry The implementation Pool Their Money to
led to rapid asset growth. Bank Mutual Funds were re-cast according to the SEBI recommended structure, and BIRLA came under voluntary SEBI supervision.


Phase 5(1999-2002):This phase was marked by very rapid growth in industry, and significant increase in market shares of private sector players. Assets crossed Rs. 1, 00,000 crore. The tax break offered to

Returns in 1999 created arbitrage opportunities for a number of institutional players. Bond Mutual Funds
Fund Manager funds and liquid funds registered the highest growth in this period, accounting for nearly 60% of
the assets. BIRLAs share of the industry dropped to nearly 50%.

The below flow chart describes the working of mutual funds.


Invest In

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The Aditya Birla Group is India's first truly multinational corporation. Global in vision, rooted in Indian values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. The Aditya Birla Groups products and services offer distinctive customer solutions worldwide. The Group has operations in 20 countries - India, Thailand, Laos, Indonesia, Philippines, Egypt, China, Canada, Australia, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Malaysia and Korea. A US $24 billion corporation with a market cap. of US $31.5 billion and in the League of Fortune 500, the Aditya Birla Group is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. Over 50 per cent of its revenues flow from its operations across the world. Its 66 state-of-the-art manufacturing units and sectorial services span India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China. The Aditya Birla Group is a dominant player in all of the sectors in which it operates. These sectors include viscose staple fibre, non-ferrous metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators and financial services. M. H. Gardi School of Management 13

The Group has also made successful forays into the IT and BPO sectors. In India, the Group has been adjudged The Best Employer in India and among the top 20 in Asia by the HewittEconomic Times and Wall Street Journal Study 2007.


With over 60 years of history in India, Sun Life returned to the country in 1999 by partnering with the highly respected Aditya V. Birla Group to form the joint venture Birla Sun Life. Today, Birla Sun Life Insurance is one of the top 5 privately owned life insurers in India, and Birla Sun Life Mutual Fund is the fifth largest Mutual Fund House. Through a rapidly growing distribution network, Birla Sun Life provides a full range of innovative products and services, including the countrys first unit-linked life insurance. Headquartered in Mumbai, we have expanded quickly throughout the country. We have 650 branches spread across India and more than 153,000 Birla Sun Life advisors.

Sun Life Financial Inc. is a leading financial services organization headquartered in Toronto, Canada, operating in key markets around the world. The Sun Life Financial group of companies and their joint ventures offer individuals and corporate customers a diverse range of financial products and services that fall into two principal business areas: wealth management and protection. Throughout its international operations, Sun Life Financial has an employee base of approximately 13,800 people plus an extensive global distribution network of career sales forces, independent agents, investment dealers and financial planners.

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Tracing its roots back to 1865, Sun Life Financial Inc. and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Indonesia, India and China. As on 30th June 2007, Sun Life Financial Inc. manages assets worth CDN $435 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol "SLF".


The SEBI (Mutual Funds) Regulations 1993 define a mutual fund (MF) as a fund established in the form of a trust by a sponsor to raise monies by the Trustees through the sale of units to the public under one or more schemes for investing in securities in accordance with these regulations. These regulations have since been replaced by the SEBI (Mutual Funds) Regulations, 1996. The structure indicated by the new regulations is indicated as under. A mutual fund comprises four separate entities, namely sponsor, mutual fund

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Trust AMC and custodians..

M. H. Gardi School of Management


SPONSOR The sponsor establishes the mutual fund and gets it registered with SEBI. The mutual fund needs to be constituted in the form of a trust and the instrument of the trust should be in the form of a deed registered under the provisions of the Indian Registration Act, 1908. The sponsor is required to contribute at least 40% of the minimum net worth (Rs. 10 crore) of the asset management company. The board of trustees manages the MF and the sponsor executes the trust deeds in favors of the trustees. It is the job of the MF trustees to see that schemes floated and managed by the AMC appointed by the trustees are in accordance with the trust deed and SEBI guidelines. ASSET MANAGEMENT COMPANY The sponsor also appoints the asset management company (AMC) for the investment and administrative functions. The AMC does the research, the managers the corpus of the fund. It launches the various schemes of the fund, manages them, and then liquidates them at the end of their term. It also takes care of the other administrative work of the fund. It receives an annual management fee from the fund for its services.

