A PROJECT REPORT ON

MUTUAL FUNDS IS THE BETTER INVESTMENTS PLAN

Submitted in pa tia! "u!"i!!ment "#

MASTER OF BUSINESS ADMIMISTRATION

P #$ amme #"

INSTITUTE OF MANA%EMENT TECHNOLO%&

%HA'IABAD Bat()*++,-+.

Submitted b/ 0A1HILESH MISHRA MBA2 T) ee &ea P #$ amme3 Bat() 2*++,-*++.3 Limited En #!ment N#-,*5+*6.7

Unde %uidan(e 0CA SHARAD CHAUHAN Mana$e A((#unt4 Uttam Su$a Mi!!4 C# p #te #""i(e N#ida

Depa tment #" Bu4ine44 Mana$ement

INSTITUTE OF MANA%EMENT TECHNOLO%&

%HA'IABAD AC1NO8LED%EMENT With regard to my Project with Mutual Fund I would like to thank each and every one who offered help, guideline and support whenever required First and foremost I would like to e!press gratitude to Manager "#I kanwali $oad %ehradoon and other staffs for their support and guidance in the Project work I am e!tremely grateful to my guide, CA S)a ad C)au)an for their valua&le

guidance and timely suggestions I would like to thank all faculty mem&ers of 'ttam "ugar Mills (imited for the valua&le guidance) support I would also like to e!tend my thanks to my mem&ers and friends for their support specially M*+ +nuj Panday officer I , 'ttam "ugar Mills (imited "haranpur ) Mr $ajeev -oyal consultant, "ales ta!, income ta! +nd lastly, I would like to e!press my gratefulness to the parent.s for seeing me through it all

A1HILESH MISHRA

CERTIFICATE
,his is to certify that Mr +khilesh Mishra a student of IM,/*%( -ha0i&ad has completed project work on

MUTUAL

FUNDS IS THE BETTER INVESTMENTS PLAN under my

guidance and supervision I certify that this is an original work and has not &een copied from any source

"ignature of -uide 1ame of Project -uide CA S)a ad C)au)an %ate/

DECLERATION

I here&y declare that this Project $eport entitled 2,34 M','+( F'1% I" #4,,4$ I154",M41, P(+1 in "#I Mutual Fund su&mitted in the partial fulfillment of the requirement of Master of #usiness +dministration 6M#+7 of I1",I,',4 8F M+1+-4M4, ,4*318(8-9, -3+:I+#+% is &ased on primary ) secondary data found &y me in various departments, &ooks, maga0ines and we&sites ) *ollected &y me in under guidance of * + "harad *hauhan

%+,4;

+<3I(4"3 MI"3$+ M#+ 6,hree 9ears7 4nrollment 1o =>?@>ABC

E9ECUTIVE SUMMAR&
In few years Mutual Fund has emerged as a tool for ensuring one.s financial well &eing Mutual Funds have not only contri&uted to the India growth story &ut have also helped families tap into the success of Indian Industry +s information and awareness is rising more and more people are enjoying the &enefits of investing in mutual funds ,he main reason the num&er of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds e!ist #ut once people are aware of mutual fund investment opportunities, the num&er who decide to invest in mutual funds increases to as many as one in five people ,he trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to &uy mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision ,his Project gave me a great learning e!perience and at the same time it gave me enough scope to implement my analytical a&ility ,he analysis and advice presented in this Project $eport is &ased on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds ,his $eport will help to know a&out the investors. Preferences in Mutual Fund means +re they prefer any particular +sset Management *ompany 6+M*7, Which type of Product they prefer, Which 8ption 6-rowth or %ividend7 they prefer or Which

Investment "trategy they follow 6"ystematic Investment Plan or 8ne time Plan7 ,his Project as a whole can &e divided into two parts ,he first part gives an insight a&out Mutual Fund and its various aspects, the *ompany Profile, 8&jectives of the study, $esearch Methodology 8ne can have a &rief knowledge a&out Mutual Fund and its &asics through the Project ,he second part of the Project consists of data and its analysis collected through survey done on >@@ people For the collection of Primary data I made a questionnaire and surveyed of >@@ people I also taken interview of many People those who were coming at the "#I #ranch where I done my Project I visited other +M*s in %ehradoon to get some knowledge related to my topic I studied a&out the products and strategies of other +M*s in %ehradoon to know why people prefer to invest in those +M*s ,his Project covers the topic 2,34 M','+( F'1% I" #4,,4$

I154",M41, P(+1 ,he data collected has &een well organi0ed and presented I hope the research findings and conclusion will &e of use

CONTENTS

+cknowledgement %eclaration 4!ecutive "ummary

*hapter / ? *hapter / > *hapter / D *hapter / F *hapter / = *hapter / A *hapter / G

I1,$8%'*,I81 *8MP+19 P$8FI(4 8#E4*,I54" +1% "*8P4 $4"4+$*3 M4,38%8(8-9 %+,+ +1+(9"I" +1% I1,4$P$4,+,I81 FI1%I1-" +1% *81*('"I81" "'--4",I81" ) $4*8MM41%+,I81" #I#(I8-$+P39

MUTUAL FUNDS
ALL ABOUT MUTUAL FUNDS
8HAT IS MUTUAL FUND B& STRUCTURE B& NATURE E:UIT& FUND DEBT FUNDS B& INVESTMENT OBJECTIVE OTHER SCHEMES PROS ; CONS OF INVESTIN% IN MUTUAL FUNDS ADVANTA%ES OF INVESTIN% MUTUAL FUNDS DISADVANTA%ES OF INVESTIN% MUTUAL FUNDS MUTUAL FUNDS INDUSTR& IN INDIA MAJOR PLA&ERS OF MUTUAL FUNDS IN INDIA HISTOR& OF THE INDIAN MUTUAL FUND INDUSTR& CATE%ORIES OF MUTUAL FUNDS INVESTMENT STRATE%IES 8OR1IN% OF A MUTUAL FUND

 %UIDELINES OF THE SEBI FOR MUTUAL FUND COMPANIES DISTRIBUTION CHANNELS DOES FUND PERFORMANCE AND RAN1IN% PERSIST< PORTFOLIO ANAL&SIS TOOLS

RESEARCH REPORT

OBJECTIVE OF RESEARCH SCOPE OF THE STUD& DATA SOURCES SAMPLIN% DATA ANAL&SIS :UESTIONNAIRE

*hapter / ? Introduction

INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS=

Mutual fund is a trust that pools the savings of a num&er of investors who share a common financial goal ,his pool of money is invested in accordance with a stated o&jective ,he joint ownership of the fund is thus 2Mutual, i e the fund &elongs to all investors ,he money thus collected is then invested in capital market instruments such as shares, de&entures and other securities ,he income earned through these investments and the capital appreciations reali0ed are shared &y its unit holders in proportion the num&er of units owned &y them ,hus a Mutual Fund is the most suita&le investment for the common man as it offers an opportunity to invest in a diversified, professionally managed &asket of securities at a relatively low cost + Mutual Fund is an investment tool that allows small investors access to a well/ diversified portfolio of equities, &onds and other securities 4ach shareholder participates in the gain or loss of the fund 'nits are issued and can &e redeemed as needed ,he funds 1et +sset value 61+57 is determined each day Investments in securities are spread across a wide cross/section of industries and sectors and thus the risk is reduced %iversification reduces the risk &ecause all stocks

may not move in the same direction in the same proportion at the same time Mutual fund issues units to the investors in accordance with quantum of money invested &y them Investors of mutual funds are known as unit holders

When an investor su&scri&es for the units of a mutual fund, he &ecomes part owner of the assets of the fund in the same proportion as his contri&ution amount put up with the corpus 6the total amount of the fund7 Mutual Fund investor is also known as a mutual fund shareholder or a unit holder +ny change in the value of the investments made into capital market instruments

6such as shares, de&entures etc7 is reflected in the 1et +sset 5alue 61+57 of the scheme 1+5 is defined as the market value of the Mutual Fund schemeHs assets net of its lia&ilities 1+5 of a scheme is calculated &y dividing the market value of schemeHs assets &y the total num&er of units issued to the investors

ADVANTA%ES OF MUTUAL FUND

Portfolio %iversification Professional management $eduction I %iversification of $isk (iquidity Fle!i&ility ) *onvenience $eduction in ,ransaction cost "afety of regulated environment *hoice of schemes ,ransparency

DISADVANTA%E OF MUTUAL FUND

1o control over *ost in the 3ands of an Investor 1o tailor/made Portfolios Managing a Portfolio Funds

%ifficulty in selecting a "uita&le Fund "cheme

HISTOR& OF THE INDIAN MUTUAL FUND INDUSTR&

,he mutual fund industry in India started in ?CAD with the formation of 'nit ,rust of India, at the initiative of the -overnment of India and $eserve #ank ,hough the growth was slow, &ut it accelerated from the year ?CBG when non/',I players entered the Industry In the past decade, Indian mutual fund industry had seen a dramatic improvement, &oth qualities wise as well as quantity wise #efore, the monopoly of the market had seen an ending phaseJ the +ssets 'nder Management 6+'M7 was $sAG &illion ,he private sector entry to the fund family raised the +um to $s FG@ &illion in March ?CCD and till +pril >@@FJ it reached the height if $s ?=F@ &illion ,he Mutual Fund Industry is o&viously growing at a tremendous space with the mutual fund industry can &e &roadly put into four phases according to the development of the sector 4ach phase is &riefly descri&ed as under Fi 4t P)a4e > 576?-.@

'nit ,rust of India 6',I7 was esta&lished on ?CAD &y an +ct of Parliament &y the $eserve #ank of India and functioned under the $egulatory and administrative control of the $eserve #ank of India In ?CGB ',I was de/linked from the $#I and the Industrial %evelopment #ank of India 6I%#I7 took over the regulatory and administrative control in place of $#I ,he first scheme launched &y ',I was 'nit "cheme ?CAF +t the end of ?CBB ',I had $s A,G@@ crores of assets under management
Se(#nd P)a4e > 57.@-577A 2Ent / #" Pub!i( Se(t# Fund43

