TABLE OF CONTENTS

INTRODUCTION
OBJECTIVE OF THE STUDY
SCOPE OF THE STUDY
RESEARCH METHODOLOGY
USE OF THE PROJECT
IMPORTANCE OF THE STUDY
HISTORY OF THE RELIANCE COMPANY
COMPANY PROFILE
RELIANCE MUTUAL FUND PROFILE
Reliance Mutual Fund - Accelerating Growth
About the project

HISTORY OF MUTUAL FUND

Advantages of mutual funds

Disadvantages of mutual funds

Risks involved in mutual funds

Various mutual fund scheme
Types of mutual fund
Different types of funds
Costs involved in mutual fund
The values of your fund

 Some of the existing asset management company

Development of mutual fund in India
Graphical representation
Mutual funds organizations
Flow chart
Frequently used terms in mutual funds
Structure of Indian mutual fund
Working of mutual fund

RESEARCH ANALYSIS AND INTERPRETATION

FINDINGS
SWOT ANALYSIS
Strengths
weakness

RECOMMENDATIONS
CONCLUSION
ANNEXURE
BIBLIOGRAPHY

Introduction

There are a lot of investment avenues available today in the financial market for an investor with
an investable surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where
there is low risk but low return. He may invest in Mutual of companies where the risk is high
and the returns are also proportionately high. The recent trends in the Mutual Market have shown
that an average retail investor always lost with periodic bearish tends. People began opting for
portfolio managers with expertise in Mutual markets who would invest on their behalf. Thus we
3

had wealth management services provided by many institutions. However they proved too costly
for a small investor. These investors have found a good shelter with the mutual funds.
Like most developed and developing countries the mutual fund cult has been catching on in
India. The reasons for this interesting occurrence are:

# Mutual funds make it easy and less costly for investors to satisfy their need for capital growth,
income and/or income preservation.

# Mutual fund brings the benefits of diversification and money management to the individual
investor, providing a Opportunity for financial success that was once available only to a select
few.

Objective of the study

To study the mutual fund industry in detail.

To study the investment procedure in detail.
To find out the market risk of sip plan.
To aware the client about mutual fund investment.
To suggest better investment option according to market behavior to the client.
Expansion of mutual fund investment.
To remove the past image of mutual fund from the mind of investors.
To show the beneficiary aspect of mutual fund.
To give the updated information to the investors about the high return and less risk fund.

Scope of the study

Scope of Mutual Funds has grown enormously over the years. In the first age of mutual funds,
when the investment management companies started to offer mutual funds, choices were few.
Even though people invested their money in mutual funds as these funds offered them diversified
investment option for the first time. By investing in these funds they were able to diversify their
investment in common Mutuals, preferred Mutuals, bonds and other financial securities. At the
same time they also enjoyed the advantage of liquidity. With Mutual Funds, they got the scope of
easy access to their invested funds on requirement.

But, in todays world, Scope of Mutual Funds has become so wide, that people sometimes take
long time to decide the mutual fund type, they are going to invest in. Several Investment
Management Companies have emerged over the years, who offer various types of Mutual Funds,
Each type carrying unique characteristics and different beneficial features.

Research Methodology

1. Research Design:
A research design is a pattern or an outline of a research projects working. It is a statement of
only the essential element of a study, those that provide the basic guidelines for the details of the
project. It comprises a series of prior decision that taken together provide master plans for
executing a research projects.
A research design serves as a bridge between what has been established i.e., the research
objectives and what is to be done, in conduct of the study to relish those objectives. If there were
no research design, the research would have only foggy notions as about what is to be done.

I have used of Exploratory Type. The research is of both qualitative as well as

quantitative type.

2. Unit of Analysis:
Investors

Characteristics of interest:

Clients knowledge about Mutual Fund.

Clients knowledge about Reliance.
Clients interest in getting knowledge of Mutual Fund.
Clients willingness to deal in Mutual Fund with Reliance.
Clients preference in selecting tax saving instrument of investment.
Clients preference in selecting dealer.

3. Sources of Data:
Primary Source:

The primary data is collected using sampling method and by survey using questionnaire.
Secondary Source:
Secondary data includes information regarding present market scenario, Information regarding
Mutual Funds and competitors are collected by internet, Magazines and Newspaper and books.

4. Sample Planning:
Sample Size: 50 units.
Sample Extent: Kanpur city.

5. Sample design:
A sample design is a definite plan for obtaining a sample from a given population. It refers to the
technique or method the researcher would adopt in selecting items for the sample.
I have used convenience sampling method

6. Data collection method:

I have used survey method to collect the data.
Questionnaire plan: I have used structured for gathering the required data through
contacting respondent personally

7. Type of information:
I have collected facts, awareness, attitude, future action plan and reason using
questionnaire.

8. Type of questions:
Close ended questions for dichotomous.
Multiple choice type
10

9. Data Analysis and Interpretation:

Data analysis is based on the data collected by way of questionnaires. The data is
tabulated and frequency distribution chart is prepared.

Use of the Project

11

Through this C can take the way that in which direction they should go for promoting

mutual fund.
Through this project (Awareness of Client towards Mutual Fund) we can know about the

securities market.
We can know that how many investors are aware about the mutual fund.
We can know that in which type of securities, people want to invest and why.
We can know that if investors dont want to invest in mutual fund so what the reason

behind that is.

We can aware the investors about mutual funds beneficiary schemes.
We can know about the market potential.
By this project we can know that, which fund is growing up and which fund is going

down.
By this we can know about the co.s that provide the mutual fund investment facilities.
We can know about the Reliance Mutual fund co. and its working.
We can know about the mutual fund AMC (Asset Management Company)

12

Importance of the
study

Mutual funds offer inexperienced and experienced investors---who may not have a lot of
money to invest---the ability to invest in more than just one investment tool without

having to monitor or manage that investment personally and at a reduced risk.

Every person who have no more knowledge about investment and he want to invest

anywhere so he can invest easily in mutual fund.

One of the mode to invest mutual fund thats SIP (Systematic Investment Plan) is less

risky to invest and every investor want to invest in less price.

Mutual fund is totally depend upon the NAV value (Net Assets Value)
By purchasing a combination of Mutuals, bonds and other securities--rather than just one
single Mutual purchase--their risk is spread out over many fields and companies, instead

of just one.
Purchasing into a mutual fund automatically provides the investor with an experienced
investment manager to oversee their investment. This is because the mutual fund is
13

composed of different investment securities and requires a competent professional to

oversee it from the onset.

It is one of the easiest ways of investing your saving money

History of Reliance
Company

The reliance group founded by Dhirubhai. H. Ambani (1932-2002) is Indias largest private
sector enterprise. He is credited to have brought about the equity cult in India in the late
seventies and is regarded as an icon for enterprise in India. He epitomized the spirit 'dare to

14

dream and learn to excel. The Reliance Group is a living testimony to his indomitable will,
single-minded dedication and an unrelenting commitment to his goals.

