Mutual Fund Marketing in India

Mutual fund marketing in India
IBMR, Bangalore. 1
INSTITUTE OF BUSINESS MANAGEMENT & RESEARCH

IBMR House, # 44, 6th Cross, Wilson Garden, Hosur Main Road,
Bangalore. 560 027. INDIA
“Mutual Fund Marketing in India”
By
“Mohneesh Kumar Bajpai”
Reg No.
520841765
A Project report submitted in partial fulfillment of the requirements of

Internship Training of Master of Business Administration II Semester of
Sikkim Manipal University
EXECUTIVE SUMMARY
IBMR, Bangalore. 2
University Centre Certificate
This is to certify that the Project entitled
“Mutual Fund Marketing in India”
Submitted in partial fulfillment of the requirements for the Internship

Training of Semester II of MASTERS OF BUSINESS
ADMINISTRATION of Sikkim Manipal University of Health, Medical &
Technological sciences
Mohneesh Kumar Bajpai
Has worked under my supervision and guidance and that no part of

this report has been submitted for the award of any other degree,
Diploma, Fellowship or other similar titles or prizes and that the work
has not been published in any journal or Magazine.
Reg. No:
520841765
Attested Certified
Director / Principal Faculty Guide’s Name &

Of the Institute Qualification
IBMR, Bangalore. 3
Examiner’s Certification
Investment may be defined as an activity that commits funds in any

The project report of
financial/physical form in the present with an expectation of receiving
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providing form
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opportunity to have a direct stake in the performance of the financial markets.
He can also benefit from attractive tax advantages.
A mutual fund is a professionally managed firm of collective investments that
collects money from many investors and puts it in stocks, bonds, short-term
money market instruments, and/or other securities. The fund manager, also
known as portfolio manager, trades the fund's underlying securities, realizing
capital gains or losses and passing any proceeds to the individual investors.
Internal Examiner External Examiner
Today, the worldwide value of all mutual funds totals more than $26 trillion in
assets.
The principal paid are invested in fund/funds of the investor’s choice
(depending on the allocation rate) & units are allocated depending on the
price of units for the fund/funds.
IBMR, Bangalore. 4
STATEMENT OF PROBLEM:
The premiums that are collected are invested in different funds like equity
The project report / Thesis of
fund, mid-cap fund, debt fund, balanced fund and cash fund. The funds must
be allocated such that their performance is stable and improves so that the
Mohneesh
investor gets high returns. Kumar
Due to the Bajpai
increasing competition it becomes
necessary that the companies fund TITLE

is the best performing fund with highest
return. Among the different mutual funds this study is to find out the best fund
“Mutual
which will yield high returns toFund Marketing
the investor in India”
and minimize there risk.
OBJECTIVES OF THE STUDY:
• To study the different investment guidelines prescribed by IRDA.

Is approved and is acceptable in quality and form
• Mutual Fund Marketing in India
• To analyze the competition among different sectors for investment.
• Based on the findings suitable suggestions are given.
Miss: Navneet
PLACE OF THE STUDY:
(MARKETING & RELATIONSHIP MANAGER)
The study was conducted at Reliance Money 3rd block Jayangar Bangalore.
Also some of the software companies were covered including Accenture,
Oracle, HP, etc. Even bank ATM’s of Axis Bank in Wilson garden and ICICI
Bank in Jayangar were covered.
IBMR, Bangalore. 5
Student Declaration
I hereby declare that the project report titled
“Mutual fund Marketing in India”
Submitted in partial fulfillment of the requirements for the Internship

