Vous êtes sur la page 1sur 104

Project Work Report


I hereby declare that the project “Channel Management- In Mutual Fund Sales” submitted
in Partial fulfillment of requirement for the degree of



Is of my Original work and not submitted for the award of any other Degree, Diploma,
Fellowship, or other similar title or prizes

MBA is a stepping-stone to the Management carrier and to develop good Managers is

necessary that the theoretical must be supplement with exposure to the real environment.

Theoretical knowledge just provides the base and it’s not sufficient to produce a good
Manager that’s why the practical knowledge is needed.

Therefore the Research Project is an essential requirement for the student of MBA. This
research project not only helps the students to utilize his skills properly and learn field
realities but also provides a chance to the organization to find out talent among the building
Managers in the very beginning.

In accordance with the requirement of MBA course I have done my research project on the
topic “Channel Management- In Mutual Fund Sales” with special reference to Prudential
ICICI Mutual Fund.

I avail this opportunity to express my sincere and deep gratitude to many who are a factor in
helping me gain the knowledge and experience during this project and throughout the course.

My special thanks to Mr.Vaibhav Chugh (Marketing Head), Mr. Amit Dhingra (Assistant
Sales Manager) & Mr. Hitesh Tuli (Retail Sales) for providing me guidance and precious
knowledge about the company and my project.

I am also thankful to all personnel in Prudential ICICI for being so kind and helpful during
the whole project.

Last but not least, sincere thanks to my parents, friends and staff directly or indirectly who
helped me to bring this project into the final shape.
What Lies Ahead
Chapter-1 Introduction to Mutual Funds

 Meaning & History of Mutual Fund Industry

 Mutual Fund Structure
 Types of Funds
 Types of Risks
 Net Asset Value (NAV)

Chapter-2 Research Methodology

 Objectives of research
 Types of Research
 Research Design
 Sampling Unit
 Sampling Size
 Types of Sampling
 Methods of Data Collection

Chapter-3 Company Profile of Prudential ICICI

Chapter-4 Objectives of the Study

Chapter-5 Introduction to the Project

Chapter-6 Analysis & Interpretation

Chapter-7 Limitations

Chapter-8 Conclusion

Chapter-9 Suggestions

Chapter-10 Annexure

Chapter-11 Glossary

Chapter- 12 Bibliography

Mutual Funds

Different Investment Avenues are available to Investors. Mutual Funds also offer good
Investment opportunities to the Investors. Like all Investments, they also carry certain risks.
The Investors should compare the risks and expected yields after adjustment of tax on
various instruments while taking Investment decisions. The investors may seek advice from
experts and consultants including agents and distributors of Mutual Funds schemes while
making Investment decisions.

Meaning of Mutual Funds

Mutual funds are investment products that operate on the principal of Strength in numbers.
They collect money from large group of investments, pool it together, and invest it various
securities, in line with their objective. They are an alternative to investing directly
investments in securities are spread across a wide cross-section of industries and sectors and
thus the risk is reduced. Diversification reduces the risk because all stocks may not move in
the same direction in the same proportion at the same time. Mutual fund issues units to the
investors in accordance with quantum of money invested by them. Investors of mutual funds
are known as unit holders.
The investors in proportion to their investments share the profits or losses. The mutual funds
normally come out with a number of schemes with different investment objectives, which are
launched from time to time. A mutual fund is required to be registered with Securities and
Exchange Board of India (SEBI), which regulates securities markets before it can collect
funds from the public.
“Mutual Fund is a trust that pools the savings of a number of Investors who share a common
Financial Goal. The Money thus collected is invested by the fund manager in different types
of securities depending upon the objective of the scheme. These could range from shares to
debentures to money market instruments. The income earned through these Investments and
the capital appreciation realized by the scheme is shared by its unit holders in proportion to
the number of units owned by them.”

“A Mutual Fund is nothing more than a collection of stocks and/or bonds. You can think of
Mutual Fund as a company that brings together a group of people and invests their money in
stocks, bonds and their securities. Each investor owns units, which represent a portion of the
holdings of the Fund.”
Why Mutual Funds?

A mutual fund is an entity that pools the money of many investors – its unit holders –to
invest in different securities. Investments may be in shares, debt securities, money market
securities or a combination of these. Those securities are professionally managed on behalf of
the unit holders, and each investor holds a pro-rata share of the portfolio, i.e. entitled to any
profits when the securities are sold, but subject to any losses in value as well.

Benefits of Investing through Mutual Funds:

 Professional Investment Management

Mutual Funds hire full-time, high-level investment professionals. Funds are afforded to do
so as they manage large pools of money. The managers have real-time access to crucial
market information and are able to execute trades on the largest and most cost-effective

 Diversification
Mutual Funds invest in a broad range of securities. This limits investment risk by reducing
the effect of a possible decline in the value of anyone security. Mutual Fund unit-holders can
benefit from diversification techniques usually available only to investors wealthy enough to
buy significant positions in a wide variety of securities.

 Low cost
A Mutual Fund let’s you participate in a diversified portfolio for as Rs.5000/-, and sometimes
less. And with a no-load Fund, you pay little or no sales charges to own them.
 Transparency
You get regular information on the value of your investment in addition to the disclosure on
the specific investments made by the Mutual Fund scheme.

 Liquidity
In open-ended schemes, you can get your, money back promptly at net asset value related
prices from the mutual fund itself.

 Personal Service
One call puts you in touch with a specialist who can provide you with information you can
use to make your own investment choices. They will provide you personal assistance in
buying and selling your fund units, provide fund information and answer questions about
your account status. Custom4er service centers are at our service and marketing team would
be eager to hear our comments on their schemes.

 Convenience and Flexibility

You own just one security rather than many; yet enjoy the benefits of a diversified portfolio
and a wide range of service. Fund manager decide what securities to trade, collect the interest
payments and see that your dividends on portfolio securities and received and your rights
exercised. It also uses the services of a high quality custodians and registrar in order to make
sure that your convenience remains at the top of our mind.
History of the Mutual Fund Industry

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

First Phase-1964-87

Unit Trust of India (UTI) was established in 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 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 1988 UTI had Rs.6, 700 crores of Assets under Management.

Second Phase 1987-93(Entry of Public Sector Funds)

1987 marked the entry of non-UTI, Public sector Mutual funds set up by public sector banks
and Life Insurance corporations of India (LIC). And General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non-UTI Mutual Fund established in June 1987
followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual Fund (Nov 89), Bank Of India (June 90), Bank Of Baroda Mutual Fund
(Oct 92), LIC established its Mutual Funds in June 1989 while GIC had set up its Mutual
Fund in Dec 1990.

At the end of 1993, the Mutual Fund Industry had assets under management of Rs.47, 004
Third Phase- 1993 -2003 (Entry of Private Sector Funds)

With the entry of Private sector funds in 1993, a new era started in the Indian Mutual Fund
Industry, giving the Indian investor a wider choice of Fund families. Also, 1993 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 1993.

The 1993 SEBI, (Mutual Fund) regulations were substituted by a more comprehensive and
revised Mutual Funds regulations in 1996. The industry now functions under the SEBI
(Mutual Fund) regulations 1996.

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 merges and acquisitions.
As at the end of January 2003, 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.

Fourth Phase-since February 2003

In February 2003, 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 asset under management of Rs. 29,835 crores as at the end of January 2003,
representing broadly, the asset 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 Govt. of India and does not come under the purview of the Mutual
Fund Regulations.

The second is the UTI Mutual Fund limited, 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 2000 more than Rs.76, 000 crores of asset under
management and with the setting up of a UTI Mutual Fund, confirming to the SEBI Mutual
Fund Regulations, and with recent merges taking place among different private sector funds,
the Mutual Fund industry has entered its current phase of consolidation and growth. As at the
end of September, 2004, there were 29 funds, which manage assets of Rs. 1, 53,108 crores
under 421 schemes.
The Graph indicates the Growth of Assets over the Years:

Mutual Fund Structure

The SEBI (Mutual Funds) Regulations 1993 define a mutual fund as a Fund established in
the form of a trust by a sponsor to raise money by the trustees through the sale of units to the
public under one or more schemes for investing in securities in accordance with these
regulations. These regulations have since been replaced by the SEBI (Mutual Funds)
Regulations, 1996.

The structure indicated by the new regulations is indicated as under:

A Mutual Fund Company of four separate entities, namely Sponsor, Trustee, AMC
(Asset Management Company) and Custodian.

The sponsor is the promoter of the Mutual Fund and gets it registered with SEBI.Sponsor
appoints the trustees, custodians and the AMC with prior approval of SEBI, and in
accordance with SEBI regulations. The sponsor is required to contribute at least 40% of the
minimum net worth (Rs. 10 crore) of the Asset Management Company.