Unit Trust of India is the first Mutual Fund set up under a separate act, UTI Act in 1963, and
started its operations in 1964 with the issue of units under the scheme US-641. In 1978 UTI was
delinked from the RBI and Industrial Development Bank of India (IDBI) took over the
Regulatory and administrative control in place of RBI.

In the year 1987 Public Sector banks like State Bank of India, Punjab National Bank, Indian
Bank, Bank of India, and Bank of Baroda have set up mutual funds.
Apart from these above mentioned banks Life Insurance Corporation [LIC] and General
Insurance Corporation [GIC] too have set up mutual fund. LIC established its mutual fund in
June 1989.while GIC had set up its mutual fund in December 1990.The mutual fund industry had
assets under management of Rs. 47,004 crores.
With the entry of Private Sector Funds a new era has started in Mutual Fund Industry .e.g:Principal Mutual Fund.

15

Company Profile

16

Reliance Group Holdings has grown from a small office data-processing equipment firm in 1961
into a major insurance and financial-services group in one generation under one chief.
Reliance's insurance operations constitute the nation's 27th-largest property and casualty
operation. The parent company also includes a development subsidiary in commercial real estate.
Reliance's international consulting group contains several energy, environment, and natural
resources consulting. A financial arm invests in other businesses, primarily television stations.
Reliance Insurance started as the Fire Association of Philadelphia in 1817, organized by 5 hose
and 11 engine fire companies. It became the nation's first association of volunteer fire
departments. Business got a boost as a result of the Great Chicago Fire of 1871.
The association soon developed a field of agents to write policies across the country. For the first
two years, shareholders received dividends twice a year of $5 a share, which increased gradually
to $10 in 1876.

17

In 1972, the Reliance insurance group divided its pool so that Reliance Insurance Company and
its subsidiaries handled most standard lines, while United Pacific Insurance Company handled
the nonstandard and other operations.
In 1977, the company moved into real estate, forming Continental Cities Corporation, which
became Reliance Development Group, Inc. This division handled all real estate operations of the
parent company and other subsidiaries. Reliance Capital Group, L.P. constituted the investment
branch of the Reliance conglomerate.
In December 1989, Reliance Capital sold its investment, Days Corporation, parent company of
Days Inn of America, the world's third-largest hotel chain; it had been purchased in 1984.
Reliance Industries Limited. The Group's principal activity is to produce and distribute plastic
and intermediates, polyester filament yarn, fiber intermediates, polymer intermediates, crackers,
chemicals, textiles, oil and gas. The refining segment includes production and marketing
operations of the Petroleum refinery. The petrochemicals segment includes production and
marketing operations of petrochemical products namely, High and Low density Polyethylene.
"Growth has no limit at Reliance. I keep revising my vision.
Only when you can dream it, you can do it."

Reliance mutual fund

profile
18

Reliance Mutual Fund - Accelerating Growth

Reliance Mutual Fund, a part of the Reliance Anil Dhirubhai Ambani Group is the No. 1 Mutual
Fund in India. Reliance Mutual Fund offers investors a well rounded portfolio of products to
meet varying investor requirements. Reliance Mutual Fund has a presence in over 100 cities
across the country, an investor base of over 3.9 million and manages assets over Rs. 67,598
Crores as on August 31, 2012. 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 Ltd.,a
wholly owned subsidiary of Reliance Capital Ltd. Reliance Capital Ltd. is one of Indias 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 and mutual funds, life and general insurance, private
equity and proprietary investments, stock broking and other financial services.
No.1 basis Assets under Management (AUM) as on August 31, 2012.

19

20

ABOUT PROJECT
MUTUAL FUND

A mutual fund is nothing more than a collection of Mutuals and/or bonds. You can think of a
mutual fund as a company that brings together a group of people and invests their money in
Mutuals, bonds, and other securities. Each investor owns shares, which represent a portion of the
holdings of the fund.

21

You can make money from a mutual fund in three ways:

1) Income is earned from dividends on Mutuals and interest on bonds. A fund pays out. Nearly
all income it receives over the year to fund owners in the form of a distribution.
2) If the fund sells securities that have increased in price, the fund have a capital gain. Most
funds also pass on these gains to investors in a distribution.
3) If fund holdings increase in price but are not sold by the fund manager, the fund's .Shares
increase in price. You can then sell your mutual fund shares for a profit.
Funds will also usually give you a choice either to receive a check for distributions or to
Reinvest the earnings and get more shares.
The competition among funds has led to the launch of newer products, tailor-made to suit the
requirements of investors. Mutual funds now offer products for the entire range of needs of
investors. The encouraging response to index funds and sector funds shows the growing maturity
among investors. Open-end funds, which provide liquidity to investors at daily NAV related
prices, are growing in popularity. The funds have be en adopting technology to provide good
service to investors and with the proposed introduction of electronic funds transfer and the
growing trend towards E-Commerce; the efficiency of service will increase even further.
In the coming years mutual funds as saving intermediaries will play a greater role in
bringing the gap between investors and issuers, especially in the area of equity funds ?At present
these funds represents 13% of BSE market capitalization. This is expected to go up with
increasing

flows

into

financial

savings,

especially

the

mutual

fund

with

the

growth and stability in the capital market flows into equity funds are expected to go up.
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
22

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.
Mutual funds, also referred to as investment companies, offer an alternative investment
choice for individuals with a long-term horizon. The way they operate is that individual investor
money are pooled and invested in many different companies. Assets are professionally
managed to meet various investment objectives. They issue and sell shares to share holders and
also redeem them (buy them back) upon request. Prices of shares are set daily at the close of
business, based on the value of all investments in the mutual funds portfolio. Their major
advantages are diversification and professional management, which are not readily available to
small investors outside the mutual fund arena. Money market mutual funds are short-term funds .
They invest in short-term cash and cash equivalent instruments, such as Treasury bills,
certificates of deposit, and short-term notes. Mutual funds may own Mutual and bonds of many
different companies.
A mutual fund is the ideal investment vehicle for todays complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real estate,
derivatives and other assets have become mature and information driven. Price changes in these
assets are driven by global events occurring in faraway places. A typical individual is unlikely to
have the knowledge, skills, inclination and time to keep track of events, understand their
implications and act speedily. An individual also finds it difficult to keep track of ownership of
his assets, investments, brokerage dues and bank transactions etc.
23

24

History of mutual fund

In 1924 three Boston securities executives pooled their money together to create the first mutual
fund. The idea of pooling money together for investing purposes started in Europe in the mid1800s. The first pooled fund in the U.S was created in 1893 for the faculty and staff of Harvard
University on March 21st, 1924 the first official mutual fund was born. It was called the
Massachusetts Investors Trust.
However in India UTI was the first to introduce mutual funds in the Indian markets and it
commenced its operations from July 1964, Government allowed public sector banks and
institutions to set up mutual funds.