Training of II Semester of Masters of Business Administration of
Sikkim –Manipal University, India, is my original work and not
submitted for the award of any other degree, diploma, fellowship, or
any other similar title or prizes
(Signature of the Student)
Place: Bangalore Mohneesh Kumar Bajpai
Date: -07-09-08 Reg. No: 520841765
IBMR, Bangalore. 6
EXECUTIVE SUMMARY
Investment may be defined as an activity that commits funds in any
financial/physical form in the present with an expectation of receiving
additional return in the future. The expectation brings with it a probability that
the quantum of return may vary from a minimum to a maximum. The
possibility of variation in the actual return is known as investment risk. Thus
every investment involves a return and risk. The investor can choose the
investment funds he wants to invest his money, providing the investor an
opportunity to have a direct stake in the performance of the financial markets.
He can also benefit from attractive tax advantages.
A mutual fund is a professionally managed firm of collective investments that
collects money from many investors and puts it in stocks, bonds, short-term
money market instruments, and/or other securities. The fund manager, also
known as portfolio manager, trades the fund's underlying securities, realizing
capital gains or losses and passing any proceeds to the individual investors.
Today, the worldwide value of all mutual funds totals more than $26 trillion in
assets.
The principal paid are invested in fund/funds of the investor’s choice
(depending on the allocation rate) & units are allocated depending on the
price of units for the fund/funds.
IBMR, Bangalore. 7
STATEMENT OF PROBLEM:
The premiums that are collected are invested in different funds like equity
fund, mid-cap fund, debt fund, balanced fund and cash fund. The funds must
be allocated such that their performance is stable and improves so that the
investor gets high returns. Due to the increasing competition it becomes
necessary that the companies fund is the best performing fund with highest
return. Among the different mutual funds this study is to find out the best fund
which will yield high returns to the investor and minimize there risk.
OBJECTIVES OF THE STUDY:
• To study the different investment guidelines prescribed by IRDA.
• Mutual Fund Marketing in India
• To analyze the competition among different sectors for investment.
• Based on the findings suitable suggestions are given.
PLACE OF THE STUDY:
The study was conducted at Reliance Money 3rd block Jayangar Bangalore.
Also some of the software companies were covered including Accenture,
Oracle, HP, etc. Even bank ATM’s of Axis Bank in Wilson garden and ICICI
Bank in Jayangar were covered.
IBMR, Bangalore. 8
DEFINITIONS:-
EQUTY DIVERSIFIED:-
• Equity Fund – This fund provides the scope of high appreciation over a long
term. The fund will primarily invest in equities & is expected to match returns
given by NSE NIFTY. This fund will invest at least 90% in equities and
maximum 10% in cash.
• Equity Gain Fund - The investment objective of this Fund is to provide
capital appreciation through investment in select equity stocks that have the
potential for high capital appreciation. This fund will invest at least 85% in
equities and maximum 15% in debt & cash instruments.
• Equity MidCap Fund - The Investment objective of this Fund is to achieve
capital appreciation by investing in a diversified basket of mid caps stocks and
large cap stocks. The fund shall primarily invest in mid cap stocks (at least
50% of the investment shall be in mid cap stocks).Investment portfolio shall
also include large cap stocks and cash with cash not exceeding 20% of the
portfolio value.
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BALANCE:-
Balanced Fund – The balanced fund is primarily for those who prefer a
mix of steady returns & growth. The balanced fund will invest 30% to 50% in
the equity fund and 50%to 70% in the debt fund.
• Cash Fund – The cash fund will invest conservatively in money market &
short-term investments to ensure that return on investments shall never be
negative. 100% of this fund will be invested in money market instruments. The
price of the units in this fund is guaranteed never to go down. (i.e:- gold, govt.
Securities, etc)
• Debt Fund - This fund provides the scope for steady returns at low risk
through investment in high quality fixed income securities. This fund will be
invested fully in debt instruments
EQUITY LINKED SAVING SCHEME:
• ELSS funds have a lock-in period of three years. This could be
restricting, but look at the other side of the picture -- the lock-in
period prevents unnecessary withdrawals and helps your money grow
over a period of time.
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If you are wondering why a three-year lock-in period is necessary, it is
because you need to take a long-term view when you invest in equity. The
real potential of equities starts to show only after a few years. This allows
you to ignore the short-term slumps and stay invested for the long haul.
The tax benefit:
• Investments in ELSSs fall under Section 80C.
• The limit under this section is Rs 1, 00,000.
• This is irrespective of how much you earn and under which tax bracket
you fall.
• Also, there are no sub-limits under this overall Rs 1, 00,000 amounts.
• The dividends you earn in an ELSS are tax free.
METHODOLOGY / RESEARCH DESIGN
Type of Study:
The study at “Reliance Money” is a combination of analytical and practical
study. It is based on data collected from records of the company and is
administered to various departmental heads connected with Fund
Management.
Types of Data:
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1. Primary Data: This data was collected from discussions and
interactions with respective departmental heads and clients.
2. Secondary Data: This data was collected through various newsletters,
publications through researchers in the field of fund management,
journals magazine reports and consolidated records from “Reliance
Money “
Sampling plan:
The sampling universe consisted of various funds and their returns.
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CONTENTS
Chapter 1 – Introduction 12-42
1.2 Mutual Fund Marketing in India 12-
14
1.2History of the organization 15-18
1.3 Mutual Fund / organizational structure 18-19
1.4 Product of company 20-23
1.4.1. Equity Shares 24
1.4.2 Bonds 24-25
1.4.3 Mutual Funds 25
1.4.4 Real Estate 25-26
1.4.5. Financial Derivatives 26-27
The advantages of investing in a Mutual Fund are: 27
Different type of mutual fund 28-39
Disadvantage of investing through funds 40- 41
Chapter 2- RESEARCH METHODOLOGY 44
2.1 Type of study 44
2.2 Types of Data 44
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2.3 Sampling Plan: 45
2.4 SWOT of the organization:- 45-46
Chapter- 3 - Aim and Objective 47-59
3.1- On Job Training: 47-51
3.2 - Job profile at reliance Money 52-54
3.3- Problems faced while selling products 55-56
3.4 - My Responsibility in organization 57-58
3.5- Limitation 59
Chapter-4- ANALYSIS AND INTERPRETATION OF DATA 60-73
4.1- Segmentation Targeting, positioning 60-63
4.2- Comparison of ULIPS vs. MFS (India) 63-65
4.3- Advantage ulips 66
4.4- Advantage of mfs 66
4.4- Data analysis and interpretation 66-73
4.5 – findings 74
Chapter -5- Conclusion and Recommendation 75-79
QUESTIONNAIRE 80-85
IBMR, Bangalore. 14
Chapter 1
INTRODUCTION
Mutual Fund Marketing in India
An investor earns or expects to earn additional monetary value from the mode
of investment that could be in the form of financial assets.
FUND Instead of directly buying equity shares or fixed income instruments an
investor can participate in various schemes floated by mutual fund. 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. Thus a Mutual Fund is the most suitable investment for the
common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost. The flow
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chart below describes broadly the working of a mutual fund:
REGULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA
The regulation of mutual funds in India is governed by the SEBI vide the
SEBI (Mutual Fund) Regulation, Act 1996 (here in after referred to as
SEBI Regulations). These regulations make it mandatory for mutual
funds to have a three-tier structure of sponsor – Trustee – Asset
Management Company (AMC). The sponsor is the promoter of the
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mutual fund and appoints the trustees. The Trustees are responsible to the
investors in the mutual fund and appoint the AMC for managing the
investment portfolio.SEBI regulations also provide for who can be a
sponsor, trustee and AMC, specifying the format of agreement between
these entities. These agreements provide for the rights, duties and
obligations of these three entities. The UTI is also structured as a trust.
The important difference through is that UTI does not have sponsors or a
separate AMC. Financial intuitions and banks that contributed to the
initial capital of the UTI have their representatives on UTI’s Board of
Trustees, which oversees the operation of UTI Mutual Fund. The
Association of Mutual Funds in India (AMFI) is a self-regulatory body
formed by the various MF Companies to address the practices and
policies of various aspects like new scheme launches, payments to
intermediaries’ comparisons and other ethical systems.
Likewise, different companies have their own Compliance and Audit
offices, which are mandated to control and report adherence to and
deviations if any on the regulations and policies issued by SEBI.
ADVANTAGES OF MUTUAL FUNDS
Professional Management
Diversification
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Convenient Administration
Return Potential
Low Costs
Liquidity
Transparency
Flexibility
Choice of schemes
Tax benefits
well regulated
History of the organization: Reliance Mutual Fund (RMF) is one of
India’s leading Mutual Funds, with Average Assets Under Management
(AAUM) of Rs. 88,388 Crs (AAUM for 30th Apr 09 ) and an investor base of
over 71.53 Lacks.
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group,
is one of the fastest growing mutual funds in the country. RMF offers investors
a well-rounded portfolio of products to meet varying investor requirements and
has presence in 118 cities across the country. Reliance Mutual Fund
constantly endeavors to launch innovative products and customer service
initiatives to increase value to investors. "Reliance Mutual Fund schemes are
managed by Reliance Capital Asset Management Limited., a subsidiary of
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Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM,
the balance paid up capital being held by minority shareholders."
Reliance Capital Ltd. is one of India’s leading and fastest growing private
sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance
Capital Ltd. has interests in asset management, life and general insurance,
private equity and proprietary investments, stock broking and other financial
services.
Reliance Mutual Fund constantly endeavors to launch innovative
products and customer service initiatives to increase value to investors.
"Reliance Mutual Fund schemes are managed by Reliance Capital
Asset Management Limited., a subsidiary of Reliance Capital Limited,
which holds 93.37% of the paid-up capital of RCAM, the balance paid up
capital being held by minority shareholders."
Reliance Capital Ltd. is one of India’s leading and fastest growing
private sector financial services companies, and ranks among the top 3
private sector financial services and banking companies, in terms of net
worth.
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Reliance Capital Ltd. has interests in asset management, life and general
insurance, private equity and proprietary investments, stock broking and
other financial services.
Statutory Details:
Sponsor: Reliance Capital Limited.
Trustee: Reliance Capital Trustee Co. Limited.
Investment Manager: Reliance Capital Asset Management Limited. The
Sponsor, the Trustee and the Investment Manager are incorporated under
the Companies Act 1956.
General Risk Factors: Mutual Funds and securities investments are
subject to market risks and there is no assurance or guarantee that the
objectives of the Scheme will be achieved. As with any investment in
securities, the NAV of the Units issued under the Scheme can go up or
down depending on the factors and forces affecting the capital markets.
Past performance of the Sponsor/AMC/Mutual Fund is not indicative of
the future performance of the Scheme. The Sponsor is not responsible or
liable for any loss resulting from the operation of the Scheme beyond
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their initial contribution of Rs.1 lakh towards the setting up of the Mutual
Fund and such other accretions and additions to the corpus. The Mutual
Fund is not guaranteeing or assuring any dividend/ bonus. The Mutual
Fund is also not assuring that it will make periodical dividend/bonus
distributions, though it has every intention of doing so. All
dividend/bonus distributions are subject to the availability of the
distributable surplus in the Scheme. For details of scheme features and
scheme specific risk factors, please refer to the provisions of the offer
document.
• Reliance Mutual Fund has won the "Most Trusted Mutual Fund
Brand" for the second year, in succession by Economic Times - AC
Nielsen ORG-MARG survey.
• CNBC TV18 - CRISIL Mutual Fund of the Year Award for 2007
Reliance Growth Fund - Most Consistent CPR Performer - Equity
Fund Category
Reliance Growth Fund was the only scheme that won the CNBC
TV18 –
• CRISIL Mutual Fund of the Year Award in the Most Consistent CPR
Performer - Equity Fund category. In total 8 schemes were eligible for
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the award universe. Schemes present in all 20 quarterly CRISIL CPRs
for the 5 years ending with 2007 were considered for the award. The
award is based on consistency of the scheme’s performance in the
twenty quarterly CRISIL CPR rankings released during the calendar
years 2003 to 2007.
• Reliance Growth Fund-Growth Plan was declared the best fund
over 5 years in the Equity India category, out of 81 eligible
schemes.
• Reliance Natural Resources fund is the only one Natural Resources
sector fund in India .
• Reliance Mutual has completely withdrawn the restriction/upper limit
imposed on subscription in Reliance Equity and Reliance Growth
schemes with effect from August 18. Fresh and additional
subscriptions including systematic investment plans will henceforth be
accepted without any limit, subject to the minimum subscription
amount for each scheme.
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1.3 Mutual Fund / organizational structure:
Establishes the
Managed by the
mutual fund as a
Sponsor Company board of trustees.
trust and registers
with SEBI
Mutual fund Hold unit holders funds in mutual