?CBG marked the entry of non/ ',I, pu&lic sector mutual funds set up &y pu&lic sector &anks and (ife Insurance *orporation of India 6(I*7 and -eneral Insurance *orporation of India 6-I*7 "#I Mutual Fund was the first non/ ',I Mutual Fund esta&lished in Eune ?CBG followed &y *an&ank Mutual Fund 6%ec BG7, Punja& 1ational #ank Mutual Fund 6+ug BC7, Indian #ank Mutual Fund 61ov BC7, #ank of India 6Eun C@7, #ank of #aroda Mutual Fund 68ct C>7 (I* esta&lished its mutual fund in Eune ?CBC while -I* had set up its mutual fund in %ecem&er ?CC@ +t the end of ?CCD, the mutual fund industry had assets under management of $s FG,@@F crores T)i d P)a4e > 577A-*++A 2Ent / #" P iBate Se(t# Fund43 ?CCD was the year in which the first Mutual Fund $egulations came into &eing, under which all mutual funds, e!cept ',I were to &e registered and governed ,he erstwhile <othari Pioneer 6now merged with Franklin ,empleton7 was the first private sector mutual fund registered in Euly ?CCD

,he ?CCD "4#I 6Mutual Fund7 $egulations were su&stituted &y a more comprehensive and revised Mutual Fund $egulations in ?CCA ,he industry now functions under the "4#I 6Mutual Fund7 $egulations ?CCA +s at the end of Eanuary >@@D, there were DD mutual funds with total assets of $s ?,>?,B@= crores F#u t) P)a4e > 4in(e Feb ua / *++A In Fe&ruary >@@D, following the repeal of the 'nit ,rust of India +ct ?CAD ',I was &ifurcated into two separate entities 8ne is the "pecified 'ndertaking of the 'nit ,rust of India with assets under management of $s >C,BD= crores as at the end of Eanuary >@@D, representing &roadly, the assets of '" AF scheme, assured return and certain other schemes ,he second is the ',I Mutual Fund (td, sponsored &y "#I, P1#, #8# and (I* It is registered with "4#I and functions under the Mutual Fund $egulations consolidation and growth +s at the end of "eptem&er, >@@F, there were >C funds, which manage assets of $s ?=D?@B crores under F>? schemes

CATE%ORIES OF MUTUAL FUND0

Mutual funds can &e classified as follow ;

Ba4ed #n t)ei 4t u(tu e0

8pen/ended funds; Investors can &uy and sell the units from the fund, at any point of
time

*lose/ended funds; ,hese funds raise money from investors only once ,herefore,
after the offer period, fresh investments can not &e made into the fund If the fund is listed on a stocks e!change the units can &e traded like stocks 64 g , Morgan "tanley -rowth Fund7 $ecently, most of the 1ew Fund 8ffers of close/ended funds provided liquidity window on a periodic &asis such as monthly or weekly $edemption of units can &e made during specified intervals ,herefore, such funds have relatively low liquidity

Ba4ed #n t)ei inBe4tment #bCe(tiBe0 EDuit/ "und4; ,hese funds invest in equities and equity related instruments With
fluctuating share prices, such funds show volatile performance, even losses 3owever, short term fluctuations in the market, generally smoothens out in the long term, there&y offering higher returns at relatively lower volatility +t the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term 3ence, investment in equity funds should &e considered for a period of at least D/= years It can &e further classified as; i3 IndeE "und4/ In this case a key stock market inde!, like #"4 "ense! or 1ifty is tracked ,heir portfolio mirrors the &enchmark inde! &oth in terms of composition

and individual stock weightages

ii3 EDuit/ diBe 4i"ied "und4- ?@@K of the capital is invested in equities spreading across different sectors and stocks iiiF3 DiBidend /ie!d "und4- it is similar to the equity diversified funds e!cept that they invest in companies offering high dividend yields iB3 T)emati( "und4- Invest ?@@K of the assets in sectors which are related through some theme e g /+n infrastructure fund invests in power, construction, cements sectors etc B3 Se(t# "und4- Invest ?@@K of the capital in a specific sector e g / + &anking sector fund will invest in &anking stocks Bi3 ELSS/ 4quity (inked "aving "cheme provides ta! &enefit to the investors

Ba!an(ed "und0 ,heir investment portfolio includes &oth de&t and equity

+s a result, on

the risk/return ladder, they fall &etween equity and de&t funds #alanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments Following are &alanced funds classes;

i3 Debt-# iented "und4 -Investment &elow A=K in equities ii3 EDuit/-# iented "und4 -Invest at least A=K in equities, remaining in de&t

Debt "und0 ,hey invest only in de&t instruments, and are a good option for investors
averse to idea of taking risk associated with equities ,herefore, they invest

e!clusively in fi!ed/income instruments like &onds, de&entures, -overnment of India securitiesJ and money market instruments such as certificates of deposit 6*%7, commercial paper 6*P7 and call money Put your money into any of these de&t funds depending on your investment hori0on and needs i3 LiDuid "und4- ,hese funds invest ?@@K in money market instruments, a large portion &eing invested in call money market ii3 %i!t "und4 ST- ,hey invest ?@@K of their portfolio in government securities of and ,/&ills iii3 F!#atin$ ate "und4 - Invest in short/term de&t papers Floaters invest in de&t instruments which have varia&le coupon rate iB3 A bit a$e "und- ,hey generate income through ar&itrage opportunities due to mis/ pricing &etween cash market and derivatives market Funds are allocated to equities, derivatives and money markets 3igher proportion 6around G=K7 is put in money markets, in the a&sence of ar&itrage opportunities B3 %i!t "und4 LT- ,hey invest ?@@K of their portfolio in long/term government securities

Bi3 In(#me "und4 LT- ,ypically, such funds invest a major portion of the portfolio in long/term de&t papers Bii3 MIP4- Monthly Income Plans have an e!posure of G@K/C@K to de&t and an e!posure of ?@K/D@K to equities Biii3 FMP4- fi!ed monthly plans invest in de&t papers whose maturity is in line with that of the fund

INVESTMENT STRATE%IES
5= S/4temati( InBe4tment P!an0 under this a fi!ed sum is invested each month on a fi!ed date of a month Payment is made through post dated cheques or direct de&it facilities ,he investor gets fewer units when the 1+5 is high and more units when the 1+5 is low ,his is called as the &enefit of $upee *ost +veraging 6$*+7 *= S/4temati( T an4"e P!an0 under this an investor invest in de&t oriented fund and give instructions to transfer a fi!ed sum, at a fi!ed interval, to an equity scheme of the same mutual fund A= S/4temati( 8it)d aGa! P!an0 if someone wishes to withdraw from a mutual fund then he can withdraw a fi!ed amount each month

RISK V/S. RETURN:

*hapter L > *ompany Profile

INTRODUCTION TO SBI MUTUAL FUND

"#I Funds Management Pvt (td is one of the leading fund houses in the country with an investor &ase of over F A million and over >@ years of rich

e!perience in fund management consistently delivering value to its investors "#I Funds Management Pvt (td is a joint venture &etween H,he "tate #ank of IndiaH one of IndiaHs largest &anking enterprises, and "ociMtM -MnMrale +sset Management 6France7, one of the worldHs leading fund management companies that manages over '"N =@@ #illion worldwide ,oday the fund house manages over $s >B=@@ crores of assets and has a diverse profile of investors actively parking their investments across DA active schemes In >@ years of operation, the fund has launched DB schemes and successfully redeemed ?= of them, and in the process, has rewarded our investors with consistent returns "chemes of the Mutual Fund have time after time

outperformed &enchmark indices, honored us with ?= awards of performance and have emerged as the preferred investment for millions of investors ,he trust reposed on us &y over F A million investors is a genuine tri&ute to our e!pertise in fund management "#I Funds Management Pvt (td serves its vast family of investors through a network of over ?D@ points of acceptance, >B Investor "ervice *entres, FA Investor "ervice %esks and =A %istrict 8rgani0ers "#I Mutual is the first &ank/ sponsored fund to launch an offshore fund L $esurgent India 8pportunities Fund -rowth through innovation and sta&le investment policies is the "#I MF credo

PRODUCTS OF SBI MUTUAL FUND 4quity schemes

,he investments of these schemes will predominantly &e in the stock markets and endeavor will &e to provide investors the opportunity to &enefit from the higher returns which stock markets can provide 3owever they are also e!posed to the volatility and attendant risks of stock markets and hence should &e chosen only &y such investors who have high risk taking capacities and are willing to think long term 4quity Funds include diversified 4quity Funds, "ectoral Funds and Inde! Funds %iversified 4quity Funds invest in various stocks across different sectors while sectoral funds which are speciali0ed 4quity Funds restrict their investments only to shares of a particular sector and hence, are riskier than %iversified 4quity Funds Inde! Funds invest passively only in the stocks of a particular inde! and the performance of such funds move with the movements of the inde! Magnum *8MM+ Fund Magnum 4quity Fund Magnum -lo&al Fund Magnum Inde! Fund Magnum Midcap Fund Magnum Multicap Fund Magnum Multiplier plus ?CCD Magnum "ectoral Funds 'm&rella

M"F'/ 4merging #usiness Fund M"F'/ I, Fund

 M"F'/ Pharma Fund M"F'/ *ontra Fund M"F'/ FM*- Fund

"#I +r&itrage 8pportunities Fund "#I #lue chip Fund "#I Infrastructure Fund / "eries I "#I Magnum ,a!gain "cheme ?CCD "#I 814 India Fund "#I ,+O +%5+1,+-4 F'1% / "4$I4" I

%e&t schemes
%e&t Funds invest only in de&t instruments such as *orporate #onds, -overnment "ecurities and Money Market instruments either completely avoiding any investments in the stock markets as in Income Funds or -ilt Funds or having a small e!posure to equities as in Monthly Income Plans or *hildrenHs Plan 3ence they are safer than equity funds +t the same time the e!pected returns from de&t funds would &e lower "uch investments are advisa&le for the risk/averse investor and as a part of the investment portfolio for other investors Magnum *hildren.s &enefit Plan