BOARD OF TRUSTEES The board of trustees is responsible for protecting the investors interests. Under the SEBI regulation 1996, trustee means a person who holds the property of the mutual fund in trust, for the benefit of the unit holders. The word trustee can be used to denote board of trustees. In case a trustee company governs the trust, it can be used to denote either the trustee company or its directors. CUSTODIANS The custodians are appointed by the sponsor to look after the transfer and storage of securities. Only a registered custodian under the SEBI Regulation can act as a custodian of a mutual fund. The functions of custodian a cover a wider range of services like safe keeping of securities bid settlement, corporate action, and transfer agent. In addition, they may be contracted to perform administrative functions like fund accounting, cash management and other similar functions

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Vision To be the most trusted name in investment and wealth management, to be the preferred employer in the industry and to be a catalyst for growth and excellence of the asset management business in India.

Mission Values Integrity Commitment Passion Seamlessness Speed Achieving superior and consistent investment results. Creating a conductive environment to hone and retain talent. Providing customer delight. Institutionalizing system-approach in all aspects of functioning. Upholding highest standards of ethical values at all times.

M. H. Gardi School of Management



HERITAGE: Birla Sun Life Mutual Fund is a joint venture between the Aditya Birla Group and Sun Life Financial Inc. of Canada. Birla Sun Life Mutual Fund offers a wide range of top quality financial services solutions for resident and non-resident Indians. TRACK RECORD: With a proven track record of 14 years, Birla Sun Life Mutual Fund has been a catalyst towards the growth of the private sector asset management business.

INNOVATIONS: Birla Sun Life Mutual Fund was the first to launch Birla Cash Plus, a liquid fund. Birla Dividend Yield Plus which is a dividend yield fund. Birla Bond Index Fund (a debt index fund) which replicates the CRISIL Composite Bond Fund Index has been assigned AAAF rating by CRISIL. INVESTMENT PHILOSOPHY: Birla Sun Life Mutual Fund follows a long-term, fundamental research based approach to investment. The approach is to identify companies, which have excellent credit-worthiness and strong fundamentals. The fundamentals include the quality of the company's management, sustainability of its business model and its competitive position, amongst other factors. Birla Sun Life Asset Management Company (BSLAMC) has one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to invest in. BSLAMC will always strive to provide transparent, ethical and research-based investments and wealth management services.

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GEOGRAPHICAL COVERAGE: Today, BSLAMC is present in 111 locations, including 74 branches. PRODUCT OFFERING: Birla Sun Life Mutual Fund offers a range of investment options, which include diversified and sector specific equity schemes, fund-of-fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. BSLAMC also provides Private Wealth Management services.

M. H. Gardi School of Management



Article II.

The following are the important advantages of Mutual Funds to Investors:-

Portfolio Diversification:By offering readymade diversified portfolios, Mutual Funds enables investors to hold diversified portfolio. Though investors can create their own diversified portfolio, the costs of creating and monitoring such portfolios can be high, apart from the fact that investors may lack the professional expertise to manage such a portfolio.

Professional Management:Mutual Funds are managed by investment managers (asset management companies or AMCs) who are appointed by trustees and bound by the investment management agreement, on the hows and whys of their investment management functions. AMCs are also required to be adequately capitalized, and are closely regulated by SEBI. AMCs competing for funds under management therefore bring in significant professional expertise and are bound by regulatory and trustees supervision. AMCs are prohibited by regulation to include in any other business. Regulations also ensure that trustees are able to monitor the performance of AMCs, and there are a number of safeguards and prudential regulations in the interest of investors. Investment managers and funds are also bound by AMFI code of ethics, which foster professional standards in the industry.

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Convenient Administration:Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient. Low Cost:Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. Reduction in Risk:Mutual Funds invest in a portfolio of security. This means that all funds are not invested in same investment avenue. It is known that risk and returns of various investment options do not move uniformly or sympathy with one another. If a pharma company share is going down, an InfoTech companys share could be moving up; if the equity market is moving down, debt markets may be moving up. Therefore, holding a portfolio is liquid and market to market, it enables investors to continuously evaluate the portfolio and manage their risks more efficiently. Reduction of Transaction Cost:Mutual Funds provide the investors the benefits of economy of scale, by virtue of their size. Though the individual investors contribution may be small, the Mutual Fund itself is large enough to be able to reduce costs in its transactions. These benefits are passed on to the investors.

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Liquidity:Most of the funds being sold today are open-ended. That is, investors can sell their existing units, or buy new units, at any point of time, at prices that are related to NAV of the fund on the date of the transaction. This enables investors to enjoy a high level of liquidity on their investments.