(For e.g. Reliance fund. Enters into an agreement
AMC) with SEBI.
Floats mutual funds as per the

Asset Management
regulations of SEBI regulations.
Company.
Provides custodial services.

Custodian
Provides registrar and transfer

Registrar services.
Provides the network for 23

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distribution of schemes to the
Distributors
investors.
1.4. Product of company:
1.4.1. Equity Shares: Equity shares represent ownership
capital. As an equity shareholder, you have an ownership stake
in the company. This essentially means that you have a
residual interest in income and wealth. Perhaps, the most
romantic among various investment avenues, equity shares are
classified into the following broad categories by stock market
analysts:
• Blue chip shares
• Growth shares
• Income shares
• Cyclical shares
• Speculative shares
1.4.2 Bonds: Bonds or debentures represent long-term debt
instruments. The issuer of a bond promises to pay a stipulated
IBMR, Bangalore. 24
steam of cash flow. Bonds may be classified into the following
categories:
• Government securities
• Government of India relief bonds
• Government agency securities
• PSU bonds
• Debentures of private sector companies
• Preference shares
1.4.3 Mutual Funds - Instead of directly buying equity shares
and/or fixed income instruments, you can participate in
various schemes floated by mutual funds which, in turn, invest
in equity shares and fixed income securities. There are three
broad types of mutual fund schemes:
• Equity schemes
• Debt schemes
• Balanced schemes
1.4.4 Life Insurance - In a broad sense, life insurance may be
viewed as an investment. Insurance premiums represent the
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sacrifice and the assured sum the benefit. The important types
of insurance policies in India are:
• Endowment assurance policy
• Money back policy
• Whole life policy
• Term assurance policy
1.4.5 Real Estate - For the bulk of the investors the most
important asset in their portfolio is a residential house. In
addition to a residential house, the more affluent investors are
likely to be interested in the following types of real estate:
• Agricultural land
• Semi-urban land
• Time share in a holiday resort
Financial Derivatives - A financial derivative is an instrument
whose value is derived from the value of an underlying asset.
It may be viewed as a side bet on the asset. The most
important financial derivatives from the point of view of
investors are:
• Options
• Futures
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Since every individual would like to earn return on their
investment but where to invest has always been a problem.
There has always been a confusion as to which instrument to
invest, which instrument will give me higher returns, etc. Even
now nuclear families are in and so are longer life spans. Even
inflation is increasing and so do the standard of life, medical
costs, and other things. In such a scenario, one need to think
as to how he will take care of all his future needs and build up
a corpus that will not only take care of routine expenses but
also provide for extra costs, especially of health care. One
need to have a corpus of funds, post-retirement, which will
give him close to 100% of the salary to preserve the lifestyle
he has grown to enjoy.
: The advantages of investing in a Mutual Fund are:
• Professional Management
• Diversification
• Convenient Administration
• Return Potential
• Low Costs
• Liquidity
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• Transparency
• Flexibility
• Choice of schemes
• Tax benefits
• Well regulated
There are different types of mutual funds are available in the investment
market. An investor who wants to invest his money in mutual funds must have
the knowledge about different kinds of mutual funds.
GOALS OF THE FUND:
Many funds are designed to invest in companies that meet specific investor
goals, like growth, value, dividend or income to name a few.
Only companies that meet certain criteria will be included in the fund. For
example, a growth fund looks for companies with significant, untapped growth
potential, whereas a value fund will look for companies that are undervalued
by the market as a way to increase investor returns. Both of these types of
funds are designed for long-term capital appreciation.
If you need the funds to generate income either because you have retired, are
saving to buy a house or are unable to work, you need to look at funds that
will not only grow over time, but will also provide you with an income. For
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example, dividend funds are designed to pay you dividends on a quarterly or
annual basis.
DIFFERENT TYPES OF FUNDS:
• GROWTH FUNDS:
Is the type of funds where the collected money is invested in different stocks
in order to capital appreciation over a long term?
Value of these mutual funds increase with the upward in stock market and
decrease with a downfall in the stock market.
The collected money is invested in common stocks of the companies that
have a solid growth rates, as well as a history of consistent dividend payout.
• BOND FUNDS / FIXED INCOME FUND:
Bond funds typically invest in bonds issued by governments and large
companies.
Bond fund returns are based on a combination of interest payments and price
changes of the bonds in the fund.
The market value of bonds is affected by prevailing interest rates. When
interest rates fall, existing bonds will generally rise in value; when interest
rates rise, bonds will generally fall in value. Overall, bond funds are affected in
the same way.
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Fund managers attempt to control risk by managing the credit quality and the
average term of the bonds in the fund.
Fixed income funds generally have the potential for higher returns than money
market or guaranteed funds, but there tends to be a greater risk of a loss.
The risk on a bond fund is that the bond issuer is not able to repay the
borrowed amount.
Under this category funds are invested in the opportunities that can provide a
regular profit on the invested money.
• BALANCED FUNDS / DIVERSIFIED FUND:
Balanced funds invest in a mix of stocks, bonds, and cash investments. The
mix will change as market conditions change, but it usually stays within pre-
determined ranges. (For example, stocks 40-60%, bonds 30-50%, cash 0-
30%).
The benefit of a balanced fund is that it provides automatic diversification by
investing in a variety of asset classes and thereby reduces the risk of one
asset class performing poorly.
Balanced funds tend to be more risky than bond funds and less risky than
equity funds. The main objective is to earn a high rate of return on the
invested money.
• MONEY MARKET FUND / GUARANTEED FUND:
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Money market funds invest primarily in short-term (less than one year)
government Treasury Bills (also called T-Bills) and corporate notes which pay
a fixed rate of interest.
The rate of return of money market funds tends to be lower than that of funds
that are managed for long-term gains, but they are a very low-risk investment.
Money market funds are ideal for parking your cash while you decide where to
invest for the long haul, or for money you will need in the near future.
• ASSET ALLOCATION FUNDS:
Asset allocation funds are similar to balanced funds in that they invest in all of
the asset classes.
Asset allocation funds differ from balanced funds because the fund manager
isn't restricted to the percentage of the money they can put in a specific type
of investment (stocks, bonds, and so on).
A tactical asset allocation fund is one where the manager frequently makes
decisions about the best asset allocation, sometimes every few months.
The manager of a strategic asset allocation fund will generally revise the
fund's asset allocation once a year.
Asset allocation funds provide a "one stops shopping" approach to asset
allocation.
• INDEX FUND:
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Index funds include stock or bond funds that closely match the performance of
a market index, such as the BSE.
Over time, index fund performance will slightly lag that of the actual index as
result of cash flows and transaction costs.
Since index fund investments are not actively researched, the management
fees on index funds are generally very low.
The risks associated with index fund investing are similar to those of bond
and equity funds; however, index funds can have significant exposure to
individual stocks when the weighting in the index is in excess of that allowed
for actively managed funds. This can reduce the diversification in the fund.
The risk level in this category is at the minimum level.
• EQUITY FUNDS:
Equity funds invest primarily in stocks.
Because stocks have traditionally risen in value more than other types of
investments, they offer the greatest potential for long-term growth.
Investing in stocks is also riskier than other investments as stock prices can
fluctuate more than other types of investments.
The market price of a stock will vary with the company's financial
performance, general economic conditions in the country in which it operates,
as well as investor perceptions.
ALSO, PERHAPS MOST COMMONLY FUNDS ARE DIVIDED BY THEIR
GEOGRAPHIC MARKETS, COMPANY SIZE AND INDUSTRY.
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GEOGRAPHY:
Specific countries: Funds can invest primarily in investments in one
country. For example, Canadian equity funds invest primarily in Canadian
companies.
International: These funds can generally invest in any country around the
world except for Canada. Most international funds invest in the U.S., Europe,
Australia and the Far East, sometimes referred to as the EAFE countries.
Global funds: These funds invest in any country around the globe,
including Canada.
Foreign equity funds provide an opportunity to diversify across many markets
and reduce the risks associated with the health of any one economy and its
stock market.
These funds do have risks associated with political and market conditions in
other countries. In addition, foreign funds are exposed to currency risk. If the
Value of the Canadian dollar rises, or the currencies of the countries the fund
invests in fall, your return calculated in Canadian dollars will be lower.
Different accounting practices and securities regulations around the world
may affect the fund managers' ability to value and trade in some securities.
Portfolio managers seek to reduce these risks by investing in different
countries and industries.
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COMPANY SIZE:
Many funds restrict the types of stocks they buy for the fund based on the size
of the company. The size of the company is measured by its market
capitalization (market cap - measures the company's worth by multiplying its
stock price by the number of shares outstanding).
Generally speaking, small cap funds are more risky than large cap funds as
minor changes in a small cap company's stock price can have a major impact