Magnum -ilt Fund Magnum Income Fund Magnum Insta *ash Fund Magnum Income Fund/ Floating $ate Plan Magnum Income Plus Fund Magnum Insta *ash Fund /(iquid Floater Plan Magnum Monthly Income Plan Magnum Monthly Income Plan / Floater Magnum 1$I Investment Fund "#I Premier (iquid Fund

#+(+1*4% "*34M4"
Magnum #alanced Fund invests in a mi! of equity and de&t investments 3ence they are less risky than equity funds, &ut at the same time provide commensurately lower returns ,hey provide a good investment opportunity to investors who do not wish to &e completely e!posed to equity markets, &ut is looking for higher returns than those provided &y de&t funds Magnum #alanced Fund

COMPETITORS OF SBI MUTUAL FUND

"ome of the main competitors of "#I Mutual Fund in %ehradoon are as Follows; i ii iii iv v vi vii viii i! ! I*I*I Mutual Fund $eliance Mutual Fund ',I Mutual Fund #irla "un (ife Mutual Fund <otak Mutual Fund 3%F* Mutual Fund "undaram Mutual Fund (I* Mutual Fund Principal Franklin ,empleton

A8ARDS AND ACHIEVEMENTS

"#I Mutual Fund 6"#IMF7 has &een the proud recipient of the I*$+ 8nline +ward / B times, *1#* ,5 / ?B *risil +ward >@@A / F +wards, ,he (ipper +ward 69ear >@@=/>@@A7 and most recently with the *1#* ,5 / ?B *risil Mutual Fund of the 9ear +ward >@@G and = +wards for our schemes

*hapter / D 8&jectives and scope

OBJECTIVES OF THE STUD& ? ,o find out the Preferences of the investors for +sset Management *ompany > ,o know the Preferences for the portfolios D ,o know why one has invested or not invested in "#I Mutual fund F ,o find out the most preferred channel = ,o find out what should do to &oost Mutual Fund Industry

S(#pe #" t)e 4tud/

+ &ig &oom has &een witnessed in Mutual Fund Industry in resent times + large num&er of new players have entered the market and trying to gain market share in this rapidly improving market ,he research was carried on in %ehradoon I had &een sent at one of the &ranch of "tate #ank of India %ehradoon where I completed my Project work I surveyed on my Project ,opic 2+ study of preferences of the Investors for investment in Mutual Fund on the visiting customers of the "#I #oring *anal $oad #ranch ,he study will help to know the preferences of the customers, which company, portfolio, mode of investment, option for getting return and so on they prefer ,his project report may help the company to make further planning and strategy

*hapter L F $esearch Methodology

RESEARCH METHODOLO%&
,his report is &ased on primary as well secondary data, however primary data collection was given more importance since it is overhearing factor in attitude studies 8ne of the most important users of research methodology is that it helps in identifying the pro&lem, collecting, analy0ing the required information data and providing an alternative solution to the pro&lem It also helps in collecting the vital information that is required &y the top management to assist them for the &etter decision making &oth day to day decision and critical ones

Data 4#u (e40

$esearch is totally &ased on primary data "econdary data can &e used only for the reference $esearch has &een done &y primary data collection, and primary data has &een collected &y interacting with various people ,he secondary data has &een collected through various journals and we&sites

Du ati#n #" Stud/0

,he study was carried out for a period of two months, from D@th May to D@th Euly >@@B

Samp!in$0
Samp!in$ p #(edu e0

,he sample was selected of them who are the customersIvisitors of "tate #ank if India, #oring *anal $oad #ranch, irrespective of them &eing investors or not or availing the services or not It was also collected through personal visits to persons, &y formal and informal talks and through filling up the questionnaire prepared ,he data has &een analy0ed &y using mathematicalI"tatistical tool

Samp!e 4iHe0

,he sample si0e of my project is limited to >@@ people only 8ut of which only ?>@ people had invested in Mutual Fund 8ther B@ people did not have invested in Mutual Fund

Samp!e de4i$n0

%ata has &een presented with the help of &ar graph, pie charts, line graphs etc

Limitati#n0

"ome of the persons were not so responsive Possi&ility of error in data collection &ecause many of investors may have not given actual answers of my questionnaire "ample si0e is limited to >@@ visitors of "tate #ank of India , #oring *anal $oad #ranch, %ehradoon out of these only ?>@ had invested in Mutual Fund ,he sample si0e may not adequately represent the whole market

"ome respondents were reluctant to divulge personal information which can affect the validity of all responses

,he research is confined to a certain part of %ehradoon

*hapter L = %ata +nalysis ) Interpretation

ANAL&SIS ; INTERPRETATION OF THE DATA

5= 2a3 A$e di4t ibuti#n #" t)e InBe4t# 4 #" De) ad##n

+ge -roup 1o of Investors

PQ D@ ?>

D?/D= ?B

DA/F@ D@

F?/F= >F

FA/=@ >@

R=@ ?A

I%&e'#or' (%&e'#e) (% M # *+ F %)

35 30 25 20 15 10 5 0 <=30 31-35 36-40 41-45 46-50 >50 Age gro ! o" #$e I%&e'#or' 12 18 30 24 20 16

Inte p etati#n0

+ccording to this chart out of ?>@ Mutual Fund investors of %ehradoon the most are in the age group of DA/F@ yrs i e >=K, the second most investors are in the age group of F?/F=yrs i e >@K and the least investors are in the age group of &elow D@ yrs

2b3= Edu(ati#na! :ua!i"i(ati#n #" inBe4t# 4 #" De) ad##n

Edu(ati#na! :ua!i"i(ati#n -raduateI Post -raduate 'nder -raduate 8thers ,otal Numbe #" InBe4t# 4 BB >= G ?>@

623-

,1-

.r*) *#e/0o'# .r*) *#e

U%)er .r*) *#e

O#$er'

Inte p etati#n0

8ut of ?>@ Mutual Fund investors G?K of the investors in %ehradoon are -raduateIPost -raduate, >DK are 'nder -raduate and AK are others 6under 3"*7

(3= O((upati#n #" t)e inBe4t# 4 #" De) ad##n

O((upati#n
-ovt "ervice Pvt "ervice #usiness +griculture 8thers

N#= #" InBe4t# 4

D@ F= D= F A

50 No1 o" I%&e'#or' 40 30 20 10 0 .o&#1 Ser&(2e 0&#1 Ser&(2e B '(%e'' 35 45 30 4 Agr(2 +# re 6 O#$er'

O22 !*#(o% o" #$e 2 '#o3er'

Inte p etati#n0
In 8ccupation group out of ?>@ investors, DBK are Pvt 4mployees, >=K are #usinessman, >CK are -ovt 4mployees, DK are in +griculture and =K are in others

2d3= M#nt)!/ Fami!/ In(#me #" t)e InBe4t# 4 #" De) ad##n= In(#me % #up
PQ?@,@@@ ?@,@@?/?=,@@@ ?=,@@?/>@,@@@ >@,@@?/D@,@@@ RD@,@@@ 50 45 40 35 30 25 20 15 10 5 0

N#= #" InBe4t# 4

=

?> >B FD D>

No1 o" I%&e'#or'

43 28 5 <=10 12 10-15 15-20 20-30 >30 32

I%2o3e .ro ! o" #$e I%&e'#or'% 4R'1 (% T$15

Inte p etati#n0
In the Income -roup of the investors of %ehradoon, out of ?>@ investors, DAK investors that is the ma!imum investors are in the monthly income

group $s >@,@@? to $s D@,@@@, "econd one i e >GK investors are in the monthly income group of more than $s D@,@@@ and the minimum investors i e FK are in the monthly income group of &elow $s ?@,@@@

2*3 InBe4t# 4 inBe4ted in di""e ent Iind #" inBe4tment4= <ind of Investments
"aving +I*

Fi!ed deposits Insurance Mutual Fund Post office 61"*7 "haresI%e&entures -oldI"ilver $eal 4state

1o of $espondents ?C= ?FB ?=> ?>@ G= =@ D@ A=

7(%)' o" I%&e'#3e%#

65
0o '# O . S* I% ""( ' &( 2e o+) %g /S r* 4 (+& %2 NS A/ C5 er e 2

30 50 ,5 120 152 148 165 0 50 100 150 200 250

No1o" Re'!o%)e%#'

Inte p etati#n0 From the a&ove graph it can &e inferred that out of >@@ people,
CG =K people have invested in "aving +Ic, GAK in Insurance, GFK in Fi!ed %eposits, A@K in Mutual Fund, DG =K in Post 8ffice, >=K in "hares or %e&entures, ?=K in -oldI"ilver and D> =K in $eal 4state

A= P e"e en(e #" "a(t# 4 G)i!e inBe4tin$

Factors 6a7 (iquidity 6&7 (ow $isk 6c7 3igh $eturn 6d7 ,rust

1o of $espondents

F@

A@

AF

DA

18%

20%

32%

30%

Liquidity

Low Risk

High Return

Trust

Inte p etati#n0

8ut of >@@ People, D>K People prefer to invest where there is 3igh $eturn, D@K prefer to invest where there is (ow $isk, >@K prefer easy (iquidity and ?BK prefer ,rust

?= AGa ene44 ab#ut Mutua! Fund and it4 Ope ati#n4

$esponse 1o of $espondents

9es ?D=

1o A=

33%

67%

Yes

No

Inte p etati#n0
From the a&ove chart it is inferred that AGK People are aware of Mutual Fund and its operations and DDK are not aware of Mutual Fund and its operations

,= S#u (e #" in"# mati#n "# (u4t#me 4 ab#ut Mutua! Fund

S#u (e #" in"# mati#n +dvertisement Peer -roup #ank Financial +dvisors N#= #" Re4p#ndent4 ?B >= D@ A>

70 60 50 0 30 20 10 0

No! o" Res#ondents

62 18 25 30 )*nk +in*n,i*$d%isors

$d%ertise&ent 'eer (rou#

. our,e o" /n"or&*tion

Inte p etati#n0
From the a&ove chart it can &e inferred that the Financial +dvisor is the most important source of information a&out Mutual Fund 8ut of ?D= $espondents, FAK

know a&out Mutual fund ,hrough Financial +dvisor, >>K through #ank, ?CK through Peer -roup and ?DK through +dvertisement

A InBe4t# 4 inBe4ted in Mutua! Fund

Re4p#n4e 94" 18 ,otal N#= #" Re4p#ndent4 ?>@ B@ >@@

No 40-

8e' 60-

Inte p etati#n0

8ut of >@@ People, A@K have invested in Mutual Fund and F@K do not have invested in Mutual Fund

@= Rea4#n "# n#t inBe4ted in Mutua! Fund

Rea4#n 1ot +ware 3igher $isk 1ot any "pecific $eason N#= #" Re4p#ndent4

6, , 5+

13%

6%

81%
Not $w*re Higher Risk Not $ny

Inte p etati#n0
8ut of B@ people, who have not invested in Mutual Fund, B?K are not aware of Mutual Fund, ?DK said there is likely to &e higher risk and AK do not have any specific reason

.= InBe4t# 4 inBe4ted in di""e ent A44et4 Mana$ement C#= 2AMC3 Name #" AMC
"#IMF ',I 3%F* $eliance I*I*I Prudential <otak 8thers

N#= #" InBe4t# 4 == G= D@ G= =A F= G@

O#$er' :DFC N*3e o" AMC 7o#*9 SBIMF ICICI Re+(*%2e UTI 0 20 40 No1 o" I%&e'#or' 60 30 45 55 56

,0

,5 ,5 80

Inte p etati#n0
In %ehradoon most of the Investors preferred ',I and $eliance Mutual Fund 8ut of ?>@ Investors A> =K have invested in each of them, only FAK have invested in "#IMF, FGK in I*I*I Prudential, DG =K in <otak and >=K in 3%F*

7= Rea4#n "# inBe4ted in SBIMF $eason

+ssociated with "#I #etter $eturn +gents +dvice

1o of $espondents
D= = ?=

27%

0%

6 %

$sso,i*ted with .)/

)etter Return

$gents $d%i,e

Inte p etati#n0
8ut of == investors of "#IMF AFK have invested &ecause of its association with #rand "#I, >GK invested on +gent.s +dvice, CK invested &ecause of &etter return

5+= Rea4#n "# n#t inBe4ted in SBIMF Rea4#n

1ot +ware (ess $eturn +gent.s +dvice

N#= #" Re4p#ndent4

>= ?B >>

3 %

38%

28%
Not $w*re Less Return $gent1s $d%i,e

Inte p etati#n0
8ut of A= people who have not invested in "#IMF, DBK were not aware with "#IMF, >BK do not have invested due to less return and DFK due to +gent.s +dvice

55= P e"e en(e #" InBe4t# 4 "# "utu e inBe4tment in Mutua! Fund Name #" AMC N#= #" InBe4t# 4

"#IMF ',I 3%F* $eliance I*I*I Prudential <otak 8thers

GA F= D= B> B@ A@ G=

7thers 6ot*k N*&e o" $25 /5 /5 / 'rudenti*Re-i*n,e H4+5 3T/ .)/2+ 0 20 35 5 60

75

80 82

76 0 60 80 100

No! o" /n%estors

Inte p etati#n0
8ut of ?>@ investors, ABK prefer to invest in $eliance, AGK in I*I*I Prudential, ADK in "#IMF, A> =K in 8thers, =@K in <otak, DG =K in ',I and >CK in 3%F* Mutual Fund

5*= C)anne! P e"e ed b/ t)e InBe4t# 4 "# Mutua! Fund InBe4tment

*hannel 1o of $espondents

Financial +dvisor G>

#ank ?B

+M* D@

25%

15%

60%

+in*n,i*- $d%isor

)*nk

$25

Inte p etati#n0
8ut of ?>@ Investors A@K preferred to invest through Financial +dvisors, >=K through +M* and ?=K through #ank

5A= M#de #" InBe4tment P e"e ed b/ t)e InBe4t# 4

Mode of Investment 1o of $espondents

8ne time Investment GB

"ystematic Investment Plan 6"IP7 F>

35%

65%

7ne ti&e /n%est&ent

./'

Inte p etati#n0
8ut of ?>@ Investors A=K preferred 8ne time Investment and D= K Preferred through "ystematic Investment Plan

5?= P e"e ed P# t"#!i#4 b/ t)e InBe4t# 4 P# t"#!i# N#= #" InBe4t# 4

4quity %e&t #alanced

=A >@ FF

37%

6%

17%

8quity

4e9t

)*-*n,e

Inte p etati#n0
From the a&ove graph FAK preferred 4quity Portfolio, DGK preferred #alance and ?GK preferred %e&t portfolio

5,= Opti#n "# $ettin$ Retu n P e"e ed b/ t)e InBe4t# 4

8ption 1o of $espondents

%ividend Payout >=

%ividend $einvestment ?@

-rowth B=

21%

8% 71%
4i%idend '*yout 4i%idend Rein%est&ent (rowth

Inte p etati#n0
From the a&ove graph G?K preferred -rowth 8ption, >?K preferred %ividend Payout and BK preferred %ividend $einvestment 8ption

56= P e"e en(e #" InBe4t# 4 G)et)e t# inBe4t in Se(t# a! Fund4 Re4p#n4e N#= #" Re4p#ndent4

&e4 N#

*, 7,

21%

70%

Yes

No

Inte p etati#n0
8ut of ?>@ investors, GCK investors do not prefer to invest in "ectoral Fund &ecause there is ma!imum risk and >?K prefer to invest in "ectoral Fund

*hapter L A Findings and *onclusion

Findin$4

 In %ehradoon in the +ge -roup of DA/F@ years were more in num&ers ,he second most Investors were in the age group of F?/F= years and the least were in the age group of &elow D@ years In %ehradoon most of the Investors were -raduate or Post -raduate and &elow 3"* there were very few in num&ers In 8ccupation group most of the Investors were -ovt employees, the second most Investors were Private employees and the least were associated with +griculture In family Income group, &etween $s >@,@@?/ D@,@@@ were more in num&ers, the second most were in the Income group of more than $s D@,@@@ and the least were in the group of &elow $s ?@,@@@ +&out all the $espondents had a "aving +Ic in #ank, GAK Invested in Fi!ed %eposits, 8nly A@K $espondents invested in Mutual fund Mostly $espondents preferred 3igh $eturn while investment, the second most preferred (ow $isk then liquidity and the least preferred ,rust 8nly AGK $espondents were aware a&out Mutual fund and its operations and DDK were not +mong >@@ $espondents only A@K had invested in Mutual Fund and F@K did not have invested in Mutual fund

 8ut of B@ $espondents B?K were not aware of Mutual Fund, ?DK told there is not any specific reason for not invested in Mutual Fund and AK told there is likely to &e higher risk in Mutual Fund Most of the Investors had invested in $eliance or ',I Mutual Fund, I*I*I Prudential has also good #rand Position among investors, "#IMF places after I*I*I Prudential according to the $espondents 8ut of == investors of "#IMF AFK have invested due to its association with the #rand "#I, >GK Invested &ecause of +dvisor.s +dvice and CK due to &etter return Most of the investors who did not invested in "#IMF due to not +ware of "#IMF, the second most due to +gent.s advice and rest due to (ess $eturn For Future investment the ma!imum $espondents preferred $eliance Mutual Fund, the second most preferred I*I*I Prudential, "#IMF has &een preferred after them A@K Investors preferred to Invest through Financial +dvisors, >=K through +M* 6means %irect Investment7 and ?=K through #ank A=K preferred 8ne ,ime Investment and D=K preferred "IP out of &oth type of Mode of Investment

 ,he most preferred Portfolio was 4quity, the second most was #alance 6mi!ture of &oth equity and de&t7, and the least preferred Portfolio was %e&t portfolio Ma!imum 1um&er of Investors Preferred -rowth 8ption for returns, the second most preferred %ividend Payout and then %ividend $einvestment Most of the Investors did not want to invest in "ectoral Fund, only >?K wanted to invest in "ectoral Fund

C#n(!u4i#n

$unning a successful Mutual Fund requires complete understanding of the peculiarities of the Indian "tock Market and also the psyche of the small investors ,his study has made an attempt to understand the financial &ehavior of Mutual Fund investors in connection with the preferences of #rand 6+M*7, Products, *hannels etc I o&served that many of people

have fear of Mutual Fund ,hey think their money will not &e secure in Mutual Fund ,hey need the knowledge of Mutual Fund and its related terms Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest +s the awareness and income is growing the num&er of mutual fund investors are also growing 2#rand plays important role for the investment People invest in those *ompanies where they have faith or they are well known with them ,here are many +M*s in %ehradoon &ut only some are performing well due to #rand awareness "ome +M*s are not performing well although some of the schemes of them are giving good return &ecause of not awareness a&out #rand $eliance, ',I, "#IMF, I*I*I Prudential etc they are well known #rand, they are performing well and their +ssets 'nder Management is larger than others whose #rand name are not well known like Principle, "underam, etc

%istri&ution channels are also important for the investment in mutual fund Financial +dvisors are the most preferred channel for the

investment in mutual fund ,hey can change investors. mind from one investment option to others Many of investors directly invest their money through +M* &ecause they do not have to pay entry load 8nly those people invest directly who know well a&out mutual fund and its operations and those have time

*hapter L G "uggestions +nd $ecommendations

Su$$e4ti#n4 and Re(#mmendati#n4

,he most vital pro&lem spotted is of ignorance Investors should &e made aware of the &enefits 1o&ody will invest until and unless he is fully convinced Investors should &e made to reali0e that ignorance is no longer &liss and what they are losing &y not investing Mutual funds offer a lot of &enefit which no other single option could offer #ut most of the people are not even aware of what actually a mutual fund isS ,hey only see it as just another investment option "o the advisors should try to change their mindsets ,he advisors should target for more and more young investors 9oung investors as well as persons at the height of their career would like to go for advisors due to lack of e!pertise and time Mutual Fund *ompany needs to give the training of the Individual Financial +dvisors a&out the FundI"cheme and its o&jective, &ecause they are the main source to influence the investors

 #efore making any investment Financial +dvisors should first enquire a&out the risk tolerance of the investorsIcustomers, their need and time 6how long they want to invest7 #y considering these three things they can take the customers into consideration 9ounger people aged under D= will &e a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off *ustomers with graduate level education are easier to sell to and there is a large untapped market there ,o succeed however, advisors must provide sound advice and high quality "ystematic Investment Plan 6"IP7 is one the innovative products launched &y +ssets Management companies very recently in the industry "IP is easy for monthly salaried person as it provides the facility of do the investment in 4MI ,hough most of the prospects and potential investors are not aware a&out the "IP ,here is a large scope for the companies to tap the salaried persons

BIBLIO%RAPH&
N;<S 0A0;RS OUTLOO7 MON;8 T;L;=ISION C:ANN;L 4CNBC AA<A>5 MUTUAL FUND :AND BOO7 FACT S:;;T AND STAT;M;NT <<<1SBIMF1COM <<<1MON;8CONTROL1COM <<<1AMFIINDIA1COM <<<1ONLIN;R;S;ARC:ONLIN;1COM <<<1 MUTUALFUNDSINDIA1COM

Mutua! Fund4

A!! Ab#ut Mutua! Fund4

#efore we understand what is mutual fund, it.s very important to know the area in which mutual funds works, the &asic understanding of stocks and &onds St#(I4 ; "tocks represent shares of ownership in a pu&lic company 4!amples of pu&lic companies include $eliance, 81-* and Infosys "tocks are considered to &e the most common owned investment traded on the market B#nd4 ; #onds are &asically the money which you lend to the government or a company, and in return you can receive interest on your invested amount, which is &ack over predetermined amounts of time #onds are considered to &e the most common lending investment traded on the market ,here are many other types of investments other than stocks and &onds 6including annuities, real estate, and precious metals7, &ut the majority of mutual funds invest in stocks andIor &onds

8)at I4 Mutua! Fund

+ mutual fund is just the connecting &ridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment o&jective ,he mutual fund will have a fund manager who is responsi&le for investing the gathered money into specific securities 6stocks or &onds7 When you invest in a mutual fund, you are &uying units or portions of the mutual fund and thus on investing &ecomes a shareholder or unit holder of the fund Mutual funds are considered as one of the &est availa&le investments as compare to others they are very cost efficient and also easy to invest in, thus &y pooling money together in a mutual fund, investors can purchase stocks or &onds with much lower trading costs than if they tried to do it on their own #ut the &iggest advantage to mutual funds is diversification, &y minimi0ing risk ) ma!imi0ing returns

,hus a Mutual Fund is the most suita&le investment for the common man as it offers an opportunity to invest in a diversified, professionally managed &asket of securities at a relatively low cost ,he flow chart &elow descri&es &roadly the working of a mutual fund 3nit Trust o" /ndi* is the "irst 2utu*- +und set u# under * se#*r*te *,t: 3T/ $,t in 1063: *nd st*rted its o#er*tions in 106 with the issue o" units under the s,he&e 3.; 6 !

OBe BieG #" eEi4tin$ 4()eme4 eEi4ted in mutua! "und (ate$# /

Wide variety of Mutual Fund "chemes e!ists to cater to the needs such as financial position, risk tolerance and return e!pectations etc ,he ta&le &elow gives an overview into the e!isting types of schemes in the Industry T/pe #" Mutua! Fund S()eme4 B& STRUCTURE Open Ended S()eme4 +n open/end fund is one that is availa&le for su&scription all through the year ,hese do not have a fi!ed maturity Investors can conveniently &uy and sell units at 1et +sset 5alue 6T1+5T7 related prices ,he key feature of open/end schemes is liquidity C!#4e Ended S()eme4 + closed/end fund has a stipulated maturity period which generally ranging from D to ?= years ,he fund is open for su&scription only during a specified period Investors can invest in the scheme at the time of the initial pu&lic issue and thereafter they can &uy or sell the units of the scheme on the stock e!changes where they are listed In order to provide an e!it route to the investors, some close/ended funds give an option of selling &ack the units to the Mutual Fund through periodic repurchase at 1+5 related prices "4#I $egulations stipulate that at least one of the two e!it routes is provided to the investor Inte Ba! S()eme4 Interval "chemes are that scheme, which com&ines the features of open/ended and close/ ended schemes ,he units may &e traded on the stock e!change or may &e open for sale or redemption during pre/determined intervals at 1+5 related prices

B& NATURE 5= EDuit/ "und0 ,hese funds invest a ma!imum part of their corpus into equities holdings ,he structure of the fund may vary different for different schemes and the fund manager.s outlook on different stocks ,he 4quity Funds are su&/classified depending upon their investment o&jective, as follows;

%iversified 4quity Funds Mid/*ap Funds "ector "pecific Funds ,a! "avings Funds 64(""7

4quity investments are meant for a longer time hori0on, thus 4quity funds rank high on the risk/ return matri! *= Debt "und40 ,he o&jective of these Funds is to invest in de&t papers -overnment authorities, private companies, &anks and financial institutions are some of the major issuers of de&t papers #y investing in de&t instruments, these funds ensure low risk and provide sta&le income to the investors %e&t funds are further classified as;

%i!t Fund4; Invest their corpus in securities issued &y -overnment, popularly known as -overnment of India de&t papers ,hese Funds carry 0ero %efault risk &ut are associated with Interest $ate risk ,hese schemes are safer as they invest in papers &acked &y -overnment

In(#me Fund4; Invest a major portion into various de&t instruments such as &onds, corporate de&entures and -overnment securities

MIP4; Invests ma!imum of their total corpus in de&t instruments while they take minimum e!posure in equities It gets &enefit of &oth equity and de&t market ,hese scheme ranks slightly high on the risk/return matri! when compared with other de&t schemes

S)# t Te m P!an4 2STP43; Meant for investment hori0on for three to si! months ,hese funds primarily invest in short term papers like *ertificate of %eposits 6*%s7 and *ommercial Papers 6*Ps7 "ome portion of the corpus is also invested in corporate de&entures

LiDuid Fund4; +lso known as Money Market "chemes, ,hese funds provides easy liquidity and preservation of capital ,hese schemes invest in short/term instruments like ,reasury #ills, inter/&ank call money market, *Ps and *%s ,hese funds are meant for short/term cash management of corporate houses and are meant for an investment hori0on of ?day to D months ,hese schemes rank low on risk/return matri! and are considered to &e the safest amongst all categories of mutual funds

A= Ba!an(ed "und40 +s the name suggest they, are a mi! of &oth equity and de&t funds ,hey invest in &oth equities and fi!ed income securities, which are in line with pre/defined investment o&jective of the scheme ,hese schemes aim to provide investors with the &est of &oth the worlds 4quity part provide growth and the de&t part provides sta&ility in returns Further the mutual funds can be broadly classified on the basis of investment parameter viz, 4ach category of funds is &acked &y an investment philosophy, which is pre/defined in the o&jectives of the fund ,he investor can align his own investment needs with the funds o&jective and invest accordingly

B& INVESTMENT OBJECTIVE % #Gt) S()eme40 -rowth "chemes are also known as equity schemes ,he aim of these schemes is to provide capital appreciation over medium to long term ,hese schemes normally invest a major part of their fund in equities and are willing to &ear short/term decline in value for possi&le future appreciation

In(#me S()eme40 Income "chemes are also known as de&t schemes ,he aim of these schemes is to provide regular and steady income to investors ,hese schemes generally invest in fi!ed income securities such as &onds and corporate de&entures *apital appreciation in such schemes may &e limited

Ba!an(ed S()eme40 #alanced "chemes aim to provide &oth growth and income &y periodically distri&uting a part of the income and capital gains they earn ,hese schemes invest in &oth shares and fi!ed income securities, in the proportion indicated in their offer documents 6normally =@;=@7

M#ne/ Ma Iet S()eme4; Money Market "chemes aim to provide easy liquidity, preservation of capital and moderate income ,hese schemes generally invest in safer, short/ term instruments, such as treasury &ills, certificates of deposit, commercial paper and inter/ &ank call money

OTHER SCHEMES

TaE SaBin$ S()eme40 ,a!/saving schemes offer ta! re&ates to the investors under ta! laws prescri&ed from time to time 'nder "ec BB of the Income ,a! +ct, contri&utions made to any 4quity (inked "avings "cheme 64(""7 are eligi&le for re&ate

IndeE S()eme40 Inde! schemes attempt to replicate the performance of a particular inde! such as the #"4 "ense! or the 1"4 =@ ,he portfolio of these schemes will consist of only

those stocks that constitute the inde! ,he percentage of each stock to the total holding will &e identical to the stocks inde! weightage +nd hence, the returns from such schemes would &e more or less equivalent to those of the Inde!

Se(t# Spe(i"i( S()eme40 ,hese are the fundsIschemes which invest in the securities of only those sectors or industries as specified in the offer documents e g Pharmaceuticals, "oftware, Fast Moving *onsumer -oods 6FM*-7, Petroleum stocks, etc ,he returns in these funds are dependent on the performance of the respective sectorsIindustries While these funds may give higher returns, they are more risky compared to diversified funds Investors need to keep a watch on the performance of those sectorsIindustries and must e!it at an appropriate time

T/pe4 #" etu n4 ,here are three ways, where the total returns provided &y mutual funds can &e enjoyed &y investors;

Income is earned from dividends on stocks and interest on &onds + fund pays out nearly all income it receives over the year to fund owners in the form of a distri&ution If the fund sells securities that have increased in price, the fund has a capital gain Most funds also pass on these gains to investors in a distri&ution If fund holdings increase in price &ut are not sold &y the fund manager, the fundHs shares increase in price 9ou can then sell your mutual fund shares for a profit Funds will also usually give you a choice either to receive a check for distri&utions or to reinvest the earnings and get more shares

P #4 ; (#n4 #" inBe4tin$ in mutua! "und40

For investments in mutual fund, one must keep in mind a&out the Pros and cons of investments in mutual fund

AdBanta$e4 #" InBe4tin$ Mutua! Fund40

5= P #"e44i#na! Mana$ement - ,he &asic advantage of funds is that, they are professional managed, &y well qualified professional Investors purchase funds &ecause they do not have the time or the e!pertise to manage their own portfolio + mutual fund is considered to &e relatively less e!pensive way to make and monitor their investments *= DiBe 4i"i(ati#n - Purchasing units in a mutual fund instead of &uying individual stocks or &onds, the investors risk is spread out and minimi0ed up to certain e!tent ,he idea &ehind diversification is to invest in a large num&er of assets so that a loss in any particular investment is minimi0ed &y gains in others A= E(#n#mie4 #" S(a!e - Mutual fund &uy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to &ring down the average cost of the unit for their investors ?= LiDuidit/ - Eust like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want ,= Simp!i(it/ - Investments in mutual fund is considered to &e easy, compare to other availa&le instruments in the market, and the minimum investment is small Most +M* also have automatic purchase plans where&y as little as $s >@@@, where "IP start with just $s =@ per month &asis

Di4adBanta$e4 #" InBe4tin$ Mutua! Fund40

5= P #"e44i#na! Mana$ement/ "ome funds doesn.t perform in neither the market, as their management is not dynamic enough to e!plore the availa&le opportunity in the market, thus many investors de&ate over whether or not the so/called professionals are any &etter than mutual fund or investor himself, for picking up stocks *= C#4t4 L ,he &iggest source of +M* income, is generally from the entry ) e!it load which they charge from an investors, at the time of purchase ,he mutual fund industries are thus charging e!tra cost under layers of jargon A= Di!uti#n / #ecause funds have small holdings across different companies, high returns from a few investments often donHt make much difference on the overall return %ilution is also the result of a successful fund getting too &ig When money pours into funds that have had strong success, the manager often has trou&le finding a good investment for all the new money ?= TaEe4 / when making decisions a&out your money, fund managers donHt consider your personal ta! situation For e!ample, when a fund manager sells a security, a capital/gain ta! is triggered, which affects how profita&le the individual is from the sale It might have &een more advantageous for the individual to defer the capital gains lia&ility

Mutua! Fund4 Indu4t / in India

,he origin of mutual fund industry in India is with the introduction of the concept of mutual fund &y ',I in the year ?CAD ,hough the growth was slow, &ut it accelerated from the year ?CBG when non/ ',I players entered the industry In the past decade, Indian mutual fund industry had seen a dramatic improvements, &oth quality wise as well as quantity wise #efore, the monopoly of the market had seen an ending phase, the +ssets 'nder Management 6+'M7 was $s AG&n ,he private sector entry to the fund family rose the +'M to $s FG@ in in March ?CCD and till +pril >@@F, it reached the height of ?,=F@ &n Putting the +'M of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of "#I alone, constitute less than ??K of the total deposits held &y the Indian &anking industry ,he main reason of its poor growth is that the mutual fund industry in India is new in the country (arge sections of Indian investors are yet to &e intellectuated with the concept 3ence, it is the prime responsi&ility of all mutual fund companies, to market the product correctly a&reast of selling ,he mutual fund industry can &e &roadly put into four phases according to the development of the sector 4ach phase is &riefly descri&ed as under

T)e maC# p!a/e 4 in t)e Indian Mutua! Fund Indu4t / a e0

MaC# P!a/e 4 #" Mutua! Fund4 In India Pe i#d 2La4t;nb4p5 8eeI3

RanI 5 * A ? , 6 @ . 7 5+ 55 5* 5A 5? S()eme Name EM *ore ?? Fund / "eries ? / -rowth ,ata Indo/-lo&al Infrastructure Fund / -rowth ,ata *apital #uilder Fund / -rowth "tandard *hartered 4nterprise 4quity Fund / -rowth %#" *hola Infrastructure Fund / -rowth I*I*I Prudential Fusion Fund / "eries III / Institutional / -rowth %"P Merrill (ynch Micro *ap Fund / $egular / -rowth I*I*I Prudential Fusion Fund / "eries III / $etail / -rowth %#" *hola "mall *ap Fund / -rowth Principal Personal ,a!saver #enchmark "plit *apital Fund / Plan + / Preferred 'nits I*I*I Prudential FMP / "eries DD / Plan + / -rowth ,ata "IP Fund / "eries I / -rowth "ahara $ 4 + ( Fund / -rowth Date Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >= , >@@B Mar >A , >@@B Mar >A , >@@B Mar >A , >@@B Mar >= , >@@B NAV 2R4=3 B F= B >A ?> FF ?F @G C @? ?@ > C CD ?@ ?C A DA ?>F AA ?F? =? C BC ?@ >= G AF La4t 5 8eeI = ?> = @= = @D = F A= F A> F =A F =? D G= D FF D ?F > C? > DB ? BA Sin(e In(epti#n /CF AF /F@ F> ?= D= >@ C> /?G ?G >D AC /@ B= >> DC /B? GB >C CG ?D G? /G BB > DC /FC =>

5,

,ata "IP Fund / "eries II / -rowth

Mar >A , >@@B

C CD

? =B

/@ CF

+ mutual fund is a professionally/managed firm of collective investments that pools money from many investors and invests it in stocks, &onds, short/term money market instruments, andIor other securities in other words we can say that + Mutual Fund is a trust registered with the "ecurities and 4!change #oard of India 6"4#I7, which pools up the money from individual I corporate investors and invests the same on &ehalf of the investors Iunit holders, in equity shares, -overnment securities, #onds, *all money markets etc , and distri&utes the profits ,he value of each unit of the mutual fund, known as the net asset value 61+57, is mostly calculated daily &ased on the total value of the fund divided &y the num&er of shares currently issued and outstanding ,he value of all the securities in the portfolio in calculated daily From this, all e!penses are deducted and the resultant value divided &y the num&er of units in the fund is the fund.s 1+5

NAV J

T#ta! Ba!ue #" t)e "undKKKKKK= N#= #" 4)a e4 (u ent!/ i44ued and #ut4tandin$

AdBanta$e4 #" a MF L Mutual Funds provide the &enefit of cheap access to e!pensive stocks L L L Mutual funds diversify the risk of the investor &y investing in a &asket of assets + team of professional fund managers manages them with in/depth research inputs from investment analysts #eing institutions with good &argaining power in markets, mutual funds have access to crucial corporate information, which individual investors cannot access

Hi4t# / #" t)e Indian mutua! "und indu4t /0

,he mutual fund industry in India started in ?CAD with the formation of 'nit ,rust of India, at the initiative of the -overnment of India and $eserve #ank ,he history of mutual funds in India can &e &roadly divided into four distinct phases Fi 4t P)a4e > 576?-.@ 'nit ,rust of India 6',I7 was esta&lished on ?CAD &y an +ct of Parliament &y the $eserve #ank of India and functioned under the $egulatory and administrative control of the $eserve #ank of India In ?CGB ',I was de/linked from the $#I and the Industrial %evelopment #ank of India 6I%#I7 took over the regulatory and administrative control in place of $#I ,he first scheme launched &y ',I was 'nit "cheme ?CAF +t the end of ?CBB ',I had $s A,G@@ crores of assets under management

Se(#nd P)a4e > 57.@-577A 2Ent / #" Pub!i( Se(t# Fund43

?CBG marked the entry of non/ ',I, pu&lic sector mutual funds set up &y pu&lic sector &anks and (ife Insurance *orporation of India 6(I*7 and -eneral Insurance *orporation of India 6-I*7 "#I Mutual Fund was the first non/ ',I Mutual Fund esta&lished in Eune ?CBG followed &y *an&ank Mutual Fund 6%ec BG7, Punja& 1ational #ank Mutual Fund 6+ug BC7, Indian #ank Mutual Fund 61ov BC7, #ank of India 6Eun C@7, #ank of #aroda Mutual Fund 68ct C>7 (I* esta&lished its mutual fund in Eune ?CBC while -I* had set up its mutual fund in %ecem&er ?CC@ +t the end of ?CCD, the mutual fund industry had assets under management of $s FG,@@F crores T)i d P)a4e > 577A-*++A 2Ent / #" P iBate Se(t# Fund43

?CCD was the year in which the first Mutual Fund $egulations came into &eing, under which all mutual funds, e!cept ',I were to &e registered and governed ,he erstwhile <othari Pioneer 6now merged with Franklin ,empleton7 was the first private sector mutual fund registered in Euly ?CCD ,he ?CCD "4#I 6Mutual Fund7 $egulations were su&stituted &y a more comprehensive and revised Mutual Fund $egulations in ?CCA ,he industry now functions under the "4#I 6Mutual Fund7 $egulations ?CCA +s at the end of Eanuary >@@D, there were DD mutual funds with total assets of $s ?,>?,B@= crores

F#u t) P)a4e > 4in(e Feb ua / *++A In Fe&ruary >@@D, following the repeal of the 'nit ,rust of India +ct ?CAD ',I was &ifurcated into two separate entities 8ne is the "pecified 'ndertaking of the 'nit ,rust of India with assets under management of $s >C,BD= crores as at the end of Eanuary >@@D, representing &roadly, the assets of '" AF scheme, assured return and certain other schemes ,he second is the ',I Mutual Fund (td, sponsored &y "#I, P1#, #8# and (I* It is registered with "4#I and functions under the Mutual Fund $egulations consolidation and growth +s at the end of "eptem&er, >@@F, there were >C funds, which manage assets of $s ?=D?@B crores under F>? schemes

Cate$# ie4 #" mutua! "und40

Mutual funds can &e classified as follow;