25

In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives
of SEBI are to protect the interest of investors in securities and to promote the development of
and to regulate the securities market.
As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds
to protect the interest of the investors. SEBI notified regulations for the mutual funds in1993.
Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital
market. The regulations were fully revised in 1996 and have been amended thereafter from time
to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the
interests of investors.
All mutual funds whether promoted by public sector or private sector entities including those
promoted by foreign entities are governed by the same set of Regulations. There is no distinction
in regulatory requirements for these mutual funds and all are subject to monitoring and
inspections by SEBI. The risks associated with the schemes launched by the mutual funds
sponsored by these entities are of similar type. It may be mentioned here that Unit Trust of India
(UTI) is not registered with SEBI as a mutual fund (as on January15, 2002. The end of
millennium marks 36 years of existence of mutual funds in our country. The ride through these
36 years is not been smooth. Investor opinion is still divided. While some are for mutual funds
others are against it.

MUTUAL FUND SCHEMES

Mutual funds offer a variety of schemes to investor so as to provide steady income or growth or
both. They differ according to the investment policies. The funds like individual investor have
different goals. Of the investor who will first ascertain his investment objectives, thinking that
the units of a fund have an investment goal paralleling his objectives
26

 FUND MUTUAL BASICS:

As you probably know, mutual funds have become extremely popular over the last 20years.
What was once just another obscure financial instrument is now a part of our daily lives.
In fact, too many people, investing means buying mutual funds. After all, it's common
knowledge that investing in mutual funds is (or at least should be) better than simply letting your
cash waste away in a savings account, but, for most people, that's where the understanding of
funds ends. It doesn't help those mutual fund sales people speak a strange language that,
sounding sort of like English, is interspersed with jargon like MER, NAVPS, load/no-load, etc.
Originally mutual funds were heralded as a way for the little guy to get a piece of the market.
Instead of spending all your free time buried in the financial pages of the investment Journal, all
you have to do is buy a mutual fund and you'd be set on your way to financial freedom. As you
might have guessed, it's not that easy. Mutual funds are an excellent idea in theory, but, in reality,
they haven't always delivered. Not all mutual funds are created equal, and investing in mutuals
isn't as easy as throwing your money at the first salesperson who solicits your business.

27

ADVANTAGES OF MUTUAL FUND

1-Professional Management - The primary advantage of funds (at least theoretically) is the
professional management of your money. Investors purchase funds because they do not have the
time or the expertise to manage their own portfolio. A mutual fund is a relatively inexpensive
way for a small investor to get a full-time manager to make and monitor investments.

2-Diversification - By owning shares in a mutual fund instead of owning individual Mutual

Or bonds, your risk is spread out. The idea behind diversification is to invest in a large number
of assets so that a loss in any particular investment is minimized by gains in others. In other
words, the more Mutuals and bonds you own, the less any one of them can hurt you (think about
Enron). Large mutual funds typically own hundreds of different Mutuals in many different
industries. It wouldn't be possible for an investor to build this kind of a portfolio with a small
amount of money.

3-Economies of Scale - Because a mutual fund buys and sells large amounts of securities at
a time, its transaction costs are lower than you as an individual would pay.

4-Liquidity - Just like an individual Mutual, a mutual fund allows you to request that your
shares be converted into cash.

5-Simplicity- Buying a mutual fund is easy.

DISADVANTAGES OF MUTUAL FUND

28

1-Professional Management- Did you notice how we qualified the advantage of

professional management with the word "theoretically"? Many investors debate over whether or
not the so-called professionals are any better than you or I at picking Mutuals. Management is by
no means infallible, and, even if the fund loses money, the manager still takes his/her cut. .

2-Costs- Mutual funds don't exist solely to make your life easier--all funds are in it for a Profit.
The mutual fund industry is masterful at burying costs under layers of jargon .Because funds
have small holdings in so many different companies, high returns from a few Investments often
don't make much difference on the overall return. Dilution is also the result of a successful fund
getting too big. When money pours into funds that have had strong Success, the manager often
has trouble finding a good investment for all the new money

3-Taxes- When making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is
triggered, which affects how profitable the individual is from the sale. It might have been more
advantageous for the individual to defer the capital gains liability

RISKS INVOLVED IN MUTUAL FUND

29

In short, how stable is the company or entity to which you lend your money when you invest?
How certain are you that it will be able to pay the interest you are promised, or repay your
principal when the investment matures?

Inflation risk
Changing interest rates affect both equities and bonds in many ways. Investors are
reminded that predicting which way rates will go is rarely successful. A diversified portfolio
can help in offsetting these changes.

Effect of loss of key professional and inability to adopt

An industries key asset is often the personnel who run the business i.e. intellectual properties of
the key employees of the respective companies. Given the ever-changing complexion of few
industries and the high obsolescence levels, availability of qualified, trained and motivated
personnel is very critical for the success of industries in few sectors. It is, therefore, necessary to
attract key personnel and also to retain them to meet the changing environment and challenges
all investments involve some form of risk, which should be evaluated them potential Rewards
when an investment is selected.

Managing risk
At times the prices or yields of all the securities in a particular market rise or fall due to broad
outside influences. When this happens, the Mutual prices of an out standing, highly profitable
company and a fledgling corporation may be affected.

30

This change in price is due to market risk.

Interest rate risk

Sometimes referred to as loss of purchasing power. Whenever inflation sprints forward faster
than the earnings on your investment, you run the risk that you will actually be able to buy less,
not more. Inflation risk also occurs when prices rise faster than your returns.

Credit risk
The sector offers. Failure or inability to attract/retain such qualified key personnel may impact
the prospects of the companies in the particular sector in which the fund invests.

Exchange risks
A number of companies generate revenues in foreign currencies and may have investments or
expenses also denominated in foreign currencies. Changes in exchange rates may, therefore,
have a positive or negative impact on companies which in turn would have an effect on the
investment of the fund.

Investment risks
The sectoral fund schemes, investments will be predominantly in equities of select companies in
the particular sectors. Accordingly, the NAV of the schemes are linked to the equity performance
of such companies and may be more volatile than a more diversified portfolio of equities.

Changes in government policy

Changes in Government policy especially in regard to the tax benefits may impact the business
prospects of the companies leading to an impact on the investments made by the fund.

31

VARIOUS MUTUAL FUND SCHEME

Mutual Fund Schemes:-

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk
tolerance and return expectations etc. The table below gives an overview into the existing types
of schemes in the Industry.

By Structure

Open - Ended Schemes

Close - Ended Schemes

Interval Schemes

By Investment Objective
Growth Schemes
Income Schemes
Balanced Schemes
Money Market Schemes

32

Types of Mutual Fund

33

Mutual Funds: Different Types of Funds

No matter what type of investor you are there is bound to be a mutual fund that fits your style.
According to the last count there are over 10,000 mutual funds in North America! That means
there are more mutual funds than Mutuals. It's important to understand that each mutual fund has
different risks and rewards. In general, the higher the potential return, the higher the risk of loss.
Although some funds are less risky than others, all funds have some level of risk--it's never
possible to diversify away all risk. This is a fact for all investments.