on its market cap. However, if you can take the ups and downs, there can be
greater rewards for investors in small cap funds.
INDUSTRY:
Some funds concentrate all their investments in a specific sector or industry of
the economy. For example, biotechnology, communications, natural
resources, etc. Industry specific funds provide an opportunity to capitalize on
the strength of a particular sector of the economy. Investing a significant
portion of your portfolio in one industry can be risky, especially if that industry
falls on hard times. However, the upside can be equally as good if the industry
performs well. (We have seen this in the technology sector.) However, if you
have a diversified portfolio you may be able to reap some incremental returns
by investing in an industry-specific fund.
INVESTMENT ATTRIBUTES
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For evaluating an investment avenue, the following attributes are relevant.
• Rate of return
• Risk
• Marketability/Liquidity
• Safety
• Tax Shelter
RATE OF RETURN:
Investments are made with the primary objective of deriving a return. The
expectation of a return may be from income (yield) as well as through capital
appreciation. The dividend or interest from the investment is the yield.
Different types of investments promise different rates of return. The
expectation of return from an investment depends upon the nature of
investment, maturity period, market demand, and so on.
RISK:
Risk is inherent in any investment. Risk may relate to loss of capital, delay in
repayment of capital, nonpayment of interest, or variability of returns. While
some investments such as government securities and bank deposits are
almost without risk, others are more risky. The risk of an investment is
determined by the investment’s maturity period, repayment capacity, nature of
return commitment, and so on.
SAFETY:
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The safety of investment is identified with the certainty of return of capital
without loss of money or time. Safety is another feature that an investor
desires from investments. Every investor expects to get back the initial capital
on maturity without loss and without delay. Investment safety is gauged
through the reputation established by the borrower of funds. A highly reputed
and successful corporate entity assures the investors of their initial capital.
MARKETABILITY/LIQUIDITY:
An investment that is easily saleable or marketable without loss of money and
without loss of time is said to possess the characteristic of liquidity. Some
investments such as deposits in unknown corporate entities, bank deposits,
post office deposits, national savings certificates, and so on are not
marketable. Investment instruments such as preference shares and
debentures listed on a stock exchange are marketable. The extent of trading
however depends on the demand and supply of such instruments in the
market for the investors. Equity shares of companies listed on recognized
stock exchanges are easily marketable. A well-developed secondary market
for securities increases the liquidity of the instruments traded therein.
TAX SHELTER:
Some investments provide tax benefits; others do not. They are of three
kinds.
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Initial tax benefit referring to tax relief enjoyed at the time of making the
investment. For Eg:, when you make a deposit in a Public Provident Fund
account, we get a tax rebate under section 88 of the Income Tax Act..
Continuing tax benefit represents the tax shield associated with the periodic
returns from the investment. For Eg:, dividend income and income from
certain other sources is tax-exempt, up to a certain limit, in the hands of the
recipient.
Terminal tax benefit Refers to relief from taxation when an investment is
realized or liquidated. For E.g.: a withdrawal from a Public Provident Fund
account is not subject to tax.
CONVENIENCE:
The degree of convenience associated with investments varies widely. At one
end of the spectrum is the deposit in a savings bank account that can be
made readily and that does not require any maintenance effort. At the other
end of the spectrum is the purchase of a property that may involve a lot of
procedural and legal hassles at the time of acquisition alIot a great deal of
maintenance effort subsequently.
An investor tends to prefer maximization of expected return, minimization of
risk, safety of funds and liquidity of investments
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FOR THE PURPOSE OF FUND MANAGEMENT TYPICALLY
THERE IS:
1. A fund manager or investment manager who manages the
investment decisions.
2. A trustee or board who safeguards the assets and ensures
compliance with the laws and rules.
3. The shareholders or unitholders who own (or have rights to) the
assets.
A "Marketing" or "Distribution" company to promote and sell the fund.
NET ASSET VALUE:
The Net Asset Value or NAV is the value of a scheme's assets less the value
of its liabilities. The per unit NAV is the net asset value of the scheme divided
by the number of units outstanding on the Valuation Date.The method for
calculating this varies between scheme types and jurisdiction and can be
subject to complex regulation.
OPEN-ENDED FUND:
An open-ended fund is equitably divided into shares (or units) which vary in
price in direct proportion to the variation in value of the funds net asset value.
Each time money is invested new shares or units are created to match the
prevailing share price; each time shares are redeemed the assets sold match
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the prevailing share price. In this way there is no supply or demand created
for shares and they remain a direct reflection of the underlying assets.
CLOSED-ENDED FUND:
A closed-ended fund issues a limited number of shares (or units) in an initial
public offering (or IPO). The shares are then traded on an exchange or
directly through the fund manager to create a secondary market subject to
market forces. If demand for the shares are high they may trade at a premium
to net asset value. If demand is low they may trade at a discount to net asset
value. Further share (or unit) offerings may be made by the scheme if demand
is high although this may affect the share price.The added element of market
forces tends to amplify the performance of the fund increasing investment
risk through increased volatility.
ADVANTAGES OF INVESTING THROUGH FUNDS:
• DIVERSITY AND RISK
One of the main advantages of investment through different fund is the
reduction in investment risk (capital risk) by diversification. An investment
in a single equity may do well, but it may collapse for investment or other
reasons. If your money is invested in such a failed holding you could lose your
capital. By investing in a range of equities (or other securities) the capital risk
is reduced.
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The more diversified your capital, the lower the capital risk this investment
principle is often referred to as spreading risk. Collective investments by their
nature tend to invest in a range of individual securities. However, if the
securities are all in a similar type of asset class or market sector then there
is a systematic risk that all the shares could be affected by adverse market
changes. To avoid these systematic risk investment managers may diversify
into different non-correlated asset classes. If any one of the three is failing,
because each is Non-correlated (i.e. behaves independently) then by logical
extension at least one of the other two is doing well.
• REDUCED DEALING COSTS:
If one investor were to buy a large number of direct investments, the amount
they would be able to invest in each holding is likely to be small. Dealing costs
are normally based on the number and size of each transaction; therefore the
overall dealing costs would take a large chunk out of the capital (affecting
future profits). Pooling your money with that of other investors means you
have the advantages of buying in bulk making dealing costs an insignificant
part of the investment.
DISADVANTAGES OF INVESTING THROUGH FUNDS:
• COSTS
The fund manager managing the investment decisions on behalf of the
investors requires remuneration. This is often taken directly from the fund
assets as a fixed percentage each year or sometimes a variable (performance
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based) fee. If the investor managed their own investments, this cost would be
avoided.
Often the cost of advice given by a stock broker or financial adviser is built
into the scheme. Often referred to as commission or load (in the U.S.) this
charge may be applied at the start of the plan or as an ongoing percentage of
the fund value each year. While this cost will diminish your returns it could be
argued that it reflects a separate payment for an advice service rather than a
detrimental feature of collective investment schemes. Indeed it is often
possible to purchase units or shares direct from the providers without bearing
this cost.
• LACK OF CHOICE
Although the investor can choose the type of fund to invest in, they have no
control over the choice of individual holdings that make up the fund.
• LOSS OF OWNER'S RIGHTS
If the investor holds shares directly, they may be entitled to shareholders'
perks (for example, discounts on the company's products) and the right to
attend the company's annual general meeting and vote on important matters.
Investors in a collective investment scheme often have none of the rights
connected with individual investments within the fund.
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• INVESTMENT AIMS AND BENCHMARKING
Each fund has a defined investment goal to describe the remit of the
investment manager and to help investors decide if the fund is right for them.
The investment aims will typically fall into the broad categories of Income
(value) investment or Growth investment. Income or value based investment
tends to select stocks with strong income streams, often more established
businesses. Growth investment selects stocks that tend to reinvest their
income to generate growth. Each strategy has its critics and proponents;
some prefer a blend approach using aspects of each.
TYPES OF RISK
Depending on the nature of the investment, the type of 'investment' risk will
vary. A common concern with any investment is that you may lose the money
you invest - your capital. This risk is therefore often referred to as capital risk.
If the assets you invest in are held in another currency there is a risk that
currency movements alone may affect the value. This is referred to as
currency risk.Many forms of investment may not be readily salable on the
open market (e.g. commercial property) or the market has a small capacity
and can therefore may take time to sell. Assets that are easily sold are termed
liquid therefore this type of risk is termed liquidity.
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Why Mutual fund?
Investment Rate of Inflation (%) G D P (%) DIFFERENCE
option interest (%)