Ba4ed #n t)ei 4t u(tu e0

8pen/ended funds; Investors can &uy and sell the units from the fund, at any point of time *lose/ended funds; ,hese funds raise money from investors only once ,herefore, after the offer period, fresh investments can not &e made into the fund If the fund is listed on a stocks e!change the units can &e traded like stocks 64 g , Morgan "tanley -rowth Fund7 $ecently, most of the 1ew Fund 8ffers of close/ended funds provided liquidity window on a periodic &asis such as monthly or weekly $edemption of units can &e made during specified intervals ,herefore, such funds have relatively low liquidity

Ba4ed #n t)ei inBe4tment #bCe(tiBe0 4quity funds; ,hese funds invest in equities and equity related instruments With fluctuating share prices, such funds show volatile performance, even losses 3owever, short term fluctuations in the market, generally smoothens out in the long term, there&y offering higher returns at relatively lower volatility +t the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term 3ence, investment in equity funds should &e considered for a period of at least D/= years It can &e further classified as;

i3 Inde! funds/ In this case a key stock market inde!, like #"4 "ense! or 1ifty is tracked ,heir portfolio mirrors the &enchmark inde! &oth in terms of composition and individual stock weightages

ii3 4quity diversified funds/ ?@@K of the capital is invested in equities spreading across different sectors and stocks iii3 %ividend yield funds/ it is similar to the equity diversified funds e!cept that they invest in companies offering high dividend yields iB3 ,hematic funds/ Invest ?@@K of the assets in sectors which are related through some theme e g /+n infrastructure fund invests in power, construction, cements sectors etc B3 "ector funds/ Invest ?@@K of the capital in a specific sector e g / + &anking sector fund will invest in &anking stocks Bi3 4(""/ 4quity (inked "aving "cheme provides ta! &enefit to the investors Ba!an(ed "und0 ,heir investment portfolio includes &oth de&t and equity +s a result, on the risk/return
ladder, they fall &etween equity and de&t funds #alanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments Following are &alanced funds classes;

i7 %e&t/oriented funds /Investment &elow A=K in equities ii7 4quity/oriented funds -Invest at least A=K in equities, remaining in de&t Debt "und0 ,hey invest only in de&t instruments, and are a good option for investors averse to idea of taking risk associated with equities ,herefore, they invest e!clusively in fi!ed/income instruments like &onds, de&entures, -overnment of India securitiesJ and money market instruments such as certificates of deposit 6*%7, commercial paper 6*P7 and call money Put your money into any of these de&t funds depending on your investment hori0on and needs i3 (iquid funds/ ,hese funds invest ?@@K in money market instruments, a large portion &eing invested in call money market ii3-ilt funds ",/ ,hey invest ?@@K of their portfolio in government securities of and ,/&ills iii3Floating rate funds / Invest in short/term de&t papers Floaters invest in de&t instruments which have varia&le coupon rate iB3+r&itrage fund/ ,hey generate income through ar&itrage opportunities due to mis/pricing &etween cash market and derivatives market Funds are allocated to equities, derivatives and money markets 3igher proportion 6around G=K7 is put in money markets, in the a&sence of ar&itrage opportunities

B3-ilt funds (,/ ,hey invest ?@@K of their portfolio in long/term government securities Bi3 Income funds (,/ ,ypically, such funds invest a major portion of the portfolio in long/term de&t papers Bii3 MIPs/ Monthly Income Plans have an e!posure of G@K/C@K to de&t and an e!posure of ?@K/ D@K to equities Biii3FMPs/ fi!ed monthly plans invest in de&t papers whose maturity is in line with that of the fund

InBe4tment 4t ate$ie40
5= S/4temati( InBe4tment P!an0 under this a fi!ed sum is invested each month on a fi!ed date of a month Payment is made through post dated cheques or direct de&it facilities ,he investor gets fewer units when the 1+5 is high and more units when the 1+5 is low ,his is called as the &enefit of $upee *ost +veraging 6$*+7 *= S/4temati( T an4"e P!an0 under this an investor invest in de&t oriented fund and give

instructions to transfer a fi!ed sum, at a fi!ed interval, to an equity scheme of the same mutual fund A= S/4temati( 8it)d aGa! P!an0 if someone wishes to withdraw from a mutual fund then he can withdraw a fi!ed amount each month

Risk v/s. return:

8# Iin$ #" a Mutua! "und0

,he entire mutual fund industry operates in a very organi0ed way ,he investors, known as unit holders,handover their savings to the +M*s under various schemes ,he o&jective of the investment should match with the o&jective of the fund to &est suit the investors. needs ,he +M*s further invest the funds into various securities according to the investment o&jective ,he return generated from the investments is passed on to the investors or reinvested as mentioned in the offer document

8# Iin$ O" Mutua! Fund

Mutua! Fund4
#efore we understand what is mutual fund, it.s very important to know the area in which mutual funds works, the &asic understanding of stocks and &onds

St#(I4 ; "tocks represent shares of ownership in a pu&lic company 4!amples of pu&lic companies include $eliance, 81-* and Infosys "tocks are considered to &e the most common owned investment traded on the market B#nd4 ; #onds are &asically the money which you lend to the government or a company, and in return you can receive interest on your invested amount, which is &ack over predetermined amounts of time #onds are considered to &e the most common lending investment traded on the market ,here are many other types of investments other than stocks and &onds 6including annuities, real estate, and precious metals7, &ut the majority of mutual funds invest in stocks andIor &onds 8)at I4 Mutua! Fund + mutual fund is just the connecting &ridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment o&jective ,he mutual fund will have a fund manager who is responsi&le for investing the gathered money into specific securities 6stocks or &onds7 When you invest in a mutual fund, you are &uying units or portions of the mutual fund and thus on investing &ecomes a shareholder or unit holder of the fund Mutual funds are considered as one of the &est availa&le investments as compare to others they are very cost efficient and also easy to invest in, thus &y pooling money together in a mutual fund, investors can purchase stocks or &onds with much lower trading costs than if they tried to do it on their own #ut the &iggest advantage to mutual funds is diversification, &y minimi0ing risk ) ma!imi0ing returns

,hus a Mutual Fund is the most suita&le investment for the common man as it offers an opportunity to invest in a diversified, professionally managed &asket of securities at a relatively low cost ,he flow chart &elow descri&es &roadly the working of a mutual fund

OBe BieG #" eEi4tin$ 4()eme4 eEi4ted in mutua! "und (ate$# /

Wide variety of Mutual Fund "chemes e!ists to cater to the needs such as financial position, risk tolerance and return e!pectations etc ,he ta&le &elow gives an overview into the e!isting types of schemes in the Industry

T/pe #" Mutua! Fund S()eme4

B& STRUCTURE Open Ended S()eme4
+n open/end fund is one that is availa&le for su&scription all through the year ,hese do not have a fi!ed maturity Investors can conveniently &uy and sell units at 1et +sset 5alue 6T1+5T7 related prices ,he key feature of open/end schemes is liquidity

C!#4e Ended S()eme4

+ closed/end fund has a stipulated maturity period which generally ranging from D to ?= years ,he fund is open for su&scription only during a specified period Investors can invest in the scheme at the time of the initial pu&lic issue and thereafter they can &uy or sell the units of the scheme on the stock e!changes where they are listed In order to provide an e!it route to the investors, some close/ended funds give an option of selling &ack the units to the Mutual Fund through periodic repurchase at 1+5 related prices "4#I $egulations stipulate that at least one of the two e!it routes is provided to the investor

Inte Ba! S()eme4

Interval "chemes are that scheme, which com&ines the features of open/ended and close/ ended schemes ,he units may &e traded on the stock e!change or may &e open for sale or redemption during pre/determined intervals at 1+5 related prices

B& NATURE
'nder this the mutual fund is categori0ed on the &asis of Investment 8&jective #y nature the mutual fund is categori0ed as follow;

5= EDuit/ "und0

,hese funds invest a ma!imum part of their corpus into equities holdings ,he structure of the fund may vary different for different schemes and the fund manager.s outlook on different stocks ,he 4quity Funds are su&/classified depending upon their investment o&jective, as follows;

%iversified 4quity Funds Mid/*ap Funds "ector "pecific Funds ,a! "avings Funds 64(""7

4quity investments are meant for a longer time hori0on, thus 4quity funds rank high on the risk/ return matri!

*= Debt "und40
,he o&jective of these Funds is to invest in de&t papers -overnment authorities, private companies, &anks and financial institutions are some of the major issuers of de&t papers #y investing in de&t instruments, these funds ensure low risk and provide sta&le income to the investors %e&t funds are further classified as;

%i!t Fund4; Invest their corpus in securities issued &y -overnment, popularly known as -overnment of India de&t papers ,hese Funds carry 0ero %efault risk &ut are associated with Interest $ate risk ,hese schemes are safer as they invest in papers &acked &y -overnment

In(#me Fund4; Invest a major portion into various de&t instruments such as &onds, corporate de&entures and -overnment securities

MIP4; Invests ma!imum of their total corpus in de&t instruments while they take minimum e!posure in equities It gets &enefit of &oth equity and de&t market ,hese scheme ranks slightly high on the risk/return matri! when compared with other de&t schemes

S)# t Te m P!an4 2STP43; Meant for investment hori0on for three to si! months ,hese funds primarily invest in short term papers like *ertificate of %eposits 6*%s7 and *ommercial Papers 6*Ps7 "ome portion of the corpus is also invested in corporate de&entures

LiDuid Fund4; +lso known as Money Market "chemes, ,hese funds provides easy liquidity and preservation of capital ,hese schemes invest in short/term instruments like ,reasury #ills, inter/&ank call money market, *Ps and *%s ,hese funds are meant for short/term cash management of corporate houses and are meant for an investment hori0on of ?day to D months ,hese schemes rank low on risk/return matri! and are considered to &e the safest amongst all categories of mutual funds

A= Ba!an(ed "und40 +s the name suggest they, are a mi! of &oth equity and de&t funds ,hey
invest in &oth equities and fi!ed income securities, which are in line with pre/defined investment o&jective of the scheme ,hese schemes aim to provide investors with the &est of &oth the worlds 4quity part provides growth and the de&t part provides sta&ility in returns Further the mutual funds can be broadly classified on the basis of investment parameter viz, 4ach category of funds is &acked &y an investment philosophy, which is pre/defined in the o&jectives of the fund ,he investor can align his own investment needs with the funds o&jective and invest accordingly

B& INVESTMENT OBJECTIVE

% #Gt) S()eme40 -rowth "chemes are also known as equity schemes ,he aim of these schemes is to provide capital appreciation over medium to long term ,hese schemes normally invest a major part of their fund in equities and are willing to &ear short/term decline in value for possi&le future appreciation

In(#me S()eme40 Income "chemes are also known as de&t schemes ,he aim of these schemes is to provide regular and steady income to investors ,hese schemes generally invest in fi!ed income securities such as &onds and corporate de&entures *apital appreciation in such schemes may &e limited

Ba!an(ed S()eme40 #alanced "chemes aim to provide &oth growth and income &y periodically distri&uting a part of the income and capital gains they earn ,hese schemes invest in &oth shares and fi!ed income securities, in the proportion indicated in their offer documents 6normally =@;=@7

M#ne/ Ma Iet S()eme4; Money Market "chemes aim to provide easy liquidity, preservation of capital and moderate income ,hese schemes generally invest in safer, short/ term instruments, such as treasury &ills, certificates of deposit, commercial paper and inter/ &ank call money

OTHER SCHEMES

TaE SaBin$ S()eme40 ,a!/saving schemes offer ta! re&ates to the investors under ta! laws prescri&ed from time to time 'nder "ec BB of the Income ,a! +ct, contri&utions made to any 4quity (inked "avings "cheme 64(""7 are eligi&le for re&ate

IndeE S()eme40 Inde! schemes attempt to replicate the performance of a particular inde! such as the #"4 "ense! or the 1"4 =@ ,he portfolio of these schemes will consist of only those stocks that constitute the inde! ,he percentage of each stock to the total holding will &e identical to the stocks inde! weightage +nd hence, the returns from such schemes would &e more or less equivalent to those of the Inde!

Se(t# Spe(i"i( S()eme40 ,hese are the fundsIschemes which invest in the securities of only those sectors or industries as specified in the offer documents e g Pharmaceuticals, "oftware, Fast Moving *onsumer -oods 6FM*-7, Petroleum stocks, etc ,he returns in these funds are dependent on the performance of the respective sectorsIindustries While these funds may give higher returns, they are more risky compared to diversified funds Investors need to keep a watch on the performance of those sectorsIindustries and must e!it at an appropriate time

T/pe4 #" etu n40

,here are three ways, where the total returns provided &y mutual funds can &e enjoyed &y investors;

Income is earned from dividends on stocks and interest on &onds + fund pays out nearly all income it receives over the year to fund owners in the form of a distri&ution If the fund sells securities that have increased in price, the fund has a capital gain Most funds also pass on these gains to investors in a distri&ution If fund holdings increase in price &ut are not sold &y the fund manager, the fundHs shares increase in price 9ou can then sell your mutual fund shares for a profit Funds will also usually give you a choice either to receive a check for distri&utions or to reinvest the earnings and get more shares

P #4 ; (#n4 #" inBe4tin$ in mutua! "und40

For investments in mutual fund, one must keep in mind a&out the Pros and cons of investments in mutual fund

AdBanta$e4 #" InBe4tin$ Mutua! Fund40

5= P #"e44i#na! Mana$ement - ,he &asic advantage of funds is that, they are professional managed, &y well qualified professional Investors purchase funds &ecause they do not have the time or the e!pertise to manage their own portfolio + mutual fund is considered to &e relatively less e!pensive way to make and monitor their investments *= DiBe 4i"i(ati#n - Purchasing units in a mutual fund instead of &uying individual stocks or &onds, the investors risk is spread out and minimi0ed up to certain e!tent ,he idea &ehind diversification is to invest in a large num&er of assets so that a loss in any particular investment is minimi0ed &y gains in others A= E(#n#mie4 #" S(a!e - Mutual fund &uy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to &ring down the average cost of the unit for their investors ?= LiDuidit/ - Eust like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want ,= Simp!i(it/ - Investments in mutual fund is considered to &e easy, compare to other availa&le instruments in the market, and the minimum investment is small Most +M* also have automatic purchase plans where&y as little as $s >@@@, where "IP start with just $s =@ per month &asis

Di4adBanta$e4 #" InBe4tin$ Mutua! Fund40

5= P #"e44i#na! Mana$ement/ "ome funds doesn.t perform in neither the market, as their management is not dynamic enough to e!plore the availa&le opportunity in the market, thus many investors de&ate over whether or not the so/called professionals are any &etter than mutual fund or investor himself, for picking up stocks *= C#4t4 L ,he &iggest source of +M* income, is generally from the entry ) e!it load which they charge from an investors, at the time of purchase ,he mutual fund industries are thus charging e!tra cost under layers of jargon A= Di!uti#n / #ecause funds have small holdings across different companies, high returns from a few investments often donHt make much difference on the overall return %ilution is also the result of a successful fund getting too &ig When money pours into funds that have had strong success, the manager often has trou&le finding a good investment for all the new money ?= TaEe4 / when making decisions a&out your money, fund managers donHt consider your personal ta! situation For e!ample, when a fund manager sells a security, a capital/gain ta! is triggered, which affects how profita&le the individual is from the sale It might have &een more advantageous for the individual to defer the capital gains lia&ility

%uide!ine4 #" t)e SEBI "# Mutua! Fund C#mpanie4 0

,o protect the interest of the investors, "4#I formulates policies and regulates the mutual funds It notified regulations in ?CCD 6fully revised in ?CCA7 and issues guidelines from time to time "4#I approved +sset Management *ompany 6+M*7 manages the funds &y making investments in various types of securities *ustodian, registered with "4#I, holds the securities of various schemes of the fund in its custody +ccording to "4#I $egulations, two thirds of the directors of ,rustee *ompany or &oard of trustees must &e independent ,he +ssociation of Mutual Funds in India 6+MFI7 reassures the investors in units of mutual funds that the mutual funds function within the strict regulatory framework Its o&jective is to increase pu&lic awareness of the mutual fund industry +MFI also is engaged in upgrading professional standards and in promoting &est industry practices in diverse areas such as valuation, disclosure, transparency etc

D#(ument4 eDui ed 2PAN mandat# /30 P ##" #" identit/ ; 5= Photo P+1 card *= In case of non/photo P+1 card in addition to copy of P+1 card any one of the following; driving licenseIpassport copyI voter idI &ank photo pass &ook Proof of address 6any of the following 7 ;latest telephone &ill, latest electricity &ill, Passport, latest &ank pass&ookI&ank account statement, latest %emat account statement, voter id, driving license, ration card, rent agreement

O""e d#(ument0 +n offer document is issued when the +M*s make 1ew Fund 8ffer61F87 Its advisa&le to every investor to ask for the offer document and read it &efore investing +n

:UESTIONNAIRE
A 4tud/ #" p e"e en(e4 #" t)e inBe4t# 4 "# inBe4tment in mutua! "und4=
5= Pe 4#na! Detai!40 6a7 1ame;/ 6&7 +dd; / 6c7 +ge;/ 6d7 Uualification;/ -raduationIP'nder -raduate 8thers Phone;/

6e7 8ccupation Pl tick 6V7 -ovt "er Pvt "er #usiness +griculture 8thers

6g7 What is your monthly family income appro!imatelyS Pl tick 6V7 'p to $s ?@,@@@ $s ?@,@@? to ?=@@@ $s ?=,@@? to >@,@@@ $s >@,@@? to D@,@@@ $s D@,@@? and a&ove

*= What kind of investments you have made so farS Pl tick 6V7 +ll applica&le a "aving account e Post 8ffice/1"*, etc & Fi!ed deposits f "haresI%e&entures c Insurance g -oldI "ilver d Mutual Fund h $eal 4state

A= While investing your money, which factor will you preferS 6a7 (iquidity 6&7 (ow $isk 6c7 3igh $eturn 6d7 ,rust

?= +re you aware a&out Mutual Funds and their operationsS Pl tick 6V7

9es

1o

,= If yes, how did you know a&out Mutual FundS a +dvertisement & Peer -roup c #anks d Financial +dvisors 9es 1o

6= 3ave you ever invested in Mutual FundS Pl tick 6V7 @= If not invested in Mutual Fund then whyS 6a7 1ot aware of MF 6&7 3igher risk 6c7 1ot any specific reason

. If yesL in which Mutual Fund you have investedS Pl tick 6V7 +ll applica&le a "#IMF & ',I c 3%F* d $eliance e <otak f 8ther specify

7= If invested in "#IMF, you do so &ecause 6Pl tick 6V7, all applica&le7 a "#IMF is associated with "tate #ank of India & ,hey have a record of giving good returns year after year c +gent. +dvice 5+= If 18, invested in "#IMF, you do so &ecause 6Pl tick 6V7 all applica&le7 a 9ou are not aware of "#IMF & "#IMF gives less return compared to the others c +gent. +dvice

55 When you plan to invest your money in asset management co which +M* will you preferS +ssets Management *o a "#IMF & ',I c $eliance d 3%F* e <otak f I*I*I

5* Which *hannel will you prefer while investing in Mutual Fund < 6a7 Financial +dvisor 6&7 #ank 6c7 +M*

5A= When you invest in Mutual Funds which mode of investment will you preferS Pl tick 6V7 a 8ne ,ime Investment & "ystematic Investment Plan 6"IP7

5?= When you want to invest which type of funds would you chooseS a 3aving only de&t portfolio & 3aving de&t ) equity portfolio c 8nly equity portfolio

5,= 3ow would you like to receive the returns every yearS Pl tick 6V7 a %ividend payout & %ividend re/investment c -rowth in 1+5

56= Instead of general Mutual Funds, would you like to invest in sectorial fundsS Please tick 6V7 9es 1o