Each fund has a predetermined investment objective that tailors the fund's assets, regions
of investments, and investment strategies. At the fundamental level, there are three
varieties: of mutual funds
1) Equity funds (Mutual)
2)Fixed-income funds (bonds)
3) Money market funds

All mutual funds are variations of these three asset classes. For example, while equity Funds that
invest in fast-growing companies are known as growth funds, equity funds that Invest only in
companies of the same sector or region is known as specialty funds. Lets go over the many
different flavors of funds. We'll start with the safest and then Work through to the more risky.

34

 Money Market Funds

The money market consists of short-term debt instruments, mostly T-bills. This is a safe Lace to
park your money. You won't get great returns, but you won't have to worry about losing your
principal. A typical return is twice the amount you would earn in a regular checking/savings
account and a little less than the average certificate of deposit (CD).We've got a whole tutorial on
the money market if you'd like to learn more about it.

Bond/Income Funds
Income funds are named appropriately: their purpose is to provide current income on a steady
basis. When referring to mutual funds, the terms "fixed-income," "bond," and" income" are
synonymous. These terms denote funds that invest primarily in government and corporate debt.
While fund holdings may appreciate in value, the primary objective of these funds is to provide a
steady cash flow to investors. As such, the audience for these funds consists of conservative
investors and retirees.

Bond funds are likely to pay higher returns than certificates of deposit and money market
Investments, but bond funds aren't without risk. Because there are many different types of
Bonds, bond funds can vary dramatically depending on where they invest. For example, a fund
specializing in high-yield junk bonds is much more risky than a fund that invests in government
securities; also, nearly all bond funds are subject to interest rate risk, which means that if rates
go up the value of the fund goes down.
35

 Balanced Funds
The objective of these funds is to provide a "balanced" mixture of safety, income, and capital
appreciation. The strategy of balanced funds is to invest in a combination of fixed-income and
equities. A typical balanced fund might have a weighting of 60% equity and40% fixed-income.
The weighting might also be restricted to a specified maximum or minimum for each asset class.
A similar type of fund is known as an asset allocation fund. Objectives are similar to those of a
balanced fund, but these kinds of funds typically do not have to hold a specified percentage of
any asset class. The portfolio manager is therefore given freedom to switch the ratio of asset
classes as the economy moves through the business cycle.

Equity Funds
Funds that invest in Mutual represent the largest category of mutual funds. Generally, the
investment objective of this class of funds is long-term capital growth with some income. There
are, however, many different types of equity funds because there are many different types of
equities. A great way to understand the universe of equity funds is to use a style box, an example
of which is below.
The idea is to classify funds based on both the size of the companies invested in and the
investment style of the manager. The term "value" refers to a style of investing that looks for
high quality companies that are out of favor with the market. These companies are characterized
by low P/E ratios, price-to-book ratios, and high dividend yields, etc.

36

The opposite of value is growth, which refers to companies that have had (and are expected to
continue to have) strong growth in earnings, sales, and cash flow, etc. A compromise between
value and growth is "blend," which simply refers to companies that are neither value nor growth
Mutuals and so are classified as being somewhere in the middle.

For example, a mutual fund that invests in large-cap companies who are in strong
financial shape but have recently seen their share price fall would be placed in the upper
left quadrant of the style box (large and value). The opposite of this would be a fund that
invests in startup technology companies with excellent growth prospects. Such a mutual
would reside in the bottom right quadrant

Global/International Funds
An international fund (or foreign fund) invests only outside your home country.
Global funds invest anywhere around the world, including your home country.
It's tough to classify these funds as either riskier or safer. On the one hand they tend to be more
volatile and have unique country and/or political risks. But, on the flip side, they can, as part of a
well-balanced portfolio, actually reduce risk by increasing diversification. Although the world's
economies are becoming more inter-related, it is Likely that another economy somewhere is
outperforming the economy of your home Country.

37

 Index Funds
The last but certainly not the least important are index funds. This type of mutual fund replicates
the performance of a broad market index such as the sensex and nifty. An investor in an index
fund figures that most managers can't beat the market. An index fund merely replicates the
market return and benefits investors in the form of low fees.

COSTS INVOLVED IN MUTUAL FUND

Mutual Funds: Costs

Costs are the biggest problem with mutual funds. These costs eat into your return, and they are
the main reason why the majority of funds end up with sub-par performance. Whats even more
disturbing is the way the fund industry hides costs through a layer of financial complexity and
jargon. Some critics of the industry say that mutual fund Companies get away with the fees they
charge only because the average investor does not understand what he/she is paying for.

Fees can be broken down into two categories:

1. Ongoing yearly fees to keep you invested in the fund.
2. Transaction fees paid when you buy or sell shares in a fund (loads)

The Expense Ratio

The ongoing expenses of a mutual fund are represented by the expense ratio. This is sometimes
also referred to as the management expense ratio (MER). The expense ratio is composed of the
following:

38

The cost of hiring the fund manager(s) - Also known as the management fee,

This cost is between 0.5% and 1.0% of assets on average. While it sounds small, This fee
ensures that mutual fund managers remain in the countrys top echelon of Earners. Think about it
for a Second: 1% of 250 million (a small mutual fund) is 2.5 million--fund managers are
definitely not going hungry! Its true that paying Managers is a necessary fee, but dont think
that a high fee assures superior Performance.

Administrative costs

These include necessities such as postage, record keeping, customer service, cappuccino
machines, etc. Some funds are excellent at minimizing these costs while others (the ones with
the cappuccino machines in the office) are not. On the whole, expense ratios range from as low
as 0.2% (usually for index funds) to as high as 2.0%. The average equity mutual fund charges
around 1.3%-1.5%. Youll generally pay more for specialty or international funds, which require
more expertise from manager.

Buying and Selling

39

(You can buy some mutual funds no-load) by contacting the fund companies directly. Other
funds are sold through brokers, banks financial planners, or insurance agents. If you buy through
a third party there is a good chance theyll hit you with a sales charge (load). That being said,
more and more funds can be purchased through no-transaction fee programs that offer funds of
many companies. Sometimes referred to as a "fund supermarket," this service lets you
consolidate your holdings and record keeping, and it still allows you to buy funds without sales
charges from many different companies.

Popular examples are Schwabs OneSource, Vanguards Fund Access, and Fidelitys

Funds Network. Many large brokerages have similar offerings. Selling a fund is as easy as
purchasing one. All mutual funds will redeem (buy back) your shares on any business day. In
the United States companies must send you the payment within seven days.

THE VALUES OF YOUR FUND

Net asset value (NAV), which is a fund's assets minus liabilities, is the value of a mutual fund.
NAV per share is the value of one share in the mutual fund, and it is the number that is quoted in
newspapers. You can basically just think of NAV per share as the price of a mutual fund. It
fluctuates everyday as fund holdings and shares outstanding change.
When you buy shares, you pay the current NAV per share plus any sales front-end load. When
you sell your shares, the fund will pay you NAV less any back-end load .Moses gave to his
follow eternities 10 commandments that were to be followed till: The world of investments too
has several ground rules meant for investors who are novices in their own right and wish to enter

40

the myriad world of investments. These come in handy for there is every possibility of losing
what one has if due care is not taken.