Since investors continuously enter and exit funds, funds are actually able to provide liquidity to investors, even if the underlying markets, in which the portfolio is invested, may not have the liquidity that the investor seeks. For example, the debt market is wholesale markets, where minimum trade lots are Rs. 25,000 upward. However, investors in debt funds can invest as little as Rs. 500, and withdraw the same at NAV related prices, at any time.

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DISADVANTAGES OF MUTUAFUND:Transparency:You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook. Convenience & Flexibility:Investing in Mutual Fund reduce paperwork and helps you avoid many problem such as bad deliveries, delayed payments and unnecessary follow up with brokers and companies. Mutual Funds save your time & make investing easy and convenience. Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. Choice of schemes:Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. Well Regulated:All Mutual Funds are registered with SEBI and they function within the provision of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI. No Control Over Costs:Since investors do not directly monitor the funds operations they cannot control the costs effectively. Regulators therefore usually limit the expenses of Mutual Funds.

No Tailor-Made Portfolios:-

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Mutual Fund portfolios are created and marketed by AMCs, into which investors invest. They cannot create tailor made portfolios.

Managing A Portfolio Of Funds:As the number of Mutual Funds increases, in order to tailor a portfolio for himself, an investor may be holding a portfolio of funds, with the costs of monitoring them and using them, being incurred by him. No Guarantees:No investment is risk free. If the entire stock market declines in value, the value of Mutual Fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in Mutual Funds than when the buy and sell stocks on their own. However, anyone who invests through a Mutual Fund runs the risk of losing money. Management Risk:When you invest in a Mutual Fund, you depend on the funds manager to make the right decisions regarding the funds portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.

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A) Bank Sponsored 1. Joint Ventures - Predominantly Indian a. SBI Funds Management Private Ltd. 2. Others a. BOB Asset Management Co. Ltd. b. Can bank Investment Management Services Ltd. c. UTI Asset Management Co. Private Ltd. B) Institutions a. Jeevan Bima Sahayog Asset Management Co. Ltd. C) Private Sector 1. Indian a. Benchmark Asset Management Co. Private Ltd. b. Cholamandalam Asset Management Co. Ltd. c. Credit Capital Asset Management Co. Ltd. d. Escorts Asset Management Ltd. e. J. M. Financial Asset Management Private Ltd. f. Kotak Mahindra Asset Management Co. Ltd. g. Reliance Capital Asset Management Ltd. h. Sahara Asset Management Co. Private Ltd i. Sundaram Asset Management Co. Ltd. j. Tata Asset Management Ltd. 2. Joint Ventures Predominantly Indian a. DSP Merrill Lynch Fund Managers Ltd. b. Prudential ICICI Asset Management Co. Ltd.

3. Joint Ventures - Predominantly Foreign a. ABN AMRO Asset Management (India) Ltd.

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b. Deutsche Asset Management (India) Private Ltd. c. Fidelity Fund Management Private Ltd. d. Franklin Templeton Asset Management (India) Private Ltd. e. HSBC Asset Management (India) Private Ltd. f. ING Investment Management (India) Private Ltd. g. Morgan Stanley Investment Management Private Ltd. h. Principal PNB Asset Management Co. Private Ltd. i. Standard Chartered Asset Management Co. Private Ltd.


EQUITY SCHEMES M. H. Gardi School of Management DEBT SCHEMES 27

Birla Sun Life Advantage Fund Birla Sun Life Dividend Yield Plus Birla Sun Life Tax Plan Birla Sun Life Index Fund Birla Sun Life India GenNect Fund Birla Sun Life India Opportunities Fund Birla Sun Life Midcap Fund Birla Sun Life MNC Fund Birla Sun Life Basic Industries fund Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Birla Sun Life Frontline Equity Fund Birla Sun Life New Millennium fund Birla Sun Life Tax Relief96 Birla Sun Life Top 100 fund

Birla Sun Life Short Term Opportunities Fund Birla Sun Life Dynamic Bond fund Birla Sun Life Gilt Plus- liquid Plan Birla Sun Life Gilt Plus-PF Plan Birla Sun Life Gilt Plus- Regular Plan Birla Sun Life Income Plus Birla Sun Life Govt. Securities(Long Term) Birla Sun Life Govt. Securities(Short Term) Birla Sun Life Income Fund- Half Yearly Dividend Birla Sun Life Income Fund- Quarterly Dividend Birla Sun Life Liquid Plus-Institutional Monthly Dividend Birla Sun Life Liquid Plus-Retail Monthly Dividend Birla Sun Life Short Term Fund- Monthly Dividend


Well-regained and reputed brand of BIRLA. Experience of SUN LIFE Investment. Young and well qualified staff. Well aware of customer need.
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Weakness: Less marketing. Presence of BIRLA MF in very less places. Comparatively very less staff and very heavy work load.