SAVING A/C 3.75 6 8.5 -2.25(NEGATIVE
RETURN)
FIXED 8-9.5 6 8.5 THE
DEPOSIT ACCOMMODATE
BY PRESENT
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VALUE FACTOR
GOVT. BOND 7-8 6 8.5 -0.5 (NEGATIVE
RETURN)
REAL 30+ 6 8.5 HIGH AMOUNT
ESTATE OF MONEY
REQURIED FOR
PURCHASE OF
REAL ESTATE
KISSAN 7-8 6 8.5 -1(NEGATIVE
VIKAS RETURN)
PATRA
POST 6.5-8.5 6 8..5 AVERAGE
OFFICE
DEPOSIT
MUTUAL 20-30 6 8.5
CHAPTER 2
RESEARCH DESIGN
METHODOLOGY / RESEARCH DESIGN
Type of Study:
The study at “Reliance Money” is a combination of analytical and practical
study. It is based on data collected from records of the company and is
administered to various departmental heads connected with Fund
Management.
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Types of Data:
1. Primary Data: This data was collected from discussions and
interactions with respective departmental heads and clients.
2. Secondary Data: This data was collected through various newsletters,
publications through researchers in the field of fund management,
journals magazine reports and consolidated records from Deutsche
asset management.
Sampling Plan:
The sampling universe consisted of various mutual funds and their returns .
SWOT of the organization:-
SWOT analysis of organizations to provide recommendations on their
performance and growth potential. It is a powerful tool for analyzing both
complex qualitative and quantitative facets of an investment decision.
The results of this analysis have been fed into marketing and organizational
strategic plans and have been highly successful in strategy formulation.
Through our SWOT analysis, our clients have been able to take advantage of
niche markets and focus on product innovation which allows them to capture
greater margins.
Our SWOT analysis identifies strengths and weaknesses and relates them
with forward looking opportunities and threats. This helps to identify company
and industry specific critical drivers and catalysts.
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SWOT Analysis identifies your company’s:
Strengths - to build on
Weaknesses - to cover
Opportunities - to capture
Threats - to defend against
SWOT Analysis
Strengths:
* Rich experience of the management.
Good brand equity
Giving the very good return from inception
* Stabilized and loyal clients.
* Well combination of new energetic and experienced employees.
* Wide variety of investment product to match with every level of customer
* Giving the mutual fund exposure
Weakness:
* Insufficient office equipments.
* Not all employees have his/her cabin.
* Work place (back office) is quite congested.
* Not very popular in rural area
Opportunities:
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* Stability through increased brand awareness, market penetration and
Service offerings
* Across all categories of financial services.
* Increase in customer’s wallet share.
* Leveraging the latest technology for providing quality and client centric
Services.
Threats;
* Increasing interest rate scenario.
* Execution risk.
* Competition from local and multinational players.
* Rising inflation could reduce savings and investments
CHAPTER 3
Aim And Objective:
On Job Training:
1. Empanelment:
For empanelment we have to call up the IFA in the Bangalore from the data
base given by the company, have to fix the appointment then have to go for
empanelling them.
2. Interaction & Calling:
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Had meetings with clients to check for their requirements which is based on
satisfying their queries about the companies profile, schemes and it’s
performance in the industry. The main work of the relationship manager is to
build a strong relation between the company and the IFA, keep motivating
them for giving the business to the company, assisting them to remain
updated about the market activities, as they don’t have any sources of getting
the updates of the market.
3. Promotion of companies fund schemes:
For this purpose we had to go out in the other branches of other banks like
K.R.Puram branch of ING VISYA bank. There we have to generate the leads
for selling the funds for selling team by going directly to them, explain about
the schemes, benefits that they would get after investing in the schemes etc.
we were mainly there for the promotion of tax saver scheme. This was the first
time I was doing this thing, but I had a really good experience of talking with
the existing customers of the bank. After doing the activity we learned how we
can convince the people for investing in the mutual fund industry. Other
reason for organizing such an activity was the closing financial year in which
the people would require to pay the tax, and the investment in the tax saver
scheme can assist them in saving their tax.
PERFORMANCE APPARAISAL:
It is the activity used to determine the extent to which an employee performs
work effectively. Other terms of performance evaluation include performance
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review, performance rating, performance appraisal, and employee appraisal
and employee evaluation.
PURPOSE OF PERFORMANCE APPRAISAL:
The purpose of performance appraisal is:
1. DEVELOPMENT:
It is used to find out which employee need training, helps in
subordinate-supervisor counseling relation and encourages subordinate
behavior to help employee.
2. MOTIVATION:
It encourages initiative, develops a sense of responsibility and
stimulates efforts to perform better.
3. COMMUNICATION:
It serves as a basis for ongoing discussion between superior and
subordinate about job related matters and thus they get to know each
other better.
4. LEGAL COMPLIANCE:
It serves as a legally defensible reason for promotion, transfer, reward
and discharges.
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WHO EVALUTE THE EMPLOYEE?
Employees can be evaluated by:
1. Committee of Several supervisors.
2. By employee peers.
3. By employees subordinate.
4. By someone outside the work environment.
5. Self evaluation.
6. By using number of approaches.
The performance appraisal used by the Reliance Money” is usually
done by a subordinate that is employee subordinate. The employee is
rated different areas. The areas are:
1. Client interaction
2. Candidate interaction
3. Documentation
4. Job posting
5. Average CV received
6. Head hunting
7. Speed of Response
8. Client response
9. Performance against targets
10. Attitude
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11. Leadership
12. Attendance/Punctuality
13. Integrity
14. Loyalty
15. Additional areas of responsibility you would like to handle:
16. Overall rating
The employee is rated of the areas and finally a cumulative
sum is taken out. The employee would scored high is awarded best employee
of the month (per semester) and the employee scoring low is given training for
the improvement of the work.
COMPENSATION AND BENEFITS
COMPENSATION:
It is the human resource management function that deals with every
type of reward individuals receive in exchange for performing organizational
tasks. Compensation consists of pay an employee receives in form of wages,
salaries, bonuses or commission.
Objective of compensation:
The objective of the compensation function is to crate a system of
rewards that is equitable to the employee and employer alike. The desired
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outcome is an employee who is attracted to the work and motivated to do a
good job for the employer. Compensation should be
1. Adequate
2. Equitable
3. Balanced
4. Cost-effective
5. Secure
6. Incentive – providing
7. Acceptable to the employee
3.1- Job profile at reliance Money:
The time duration of the project is 3 months starting from
25 t h May. We were given targets to be achieved during training
months. The targets of each month were:
• 3Demat Accounts
• 1SIP or Mutual Fund worth Rs10,000
• General Insurance Premium worth Rs50,000
• Life Insurance Premium worth Rs1,00,000
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I was supposed to use the database provided by the
company to make cold calls or by directly meeting people to
get new leads
The questionnaire used is attached in appendix A.1
While making cold calls, we need to have:
• Good Communication Skills (Voice quality is clear and
articulate)
• Persistent and able to bounce back from rejection
• Good organizational skills.
• Ability to project a telephone personality (Enthusiasm,
friendliness)
• Flexibility: can adapt to different types of clients and
new situations.
Fig6.1 The Constructive Factors of
Tele calling
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Using a good database is very essential.
“Eighty percent of our business comes from 20 percent of our
customers" is a frequent statement at any sales convention.
There's hardly a sales executive who is not aware of the 80/20
rule”.
While talking to customers, I analyze their needs. Whether
they want to go for investment purpose or insurance or both.
Suggest them the plan that best suits them. If they agree to it
then either we send across the agents to close the deal or close
it themselves.
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Fig6.2 The Customers Sales
Cycle
Problems faced while selling products:
• Customer dissatisfied with the services.
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• People fear that Reliance Money Being a Private
company and a new entrant may be able to sustain or not.
• Insurance means LIC for people.
• Past experience, word of mouth.
• Misguidance by agents.
• People do not want insurance products.
• Lack of knowledge and awareness about general and life
insurance.
• People risk appetite is very low, so they are afraid of
mutual fund as well.
• People relate the problems of mobile phones of Reliance
Communication with Reliance Money.
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Customer Acquisition Process
• Educate the prospects on the products and services.
• Customize the approach to each of the different
customers involved in the sales process.
• Establish a knowledge base for sales people, resellers
and partners.
• Ramp up the new salespeople more quickly and keep
them on road.
• Track the prospects as they move through the sales
process.
• Harvest other types of information from your market to
help the company close business more quickly. The data
of the prospects can be used for research and
development purpose.
• Enabling the consistent flow of information to the
customer and encouraging feedback from them.
• Helping the customers do the Financial Planning for
future.
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MY RESPONSIBILITY IN ORGANISATION:
I worked with Reliance money with a profile of Project
trainee. This profile offers me to understand the need of the
customer and provide them the best deal possible with
maximization of the profit, both for the company as well as for
the customer.
The most important aspect for the role of financial advisor
is trust. So for fulfillment of the targets one needs to:
• Capitalize on old and loyal clientage which can be
building slowly by advising people in the best possible
way.
• Generating new leads through various activities.
Generation of leads:
Since I was new in this field so I had to start from the