1. Assess yourself: Self-assessment of ones needs; expectations and risk profile is of prime
importance failing which; one will make more mistakes in putting money in right places than
otherwise. One should identify the degree of risk bearing capacity one has and also clearly state
the expectations from the investments. Irrational expectations will only bring pain.

2. Try to understand where the money is going : It is important to identify the nature of
investment and to know if one is compatible with the investment. One can lose substantially if
one picks the wrong kind of mutual fund. In order to avoid any confusion it is better to go
through the literature such as offer document and fact sheets that mutual fund companies provide
on their funds.

3. One first has to decide what he wants the money for and it is this investment goal that
should be the guiding light for all investments done. It is thus important to know the risks
associated with the fund and align it with the quantum of risk one is willing to take. One should
take a look at the portfolio of the funds for the purpose. Excessive exposure to any specific
sector should be avoided, as it will only add to the risk of the entire portfolio .Mutual funds
invest with a certain ideology such as the "Value Principle" or "Growth Philosophy". Both have
their share of critics but both philosophies work for investors of different kinds. Identifying the
proposed investment philosophy of the fund will give an insight into the kind of risks that it shall
be taking in future.

4. A common investor is limited in the degree of risk that . It is thus of key importance
that there is thought given to the process of investment and to the time horizon of the intended
41

investment. One should abstain from speculating which in other words would mean getting out
of one fund and investing in another with the intention of making quick money. One would do
well to remember that nobody can perfectly time the market so staying invested is the best option
unless there are compelling reasons to exit.

5. This old age adage is of utmost importance. No matter what the risk profile of a person
is, it is always advisable to diversify the risks associated. So putting ones money in different
asset classes is generally the best option as it averages the risks in each category. Thus, even
investors of equity should be judicious and invest some portion of the investment in debt.
Diversification even in any particular asset class (such as equity, debt) is good. Not all fund
managers have the same acumen of fund management and with identification of the best man
being a tough task; it is good to place money in the hands of several fund managers. This might
reduce the maximum return possible, but will also reduce the risks.

6. Investing should be a habit and not an exercise undertaken at ones wishes, if one
has to really benefit from them. As we said earlier, since it is extremely difficult to know when to
enter or exit the market, it is important to beat the market by being systematic. The basic
philosophy of Rupee cost averaging would suggest that if one invests regularly through the ups
and downs .of the market, he would stand a better chance of generating more returns than the
market for the entire duration. The SIP s (Systematic Investment Plans) offered by all funds
helps in being systematic. All that one needs to do is to give post-dated cheques to the fund and
thereafter one will not be harried later. The Automatic investment Plans offered by some funds
goes a step further, as the amount can be directly/electronically transferred from the account of
the investment

42

7. Do your homework:
It is important for all investors to research the avenues available to them irrespective of the
investor category they belong to. This is important because an informed investor is in a better
decision to make right decisions. Having identified the risks associated with the investment is
important and so one should try to know all aspects associated with it. Asking the intermediaries
is one of the ways to take care of the problem.

8. Find the right funds

Finding funds that do not charge many fees is of importance, as the fee charged ultimately goes
from the pocket of the investor. This is even more important for debt funds as the returns from
these funds are not much. Funds that charge more will reduce the yield to the investor. Finding
the right funds is important and one should also use these funds for tax efficiency. Investors of
equity should keep in mind that all dividends are currently tax-free in India and so their tax
liabilities can be reduced if the dividend payout option is used. Investors of debt will be charged
a tax on dividend distribution and so can easily avoid the payout options.

9. Keep track of your investments

Finding the right fund is important but even more important is to keep track of the way they are
performing in the market. If the market is beginning to enter a bearish phase, then investors of
equity too will benefit by switching to debt funds as the losses can be minimized. One can
always switch back to equity if the equity market starts to show some buoyancy.

10. Know when to sell your mutual funds:

43

Knowing when to exit a fund too is of utmost importance. One should book profits immediately
when enough has been earned i.e. the initial expectation from the fund has been met with. Other
factors like non-performance, hike in fee charged and change in any basic attribute of the fund
etc. are some of the reasons for to exit. For more on it, read "When to say goodbye to your
mutual fund.

Investments in mutual funds too are not risk-free and so investments warrant some caution and
careful attention of the investor. Investing in mutual funds can be a dicey business for people
who do not remember to follow these rules diligently, as people are likely to commit mistakes by
being ignorant or adventurous enough to take risks more than what they can absorb. This is the
reason why people would do well to remember these rules before they set out to invest their
hard-earned money.

SOME OF THE EXISTING AMC (ASSET MANAGEMENT

COMPANY)
Alliance Mutual Fund
Birla Mutual Fund
BOB Mutual Fund
BOI Mutual Fund
DSP Merrill Lynch Mutual Fund
HDFC Mutual Fund
IDBI Principal Mutual Fund
Indian Bank Mutual Fund
ING Mutual Fund
Kotak Mahindra Mutual Fund
44

 LIC Mutual Fund

Morgan Stanley Mutual Fund
Pioneer ITI Mutual Fund
PNB Mutual Fund
Prudential ICICI Mutual FundReliance Capital Mutual FundSBI Mutual
Fund
Standard Chartered Mutual Fund
Sundaram Mutual Fund
Tata TD Waterhouse Mutual Fun
Taurus Mutual Fund

DEVELOPMENT OF MUTUAL FUND IN INDIA

45

The mutual fund industry in India started in 1963 with the formation of unit trust of
India at the initiative of government of India and reserve bank of India. The history
Of mutual fund

In India can be divided into four phases:

FIRST PHASE :

1964 96

SECOND PHASE: 1996-2003 (ENTRY OF PUBLIC SECTOR FUNDS)

THIRD PHASE

: 2003 2013 (ENTRY OF PRIVATE SECTOR FUNDS)

FOURTH PHASE: SINCE FEBURARY 2003

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank of India. The history of mutual funds in
India can be broadly divided into four distinct phases
First Phase 1964-96

Unit Trust of India (UTI) was established on 1963 by an Act of

Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI
and the Industrial Development Bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme
1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management.

46

Second Phase 1996-2003 (Entry of Public Sector Funds) 1996 marked the entry of nonUTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of
India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first
non- UTI Mutual Fund established in June 1996 followed by Canara bank Mutual Fund (Dec
96), Punjab National Bank Mutual Fund (Aug 98), Indian Bank Mutual Fund (Nov 91), Bank of
India (Jun 92), Bank of Baroda Mutual Fund (Oct 94). LIC established its mutual fund in June
1991 while GIC had set up its mutual fund in December 1992. At the end of 1995, the mutual
fund industry had assets under management of Rs.47, 004 crores.

Third Phase 2003-2013 (Entry of Private Sector Funds) with the entry of private sector
funds in 2003, a new era started in the Indian mutual fund industry, giving the Indian investors a
wider choice of fund families. Also, 2003 was the year in which the first Mutual Fund
Regulations came into being, under which all mutual funds, except UTI were to be registered
and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the
first private sector mutual fund registered in July 2003.