Opportunities: Day by day increasing knowledge about Mutual Fund. Only instrument with proper corporate governance and comparatively high return with lesser risk. Rural market is totally untapped.

Threats: Presence of nationalized player like UTI and many more. Increase in competition and competitor.



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SPONSOR Sponsor is the person who is acting alone or in combination with another body corporate establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the M. H. Gardi School of Management 30

investment managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. The sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the schemes beyond the initial contribution made by it towards setting up of the mutual fund. TRUST The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908. TRUSTEE Trustee is usually a company (corporate body) or a Board of Trustees (Body of Individuals). The main responsibility of the Trustees is to safeguard the interest of the unit holders and to ensure that the AMC functions in the interest of the investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are independent directors who are not associated with the Sponsor in any manner. ASSET MANAGEMENT COMPANY (AMC) The AMC is appointed by the Trustee as the investment Manager of the Mutual Fund. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the mutual fund. At least 50% of the directors of the AMC are independent directors who are not associated with the sponsor in any manner. The AMC must have a net worth of at least 10 crores at all times.


A mutual fund is in essence a way for investors to pool their money together for investment purposes. Although you can make deposits as well as withdrawals from a mutual fund, it is a mistake to look at it as a glorified bank account. That is because when you deposit money into a mutual fund account, you are actually purchasing stock in the mutual fund, not simply dropping

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your money into a bank account to accumulate some interest. By investing in a mutual fund, you own shares of stock in a company that in turn owns the investments. Income from this fund will produce dividends, not interest. This difference changes the way you report income when it comes to your taxes.

Keep in mind that when you withdraw money from a mutual fund that you are essentially selling mutual fund stock. This is important because when you take money out of a mutual fund, it is considered a sale of stock and therefore you are required to report a sale on your tax return. When you withdraw money from a bank account, the interest incurred is taxed before it goes into your account and you do not have to report anything on your tax return. That's a big difference from a mutual fund withdrawal.

If your mutual fund is part of a family of mutual funds that are under related management and you can move money from one account to another, do not be misled in believing that you are simply transferring money from one account to another within a single company. This is not the case. These transfers are actually taxable sales because when you transfer money from one account to another, you are selling one fund and buying one fund. This means that if the value of your shares in the first fund had increased while you were in possession of them, you will be required to report a capital gain on the sale on your tax return.

On a more upbeat note, some types of dividend on mutual funds are not taxable as ordinary income as dividend on regular stocks is. Special rules for mutual funds permit the tax treatment of certain types of income to flow through to the shareholders. If your mutual fund has a longterm capital gain, you get to report this as capital gain on your tax return. However, if your mutual fund has a short-term gain, the dividend is treated as ordinary income.

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Any distribution of money you receive from a mutual fund is usually a capital gain distribution, an exempt interest dividend, nontaxable return of capital, or an ordinary dividend. 1. An ordinary dividend is paid out to you from its earnings and profits. It is reported as dividend income on your tax return. 2. Capital gain distributions are long term net realized capital gains from the fund. The money is based on projections of how well the fund would do. You report them as long term capital gain on your tax return regardless of the amount of time you have had ownership of the funds. A small part of this is undistributed capital gains. These are like a ghost income, you never have it in your hands but you have to pay taxes on it anyway. You can claim these as a tax credit on your return because you are considered to have paid them. 3. Exempt interest dividend is paid from tax exempt interest earned by the mutual fund. Hence, you do not have to pay taxes on this dividend, but you must report it nevertheless. 4. When you receive money out of your mutual fund that is not part of the earnings or profits but is part of your investment, it is called a nontaxable return of capital. The money is tax free because that was part of your principal in the fund. This reduces your basis in the mutual fund. Even when the basis becomes zero, you must report it on your tax return as capital gain.