In India, Mutual Funds are organized as trusts. The trust is created by sponsor, who
is actually the entity interested in creating the Mutual Fund Business. The Mutual
Fund, which is a trust, is managed by a by a trust company or a Board of trustees.
The Provisions of the Indian trust Act govern board of trustees and trust companies.
If the Trustee is a Company; it is also subject to the provisions of the Indian
Companies Act. The sponsor executes and registers a trust deed in favor of the trustees.
SEBI Regulations stipulate that the trustees are fully responsible for the compliance of the
Mutual Funds with SEBI regulations, and for the protection of the interest of the Mutual
Fund investors.

Asset Management Company

The trustees, on the advice of the sponsors, usually appoint the AMC. The trust deed
authorizes the trustees to appoint the AMC. The AMC is usually a private limited company,
in which the sponsors and their associates or joint venture partners are shareholders. The
AMC has to be a SEBI registered entity, and should have a minimum net worth of Rs.10
crore. The trustees sign an investment agreement with the AMC, which spells out the
functions of the AMC. Though the trust is the Mutual Fund, the AMC is its operational face.
The AMC structures the Mutual Fund products, markets them and mobilizes the funds of the
investors, according to the mandate they receive from the trustees. The fee is defined as a
percentage of the funds managed by the AMC. Against this fee, the AMC will bear all its
operational expenses. Resultant profits would be available for distribution to the sponsors.
AMCs can be of following types :

 AMCs owned by Banks.

 AMCs owned by Financial Institutions.
 AMC s owned by Indian Private Sector Companies.
 AMCs owned by Foreign Institutional Investors.
 AMCs owned by Indian & Foreign Sponsors.


Custodians are responsible for the securities held in the Mutual Fund’s portfolio. They ensure
that securities that are bought are delivered and transferred to the books of the Mutual Funds,
and that Funds are paid out when a Mutual Fund buys securities. Custodians also track
corporate actions like bonus issues, right offers, offer for sale, buy back & open offers for

Association of Mutual Funds Of India (AMFI)

With the Increase in Mutual und players in India, a need for Mutual fund association was
generated to function as a non-profit organization. Association of Mutual Fund of India
(AMFI) was incorporated on 22nd August 1995.

AMFI is governed by a board of directors elected from Mutual Funds and it’s headed by a
full time chairman.

AMFI is not a registered SRO ( Self Regulatory Organization), and therefore can only issue
guidelines to members. It cannot enforce regulation. However, in order to enable orderly
growth of the industry, and bring about uniformity and standards in practice, most members
tend to abide by the guidelines.

Objectives of AMFI

 To define and maintain high professional and ethical standards in all areas of operation
of mutual fund industry.

 To recommend and promote best business practices and code of conduct to be followed
by members and others engaged in the activities of mutual fund and asset management
including agencies connected or involved in the field of capital markets and financial

 To interact with the Securities and Exchange Board of India (SEBI) and to represent
to SEBI on all matters concerning the mutual fund industry.

 To represent to the Government, Reserve Bank of India and other bodies on all
matters relating to the Mutual Fund Industry.

 To develop a cadre of well-trained Agent distributors and to implement a programme

of training and certification for all intermediaries and other engaged in the industry.

 To undertake nation wide investor awareness programme so as to promote proper

understanding of the concept and working of mutual funds.

 To disseminate information on Mutual Fund Industry and to undertake studies and

research directly and/or in association with other bodies.

Choice offered by a Mutual Fund to the Investor

Mutual Funds are investment portfolios that invest in Financial market instruments. These
portfolios are created by pooling investor contributions, usually denominated in units. There
are a variety of ways in which Mutual Funds are created, to cater to the varied risk and return
requirements of investors. Depending on the investment portfolios that are created, and the
segments of the various markets in which funds are invested, there is choices of funds to

Mutual Funds can offer further Generic choices to the Investors in terms of :

Nature of participation: Open or Closed ended

Nature of Income distribution: Dividend, Growth, and Re-investment of dividends.

Open-ended Funds/Schemes
These funds are sold at the NAV based prices, generally calculated on every business day.
These schemes have unlimited capitalization, Open-ended schemes do not have a fixed
maturity, i.e. there is no cap on the amount you can buy from the fund and the unit capital
can keep growing. These funds are not generally listed on any exchange.

Open-ended funds are bringing in a revival of the Mutual Fund industry, owing to increased
liquidity, transparency and performance in the new Open-ended funds prompted by the
private sector and foreign players.

Close-ended Funds/Schemes

Schemes that have stipulated maturity period, limited capitalization and the units are listed on
the stock exchange are called Closed-ended schemes. These schemes have historically scene
a lot of subscription. This popularity is estimated to be on account of firstly, public sector
Mutual Funds having floated a lot of Closed-ended income schemes with guaranteed returns
and secondly easy liquidity on account of listed on the stock exchanges.

Dividend Option
Investors, who choose a dividend option on their investments, will receive dividend from the
Mutual Fund, as and when dividends are declared. Dividends are paid in the form of
warrants, or are directly credited to the investor’s bank account. In a normal dividend plan,
periodicity of dividend is left to the Fund Managers, who may pay annual or an interim
dividend. Fund Managers decide the time of the payouts. Mutual Funds provide investors the
option of receiving dividends at pre-determined frequencies, which can vary from daily,
weekly, monthly, quarterly, half yearly and annually. The NAV of these investors holding
will vary with changes in the value of the portfolio.

Growth Option
Investors who do not require periodic income distributions can choose the Growth Option,
where the incomes earned are retained in the investment portfolio, and allowed to grow,
rather than being distributed to the investors. Investors with longer-term investment horizons,
and limited requirements for income, choose this option The returned to the investor who
chooses a Growth option is the rate at which his initial investment has grown over the period
for which he has invested in the Fund.

Re-investment Option
Mutual Funds also provide option to investors in the form of Re-investment. Investors Re-
invest the dividends that are declared by the Mutual fund, back into the Fund itself, at NAV
that is prevalent at the time of Re-investment. In this option, the number of units held by the
investor will change with every Re-investment. The value of the units will be similar to that
under the dividend option.

Types of Fund
Types of Mutual Funds Schemes
 By Structure
Open- Ended Schemes
Closed-Ended Schemes
 By Investment Objective
Growth Schemes
Income Schemes
Balanced Schemes
Money Market Schemes
Specialty/Sector Schemes
Load or No-Load Schemes
 Other Schemes
Tax Saving Schemes
Special Schemes
Index Schemes
Sector Specific Schemes

Classification on the Basis of Structure

 Open-ended Funds
An open-end fund is one that is available for subscription all through the year. These do not
have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value
("NAV") related prices. The key feature of open-end schemes is liquidity.

 Closed-ended Funds

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15
years. The fund is open for subscription only during a specified period. Investors can invest
in the scheme at the time of the initial public issue and thereafter they can buy or sell the
units of the scheme on the stock exchanges where they are listed. In order to provide an exit
route to the investors, some close-ended funds give an option of selling back the units to the
Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate
that at least one of the two exit routes is provided to the investor.

 Interval Funds

Interval funds combine the features of open-ended and close-ended schemes. They are open
for sale or redemption during pre-determined intervals at NAV related prices.

By Investment Objective

 Growth Funds
The aim of growth funds is to provide capital appreciation over the medium to long- term.
Such schemes normally invest a majority of their corpus in equities. It has been proven that
returns from stocks, have outperformed most other kind of investments held over the long
term. Growth schemes are ideal for investors having a long-term outlook seeking growth
over a period of time.

 Income Funds

The aim of income funds is to provide regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds, corporate debentures and
Government securities. Income Funds are ideal for capital stability and regular income.

 Balanced Funds

The aim of balanced funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income
securities in the proportion indicated in their offer documents. In a rising stock market, the
NAV of these schemes may not normally keep pace, or fall equally when the market falls.
These are ideal for investors looking for a combination of income and moderate growth.

 Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer short-term instruments such as
treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns
on these schemes may fluctuate depending upon the interest rates prevailing in the market.
These are ideal for Corporate and individual investors as a means to park their surplus funds
for short periods.

 Speciality/Sectoral funds
These funds invest in securities of a specific industry or sector of the economy such as health
care, technology, leisure, utilities or precious metals. The fund enables investors to diversify
holdings among many companies with in an industry, a more conservative approach then
investing directly in one particular company.

Sector fund offers the opportunity for sharp capital gains in cases where the fund’s industry
is “in Favor” but also in entaile the risk of capital losses when the industries out of favor.
While Sector funds restrict holdings tom a particular industry, other specialty funds such as
Index funds gives investors a broadly diversify portfolio and attempt to mirror the
performance of various market averages.

Index Funds generally buy share in all the companies composing the BSE Sensex or NSE
Nifty or other stock market indices.