The 2003 SEBI (Mutual Fund)

Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in
1996. The industry now functions under the SEBI (Mutual Fund) Regulations 2006.

The

number of mutual fund houses went on increasing, with many foreign mutual funds setting up
funds in India and also the industry has witnessed several mergers and acquisitions. As at the end
of January 2013, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit
Trust of India with Rs.44, 541 crores of assets under management was way ahead of other
mutual funds.

47

Fourth Phase since February 2013 In February 2013, following the repeal of the Unit
Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified
Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at
the end of January 2013, representing broadly, the assets of US 64 scheme, assured return and
certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come under the
purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund, sponsored by
SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund
Regulations. With the bifurcation of the erstwhile UTI which had in March 2008 more than
Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth.

48

GRAPHICAL REPRESENTATION

49

MUTUAL FUND - ORGANIZATIONS

There are many entities involved and the diagram below illustrates the
Organizational set up of a mutual fund:

50

REGULATORY BODIES
Financial System is basically responsible for the major up and downs in the Economy. So, there
are some regulatory bodies on it which ensures effectiveness In the management of Fund of the
investors and transparency in the transactions.

FLOW CHART
51

FREQUENTLY USED TERMS IN MUTUAL FUND

52

 NET ASSET VALUE

Net Asset Value is the market value of the assets of the scheme minus 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.

SALE PRICE
The price you pay when you invest in a scheme. Also called Offer Price. It may include a sales
load.
REPURCHASE PRICE
The price at which units under open-ended schemes are repurchased by the Mutual Fund. Such
prices are NAV related.
REDEMPTION PRICE
The price at which close-ended schemes redeem their units on maturity. Such prices are NAV
related.

53

 SALES LOAD
A charge collected by a scheme when it sells the units. Also called, Front-end load. Schemes
that do not charge a load are called No Load schemes.
REPURCHASE OR BACK END LOAD
A charge collected by a scheme when it buys back the units from the Unit holders.

STRUCTURE OF INDIAN MUTUAL FUND

INDIAN MUTUAL FUND INDUSTRY

The rising Indian mutual funds industry probably never had it better, as far as the entry of
individual or retail investors is concerned. The industrys total AUM in December 2012 stood at
a hefty Rs 3, 23,597 crore, with a total of2.79 crore depositor folios, of which 2.31 crore
depositor folios had invested inequity schemes. The share of direct investors, on the other hand,

54

has been dropping, stating that more retail investors see mutual funds as a preferred route for
investing in the markets.
Existing and new market players as well as Exchange Traded Funds are likely to hit the market
in the coming months with a flurry of new Mutual Funds schemes. An action packed first quarter
of 2013 was forecasted to witness at Least 20 new schemes which are waiting on the sidelines to
be launched.

Market share *(%) of mutual funds companies

55

PERFORMANCE SNAPSHOT!!!
The year 2006 scored high in terms of both returns and volatility. The rising Indian mutual funds
industry saw its best, as far as the entry of individual or retail investors is concerned.

56

In 2006, out of the 159 diversified equity funds (includes diversified equity, midcap, and equity
tax saving schemes):
20 funds (13%) out-performed the Sensex 50 funds (37%) out-performed the Nifty

The best returns generated were up to 58.3% (Tata Infrastructure Fund)

Equity Diversified funds churned out an average 33.2% return, which Comprise of 72
funds in this category comprising of total 135 funds

Infrastructure funds stole the limelight this year with the top three Performers being
Infrastructure Fund.

TOTAL ASSET MANAGED BY VARIOUS FUND HOUSES:

57

The amount of assets managed by AMCs varies every year. Following is the table that depicts
the total amount of asset managed by the well known AMCs in India. It also shows the ranking
of AMCs for the year 2011, based on the above mentioned parameter.

FUND HOUSE

JAN 2013

JAN 2012

DEC 2012

Reliance MF

39,020

16,702

36,928

UTI MF

37,535

25,617

38,109

Prudential ICICI

34,746

22,635

33,305

HDFC MF

31,425

18,591

29,635

Franklin Templeton

23,908

18,153

23,403

Birla Sun Life

21,190

13,797

17,054

SBI MF

17,552

10,839

15,086

DSP Merrill Lynch

13,440

8,976

13,517

TATA MF

13,222

8,649

12,177

Standard Chartered

12,746

9,480

12,629

Kotak Mahindra

12,674

7,397

12,062

LIC MF

12,237

6,386

11,599

HSBC

12,140

6,288

10,450

Principal

10,333

6,789

10,522

Figures in Rs crores
1)

Birla Sun life was the best performer in January 2011 and Rs4, 136 crore to its
assets

2)

Reliance MF has become the top mutual fund house in the country by adding a
very Impressive Rs2, 092 crore to assets under management

58

3)

Previous Top Fund House UTI MF declined by Rs574 crore and

lost its top

position to Reliance
4)

SBI MF was able to acquire 7th position by an addition of Rs2, 466 crore

5)

Tata MF gained Rs1, 045 crore and able to secure its position in

BEST EQUITY MUTUAL FUNDS:

(As on 27th April, 2013)

59

top 10.

Following is the ranking of the best mutual funds and their NAVs as on 27thApril, 2009. The
rankings are based on 1 year returns of the Equity Mutual Funds available in the market.

S.NO.

SCHEME NAME

1 Yr. return Present

(%)

NAV

DSPML Technology.com fund-growth

47.50

26.89

UTI Banking sector fund-growth

40.05

21.47

Magnum IT

36.06

28.49

Birla Sun life New Millennium-Growth

35.60

21.33

Banking Bees

32.69

590.31

Prudential ICICI Technology Growth

32.59

15.99

Prudential ICICI Services Industries Fund 32.07

16.02

Growth
8

UTI Software Growth

30.09

27.71

Reliance Media & Entertainment Growth

28.61

26.07

10

Birla Sun life Frontline Equity Growth

27.90

52.81

11

Reliance Banking Growth

27.81

39.20

12

Reliance NRI Equity Fund Growth

26.54

24.70

13

Franklin InfoTech Growth

25.95

52.62

14

DBS Chola Opportunity

25.85

28.63

15

Reliance Diversified Power Sector Growth

25.16

37.71

MUTUAL FUND AT A GLANCE

A mutual fund is professionally managed firm of collective instrument that pools money
from many investors and invest it in Mutual, bonds etc.
60

A mutual fund is a trust registered with securities and exchange board of India.

Value of the fund

The value of each unit of mutual fund, known as net asset value (NAV)

Formula:
Net asset scheme / No. of unit outstanding

METHODS OF MUTUAL FUND

One time payment

Systematic investment plan

SYSTEMATIC INVESTMENT PLAN:

Under this a fixed sum is invested each month on a fixed date of a month.
Payment is through post dated cheque or direct debit facilities
The investor gets the fewer units when the NAV is high and gets the more units when the
NAV is low.
61

WORKING OF MUTUAL FUND

62

NNNNN

63

Research analysis and

interpretation

64

MUTUAL FUND ADVISORS SUGGESTION ABOUT INVESTMENT

INTERPRETATION:
Mutual fund advisor will suggest the investors to invest in mutual fund investment more because
it is les risky than any investment. In mutual fund the investor can invest in sip (systematic
investment plan) which is depend upon NAV (net asset value) which is less risky and whenever
investors want to close that scheme they can. And it is profitable because its profit is based on
average basis.

65

REASONS FOR CHOOSING ABOVE

INTERPRETATION:
After analysis we have got that lots of investors want to invest just for security purpose. because
most of the investors want to secure or their money, so for holding the money they want to invest
in somewhere so that they can safe their money for future .and a persons who have no
knowledge about security market, they can also be invest in mutual funds.

66

INVESTORS WHO KNOW ABOUT THE MUTUAL FUND SERVICES

PROVIDED BY RELIANCE

INTERPRETATION:
After analysis we have known that most of the investors dont know about the mutual fund
services which has been provided by Reliance just because of publicity, Reliance doesnt show
that it provides mutual fund services along with other services such as: pan card services, d.p.
services, share trading services, IPOs services etc. thats why most of the peoples are unknown
about the Reliance mutual fund services.

67

INVESTORS INTERESTED TO INVEST IN MUTUAL FUND

INTERPRETATION:
After analysis we have seen that most of the investors are not interested to invest in mutual fund
just because of:

Past image of mutual fund.

Because of unawareness.
They are unaware about the mutual fund benefits.
They dont want to take risk

68

A INVESTORS WANTS TO INVEST ON WHICH BASIS

INTERPRETATION:
After analysis we have got the result that most of the investors want to invest in any
securities on the basis of rate of return, when they invest in any believable security so
they expected or anticipated that they will got the expected rate of return ,
Some people invest on the basis of safety purpose , some small investors mostly invest
their money for saving and for getting into near future
Businessman mostly invests their money on securities just for saving the tax because
invested money always is tax free

A PERSON WANTS TO TAKE INFORMATION ABOUT MUTUAL FUND

69

INTERPRETATION:
By above analysis we can know that most of the clients,
Persons or investors want to know about the mutual fund benefits, schemes, and
Each and every information, because now a days every persons or investors want to
Get information about everything so that on time he can utilize optimum utilization
Of resources in a right way and could get profit.

A PERSON WHO WANT TO DO THE JOB IN RELIANCE MUTUAL

FUND
70

INTERPRETATION:

After analysis we got that investors dont want to do the job in Reliance because:
71

Because lots of persons have no time for joining that and there is lack of management in

each dept. of Reliance that is also be reason that persons dont want to do job in Reliance
Some persons dont want just because of lack of knowledge about investment.
Some persons dont want to do the job in Reliance because they dont want to expand

their business.
Some persons gave no answers on such issues.

A INVESTORS WHO WANT TO ATTEND THE SEMINAR PROVIDED BY

RELIANCE

72

INTERPRETATION:

By above evaluation we can see that some investors are interested to join the seminar on
mutual fund which has been organized by Reliance because they actually want to know
the actual situation of mutual fund that : benefits ,why this investment exist, why they
should invest over there.

Most of the persons dont want to attend seminar because

They have no time for such type of activities.
They dont trust on mutual fund investment.
They think that these all are rubbish thing.

ON WHICH COMPANIES THE CLIENT BELIEVES MORE

73

INTERPRETATION:

74

We all know that most of the investors or persons are interested to invest in public co. or
government co. in which there is less chance to drop out the invested money while on the other
hand less of the persons are not interested to invest in private sector because there is more risk
than public sectors.
Same as we can see in the above chart that most of the investors want to invest in reliance co.
because investors has made the mind set that we will get always the profit in investing over there
while only small investors who invest very small amount in security invest in private co. such as:
hdfc , icici. Other.

WHY THE CLIENTS BELIEVE ONLY ABOVE CHOOSING FUND

75

INTERPRETATION:
Most of the investors or clients want to invest in public co. because most of the clients
think that/;
It is risk free means to say there is less risk to invest in that type of funds, that is a
trustworthy co.
Some investors invest just because of good return, peoples perception towards that co. is
that it will never incurred loss and it will not cheat the investors.
Reliance is one of the most powerful and reputed co. even we can say MNC co. so just
because of good positioned in the market investors want to invest over there.

CLIENTS WANT TO GET ADVISORY SERVICES FROM RELIANCE

76

INTERPRETATION:
Investors who have already invested in mutual fund they all want advisory services from
Reliance, in advisory services; we can know NAV (net assets value) of each fund on daily basis.
So investors want to get those services so that they can take right decision on right time, if he
sees that he is getting loss in investing fund so by this services he can switch from loss fund to
profitable fund. So all the investors want to get that type of services from Reliance.

CLIENTS ATTITUDE TOWARDS DSP BLACK ROCK FUND WHICH

PROVIDE 100% RETURN NOW A DAYS

77

INTERPRETATION:
We have seen that most of the investors dont want to invest in dsp black rock fund, which is
international co. , they dont want to invest because they know that now a days the NAV of this
fund is very low approx. (14 -15 rs.) so on this the 100% return is not so hectic for the org. and
market is totally based upon uncertainty and always be fluctuating so he thinks that may be
dspblack rock will not provide same return in future so the investors may get lost, so they dont
want to invest in this. Only those investors would like to invest in this fund who invests for short
term.

INVESTORS WOULD LIKE TO INVEST IN

78

INTERPRETATION:
We can see that most if the investors want to invest in debt funds because there is a solid reason
behind this is that the debt funds provide the fixed rate of interest to the investors, there is no risk
in that type of funds for the investors.
While only big investors want to invest in equity market because equity fund provide the
dividend according to performance of the org. if there will be profit in org so investors will get
the dividend otherwise they will have to face loss
Thats why investors want to invest in debt funds rather than equity market.

WHICH TYPE OF INSTRUMENT CURRENTLY INVESTED IN

79

INTERPRETATION:
Now a days most of the investors want to invest in others funds such as:
FDs
INSURANCE
Etc.
After that the investors mostly focus on to invest in debt market just for reducing the risk.
After that they want to invest in equity market for getting more profit.
Then investors want to invest in commodity market just for saving money in near future.

80

Findings

1) After getting in depth research study of Reliance, I came to know that Reliance is not
much popular as other brands operating in Kanpur city. Bajaj Allianz, HDFC, ICICI are
having much higher tapped market in respect to mutual funds.
2) Reliance as an investment option in Mutual Fund does not possess much proficiency and
potential customers in Kanpur city. Though the financial advisors advise their clients to
go for Mutual Fund as an investment option. About 42% of advisors advise their clients
3)

to invest in Mutual Funds, followed by investing in Insurance sector.

The advisors after having a deep thought says that it is the Returns that make them
convince their clients to go for investment in mutual funds. 36% of advisors said that it is
the Returns which make a person to invest in Mutual Fund. Followed by Risk which is
quite lesser in other investment options.