EQUITY FUNDS : BSL Basic Industries Fund BSL New Millennium Fund Birla Equity Plan 33

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Birla India GenNex Fund Birla Advantage Fund Birla Infrastructure Fund Birla Index Fund Birla Balance Fund Birla MNC Fund Birla Top100 Fund BSL Buy India Fund Birla India Opportunities Fund Birla Dividend Yield Plus BSL International Equity Fund Plan A BSL International Equity Fund Plan B

DEBT FUNDS : Birla MIP Birla MIP II Wealth 25 Plan Birla MIP II Savings 5 Plan Birla Asset Allocation Fund

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BSL Income Fund BSL Short Term Fund Birla Floating Rate Fund BSL Liquid Plus Birla Dynamic Bond Fund Birla Bond Index Fund BSL Cash Manager BSL Govt. Securities Fund Birla Gilt Plus

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The investment decision making process is a multi-faceted subject to change over a period of time. Mutual Funds have become an important portal for the small investors. The objectives of the study are to know investors motivational factors, investment preference and problems faced by investors in Mutual Funds. The study reveals that 1) The motivational factors to invest in mutual funds are Portfolio diversification, Risk minimization and greater tax benefits; 2) Lack of knowledge is the primary reason for not investing in mutual fund .It is concluded that the mutual fund business in Coimbatore is still in the growth phase. Journal of Empirical Legal Studies Volume pages 429459, September 2010.

More than $11 trillion is invested in mutual funds in the United States. Mutual fund investors flock to funds with high past returns, despite there being little, if any, relationship between high past returns and high future returns. Because fund management fees are based on the amount of assets invested in their funds, however, fund companies regularly advertise the returns of their high-performing funds. The SEC requires these advertisements to contain a disclaimer warning that past returns do not guarantee future returns and those investors could lose money in the funds. This article presents the results of an experiment that finds that this SEC-mandated disclaimer is completely ineffective. The disclaimer neither reduces investors' propensity to invest in advertised funds nor diminishes their expectations regarding the funds' future returns. The experiment also suggests, however, that a stronger disclaimerone that informs investors that high fund returns generally do not persistwould be much more effective.

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1. Research journal on Performance with its attributes in different time periods(1988-04). A number of researchers have empirically evaluated the relationship of open-ended funds performance with its attributes in different time periods for the developed economies (Soderlind et al., 2000; Korkeamaki and Smythe, 2004). The effect of fund size on its return can be evaluated by measuring the relationship of funds net asset with its return. Prior studies have indicated That smaller the size of fund, the higher is its operating efficiency. Robert (1988) concluded that the smallest quartile of US funds size achieved superior performance in comparison to other quartiles. The conclusion specifically indicated that the smallest quartile had significant positive risk adjusted returns as measured by Jensen Abnormal Performance Index at 90% Level of significance. Gorman (1991) also found that small mutual funds, as measured by net assets, perform slightly better than large mutual funds. These results indicate that mutual funds quickly exhaust economies of scale and experience decreased returns (Becker and Vaughan, 2001; Chen et al., 2004). Consistent with these researches, Soderlind et al. (2000) evaluated the Relationship between fund performance and fund size in the Swedish market and concluded that better performance is achieved by the equity funds that are smaller in size. 4. Miles Livingston & University of Florida research, 1998-2004. Most of the studies on mutual fund performance conclude that actively managed funds fail to boost returns sufficiently so as to recover their expenses back. Hence, one of the most evident findings among the previous studies is the negative relationship between fund return and fund expenses. Livingston and ONeal (1998) have also particularly stressed the significance of expenses in open-ended funds. In this context, Elton et al. (1993) examined the returns of US mutual funds and found that equity fund 202 Pakistan Economic and Social Review performance is negatively related to the magnitude of expense ratios. Load, another form of expense was analyzed by Droms and Walker (1995) through examining international mutual funds and using a pooled cross-sectional time series regression model to determine whether load/no-load status, asset Size, expense ratios, and turnover rate were related to unadjusted and risk adjusted returns.

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Results indicated no performance difference between no-load and load funds when using unadjusted and risk-adjusted returns. McLeod and Mathotra (1995) analyzed 12B-1, yet another form of mutual fund expense and confirmed that the fund managers justify these expenses in the form of higher returns. Consistent with above-mentioned studies a recent study by Korkeamaki and Smythe (2004) examined this relationship in Finnish market and reported that bank-managed and older funds charge higher expenses but investors were not compensated for paying higher Expenses with higher risk adjusted returns. 5. Research on international mutual funds, describes individual funds, and compares international funds to mutual funds in the U.S.Written in 2004; 4,925 words; 14 sources; This paper explains that there are four types of international mutual funds: The international funds, which invest only in well-known markets outside the U.S. such as Germany, France, Japan, Hong Kong and Australia; the global funds, which contain mixtures of U.S. and international stocks; the regional funds, which concentrate in geographic areas like Latin America, the Pacific Rim and Europe, with the concentration of these firms in small countries and emerging markets; and the country funds, which concentrate only on one country. The author points out those international funds are useful when it is felt that the U.S. market is not doing so well, and the emerging markets in the foreign countries are expected to perform better than the U.S. market. The paper relates that an important feature of international funds is that they give small investors an opportunity to invest in shares all over the world, an activity that would be very difficult or expensive to pursue on their own and that provides a good opportunity for diversification.

M. H. Gardi School of Management



The main objective of this research is to know the Awareness of Customer about Mutual Fund and Perception towards Birla Mutual Fund.

To study the Awareness of Customer about Mutual Fund and towards Birla Mutual Fund. To know the different investment options available in the market. To Know about why Customers investing in Mutual Fund. To know where the customers are investing in Mutual Fund.

M. H. Gardi School of Management


Research Methodology
A structured questionnaire for the study subjects was designed for customer within the scope of given objectives and the survey was conducted within Rajkot. SAMPLE SIZE:In the context of this project the survey of customers done by convenient sampling method. The survey is done in the central city of Rajkot. This project reports research sample size is 100 RESEARCH DESIGN The research design that is adopted in this study is descriptive design. Descriptive research is used to obtain information concerning the current status of the phenomena to describe, "What exists" with respect to variables or conditions in a situation. The focus of this study was on selfreported decisions made by various investors regarding the investment patterns in mutual funds. Thus it involves Statement of the problem, Identification of information needed to solve the problem, Selection or development of instruments for gathering the information, Identification of target population and determination of sampling procedure, Design of procedure for information collection, Collection of information, Analysis of information, Generalizations and/or predictions.

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SAMPLING DESIGN POPULATION: The population for this study is investors of Birla mutual funds in Rajkot city. SAMPLING TECHNIQUE: The sampling technique used is simple random sampling. Simple random sampling is also known as probability sampling or chance sampling. Under this sampling design, every item of the universe has an equal chance of inclusion in the sample. The sample frame for this study is the companys database of rajkot city (finite universe). From the obtained database cheque number was selected as the primary key. Then primary key is compared with random numbers and if the primary key and random numbers are matching those numbers are picked up. Such picked up random numbers were the sample respondents from whom the questionnaires were collected. SAMPLE SIZE: The sample size for this study is 100 investors of Birla mutual funds which consist of 5% of the population. Random numbers were generated and using random number tables 100 investors were selected. SAMPLE UNIT: Individuals, families, corporates, partnership firms and sole proprietors were the target respondent groups from which the data were collected.

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SOURCES OF DATA: Data were collected through both primary and secondary data sources. Primary data was collected through questionnaires. The research was done in the form of direct personal interviews and through telephone interviews. PRIMARY DATA A primary data is a data, which is collected afresh and for the first time, and thus happen to be original in character. The primary data with the help of questionnaire were collected from various investors. STATISTICAL TOOLS The statistical tools used for this analysis are: Simple Percentage analysis: Percentages are calculated and in certain cases percentages along with cross tabulation has been calculated. Mean Score Values:

Mean score values has been calculated for the different scales used to find the perception and satisfaction level of investors.

M. H. Gardi School of Management



QUESTIONNARE WISE DATA, GRAPHS AND INTERPRETATION 1. Are you aware about Mutual Funds? yes No 90 10

INTERPRETATION Most of the customers are aware about Mutual Fund because of getting more return after investing in mutual fund.

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2. How will you describe your Investment Knowledge of mutual funds?

Excellent Average Good Poor

Percentage 8% 59% 23% 10%

S ales
Average Good Poor Exellent





INTERPRETATION The customers knowledge is described in four categories. In that only 8% having excellent knowledge about mutual fund investment and 23% having good knowledge about mutual fund investment and 59% having average and the 10% having poor knowledge about mutual fund investment.