scratch and generate new leads to sustain in the market.
Cold calling is one of the trusted ways of getting to the
customers without meeting them. Although the rate of
conversion remained very less. For cold calling the quality and
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accent remains a very important criterion. This activity
gave me mixed results. I often got success and generated many
leads through it but it also landed me in awkward position
where the customer were in different mood and made us hear
words for which a marketer should be always prepared to hear.
Corporate calls always remained more difficult to crack with
respect to retail sector.
The corporate were the most difficult and most tempting to
get the business from. It took me one day to crack Hi-tech
Gears.
At Reliance money after getting the product knowledge in
the first week at the branch I was also allotted distributor to
work with. In the initial phase I was accompanied by more
experienced staff. After I became known to the market and
procedure I started attending calls alone only.
After the third week my performance also improved and I
was able to get close to the targets, though it looked difficult
to achieve in the beginning. To get awareness of the every
product I attended diversified calls. This helped me to
implement cross selling to get better results.
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Since the reliance money core product is Demat account
more stress was given over this. Demat account was also the
most tempting of all the products as it was difficult to
convince the customer for the reliance Demat as it was new
and with many limitations. It was always difficult to convince
on 1 paisa, as it wasn’t mentioned anywhere in ink.
LIMITATIONS:
1. Cold Calling
• Voice and accent plays a major role.
• The right time to call a customer cannot be decided, as
the customer may in a different mood at the time of
calling.
• Time consuming
• Less success rate
2. Corporate
• Time consuming
• Contacts with higher authorities play a major role
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CHAPTER 4
ANALYSIS AND INTERPRETATION OF DATA
SEGMENTATION, TARGETING, POSITIONING:
Company discovers different needs and groups in the market place, targets
those needs and group that it can satisfy in a superior way, and than positions
its offering in a way so that target market recognizes the company’s distinctive
offering and image. Positioning is the act of designing the company’s offering
and image to occupy a distinctive place in the mind of target market. The end
result of positioning is the successful creation of customer - focused value
proposition, a cogent reason why the target market will buy the product.
REASON BEHIND S.T.P:
A total Market can be defined as people or organization with needs, want,
demand however within the total market there is always some diversity among
buyers, not all consumers who drink hot drink wants tea. Similarly not all
consumers who wear pants wants to wear jeans. So within the same general
market there are group of customer with different needs and buying
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preference. Hence a market should never commit the mistake to taking up the
whole market uniformly at a time. The best way is to segment or break the
market into groups of buyers with similar needs and preference and than
select the more attractive groups/segments as part of their marketing strategy.
POSITIONING:
Here in the case of “Reliance Money” they did the very good segmentation,
targeting, positioning in the market. They have positioned itself very well in the
consumers mind by the way of attractive advertisement and excellent past
record. Now Deutsche asset management a brand in the market and it’s on
the consumers mind as a CASH COW
TARGETING:
Here in the case of “Reliance Money”, its targeting strategy is simply superb.
“Reliance Money” has basically targeting the all type of customer in every
level. They have the vide variety of product range that suit for every customer.
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TABLE OF S.T.P.
SEGMENT TARGET POSITIONING
BACHELOR YOUTH CREDIT CARD, TWO
WHEELER- LOAN
NEWLY MARRIED YOUTH CREDIT CARD,
MUTUAL FUND, ULIP-
PLAN
FULLNEST ONE YOUTH ULIP- PLAN, HOME-
LOAN, INSURANCE,
CAR LOAN
FULLNEST TWO MIDDLE AGE EDUCATION LOAN,
SAFE INVESTMENT,
HEALTH INSURANCE,
RETIREMENT PLAN
EMPTYNESS ONE MIDDLE AGE EASY GROWTH FUND
EMPTYNESS TWO OLD AGE FIXED DEPOSIT
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Comparision of ULIPS vs MFS (India) :
Below is a brief comparision of ULIP (Unit Linked Insurance Product) vs MF
(Mutual Funds) specific to the Indian market.
Primary Objective:
MFs: Investments
ULIPs: Protection + Investments
Investment Duration:
MFs: Works out for Medium term, Long Term Investors. Risky for Short Term
investors.
ULIPs: Works out for Long Term Investors only.
Flexibility:
MFs: Very flexible. Plenty of scope to correct your mistakes if you made any
wrong investment decisions. You can easily shuffle your portfolio in MFs.
ULIPs: Flexibility is limited to moving across the different funds offered with
your policy. Correcting mistakes can turn out to be expensive. Moving funds
from one ULIP to an other ULIP of a different fund house can be expensive.
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Liquidity:
MFs: Very liquid. You can sell your MF units any time(except ELSS). Some
MF's like those from Reliance have introduced redemptions at ATMs.
ULIPs: Limited liquidity. Need to stay invested for the minimum number of
years specified before you can redeem.
Investment Objective:
MFs: MF's can be used as your vechile for investments to achive different
objectives. (Eg: Buying a car three years from now. Downpayment for a home
five years from now. Childrens education 10 years from now. Childrens
marriage 15 years from now. Retirement planning 25 years from now. Medical
expenses after retirement 25 years from now)
ULIPs: ULIPs can be used for achieving only long term objectives (Childrens
education, Childrens marriage, Retirement planning)
Tax Implications:
MFs: All investments in MF's don't qualify for section 80C. Only investments in
ELSS qualify for 80C.
ULIPs: Provide Tax Benefits under section 80C.
MFs: Returns on equity MF's are exempt from long term capital gains tax.
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(Unless tax laws change in the future).
ULIPs: We are moving from EEE to EET. No clarity if ULIPs will be taxed
under EET.
MFs: Tax liabilities when moving across from debt to equity funds.(Returns
from debt MF's are taxed.)
ULIPs: Very flexible in moving between equity and debt funds(not tax
implications until maturity of the policy).
Strings Attached (fine print):
MFs: None so ever. At most you pay a small exit load if any.
ULIPs: Some strings attached for your policy to be in effect. Minimum number
of premiums needs to be paid. Minimum fund balance needs to be always
maintained. (I personally don’t like policies which say pay three years
premium and get insurance cover for the next 25 years since there are a lot of
ifs and butts involved. A lot of assumptions made and nothing is in your hand,
it could turn out your fund balance might be exhausted after just 12 years of
insurance cover).
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ADVANTAGES ULIPS:
• Can easily rebalance your risk between equity and debt without any tax
implications.
• Best suited for medium risk taking individuals who wish to invest in
equity and debt funds(atleast 40% or higher exposure to debt). No
additional tax burden for those investing mainly in debt unlike in MFs.
ADVANTAGES OF MFS:
• Better returns than ULIPs.
• Lower charges than ULIPs.
• Very flexible and enables you to switch your investments from non
performing MF's to better performing MFs
• Very Liquid can be redeemed at anytime.
• Best suited for medium to high risk taking individuals who wish to
invest a significant portion in equity funds(atleast 65% exposure in
equities).
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DATA ANALYSIS AND INTERPROTATION
1. Preference of Investment
Fig7.1 Result of Preference of
Investment
Interpretation: This shows that although the mutual funds market
is on the rise yet, the most favored investment continues to be in the
Share Market. So, with a more transparent system, investment in the
Stock Market can definitely be increased.
2. Awareness on Online Share Trading
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Fig7.2 Result of Awareness of Online Share
Trading
Interpretation: With the increase in cyber education, the
awareness towards online share trading has increased by leaps and
bounds. This awareness is expected to increase further with the increase
in Internet education.
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3. Awareness of Reliance Money as a Brand
Fig7.3 Result of Awareness of Reliance money as a
Brand
Interpretation: This pie-chart shows that reliance money has a
reasonable amount of Brand awareness in terms of a premier Retail stock
broking company. This brand image should be further leveraged by the
company to increase its market share over its competitors.
4. Awareness of Reliance Money Facilities
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I Fig7.4 Result of Awareness of Reliance money
nterpreta Facilities
tion: Although there is sufficiently high brand equity among the target
audience yet, it is to be noted that the customers are not aware of the
facilities provided by the company meaning thereby, that,
the company should concentrate more towards promotional tools
and increase its focus on product awareness rather than brand awareness.
5. Satisfaction Level among Customers with current
broker
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Fig7.5 Result of satisfaction level among customers with current
broker
nterpretati on:
This pie-
chart
corroborate the fact that Strategic marketing, today, has gone beyond only
meeting Sales targets and generating profit volumes. It shows that all the
competitors are striving hard not only to woo the customers but also to
make them Brand loyal by generating customer satisfaction.
6. Frequency of Trading
Fig7.6 Result of Frequency of
Trading
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Interpretation: In spite of the huge returns that the share market
promises, we see that there is still a dearth of active traders and investors.
This is because of the non – transparent structure of the Indian share
market and the skepticism of the target audience that is generated by the
volatility of the stock market. It requires efficient bureaucratic
intervention on the part of the Government.
7. Percentage of earnings invested in Share
Trading
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Fig7.7 Result of percentage of earning invested in share
trading
Interpretation: This shows that people invest only upto 10% of
their earnings in the stock market, again reiterating the volatile and
non-transparent structure of the Indian stock market. Hence,
effective and efficient steps should be undertaken to woo the
customers to invest more in the lucrative stock market
FINDINGS:
• To find the market potential and market penetration of