81

4) A huge lot of advisors showed a positive response in dealing of for Mutual Fund. About
60% of them said that they are interested in dealing for Mutual Funds, because that
results in higher brokerage.
5) As far as Reliance is concerned about 91% of the advisors said that they are not aware of
the services provided by Reliance, including Mutual Fund.
6) When asked, 53% of advisors said that they are not interested to work with Reliance
Securities, to the contrary with they dont have any such expansion plans and they have

7)

little knowledge about Reliance.

In Kanpur city advisors dont have an appropriate knowledge about Reliance as an
Investment hub.

Swot Analysis
82

A type of fundamental analysis of the health of a company by examining its strengths(S),

weakness (W), business opportunity (O), and any threat (T) or dangers it might be exposed to.

# I. STRENGTHS

Brand strategy:

as opposed to some of its competitors (e.g. HSBC), Reliance ADAG

operates a multi-brand strategy. The company operates under numerous well-known

brand names, which allows the company to appeal to many different segments of the
market.

Distribution channel strategy:

Reliance is continuously improving the distribution of

its products. Its online and Internet-based access offers a combination of excellent growth
prospects and its retail direct business also saw growth of 27% in 2002 and 15% in 2003.

83

Various sources of income: Reliance has many sources of income throughout the group,
and this diversity within the group makes the company more flexible and resistant to
economic and environmental changes.

Large pool of installed capacities.

Experienced managers for large number of Generics.

Large pool of skilled and knowledgeable manpower.

An increasing liberalization of government policies.

II. WEAKNESS

Emerging markets: since there is more investment demand in the United States, Japan
and the rest of Asia, Reliance should concentrate on these markets, especially in view of
low global interest rates.

Mutual funds are like many other investments without a guaranteed return: there is
always the possibility that the value of your mutual fund will depreciate. Unlike fixedincome products, such as bonds and Treasury bills, mutual funds experience price
fluctuations along with the stocks that make up the fund. When deciding on a particular
fund to buy, you need to research the risks involved just because a professional
manager is looking after the fund, that doesnt mean the performance will be stellar.

84

Fees: In mutual funds, the fees are classified into two categories: shareholder fees and
annual operating fees. The shareholder fees, in the forms of loads and redemption fees
are paid directly by shareholders purchasing or selling the funds. The annual fund
operating fees are charged as an annual percentage usually ranging from 1-3%. These
fees are assessed to mutual fund investors regardless of the performance of the fund. As
you can imagine, in years when the fund doesnt make money, these fees only magnify
losses.

III. OPPORTUNITIES

Potential markets: The Indian rural market has great potential. All the major market
leaders consider the segments and real markets for their products. A senior official in a
one of the leading company says foray into rural India already started and there has been
realization that the rural market is both price and quantity conscious.

Entry of MNCs: Due to multinationals are entering into market job opportunities are
increasing day by day. Also India Mutual Fund majors are tie up with other financial
institutions.

85

IV. THREATS

Hedge funds: sometimes referred to as as hot money, are also causing a threat for mutual
funds have gained worldwide notoriety for bringing the markets down. Be it a crash in
the currency, A stock or A bond market, A usually a hedge fund prominently figures
somewhere in the picture.

86

Recommendations

There is high potential market. For mutual fund investors Kanpur city but this market

need to bed explored as investors are still hesitated to invest their money in mutual fund.
In Kanpur city, investor has inadequate knowledge of mutual fund, so proper marketing
of various scheme is required, co. should arrange more and more seminar about mutual

fund.
Co. should also provide the knowledge of growth rate and expected growth rate of

mutual fund in India.

Reliance must be concentrate on the management of the co. so that every work can be

done in a proper way.

Reliance must be advertising its tie up co. fund along with their features that the

investors can invest in that type of fund in Reliance.

Reliance must be provided the advice to investors about mutual fund growing fund.

87

Conclusion
88

The awareness level of investors is low who are interested in dealing in mutual
fund:

Most of investors are totally unaware about this investment.

Very less people knows about the service of Reliance.
Past image of mutual fund is not good.
Reliance can promote the investors by advertising, hording, and by interviews to invest

in this fund.
Most of the investors want to invest in public co.s fund just because of safety purpose.
Most of the investors want to safer side in investment.
Most of the investors want to invest in debt funds because those are the risk free funds;

it gives the interest on investment.

Most of the investors dont know about the mutual funds so they want advisory services
from reliance which could provide them whole information about the market situation of
mutual fund.

89

Annexure

90

We assure you that all the information that will be collected from you will
remain fully confidential and use only for study purpose.

NAME: ___________________________________
DESIGNATION/ADDRESS: ____________________________________________
EMAIL ID: ______________________

PHONE NO.:___________________

1) As a financial advisor which investment options you will suggest your customers:
a) Shares ( )
b) Insurance ( )
c) Mutual fund ( )
d) Fixed deposit ( )
2) Please indicate reason for choosing above :
a) Return ( )
b) Risk ( )
c) Safety ( )
d) Tax benefit ( )
e) Others ( )
3) Do you know about the mutual fund services provided by the Reliance :
a) Yes ( )
b) No ( )
4) Are you interested to invest in mutual fund :
a) Yes ( )
b) No ( )
5) Do you invest your money on which basis :
a) Return ( )
91

b) Safety ( )
c) Tax saving ( )
d) Others ( )
6) Do you want to collect information about mutual fund investment:
a) Yes ( )
b) No ( )
7) Will you like to work in Reliance Mutual Fund Ltd. , which deals with mutual fund :
a) Yes ( )
b) No ( )
8) In future will you attend the seminar arranged by Reliance to guide the investors
about mutual fund :
a) Yes ( )
b) No ( )
9) In which co. you believe more :
a) Hdfc
b) Icici
c) Reliance
d) Dsp black rock
e) Any other fund _________________________
10) Why you believe only such kind of fund :
a) Return ( )
b) Good market position ( )
c) Risk free ( )
d) Any other reason ( )
11) Do you want the advisory services of Reliance :
a) Yes ( )
b) No ( )
12) Now a days DSP black rock fund provides the 100 % return so do you want to invest
in this fund :
a) Yes ( )
b) No ( )
c) If yes/no why ______________________
13) If you have Rs. 100 , in which of these assets classes would you like to invest :
a) Equity ( )
b) Debt ( )
c) Commodities ( )
d) Derivatives ( )
92

14) Which type of instrument are currently invested in :

a) Mutual fund (equities) ( )
b) Debt funds ( )
c) Currency & Commodities ( )
d) Others_____________________

Bibliography

WEBSITE:

http://www.moneycontrol.com
93

http://www.amfi.com
http://www.Reliance .com//v2/
www.amfiindia.com

MAGAZINES:

S.Gopichand, the finapolis , Reliance Mutual Fund Ltd..,volume 4 , 2010

PunithavathyPandian , Security Analysis And Portfolio Management , Vikas Publishing
House , 2001

Thank you

94