M. H. Gardi School of Management


3. What are the purposes of your investments?

High Return Short turm planning Tax benefit If Others

8.2 3.2 1.4 1.2

S ales
10% 8% High Return Short turm planning 23% 59% Tax benefit If Others

INTERPRETATION The different persons are investing their money for different reasons like 59% people are invest their money for getting high return. Some people approx. 23% are invest their money for short term planning, 10% are for Tax benefit and rest 8% are invest for others reasons.

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4. Rank the investment options according to your preferences:

Post Type PPF Fixed Deposit Public Issues/ Iop's LIC Mutual Funds Govt. & RBI bonds Stock Market

4.8 3.5 5.5 2.5 5 4.8 2.2 4.8

S eries1
6 5 4 3 2 1 0 Post Type PPF Fixed Public Deposit Issues/ Iop's LIC Mutual Govt. & Stock Funds RBI Market bonds 4.8 3.5 2.5 2.2 Series1 5.5 5 4.8 4.8

INTERPRETATION In that the customer gives their preferences for their investment. In that they more prefer to investment in fixed deposits and least invest in Government and RBI Bonds. Because the in that the return rate is low.

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5. If you invest in Mutual Funds, what is the share of mutual funds in your total Investments?

Sales 0% - 25% 25% - 50% 50% - 75% 75% - 100% 8.2 3.2 1.4 1.2

S ales
0%- 25% 25%- 50% 50%- 75% 75%- 100%

8% 10%



INTERPRETATION From above chart we can say that up to 59% of the investors are investing their 0-25% share of money in mutual fund.

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6. Which are the companies in which you invest the most (Rank according to Preferences).

Reliance MF ICICI Birla MF Fidelity SBI Franklin Templeton others

44% 10% 20% 5% 14% 4% 3%

INTERPRETATION The customers are more prefer to invest in the companies are as under, 44% in Reliance Mf (which is highest), 20% in Birla Mutual fund. 14% in S.B.I. 10% in ICICI 5% in Fidelity 4% in Franklin Templeton 3% in others.

M. H. Gardi School of Management


7. How do you normally get information about Mutual Fund?

Categories Advertisements Agents Friend Newspapers Internet

Percentage 54% 23% 13% 6% 4%

INTERPRETATION The customers are aware about the mutual funds by many ways. In that the most common and the most effective tool is the Advertisements. Through that the customers are more affected towards mutual funds. The least one is Internet, because the investment is done by the most of the aged persons like 68% approx, so these persons are not using more internet.

M. H. Gardi School of Management



90 % are aware about mutual fund. About 33% of the investors income lies between Rs.10000-Rs.20000 per month. Most of the investors have invested less than Rs.100000 in mutual funds. Returns earned on Mutual Funds are the cause for many investors to invest in BIRLA Mutual Funds after Reliance Mutual Fund. Most of the investors have invested in only Systematic Investment plan. Selection of schemes is based on the returns from the scheme. All the investors agree, High Risk involves High returns.

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In any Mutual Fund Industry investors awareness plays an important role. With the increasing number of Mutual Fund organizations, there is a need for every company to educate investors and the general public on various aspects concerned with the mutual fund investments which in turn reveals their attitude towards such investments. From the study on Investors Perception towards BIRLA Mutual funds, it is found that the investors have a positive attitude towards their investment made in BIRLA Mutual funds. Majority of the investors prefer Mutual Funds for the returns and feel that it is a safe measure of investment. The investors select the schemes considering the returns earned from them. The investors are satisfied with their investment in BIRLA Mutual Funds. The investors also feel that the annual reports and other publications of the concern help them analyses the performance of their investment. The organization can educate its investors on the risk and return in order to make their investments more effective. The investors education programmer can be conducted by the organization in order to educate the investors. The study has helped the researcher gain real time knowledge and has helped to use her analytical skills to analyses the perception of the Customer.

M. H. Gardi School of Management



A mutual fund is a pool of money from many investors that is used to invest in one portfolio of securities for the benefit of all the investors in the fund. Mutual fund investors buy shares in the mutual fund. Each share represents a piece of every investment made by the money managers that oversee the mutual fund. Although mutual funds allow you to invest in many sectors of the economy at once, mutual funds do have limitations worth considering before you invest. Decisions Since mutual funds are professionally managed, you do not have any control in how the money in the mutual fund is invested. Money managers are responsible for researching and interpreting data related to the investments that make up the mutual fund. As a result, you have no way of influencing what investments are bought and sold by the money manager. Costs The returns you generate by investing in a mutual fund are limited in part by the cost of maintaining the mutual fund. According to the U.S. Securities and Exchange Commission, a mutual fund is similar to a business. The mutual fund incurs costs to buy and sell investments on the open financial market place. Some of these fees may include advising fees, transaction costs, and fees for marketing and distribution. These fees reduce the returns you make from the investments in your mutual fund. Projections A prospectus for a mutual fund is one of the most common sources of information for investors. A key consideration when you examine a prospectus is that projections of future earnings are only estimates of how the mutual fund may perform in the future. Projections are commonly based on past performance, but there is no guarantee that a mutual fund will generate the same level of returns as past years.

M. H. Gardi School of Management


Insurance The money you invest in a mutual fund is not insured by the Federal Deposit Insurance Corporation. If your bank participates in FDIC insurance, your deposits are repaid to you if your bank fails, but the money you invest in mutual funds is not protected against investment losses or bank closure. Risk Mutual funds are exposed to risk like any other investment in the financial markets. Mutual funds try to minimize risk by investing in an assortment of securities like stocks and short- and long-term bonds. This strategy is commonly called diversification, and it protects you from losses in one area of the portfolio with gains in another. While mutual funds invest in several sectors, some specialize in certain investments like money market funds, bond funds and stock funds, which carry additional risk of loss.

M. H. Gardi School of Management



Websites Journals International journal of research in computer application & management volume NO: 1 (2011), ISSUE NO. 4 (JUNE) Journal of Empirical Legal Studies Volume 7, Issue 3, pages 429459, September 2010. Research journal on Performance with its attributes in different time periods(1988-04). Miles Livingston & University of Florida research, 1998-2004. Research on international mutual funds, describes individual funds, and compares international funds to mutual funds in the U.S. Written in 2004; 4,925 words; 14 sources; Fact sheets Fact sheets of Birla Mutual Fund

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Questionnaire for Customer Awareness of Mutual Fund & Perception toward Birla Mutual Fund

Name: ______________________________________

Age: ________

Gender : __________

Family Size: ___________

Occupation: ________________

Phone no: ________________

1. Are you aware about Mutual Funds? Yes No

2. How will you describe your Investment Knowledge of mutual funds? Excellent Average Good Poor

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3. What are the purposes of your investments?

High Return Tax Benefits

Short Term Planning If Others ________

4. For what time period do you normally invest?

Less than 6 months 6 months to 1 year 1 year to 3 years More than 5 years 3 years to 5 years If Others ________

5. Rank the investment options according to your preferences (i.e. Most Preferable-1, Least preferable-8)(Tick any one) a. Post Offices b. Fixed Deposits c. LIC d. Govt. & RBI bonds e. PPF f. Public issues/ IPOs g. Mutual Funds h. Stock market

6. If you invest in Mutual Funds, what is the share of mutual funds in your total Investments? 0% -25% 50% -75% 25% -50% 75% -100%

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7. What are the types of mutual fund scheme where you normally invest in? Monthly Income Funds Balanced Funds Equity Funds Debt Funds

8. The minimum return that you normally expect in a year is _______%

9. Which are the companies in which you invest the most (Rank according to Preferences). Birla Mutual Fund Franklin Templeton SBI MF Reliance MF ICICI MF Fidelity If, Others _______ _______ _______ _______ _______ _______ _______

10. What types of investing procedure do you normally follow? (Tick) Payment in Lumpsum (One Time) Payment in Systematic Investment Plan

11. In what type of plan do you normally invest in? Growth Fund Dividend Payout

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Dividend Reinvest

Indifferent among the plans

12. What is your annual income (Approx) Less than Rs.1 lacs Rs.2 lacs to Rs.3 lacs Rs 1 lacs to Rs.2 lacs More than Rs.3 lacs

13. What is your annual Savings (Approx) Less than Rs. 50000 Rs.1 lacs -Rs.1.5 lacs Rs.50000 to Rs. 1 lacs More than Rs.1.5 lacs

14. How do you normally get information about Mutual Fund? Friend / Associates Newspapers Advertisements

Internet which sites please specify _______________________ Agents

15. Do you invest in Birla Mutual Fund? Yes No

16. If yes than in which Fund of Birla mutual fund have you invested? _____________________________________________________

17. Are you aware about Systematic Investment Plan ? Yes No

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18. Give Suggestion about Birla Sun life Mutual Fund. . ______________________________________________________ ______________________________________________________ ______________________________________________________

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