Reliance Money product offerings in Bangalore
• To collect the real time information about preference
level of customers using Demat account and their
inclination towards various other brokerage firms e.g.
Indiabulls, Sharekhan, Indiainfoline, Religare, Alankit,
and Unicon.
• To expand the market penetration of Reliance money.
• To provide pricing strategy of competitors to fight cut
throat competition.
• To increase the product awareness of Reliance money
as single window shop for investment solutions.
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CHAPTER 5
CONCLUSION AND RECOMMENDATION
RECOMMENDATIONS
Based on the findings of our project we would like to suggest the
following:-
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• After sales services and follow up calls are important for getting
new references so trained telesales should be appointed for this
purpose whose sole work should be to make feedback calls.
• Reliance is having too many financial products right from Demat
account to General Insurance and not all the salespeople are
familiar with each and every product so the work force should be
segregated each group dealing in a specific product and the sales
target should be given likewise.
• While interacting with the investors I found that most of the
customers are unaware about the Mutual fund. Some of the people
look upon mutual funds and equity trading as gambling. Thus a
• mutual fund awareness program can help to increase the
penetration of mutual funds in the market.
• Reliance should declare in black ink that they will charge just 1
paisa per transaction. People tend to think that there must be some
hidden charges.
• Rs750 account opening charges are too high when targeting a
corporate so the company should be flexible on this amount.
IBMR, Bangalore. 76
• Reliance should provide periodic training for updating the product
knowledge of various financial advisors.
• Company should have a scheme of rewards and recognition to
employees and the field persons to boost their motivation.
KEY ISSUES AND CONCLUSIONS
Based on the above SWOT analysis and study of the available data I
have come to the following conclusions:
HUGE POTENTIAL:
• All though relatively new entrants in the market, Reliance is slowly
• but surely gaining a strong hold because it is finally able to grasp
• the investment climate in Delhi. Secondly the branch managers at
all the branches are very knowledgeable with a lot of experience in
the financial markets so under their leadership can definitely
expand its base
• The entire workforce consists of mostly youngsters, which means
they can be encouraged and motivated to do good work because
they have a long way to go and most of them are eager to climb the
ladder.
IBMR, Bangalore. 77
• Right now Reliance is at its nascent stage and will surely grab the
major market under its belt very soon like in other fields.
Huge investments taking place:
• The Stock Market has been very buoyant until now especially in
the past 3 years. This particular trend is very favorable because a
soaring SENSEX means higher returns, which encourages the
investors to invest their money in the market. Although in the past
• 3 months the market has shown very unpredictable trend and has
already lost over 1000 points.
• So in order to make the best the only thing required is to recruit
more field staff who should be trained in a proper way to get better
results.
• In case of insurance, it requires push selling because people always
associate it with emergencies and unpleasant situations like death
and they don’t want to think about such situation let alone prepare
for them, which means it requires a lot of conviction on part of the
executives.
IBMR, Bangalore. 78
Large untapped market:
• People have just opened up to the idea of ULIPs because till now
they knew only two kinds of insurance plans, endowment and term
plans so the concept of high returns with protection is very new to
them and slowly and slowly these are becoming popular so there is
a huge market waiting to be tapped.
• In the past few years there has been a tremendous inflow of funds
in the Indian market which has lead to the sky rocketing SENSEX.
In fact there has been a tremendous response from the investors not
only in shares but mutual funds as well. The Rs5700Cr infused in
the market through the Reliance Equity mutual Funds is an
example of the growing trust of investors who earlier shied from
such investments due to stock market fiascos like the Harshad
Mehta scam or the US64 disaster in which investors lost huge
amounts of money as well as their trust in financial instruments.
IBMR, Bangalore. 79
With the FDI limits being relaxed, a lot of avenues will open up in the
insurance sector and insurance companies are expected to come up with
new plans with a great deal of customization and flexibility
QUESTIONNAIRE
QUESTIONNAIRE
Q1. In which of these Financial Instruments do you invest into?
Shares Mutual Funds Bonds Derivatives
Q2. Are you aware of online Share trading?
Yes No
Q3. Heard about Reliance money?
Yes No
Q4. Do you know about the facilities provided by Reliance money?
IBMR, Bangalore. 80
Yes No
Q5. With which company do you have your DEMAT account?
Reliance money ICICI Direct Kotak Mahindra India
Bulls
Others (please specify)
Q6. What differentiates your Share trading company from others? (in
regards of brokerage, satisfaction, services, products )
Q7. Are you currently satisfied with your Share trading company?
Yes No
Q8. How often do you trade?
Daily Weekly Monthly Yearly
Q9. What percentage of your earnings do you invest in share trading?
Up to 10% Up to 25% Up to 50% Above
50%
Q13. How do you rate these share trading companies? a. Reliance money
1. 2. 3. b. ICICI Direct
4. 5. c. India Bulls
d. Kotak Mahindra
Q14. What more facilities do you think you require with youre. Others (Please
DEMAT
account? specify)
Personal Information
Name:
Age:
Sex: Male Female
Phone No:
Occupation:
IBMR, Bangalore. 81
BIBLOGRAPHY
• Agarwal, J.D. "Security Analysis & Portfolio Management: A