 Load or No-Load Funds

A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time
one buys or sells units in the Funds, a charge will be payable. This charge is used by the
Mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs.10. if
the entry as well as exit load charged is 1 %, then the investors who buy would be required to
pay Rs.10.10 and those who offer the units for repurchase to the Mutual Fund will get only
Rs.9.90 per unit. The investor should take the loads into consideration while making
investment as these affect their yields/returns. However, the investor should also consider the
performance track record and service standards of the Mutual Funds, which are more
important. Efficient funds may give higher returns in spite of Loads.

A No-Load Fund is one that does not charge for entry or exit. It means investors can enter
the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.

Other Schemes
 Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Indian
Income Tax laws as the Government offers tax incentives for investment in specified
avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes
are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides
opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual
Funds, provided the capital asset has been sold prior to April 1, 2000 and the amount is
invested before September 30, 2000.

 Special Schemes

• Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the offer document. The
investment of these funds is limited to specific industries like InfoTech, FMCG, and
Pharmaceuticals etc.

• Index Schemes

Index Funds attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50.

• Sectoral Schemes

Sectoral Funds are those, which invest exclusively in a specified industry or a group of
industries or various segments such as 'A' Group shares or initial public offerings.

A summary is presented in the Table below of the various funds and their investment
Scheme Time Risk Typical Investment Pattern
Type Horizon Profile

Objective Open Close Equity Debt Market/Inst
(%) (%) /Others

Money Yes No Short- Low 0 0-20 80-100

Market Term

Income Yes Yes Medium- Low 0 80-100 0-20

Long to
Term Medium

Growth Yes Yes Long High 80-100 0-20 0-20

d Yes Yes Long Medium 0-60 0-40 0-20
Term to
Tax Long
Saving Yes Yes Term High 80-100 80-100 0-20

Risks in mutual Funds

The discussion on investment objectives would not be complete without a discussion on the
risks that investing in a Mutual Fund entails.
At the cornerstone of investing is the basic principle that greater you risk you take, the
greater the potential reward. Remember that the value of all financial investments will
Typically, risk is defined as short-term price variability. But on the Long-term basis, risk is
the possibility that your accumulated real capital will be insufficient to meet your financial
goals. And if you want to reach your financial goals, you must start with an honest appraisal
on your own personal comfort zone with regard to risk. Individual tolerance for risk varies,
creating a distinct “Investment Personality” for each investor. Some investors can accept
short-term volatility with easy, others with near panic. So whether you consider your
investment temperament to be conservative, moderate or aggressive, you need to focus on
how comfortable or uncomfortable you will be as the value of your investment up or down.

Classification of Risks

Managing Risk


Systematic Investment Plan (SIP)

Types of Risk




Interest Rate


Exchange Rate



 Managing Risks

Mutual Funds offer increiable flexibility in managing investment risk. Diversification and
Automatic Investing ( SIP ) are two key techniques you can use to reduce your investment
risk considerably and reach your Long-term financial goals.
 Diversification

When you invest in one Mutual Fund, you instantly spread your risk over a number of
different companies. You can also diversify over several different kinds of securities by
investing in different Mutual Funds, further reducing your potential risk. Diversification is a
basic risk management tool that you will want to us e throughout your lifetime as you
rebalance your portfolio to meet your changing needs and goals. Investors, who are willing to
maintain a mix of equity shares, bonds and money market securities have a greater chance of
earning significantly higher return over time them those who invest in only the most
conservative investments. Additionally, a diversified approach to investing-combining the
growth potential of equities with the higher income of bonds and stability of money markets-
helps moderate your risk and enhance your potential return.

 Systematic Investment Plan ( SIP )

The unit holders of the scheme can benefit by investing specific Rupee amount periodically,
for a continuous period. Mutual Funds SIP allow the investors tom invest a fixed amount of
Rupees every month or quarter for purchasing additional units of the schemes at NAV based

Here is an Illustration using hypothetical figures indicating how the SIP can work for

Suppose an investor would like to invest Rs.1000 under the Systematic Investment Plan
on a Monthly basis
Amount Invested Purchase Price No. of Units
( Rs. ) ( Rs. ) Purchased
Initial Investment 1000 10 100
1 1000 8.20 121.95
2 1000 7.40 135.14
3 1000 6.10 163.93
4 1000 5.40 185.19
5 1000 6.00 166.67
6 1000 8.20 121.95
7 1000 9.25 108.11
8 1000 10.00 100.00
9 1000 11.25 88.89
10 1000 13.40 74.63
11 1000 14.40 69.44
Total 12,000 -- 1,435.90

Average Unit cost Rs.12, 000 / 1,435.9 =Rs.8.36

Average Unit Price Rs.109.6 / 12 = Rs.9.13

Unit Price at beginning of next month = Rs.14.90

Market value of Investment = 1435,9*14.90 = Rs.21, 395/-

The investor liquidates his units and gets back Rs.21, 395/-

Using the SIP strategy the Investor can reduce his average cost per unit. The Investor gets
the advantage of getting more units when the market is turned down.
 Types of Risks

All investment involves some form of risk. Even an assured Bank account is subject to the
possibility that inflation will rise faster than your earnings, leaving you with real purchasing
power than when you started ( Rs 1000 gets you less than it got your father when he was
your age ) consider these common types of risk and evaluate them against potential rewards
when you select an investment.

 Market Risk
At times the prices or yields of all the securities in particular markets rise or fall due to broad
outside influences. When this happens, the stock prices of both an outstanding, highly
profitable company and a fledging corporation may be affected. This change in price is due
to “Market Risk”.

 Inflation Risk
Sometimes refer to as “loss of purchasing power”. Whenever inflation sprints forward
faster than the earnings o your investment, you run the risk that you’ll actually be able to buy
less, not more. Inflation risk occurs when prices rise faster than your returns.

 Credit Risk
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?

 Interest Rate
Changing Interest Rate affects 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.

 Employees
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 level, 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 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 Rates
A number of companies generate revenues in foreign currencies and may have investment or
expenses also denominated in foreign currencies. Changes in exchange rate may, therefore,
have a positive or negative impact on companies that in turn would have an affect on the
investment of the fund.

 Investment Risk
The sectoral funds schemes, investment 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 volatile than a more diversified portfolio
of equities.

 Government Policies
Changes in Government policies 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

Mutual Funds Enable Regular Periodic Saving

Mutual Funds units in modern times are not issued in the form of certificates, with a
minimum denomination. They are instead issued as Account statements with the facility to
hold units in fraction up to 4 decimal points. It as also simpler to make additional
investments, to repurchase their part of investments, to reinvest dividends, to convert their
holdings in one fund into a holding of another. These facilities make it possible for small
investors to regularly save a fixed amount in Mutual Fund, and create saving plans suit their
saving habits and financial goals.

Financial goals and plans depend to a large extent on the income, expenses and cash flow
requirements of individual. It is well known that the age of the investor is an important
determinant of financial goals.

Therefore the financial planners have segmented investors according to certain stage in
their life cycle as follows:

Choice of
Life Cycle Stage Financial Needs Ability to Investment
Invest Products
Childhood Stage Taken care of by parents Investment of Long Term
Liquid plans &
Short term
Young Unmarried Immediate & Short Term Limited due Investment.
to higher Some exposure to
Spending Equity and
Pension products.

Short& Immediate term Limited due to Medium to Long term

Young Married Housing & Insurance Higher spending. Investments. Ability to
Needs. Cash flow take risks fixed
Consumer financial need. requirements are Income, insurance &
also limited Equity products.
Limited, Medium to Long term
Financial Investments. Ability to
Young Married Medium To Long term Planning needs take risks. Portfolio of
with Children Needs. Children’s are highest as Products, for growth &
Education. Housing & this stage is ideal long term
Consumer finance for disciplining
Housing. Spending &
Saving regularly
Medium term needs for Higher saving Medium term
Children’s education and ratios Investment with high
Married with older marriage. Need for recommended. Liquidity needs.
Children pension, Insurance & Requirement for Portfolio of products
Medical cover. intermittent cash including equity, debt
flows higher. & Pension plans
Ensuring adequate Income Adequate Income Maximum Investment
Post Family / Pre- to pressure the standard of & Savings. in Pension products.
retirement stage living, Post retirement
Lower Saving Medium term
ratios, Higher Investments.
Retirement Stage Short to Medium term requirement for Preference for liquid &
regular cash Income generating
flows. products. Low appetite
for risky Investments.
Net Asset value

Net Asset Value ( NAV ) denotes the performance of a particular scheme of a Mutual
Mutual Funds invest the money collected from the investors in security market. In simple
words, Net Asset Value is the market value of the securities held by the scheme. Since
market value of securities changes everyday, NAV of a scheme also varies from day to day
It is calculated by adding up the value of all the securities and cash in the Mutual Fund’s
portfolio (its assets), subtracting the fund’s liabilities, and dividing the number by the number
of units that the fund has issued.

An open-ended Mutual Fund scheme has to calculate their NAV at least once every business
day, typically after the major stock exchange closes. A close-end fund, whose unit generally
is not “redeemable”- is not subject to this requirement.

An Investment company calculates the NAV pf a single unit (or the “per unit NAV”) by
dividing its NAV by the number of units that are outstanding. For example, if a Mutual Fund
has an NAV of $100 million, and investors own 10.000,000 of the fund’s units, the fund’s
per unit NAV will be $10. because per unit NAV is based on NAV, which changes daily, and
on the number of units held by investors, which also changes daily per unit NAV also will be
change daily. Most mutual funds publish there per unit NAVs in the daily newspapers. The
NAV increases (or decreases) when the value of the Mutual fund’s holdings increase (or

The unit price of Mutual Funds is based on their NAV. That is, the price that investors pay to
purchase Mutual Fund, plus any fees that the fund imposes at purchase (n such as sales loads
or purchase fees) the price that investors minus any fees that the fund deducts at that time
(such as deferred sales or redemption fees).

Investing in Mutual Fund

The Mutual Fund is require to file with SEBI a detailed information memorandum, in
prescribed format that provides all the information about the fund and the scheme. This
document is called, as the ‘Offer Document’, which contains very useful information, is
required to be given to the prospective investor by the Mutual Fund. The application form for
subscription to a scheme is an integral a part of the Offer Document. SEBI has prescribed
minimum disclosures in the Offer Document. An investor, before investing in a scheme,
should carefully read the Offer Document. An abridged version of the Offer Document, in a
prescribed format, is appended to the application form investors can get a summary of the
Offer Document, in the abridged version, called as the ‘Key Information memorandum’

Offer Document usually contains all information about the scheme, namely objective of
scheme, the asset allocation, risk factors, initial issue expenses and recurring expenses to be
charged to the scheme, entry or exit loads, sponsors track record, education qualification and
work experience of the key personnel including fund managers, performance of other
schemes launched by the Mutual Fund in the past, pending litigations and penalties imposed,

Performance of a Mutual fund Scheme

The performance of a scheme is reflected in its Net Asset Value (NAV), which is disclosed
on daily basis in case of open-ended schemes and on weekly basis in case of close-ended
schemes. The NAVs of Mutual Fund are required to be published in the newspapers. The
NAVs are also available on the websites of Mutual Funds. All Mutual Funds re also required
to put there NAVs on the website of Association of Mutual Funds in India ( AMFI )
www.amfiindia.com, and thus the investors can access NAVs of all Mutual Funds at one

The Mutual Funds are required to disclose full portfolios of all their schemes on half yearly
basis, which are published in the newspaper. Some Mutual Funds send the portfolios to their
unit holders.

The scheme portfolio show investment made in each security i.e., equity, debentures, money
market instruments, Government securities, etc. and their quantity, market value and % to
NAV. These portfolio statements also required to disclose illiquid securities in the portfolio,
investment made in rated and un rated debt securities, non performing assets (NPAs) etc.
some of the Mutual Funds send news letters to the unit holders on quarterly basis, which also
contain portfolios of the schemes.

The Mutual Funds are also required to publish their performance in the form of half yearly
results, which also include their returns, yields over a period of time that is, last six months,
one year, three years, five years and since inception of schemes. Investors can also look into
other details like percentage of expenses of total assets as these have an effect on the yield
and other useful information in the same half yearly format.

The Mutual Funds are also required to send annual report or an abridged annual report to the
unit holders at the end of the year.

The financial newspapers on a weekly basis are publishing various studies on Mutual Fund
schemes including yields of different schemes. Apart from these, many research agencies
also publish research reports on performance of Mutual Funds including the ranking of
various schemes in terms of their performance. Investors should study these reports and keep
themselves informed about the performance of various schemes of different Mutual Funds.
Investors can compare the performance of their schemes with those of other Mutual Funds
under the same category. They also compare the performance of equity-oriented schemes
with the Benchmarks like BSE Sensitive index, S&P CNX Nifty, etc.

On the basis of performance of the Mutual Fund the investors should decide when to enter or
exit from the Mutual Fund scheme.
Research Methodology


Research is a systematic and continuous method of defining a problem, collecting the facts
and analyzing them, reaching conclusions and forming generalization.

Research Methodology is a way of defining the whole Research program. It includes the type
of Research design followed, sampling design formulation method of data collection used.
Research Methodology is a way the whole Research program. It includes the type of
Research design followed, sampling design formulation method of data collection used.

a) Objective of Research

 To Gain familiarity with a phenomenon or to achieve new insights into it-studies with this
object in view are termed as Explorative or Formulative Research studies.

 To portray accurately the characteristics of a particular Individual, situation or a group-

studies with this object in view are known as Descriptive Research studies.

 To determine the frequency with which something occurs or with which it is associated
with something else-studies with this object in view are known as Diagnostic research

 To test a hypothesis of a casual relationship between variables-such studies are known as

Hypothesis-Testing research studies.

b) Types of Research

 Descriptive Research
Descriptive research includes surveys and fact finding enquiries of different kinds. The major
purpose of Descriptive research is description of a state of affairs as it exists at present.

 Analytical Research
In Analytical Research, the researcher has to use facts or information already available, and
analyze these to make a critical evaluation of the material.
 Applied Research
Applied research aims at finding a solution for an immediate problem facing a society or an
industrial/business organization.

 Fundamental Research
Fundamental research is mainly concerned with generalizations and with the formulation of
a theory.

 Quantitative Research
Quantitative research is based on the measurement of quantity or amount. It is applicable to
phenomenon that can be expressed in terms of quantity.

 Qualitative Research
Qualitative research is concerned with qualitative phenomenon i.e. phenomenon relating or
involving quality or kind.

 Conceptual research
Conceptual research is that related to some abstract ideas or theory it generally used by
philosophers and thinkers to develop new concepts or to reinterpret existing ones.

c) Research Design
It is the conceptual structure within which the Research is conducted. Its function is to
provide for the collection of relevant evidence.
The present Project work is based on a descriptive study heavily depending upon Primary
Descriptive Research is a Research method followed in this project, which includes surveys,
and fact-findings Inquires of different kinds. The major purpose of descriptive Research is
description of the state of affairs, as it exists at present.
d) Sampling Unit – Individual

e) Sampling Size- 200 Agents

f) Area of Study - Chandigarh, Panchkula & Mohali

g) Types of Sampling

 Probability Sampling
Probability sampling is also known as random sampling or chance sampling. Under this
sampling design, every item of the universe has an equal chance of inclusion in the sample.
Lottery method is a type of probability sampling method. The results obtain from probability
sampling can be assured in term of probability i.e. we can measure the error of estimation or
the significance of result obtain from random sample, and this fact brings out the superiority
of random sampling design over the deliberate sampling design.

 Non-Probability Sampling
Non-Probability is that sampling procedure which doesn’t afford any basis for estimating the
probability that each item in the po0pulationj has of being included in the sample. It is also
known as deliberate sampling, purposive sampling and judgment sampling. Quota sampling
is an example of Non Probability sampling.

h) Methods of Data Collection

Data can be collected from either the Primary or Secondary sources. In this Study although
the Data was collected mainly through Primary sources, it was supplemented by Secondary

Methods of Data Collection

P Observation Method Books, E
R Magazines& C
I Newspapers O
M Interview Method N
A Public Records D
R and statistics A
Y Questionnaire Method O
Through Schedules
T Reports A
Other Methods A



Prudential ICICI Asset Management Company enjoys the strong parentage of prudential plc,
one of UK's largest players in the insurance & fund management sectors and ICICI Bank, a
well-known and trusted name in financial services in India. Prudential ICICI Asset
Management Company, in a span of just over six years, has forged a position of pre-
eminence in the Indian Mutual Fund industry as one of the largest asset management
companies in the country with assets under management of Rs.23559.60 crores (as of March
31, 2006). The Company manages a comprehensive range of schemes to meet the varying
investment needs of its investors spread across 68 cities in the country.

Key Indicators

At inception -
As on July 31, 2006
May 1998

Assets Under Management Rs.160 crores Rs.31, 469.16 crores

Number of Funds Managed 2 20

Guiding Principles

Pru ICICI will conduct its Business with

 Honesty and Trustworthiness in all Interactions.

 A Pioneering Spirit and Excellence in Action.
 Collaboration and Team work.
 An Understanding of Customer Needs and the Desire to satisfy them.
 The Highest service Standards.
 A Consistently above Average Performance.

Board of Directors of the AMC

The Prudential ICICI AMC Board comprises reputed people from the finance Industry
both from India and abroad.
 Mr. Mark Norbom
 Mr. Ajay Shrivasan
 Ms. Shikha Sharma
 Mr. N.S. Kannan
 Mr. K.S. Mehta
 Mr. Dadi Engineer
 Mr. Pradip P. Shah
 Dr.(Mrs.) Swati A Piramal
 Mr. Pankaj Razdon

The Directors of the Trustee Company

 Mr.Eruch B. Desai
 Mr. D.J. Balaji
 Mr. Nagesh D. Pinge
 Mr. Sham P. Subhedar

Prudential ICICI Mutual Fund Structure

Sponsor Company Establishes the MF as a Trust

(Prudential ICICI)_ Registers the MF with SEBI) 
Mr. M S Parthasa

Managed by A Board of
Mutual AMC
Fund Provides
Hold Unit-holders
Float MFtheManages
in MF
( Prudential
Custodian Asset Distribution
per SEBI
Provides of
the schemes
Registrar and
and with
AMCto the
Mutual Fund) Company) Investors
ensure compliance

Established in London in 1848, Prudential plc, through its businesses in the UK, US and
Asia, provides retail financial services products and services to more than 21 million
customers, policyholders and unit holders worldwide with over US$400 (as of 31st
December, 2005) billion in funds under management. Prudential employs some 23,000 staff

In Asia, Prudential has life insurance and funds management operations across twelve
countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines,
Singapore, Taiwan, Thailand and Vietnam. Prudential has championed customer-centric
products and services for over 80 years, supported by an extensive network of over 145,000
staff and agents across the region.
ICICI Bank is India's second-largest bank with total assets of about Rs. 2,513.89 bn (US$
56.3 bn) at March 31, 2006 and profit after tax of Rs. 25.40 bn (US$ 569 bn) for the year
ended March 31, 2006 (Rs. 20.05 bn (US$ 449 bn) for the year ended March 31, 2005).
ICICI Bank has a network of about 614 branches and extension counters and over 2,200
ATMs. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialized subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. ICICI Bank set up its international
banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its
domestic banking strengths to offer products internationally. ICICI Bank currently has
subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain,
Hong Kong, Sri Lanka and Dubai International Finance Center and representative offices in
the United States, United Arab Emirates, China, South Africa and Bangladesh. Our UK
subsidiary has established a branch in Belgium. ICICI Bank is the most valuable bank in
India in terms of market capitalization.

ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).

ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and

At June 5, 2006, ICICI Bank, with free float market capitalization* of about Rs. 480.00
billion (US$ 10.8 billion) ranked third amongst all the companies listed on the Indian
stock exchanges.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering
in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of
Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by
ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at
the initiative of the World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses. In the 1990s,
ICICI transformed its business from a development financial institution offering only project
finance to a diversified financial services group offering a wide variety of products and
services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.
In 1999, ICICI become the first Indian company and the first bank or financial institution
from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities,
and would create the optimal legal structure for the ICICI group's universal banking strategy.
The merger would enhance value for ICICI shareholders through the merged entity's access
to low-cost deposits, greater opportunities for earning fee-based income and the ability to
participate in the payments system and provide transaction-banking services.

The merger would enhance value for ICICI Bank shareholders through a large capital base
and scale of operations, seamless access to ICICI's strong corporate relationships built up
over five decades, entry into new business segments, higher market share in various business
segments, particularly fee-based services, and access to the vast talent pool of ICICI and its
subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved
the merger of ICICI and two of its wholly- owned retail finance subsidiaries, ICICI Personal
Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank.
Shareholders of ICICI and ICICI BANK approved the merger in January 2002, by the High
Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at
Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI
group's financing and banking operations, both wholesale and retail, have been integrated in
a single entity.

*Free float holding excludes all promoter holdings, strategic investments and cross holdings
among public sector entities.
Types of Fund offered by Prudential ICICI

Equity Fund

Equity funds seek to provide maximum growth of capital with secondary emphasis on
dividend or interest income. They invest in common stocks with a high potential for rapid
growth and capital appreciation. An equity fund gives an exposure to the stock market. The
fund would have long-term growth potential but provide low current income. They are not
suitable for investors who are risk averse and are focused on maximizing current income or
conserving principal.

The funds offered under this category are the Prudential ICICI Growth Plan, Prudential ICICI
FMCG Fund, Prudential ICICI Technology Fund, Prudential ICICI Tax Plan, Prudential
ICICI Index Fund, Prudential ICICI Power, Prudential ICICI Dynamic Plan, Prudential ICICI
Discovery Plan, Prudential ICICI Emerging S.T.A.R. Fund, Prudential ICICI Infrastructure
Fund and Prudential ICICI Services Industries Fund.

Investment Philosophy

The overriding objective of the AMC in managing its investments is to produce a

consistently above average long-term performance.

The AMC believes in a bottom-up approach to stock picking. This means that the focus is on
the fundamental quality of companies as opposed to a focus on favored sectors and market
The AMC will follow a structured investment process in order to identify the best stocks for
inclusion in the portfolio. This would involve consistently examining all stocks under an
internally developed research framework. A stock would be considered or inclusion in the
Portfolio when the valuation does not adequately capture its underlying fundamental value in
the AMC's opinion based on the above factors.

The AMC's portfolio management style is conducive to a low portfolio turnover rate.
However, the AMC will take advantage of the opportunities that present themselves from
time to time because of inefficiencies of the securities markets. The AMC will endeavor to
balance the increased cost on account of higher portfolio turnover with the benefits derived
there from.

Debt Fund

The goal of fixed income funds is to provide high current income consistent with the
preservation of capital. Growth of capital is of secondary importance. These funds invest in
corporate bonds or government securities that have a fixed rate of return. The funds are
suitable for investors who want to maximize current income and who do not wish to assume
a high degree of capital risk in order to do so. Since bond prices fluctuate with changing
interest rates, there is some principal risk involved despite the fund's conservative nature.

The funds offered under this category are the Prudential ICICI Income Plan, the Prudential
ICICI Gilt-Treasury Fund, The Prudential ICICI Gilt-Investment Fund, Prudential ICICI
Liquid plan, Prudential ICICI Fixed Maturity Plan, Prudential ICICI Short Term Plan,
Prudential ICICI Long Term Plan, Prudential ICICI Sweep Plan, Prudential ICICI Income
Multiplier Fund, Prudential ICICI Monthly Income Plan, Prudential ICICI Flexible Income
Plan, Prudential ICICI Gilt Fund PF Option, Prudential ICICI Long Term Floating Rate Plan
and Prudential ICICI Floating Rate Plan.

Investment Philosophy

The AMC aims to identify securities, which offer superior levels of yield at lower levels of
risks. With the aim of controlling risks, rigorous in-depth credit evaluation of the securities
proposed to be invested in will be carried out by the investment team of the AMC. The credit
evaluation includes a study of the operating environment of the company, the past track
record as well as the future prospects of the issuer, the short as well as longer-term financial
health of the issuer. Rated debt instruments in which the Scheme invests will be of

investment grade as rated by a credit rating agency. In case a debt instrument is not rated,
specific approval of the Board of the AMC will be obtained for such an investment.

Balanced Funds

Balanced funds are more evenly invested in equities and income securities. Balanced and
equity-income funds are suitable for conservative investors who want high current yield with
some growth. If you seek to generate long-term capital appreciation and current income, an
investment in the balanced fund would be ideal. It gives you an exposure to the stock market
without the entire risk of the stock market.

The funds offered under this category are the Prudential ICICI Balanced Fund, Prudential
ICICI Child Care Plan and Prudential ICICI Blended Plan.

Investment Philosophy

The AMC proposes to invest in a mix of equities and fixed income securities with the aim of
generating capital appreciation, while at the same time minimizing the volatility inherent in
pure equity schemes. With this aim, the AMC would allocate the assets between equity and
fixed income instruments within the limits laid down for each scheme.
Objective of the Study:

 To Study the Effectiveness of the facilities provided by the Prudential ICICI.

 To Study the awareness of Prudential Products among the Agents.
 To Study the Response of Agents towards the Prudential ICICI.

To the
Channel Management

To make a Mutual Fund product reach the investors, it requires a proper Channel of
Intermediaries. These Intermediaries help in proper distribution and promotion of various
Schemes to the Investor. In order to attain smooth and error free working, it requires a
prescribed, well defined and managed set of Channel.

The Channel provides a link between the AMC and the investors who are interested to know
about the various products and also help them to choose the right product according to their
need and requirement. As different sets of investors have different kinds of needs therefore it
is essential to provide them professional guidance from the knowledgeable person selected
by the company, who can dive them personalized solutions.

There are mostly three channels tht are currently used by the AMCs, these are:

 National Distributors
 Distribution Companies
 Banks and NBFCs
 Individual Agents
 Direct Marketing Channels
 National Distributors

 Distribution companies:
A Distribution has several agents and Distributors working for it, and is the organizational
interface with the Mutual Fund. It is an institutional agent for a Mutual Fund, and earns
commission on selling of Mutual Funds. Distribution companies are very popular Channel
with Mutual Fund today.

 Banks and Non Banking Financial Companies( NBFCs)

Banks and NBFCs function very much like the Distributing agencies, and are institutional
agents for Mutual Funds. They leverage their branch network and regional presence to obtain
Business from their existing clients. Banks are able to offer collection services and also sell
Mutual funds to their clients as a value added proposition.

The distribution are given weightage on the following counts:

 Client Base: How stable are the investors, the nature and number of investors.

 Sales Force: Educational Qualifications, Strength of Sales Force.

 Services Offered: Advisory, Collection.

The Communication and payments to the distributor are made on the basis of a code. In case
the distributor doesn’t have one, it can be allotted to him by the AMC. To be allotted a code,
a form needs to be filled. On the basis of this form a face to face meeting with the zonal head
and sales team, a code is allotted to the distribution after obtaining approval from the Zonal

Three Simple steps to become a Distributor:

Step I Approach the Sales person at any of the offices.

Step II Obtain approval from the Zonal head by arranging a meeting with the help of sales
StepIII After approval from Zonal head is obtained, a code is allotted(if not already allotted)
by filling a form.
 Individual Agents;

Individual agents form the largest Distribution channel, in terms of their number and
geographical spread. It is estimated that there are about one lakh Individual Mutual Fund
agents in the country. These agents usually sell schemes of multiple Mutual Funds, and also
distribute other financial products to their clients. AMFI has mandated the AMFI
certification for the Individual Agents, so that they qualify themselves to be reliable financial
advisors for investors. From Nov 2001, no new mutual fund agent can be appointed, if he/she
doesn’t have an AMFI certification, which is awarded only after clearing the AMFI
Certification Examination.
Intermediaries play a pivotal and valuable role in promoting sale of Mutual Fund it is
therefore vital that those engaged in selling Mutual Funds have the highest standards of
knowledge attitude and ethics.

Standards Set By AMFI :

Gradually raising the bar of standards in this profession, AMFI first began with creating
awareness, followed by education, then certification with the help of NSE's Capital Market
Certification Module (NCFM) as well as by conducting Manual Test in association with
Indian Institute of Capital Markets and Institute of Banking Personnel Selection. As the next
step to add value to the certification, AMFI introduced the process to register the
intermediaries who have passed the certification test as AMFI Registered Mutual Fund
Advisors (ARMFA), thus laying the foundation for an organized industry and allotting a
unique code-AMFI Registration Number (ARN) along with an identity card. SEBI
recognizing the importance of this initiative taken by AMFI has made Registration with
AMFI after passing AMFI Certification Test compulsory for intermediaries.

Thus all AMFI Certified Intermediaries engaged in marketing and selling of mutual fund
schemes are required to be registered with AMFI after passing AMFI certification Test. The
mutual funds will not be able to deal with intermediaries who are not registered with AMFI.
AMFI Registration Number (ARN):

The AMFI Registration Number (ARN) is being introduced as the unique code, which
identifies the intermediary as being a part of this foundation.

 ARN is a unique number allotted to:

 Individual agents, brokers, and other intermediaries engaged in selling Mutual Funds,
having passed the AMFI Certification Test and agreeing to abide by the code of conduct.

 Corporate engaged in the business of selling Mutual Funds, which apply to AMFI and
agree to abide by the code of conduct.

 An Identity card would be issued to persons passing the test:

 Individual intermediaries would have a card with their unique ARN.

 Employees of corporate would have a card with the ARN of their employer.

 The ARN can be used for canvassing business.

 Registered intermediaries can be de-registered as the ultimate censure, for the

following reasons:
 Violation of the code of conduct.

 Being indicted for serious offences by a regulatory authority.

 Complaints of gross negligence upheld by a consumer court.

 AMFI will be charging nominal fees to cover administrative and publicity costs. The

fees will be as under

 Corporate Intermediaries: A registration fee of Rs.15, 000/- for public limited

company and Rs.1, 000/- for other corporate bodies such as private companies,
partnership firms, sole proprietorship firms etc.

 Individuals (including employees of corporate): There is a fee of Rs. 500/-

AMFI Guidelines & Norms for Intermediaries ("AGNI"):

In order to promote best practices and ethical standards in the business of sale of mutual fund
schemes, AMFI has formulated broad guidelines and norms including a code of ethics for the
intermediaries,which will be applicable to ARMFA.

AMFI believes that a sincere endeavor to adhere to the guidelines and the code would help
promote best and healthy practices in the area of sales and marketing which would ultimately
benefit all concerned - the investor, the intermediary and the industry as a whole.

This registration process would have the following advantages:

 AMFI Registered Mutual Fund Advisors (ARMFA) will now be distinguished and the
investors will recognize and realize the importance of dealing through a ARMFA

 The AMFI Guidelines and Norms for Intermediaries (AGNI) would be a tool to ensure
that an ARMFA gets paid, as a professional should, for his skills.

 The improved knowledge requirement and censure on account of violation of AGNI

would contribute to build up a cadre of professionals committed to do business on healthy
and ethical lines.
 Over time, an ARMFA would have a track record and healthy business relationship.


AMFI has currently authorized M/s Computer Age Management Services Pvt. Ltd.
("CAMS") to act as processing agent on its behalf. AMFI may, from time to time, authorize
other organizations to undertake the task currently assigned only to CAMS.
Intermediaries are requested to apply in the prescribed form, which can be obtained from the
office of AMFI or any office of CAMS. In addition distributors may write to AMFI or
CAMS and obtain the application form by post.

Application forms can be submitted at the office of CAMS or sent by post to CAMS.

Individual Applicants:

 An individual must complete the appropriate form and enclose two photographs of the
size defined in the application form, and a self-certified copy of either the AMFI certificate
or mark-sheet as proof of having passed the AMFI Certification Test.

 Senior Citizens: All agents/distributors who were above the age of 50 and had experience
of at least 5 years as on September 30, 2003 are exempted from passing the AMFI
Certification Test. For registration they are required to submit duly filled in application form
(individuals Only) along with the following documents:

 Proof of age.
 Recommendation from a member AMC (Mutual Fund) certifying that he/she has worked
for five years as mutual fund distributor/agent.

 The prescribed fees can be paid only by a demand draft in favor of the “Association of
Mutual Funds in India” payable at the location of the CAMS office to which the form is
submitted. The prescribed fees for Individual Intermediaries as well as for each employee
of a corporate Intermediary, the prescribed fees are Rs.500/- (which may be amended from
time to time by AMFI). This fee has to be paid every time the individual renews his/her

 Non-individual Applicants:

 Non-individual applicants shall submit the form duly completed along with
memorandum and articles of association in the case of companies, partnership deed in the
case of partnership firms, society registration documents in the case of societies and trust
deed in the case of trusts. The list of authorized signatories shall also be submitted.

 The prescribed fees in case of public limited companies are Rs.15,000/- and in case
of corporate bodies in other forms such as private companies, partnership firms, sole
proprietorship firms etc., the fees are Rs.1,000/-.

The non-individual applicant must however ensure that all their employees engaged in
sales or marketing of units of mutual funds are registered with AMFI and obtained photo-
Identity card.

The documents shall be scrutinized and if found in order and if the prescribed fees have
been realized, a certificate of recognition or photo identity card as applicable shall be
issued. These will be mailed directly to the applicant.
Q. In what kind of Funds agents mostly deal with

Category Percentage
Equity Funds 75
Debt Funds 20
Others 05

40 75

Equity Funds Debt Funds Others
It suggests that Equity Fund has he highest preference among the Agents and Debt Funds
are less preferred by the Agents due to less Return.

Q. Level of Awareness about the services of the Prudential ICICI

Category No. of Persons

SMS 25
Mails 100
Website 50
Personal Contact 150

80 150
60 100
20 25
SMS Mails Website Personal

It Suggests that mostly the Agents know about the Personal Contact. Very few Agents know
about the SMS service of the company.

Q. Which mode is Preferred by the Agents to get the information

Category No. of Persons

SMS 12
Mails 14
Website 04
Personal Contact 70




40 70


10 12 14
SMS Mails Website Personal

It Suggests that Personal contacts is most ly liked by the Agents to get the information. many
are also using SMS service of the company to get information.
Q. Mutual Funds preferred by Agents

Asset Management Company Percentage

Prudential ICICI 32
HDFC Mutual Fund 22
Franklin Templeton 18
SBI Mutual Fund 28

15 28
10 18

Prudential ICICI HDFC Mutual Franklin SBI Mutual Fund
Fund Templeton

It suggests that the PRU ICICI has the highest acceptance among the Agents. Next favorite is
SBI Mutual Fund.

Q. Are you satisfied from the services offered by the PRU ICICI
Particulars Percentage
Yes 67
No 18
Can’t Say 15






10 18 15

Yes No Can't Say

Almost 70% agents are satisfied with the services provided by the company. Only 18%
Agents are unsatisfied.

Q. Which PRU ICICI products are mostly sold by the Agents

Product Percentage
Growth Fund 15
Dynamic Plan` 26
Discovery Fund 20
Emerging S.T.A.R 17
Tax Plan 22






Growth Dynamic Discobvery Emerging Tax Plan
Fund Plan Fund S.T.A.R

It suggests that Dynamic plan is the hot favorite among the agents and next favorite is Tax

In every Research there are chances of errors and constraints. I have found following
limitation in my study:

 Sample Size, which I have taken, is very small, on the basis of which efficient decision
can’t be taken.
 Respondents were biased in their responses because they were more in favor of the
Brand, they were using.
 Co-operation of Respondents: This has been a major problem. People were reluctant to
fill the Questionnaire or face the Interview.
 Most of the people were at their work, so they didn’t have enough time to give all replies.
Mutual Funds are a thankless lot. They take all the credit when their growth Funds generate
strong returns in a bullish market, which hardly a word for the stock market which help them
to do so. And when the bears take charge and the NAV of the same funds take a beating, they
are quick to pass on the buck to the market.

The reality is that the performance of the Growth Funds will broadly reflect that of the
markets-always. So, a sustained rise in the market will boost their NAVs, while a prolonged
bearished phase will drag them down. In such cases, though Mutual funds can do little to
determine whether their returns are positive or negative territory, they can control the
quantum of the rise or fall through portfolio management. How effective your Mutual Fund
is doing, especially in the week market, is a good reflection on its portfolio management
skills-in terms of timing the market and portfolio diversification.

In equity investing, direct or indirect, you can’t avoid the market risk.
The Investors are basically influenced by the intrinsic qualities of products followed by
efficient Fund Management and general of the Fund/Scheme in their selection of the Fund
Schemes. Hence it is suggested that Prudential ICICI should design products consciously to
meet the investor need and should be alert to capture the changing market moods and be
innovative. Introducing new innovative schemes could help them to attract new investors and
retain the old investors in different schemes.

 Prudential ICICI should find new methods with the help of which they could create
awareness among the investors to invest their money in Mutual Funds.

 They should adopt new sales promotion tools like Advertisement, mobile advertisement
etc. with the help of which they could create awareness among the investors about the new
Schemes launched by them.

 They should try to make better customer relationship with their customer by trying to
know about their problems and giving the way out as quickly as they can.

 They should try to make good relationship with Agents by providing links from the
investor service center.

 They should give proper updates of the investor profile to the Agent, which has help
them to make investment in the particular Scheme.

 Any transaction made should be made in the account of the investors and that should be
mailed to the customer electronically.

 Whenever the company releases a new fund offer, they should take proper steps to create
awareness among the Agents before the Scheme has been launched into the market.

1. Name of the Associates

2. Address
3. Email

4. Contact No.

5. Sex Male Female

6. Date of Birth DD MM YEAR

7. ARN No.

8. Present Assets under mangement

Mutual Funds
Fixed deposits
Post Offices
Insurance Products
9. Approximate total number of investors

10. Presently what do you sell more

Equity Funds Debt Funds Others

11. Which Mutual Fund are you selling the most?

12. What are the services you look forward for from the AMC?
13. Do you know about services being offered by Prudential ICICI?
SMS Website Mails Personal Contact

14. Which mode of service is preferred by you to get the regular information?
SMS Website Mails Personal Contact

15. Which funds are suggesting from Prudential ICICI and Why?

16. What do you feel about the service standards of Prudential ICICI?

17. Do you want training on Mutual Fund?

Yes No

18. Any Query?



A statement to his client from the broker featuring all transactions.

A charge or obligation to pay but not yet paid.

Accruals Basis
Accounting method in which income and expenditure are entered as and when earned or
incurred, although they may not have been received or paid.

Accumulated Dividend
Dividend due but not paid, and carried forward on the balance sheet as a liability till it is

Accumulated Profits
The amount of profit, after payment of dividend, taxes and providing for depreciation that is
carried forward to the next year's account.

Active Market
Characterized by frequent and large volume of trading of a particular share or shares in

Active Shares
Shares in which there are frequent and day-to-day dealings. They are also liquid which
implies they are easy to buy or sell.
Allotment Letter
A communication letter sent by the company or its agent stating the number of securities and
the value in response to the investor's application.

The amount by which a security’s return differs from the normal return for its level of risk.

When two or more separate companies come together to form one company.

A means of depreciating certain intangible assets.

Annual Report
Report of each accounting year has a review of the company's operations during the year, a
summary of its financial results and other statutory reports.

Profiting from differences in price of the same security/currency traded on two or more
markets. An arbitrageur makes money by buying in the lower market and immediately
thereafter selling in the higher market, or vice versa, thereby making a profit.

Anything owned by a company that has a market value.

A mechanism utilized by the Exchange to fulfill its obligation to a counter party member
when a member fails to deliver good securities or make the payments. Through auction the
Exchange arranges to buy good securities and deliver them to the buyer or arranges to realize
the cash and pay it to the seller.

Auction Market
The buy/sell auction for a Capital Market security is managed through the auction market. As
opposed to the Normal market where trade matching is an on-going process, the trade
matching process for auction starts after the auction period is over.

Bar Charts
A tool of technical Analysis; these have vertical bars representing each day's price
movement. Each bar covers the distance between the day's highest prices to the day's lowest
price, with an X to mark the closing price.

Basis Point
0.01%. Foe example, if the yield has gone up by 200 basis points it means it has gone up by 2

A stock market operator who expects share prices to fall and keeps selling to pick up the
shares later a lower price for actual delivery, causing selling pressure and lowering the prices

Bear Cycle
An extended period when share prices generally keep falling and the stock market indices
keep going down.

Bear Market
Prolonged period of falling share prices.

Benchmark Index
Indicators used to provide a point of reference for evaluating a fund's performance. The most
common benchmark for equity-oriented funds is the S&P 500 Index. For fixed-income funds
it is the Lehman Brothers Aggregate Bond Index.

Bid Price
It is the price at which a buyer is prepared to buy shares.

A member of the stock exchange who is licensed to buy or sell shares on his own or on his
client's behalf. He charges a commission brokerage on the deals.

A stock market operator who believes that share prices are going to rise, and keeps buying to
sell later at a profit.

Bull Market
Prolonged rise in the price of shares, sustained by buying pressure.

Business Cycle
A period of time during which the general economic activity expands and contracts with
effects on inflation, productivity and employment. Thus one recovery and one recession
complete a business cycle.

Business Risk
It is the inherent potential of declines in earnings and slowdown in growth in any business or

Buy and Hold Strategy

Accumulating shares of a company over the years for long-term growth benefits and
favorable capital gains tax on profits. It is a strategy adopted by the investor whereby he
holds on to the investment having full faith in the long term investment strategy ignoring the
short term fluctuations.
Buy and Sell Strategy
Active share trading strategy in which shares are bought at dips and sold at peaks. Since the
lowest dips and highest peaks are seldom identified, it amounts to buying low and selling
high, not holding on to a share or shares for long.

Contributions made towards the investment in equity and preference shares of the

Capital Appreciation
Increase in the capital value of shares as their price increases over a period.

Capital Expenditure
Expenditure on acquiring fixed, rather than liquid assets.

Capital Gains
Profit arising out of the sale or transfer of an asset with the cost adjusted for any
improvement or depreciation in the asset.

Capital Gearing
The ratio of fixed interest loan and preference shares to the ordinary share capital of a

Capital Loss
Loss incurred when investments are sold at a price lower than their purchase price.
Capital Market
Markets where the capital funds-debt and equity are traded. Included are private placement
sources of debt and equity as well as organized markets and exchanges.

Capital Reserves
These are undistributable reserves, arising out of profits on the revaluation of capital assets
and share premia.

Capital Structure
The capital of a company consists of issued and subscribed equity shares, redeemable
preference shares, and secured and unsecured loans. Its structure refers to the mix of debt to
equity used.

Contract Note
Given by the stockbroker to the buyer of the shares, signifying the contract between them to
buy/sell the shares at stated price.

Current Assets
Such entries on a company's balance sheet include cash, sundry debtors, marketable
securities, accounts receivable, loans and advances, and inventory - all that can be converted
into cash within one year.

Current Liabilities
Accounting term for money payable within the current accounting year, on account of trade
creditors, taxation, dividends, etc. To these are often added provisions, i.e., any charges or
liabilities various government duties, disputed claims, etc. which the company may have to
settle within the accounting year.

Current Ratio
Current assets divided by current liabilities, including all short-term debt. This ratio is used to
measure liquidity and risk of credit failure.

Dematerialization (Demat)
It is a process by which shares in the physical/paper form are cancelled and credit in the form
of electronic balance is maintained at the Depository through a DP (Depository Participant).

A financial security, such as an option, or future, whose value is derived in part from the
value and characteristics of another security, the underlying security.

Diversification-- risk-management technique that mixes a wide variety of investments within

a portfolio. The rationale behind this technique contends that a portfolio of different kinds of
investments will, on average, yield higher returns and pose a lower risk than any individual
investment found within the portfolio.

Distribution of Earnings to the shareholders of the company. Increasing the volume and

Earning Per Share

The net income of the firm divided by the number of common stock shares outstanding.

Economic Growth Rate

Annual percentage of change in the gross national product. This is adjusted for inflation to
arrive at the real economic growth rate.

Efficient Market
A market for securities in which every security’s price equals its investment value at all
times, implying that a set of information is fully and immediately reflected in the market
Ex-Dividend Date
A publicly announced date on or after which a buyer will not be entitled to the dividend
declared on a share. The share price is usually a shade lower on the ex-dividend date.

Face Value
The nominal value printed on the face of the share, debenture or bond. Also known as "Par

Financial Structure
Distinguished from capital structure of a company, which includes only long-term debt and
equity, the financial structure of a company is revealed on the right-hand liabilities side of a
company's balance sheet, which includes all the items, which finance the assets on left-hand
side of the balance sheet

GDR (Global Depository Receipt)

It is an instrument issued abroad listed and traded on foreign stock markets. A GDR is
convertible into shares, which are listed and traded on the domestic exchange, the dividend
being paid in the domestic currency.

Growth Shares

The shares of the companies, which are growing rapidly in terms of turnover and profits.
Such companies show high P/Es

Income shares
The shares of the companies, which have low P/Es but yield good dividend and follow a
policy of high dividend payout

A measurement of the trend of share prices. It is not just an average of share prices, but
weighted to reflect the number of shares outstanding for an individual scrip.

The rate of change in a price index over a certain period of time. Equivalently, the percentage
change in the purchasing power of a unit of currency over a certain period of time.

Insider Trading
Trading in a company’s shares by a connected person having non-public, price-sensitive

Institutional Investor
Organizations that trade large volume of securities, e.g., mutual funds, banks, pension funds,

Issued Capital
The amount of authorized capital issued by a company. A part of the authorized capital may
be withheld for subsequent.

Joint Venture
Collaboration, but not partnership, between two complementary companies, sometimes one
Indian and the other foreign, to make better use of each other's technology or services.
Members of a stock exchange who stand ready to buy and sell shares in which they

A measure of money supply which includes all coins and notes in circulation plus Demand
Deposits with Banks plus Demand portion of Savings Deposits with Banks + Other Deposits
with RBI (deposits of DFI s etc.). Also called "Narrow Money"

A measure of money supply, including M1, plus Post Office Savings Deposits.

A measure of money supply, including those covered by M1, plus Time Deposits with the
Banks. Also called "Broad Money"


Rupee measure of money supply covering all M3, plus All Post Office Deposits.

Market Capitalization

The total market value, at the current stock exchange list price, of the total number of equity
shares issued by a company.

Market Forces

The forces of demand and supply, which determine price in a free market.
Market lot

A fixed minimum number, in which or in multiples of which, shares are bought and sold in
the stock exchange. In demat scraps the market lot is one share.

Market Risk

This is inherent in the market, depending on how the economy and a particular segment of
industry is behaving.

Market Timing

The decision when to buy or sell a share or when to switch from one share to another.


An amicable getting together of two or more companies to form one unit for increased
overall efficiency.

Net Book Value

The value of an asset as it appears on the books of a company as at the date of the last
balance sheet, after depreciation has been applied. It is not the market value of the asset.

Net Profit
The final profit of a company, after all deductions for interest, depreciation and taxation have
been made. It is the black bottom line.

Net Worth
Net worth is taken to represent shareholders funds, i.e., equity share capital plus reserves.

Net yield
Profit made on an investment after deduction of all expenses and capital gains tax or income
tax, if any.

An option confers the right to buy or sell a specific quantity or a number of a particular asset
at a specific price at or before some date in the future. It confers on the buyer the right but
not the obligation to honor the contract. The obligation rests only with the seller or the writer
of the contract. If the buyer chooses not to exercise his option, the maximum loss he suffers
is the premium he has paid to the writer of the contract.

Combined holding of all the financial assets such as shares, debentures, government bonds,
Unit Trust of India certificates, bullion and other financial assets.

Primary Market
Markets for new issues of shares, debentures, and bonds, where investors apply directly to
the issuer for allotment any pay application money to the issuer's account. Distinguished
from the secondary market, where investors buy listed shares on the stock exchange through

Profit and loss account

a statement of account of the profit and loss of a business during the accounting period. It
summarizes the income, costs and expenses of the company over the period, and together
with the balance sheet, constitutes a company's financial statement.

Profit after tax or PAT

This is arrived at by deducting expenditure cost of materials, manufacturing expenses,
overheads, interest, and depreciation from income net sales plus other income and providing
for taxation and investment allowance reserve on the amount.
Profit before tax
Profit before tax divided by net sales and the sum multiplied by a hundred. This is a useful
indicator of how efficiently the company is being run.

Formal written offer to sell securities that sets forth the plans of the business enterprise that
an investor needs to make a decision.

Quick assets
these are liquid or near-liquid assets, such as cash, money in bank, gold, etc. In financial
statement analyses these mean current assets minus inventory.

Quick Ratio
Defined as current assets minus inventories divided by current liabilities. A measure of the
liquidity of a company, showing whether the company could meet its obligations from the
current assets. Also known as the acid test ratio.

Quoted shares
The shares of a company, which are officially registered, listed and traded

Rate of return
The dividend received divided by the price of the share, multiplied by a hundred. The total
return on an investment is the sum of dividend received and the appreciation in the price of
one's shares.
Record date
Record date is the date on which the beneficial ownership of an investor is entered into the
registers of the members. Such a member is entitled to get all the corporate benefits.

Registrar or transfer agent

It is the institution that maintains a record of all the investors/unit holders of a company/.
Normally this institution also mails the notices regarding the holding of the annual meetings
and the distribution of dividends to the unit holders. It also supplies the annual statement to
the investors representing the account position.

Retained Earnings
This part of a company's earnings which is not distributed as dividends, but held back and
accumulated for the company's growth or contingency use. Also called undistributed profit or
earned surplus or reserves.

Secondary Market
Place where already issued and outstanding shares are bought and sold. Distinguished from
the primary market in which the issuer sells shares directly to the investor.

Financial documents which give the owner specific rights of ownership; these include equity
and preference shares, debentures, treasury bills, government bonds, units of mutual fund and
any other marketable documents.

Security Analysis
A component of the investment process that involves determining the prospective future
benefits of a security, the conditions under which such benefits will be received and the
likelihood of such conditions occurring.

Security Analyst
A specialist employed by a brokerage firm, financial journal, and bank or investment body to
conduct research on investment by analyzing the working and finance of individual
companies or companies of an industrial group, and make recommendations. The analyst
studies the sales and earnings growth, capital structure, P/E ratio, dividend payouts, return on
investment, and movement of share prices, combining fundamental and technical analyses.

Seller's Market
Characterized by a shortage of shares in the market in relation to their demand and
consequent high prices, indicating a BULL MARKET; the opposite of buyer's market.

A share is one unit of ownership of a company.

Share Holder
A person or a legal entity who owns equity or preference shares of a company. The proof of
his ownership is the share certificate, which he may hold in multiple numbers, each
certificate comprising a certain quantity of shares.

Stock Exchange
A marketplace where shares change hands for a consideration.

Systematic Risk
A part of the security's risk that is common to all the securities and cannot be eliminated
through diversification; also known as " market risk".

he movement of assets from one fund to another. Also know as "exchanging." An investor
will switch mutual funds when their investment objectives change or because of market
conditions. This is usually done within a family of funds, but can be done between different
fund families. There usually is no charge for a certain number of transactions per year, after
which a transaction fee may apply.

Transfer Deed
A transfer deed is a form that is used for effecting transfer of shares or bonds/debentures and
is valid for a specific period. It should be sent to the company along with the share certificate
for affecting the transfer duly signed and stamped and complete in all respects.

Transmission is a lawful process by which the ownership of the securities is transferred to the
legal heir(s) of the deceased.

A banker or a financial institution which agrees to buy up the unsubscribe portion of a new
issue, should such a thing happen, and sells it later to investors at a premium.

Vertical line Charting
Technical analysts' charting of a share's price movement by using a vertical line to represent
the high and the low, with a horizontal bar across the point where the day's trading has
closed. There is line for each day or each week or each month depending on the breadth of
analysis. The chart gives an idea, not only of the trend or price movements, but also the range
of fluctuation of the share's price.

Volatile Shares
Shares, which are subject to sharp fluctuations in price, showing a considerable difference
between their highest and lowest recorded prices. Volatility is measure by the formula:
highest price minus lowest price, divided by the lowest price, then multiplied by 100.

Percentage return as dividend from a particular share. Current yield is calculated as dividend
per share divided by the market price of the shares, multiplied by 100.

Zero coupons Bond
Bond sold a fraction of its face value. It appreciates gaudery, but no periodic interest
payments are made.


 Books followed
Research Methodology By C R Kothari

 Websites

 Others
The Economic Times,
Pru ICICI Fact Sheet & Brochures etc