Review, Finance India, Vol. II No. 1, March 1989.
• Bhatt, V. V. "An Appraisal Of Some Recent Estimates Of Savings
and Investments", ICRNI, Vol. 5, 1963.
• Douglas A. Hayes and W. Scott Bauman "Investments: Analysis
and Management" III Ed., 1976, MacMillan
• Malhotra, Naresh "Marketing Research and Applied Orientation"
IV Ed., 2005, Pearson
IBMR, Bangalore. 82
REFERENCES
•www.mutualfundsindia.com
•www.easymf.com
•www.amfiindia.com
•www.google.com
•www.moneycontrol.com
•www.reliance capital.ac.in
•www.reliancemoney.com
e-mail-mohneeshbajpai@gamil.com
IBMR, Bangalore. 83
”MUTUAL FUND INVESTMENT IS SUBJECT TO
MARKET RISKS. PLEASE READ THE OFFER
DOCUMENT CAREFULLY BEFORE INVESTING”
IBMR, Bangalore. 84
IBMR, Bangalore. 85

Mutual Fund Marketing in India

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Mutual fund marketing in India

INSTITUTE OF BUSINESS MANAGEMENT & RESEARCH

“Mutual Fund Marketing in India”

“Mohneesh Kumar Bajpai”

A Project report submitted in partial fulfillment of the requirements of

University Centre Certificate

This is to certify that the Project entitled

“Mutual Fund Marketing in India”

Submitted in partial fulfillment of the requirements for the Internship

Mohneesh Kumar Bajpai

Has worked under my supervision and guidance and that no part of

Director / Principal Faculty Guide’s Name &

Investment may be defined as an activity that commits funds in any

the quantum of return may vary TITLE

opportunity to have a direct stake in the performance of the financial markets.

He can also benefit from attractive tax advantages.

A mutual fund is a professionally managed firm of collective investments that

known as portfolio manager, trades the fund's underlying securities, realizing

The principal paid are invested in fund/funds of the investor’s choice

price of units for the fund/funds.

necessary that the companies fund TITLE

OBJECTIVES OF THE STUDY:

• To study the different investment guidelines prescribed by IRDA.

• To analyze the competition among different sectors for investment.

• Based on the findings suitable suggestions are given.

Also some of the software companies were covered including Accenture,

Bank in Jayangar were covered.

I hereby declare that the project report titled

“Mutual fund Marketing in India”

Submitted in partial fulfillment of the requirements for the Internship

(Signature of the Student)

Place: Bangalore Mohneesh Kumar Bajpai

Date: -07-09-08 Reg. No: 520841765

Investment may be defined as an activity that commits funds in any

financial/physical form in the present with an expectation of receiving

the quantum of return may vary from a minimum to a maximum. The

possibility of variation in the actual return is known as investment risk. Thus

investment funds he wants to invest his money, providing the investor an

opportunity to have a direct stake in the performance of the financial markets.

He can also benefit from attractive tax advantages.

A mutual fund is a professionally managed firm of collective investments that

known as portfolio manager, trades the fund's underlying securities, realizing

The principal paid are invested in fund/funds of the investor’s choice

price of units for the fund/funds.

investor gets high returns. Due to the increasing competition it becomes

OBJECTIVES OF THE STUDY:

• To study the different investment guidelines prescribed by IRDA.

• Mutual Fund Marketing in India

• To analyze the competition among different sectors for investment.

• Based on the findings suitable suggestions are given.

PLACE OF THE STUDY:

Also some of the software companies were covered including Accenture,

Bank in Jayangar were covered.

maximum 10% in cash.

• Equity Gain Fund - The investment objective of this Fund is to provide

equities and maximum 15% in debt & cash instruments.

• Equity MidCap Fund - The Investment objective of this Fund is to achieve

capital appreciation by investing in a diversified basket of mid caps stocks and

50% of the investment shall be in mid cap stocks).Investment portfolio shall

the equity fund and 50%to 70% in the debt fund.

short-term investments to ensure that return on investments shall never be

invested fully in debt instruments

EQUITY LINKED SAVING SCHEME: