A Project Report On

"A Comparative study of Reliance vs UTI with Respect to Mutual Fund"

Submitted

In Partial Fulfillment of the requirements

For the Award of Degree of

Bachelor of Management Studies

Semester V

(2017-2018)

Submitted by

Saikiran Sinety

Roll No. 45

Under the Guidance of

cosmopolitans's

Valia C.L. College of Commerce & Valia L.C. College of Arts

D.N.Nagar, Andheri (West), Mumbai-400053.

 Format of Report

(Cover page)(Black with golden emboss)

University Of Mumbai

“Topic Name”

Bachelor of Management Studies

Semester V

(2017-2018)

Submitted by

(Name of Student)

(Roll no.)

Cosmopolitans’s

Valia C.L.College of Commerce &Valia L.C. College of Arts

D.N.Nagar, Andheri (West), Mumbai-400053.

 (Inside 1st page)

University Of Mumbai

“Topic Name”

Bachelor of Management Studies

Semester V

Submitted

In Partial Fulfillment of the requirements

For the Award of Degree of

Bachelor of Management Studies

By

(Name of Student)

(Roll no.)

Cosmopolitans’s

Valia C.L.College of Commerce &Valia L.C. College of Arts

D.N.Nagar, Andheri (West), Mumbai-400053.

 DECLARATION

I, _________________________________________ the student of T.Y.B.M.S. Semester V

(2017-2018) hereby declare that I have completed the project on
___________________________________________________________________________
___________________________________________________________________________

The information submitted is true and original to the best of my knowledge.

_____________________

(Signature of Student)

Name of the student

Roll number

Cosmopolitans’s

Valia C.L.College of Commerce &Valia L.C. College of Arts

D.N.Nagar, Andheri (West), Mumbai - 400053.

CERTIFICATE
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Dr. Shobha Menon for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Chief Co-ordinator Prof. Rajlaxmi Nayak and our
Course Co-ordinator Prof. Siddhita Walavalkar, for their moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Prof.
_____________ whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and
magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout my
project.
 Table of Contents

SR NO TITLE PAGE NO
1 CHAPTER 1
Introduction
2 CHAPTER 2
Introduction to Finance
3 CHAPTER 3
Introduction of Mutual Funds
4 CHAPTER 4
Mutual Funds in India
5 CHAPTER 5
Reliance Mutual Funds Vs UTI Mutual
Funds
6 CHAPTER 6
Suggestion.
Conclusion.
Annexure
Bibliography

Chapter 1- INTRODUCTION

1.1 Introduction.
 1.2 Need of the Study.
1.3 Objectives of the Study.
1.4 Scope of the Study.
1.5 Limitations of the Study.
1.6 Review of Literature.

Why Select Mutual Fund?

The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly he can expect higher returns and vise versa if he pertains to lower risk
instruments, which would be satisfied by lower returns. For example, if an investors opt for
bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest
in capital protected funds and the profit-bonds that give out more return which is slightly
higher as compared to the bank deposits but the risk involved also increases in the same
proportion.
Thus investors choose mutual funds as their primary means of investing, as Mutual funds
provide professional management, diversification, convenience and liquidity. That doesn’t
mean mutual fund investments risk free.
This is because the money that is pooled in are not invested only in debts funds which are
less riskier but are also invested in the stock markets which involves a higher risk but can
expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the
derivatives market which is considered very volatile.
Introduction:

A Mutual Fund is a trust that pools the savings of a number of investors who
share a common financial goal. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. The income earned
through these investments and the capital appreciations realized are shared by its unit
holders in proportion to the number of units owned by them. Thus a Mutual Fund is the
most suitable investment for the common man as it offers an opportunity to invest in a
diversified, -professionally managed basket of securities at a relatively low cost.

The project idea is to project mutual funds as the better avenue for investment. Mutual
fund is productive package for a lay-investor with limited finances. Mutual fund is a
very old practice in U.S., and it has made a recent entry into India. Common man in
India still finds ‘Bank’ as a safe door for investment. This shows that mutual funds
have not gained a strong foot-hold in his life.

The project creates an awareness that the mutual fund is worthy investment practice.
The various schemes of mutual funds provide the investor with a wide range of
investment options according to his risk-bearing capacities and interest. Besides, they
also give a handy return to the investor. The project analyses various schemes of mutual
fund by taking different mutual fund schemes from different AMC’S. The future
challenges for mutual funds in India are also considered.
NEED OF THE STUDY

The study basically made to educate the investors about Mutual Funds. Analyze the
various schemes to highlight the risk and return of diversity of investment that mutual
funds offer. Thus, through the study one would understand how a common man could
fruitfully convert a pittance into great penny by wisely investing into the right scheme
according to his risk- taking abilities.

A small investor is the one who is able to correctly plan & decide in which profitable &
safe instrument to invest. To lock up one’s hard earned money in a savings bank’s
account is not enough to counter the monster of inflation. Using simple concepts of
diversification, power of compound interest, stable returns & limited exposure to equity
investment, one can maximize his returns on investments & multiply one’s savings.

Investment is a serious proposition one has to look into various factors before deciding
on the instruments in which to invest. To save is not enough. One must invest wisely &
get maximum returns. One must plan investment in such a way that his investment
objectives are satisfied. A sound investment is one which gives the investor reasonable
returns with a proper profitable management

This report gives the details about various investment objectives desired by an investor,
details about the concept & working of mutual fund.
OBJECTIVES OF THE STUDY

· To understand the concept of Mutual Funds.

· To study the different Sectoral Mutual Funds in India.
· To analyse the performance of different sectoral mutual funds.
· To identify the best Sectoral Mutual Funds to invest in India.
· To suggest the best mutual funds for investors.

SCOPE OF THE STUDY

Now a days, there is a lot of scope for the mutual funds. The Financial managers
have to decide whether to invest in the Shares, bonds, debentures, real estate, gold and
other Commodities to get the maximum benefits for funds. The financial managers
should also reduce the risk from the Investments. The scope of the study is confirmed
to the sectoral funds available in Indian mutual funds.

LIMITATIONS OF THE STUDY

· The lack of information sources for the analysis part.

· Though I tried to collect some primary data but they were too inadequate for the purposes
of the study.
· Time and money are critical factors limiting this study.
· The data provided by the prospects may not be 100% correct as they too have their
limitations.
· The study is limited to selected mutual fund schemes.

REVIEW OF LITERATURE

A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is invested by 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 appreciations realized by the scheme are
shared by its unit holders in proportion to the number of units owned by them (pro
rata). Thus a Mutual Fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed portfolio at a
relatively low cost. Anybody with an investible surplus of as little as a few thousand
rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment
objective and strategy.

A mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real
estate, derivatives and other assets have become mature and information driven. Price
changes in these assets are driven by global events occurring in faraway places. A
typical individual is unlikely to have the knowledge, skills, inclination and time to keep
track of events, understand their implications and act speedily. An individual also finds
it difficult to keep track of ownership of his assets, investments, brokerage dues and
bank transactions etc.

A mutual fund is the answer to all these situations. It appoints professionally qualified
and experienced staff that manages each of these functions on a full time basis. The
large pool of money collected in the fund allows it to hire such staff at a very low cost
to each investor.

In effect, the mutual fund vehicle exploits economies of scale in all three areas -
research, investments and transaction processing. While the concept of individuals

coming together to invest money collectively is not new, the mutual fund in its present
form is a 20th century phenomenon.
In fact, mutual funds gained popularity only after the Second World War. Globally,
there are thousands of firms offering tens of thousands of mutual funds with different
investment objectives. Today, mutual funds collectively manage almost as much as or
more money as compared to banks.

A draft offer document is to be prepared at the time of launching the fund. Typically, it
pre specifies the investment objectives of the fund, the risk associated, the costs
involved in the process and the broad rules for entry into and exit from the fund and
other areas of operation. In India, as in most countries, these sponsors need approval
from a regulator, SEBI (Securities exchange Board of India) in our case. SEBI looks at
track records of the sponsor and its financial strength in granting approval to the fund
for commencing operations.

A sponsor then hires an asset management company to invest the funds according to the
investment objective. It also hires another entity to be the custodian of the assets of the
fund and perhaps a third one to handle registry work for the unit holders (subscribers)
of the fund.
Chapter 2: Introduction to Finance

1.1 Meaning.
1.2 Types of Finance.
1.3 Nature of Finance Function.
1.4 Objectives of Finance.
1.5 Scope of Finance Function.
1.6 Organization of Finance Function.

1.1 MEANING

Finance is a field that deals with the study of investments. It includes the dynamics
of assets and liabilities over time under conditions of different degrees of uncertainty and risk.
Finance can also be defined as the science of money management. Finance aims to price
assets based on their risk level and their expected rate of return. Finance can be broken into
three different sub-categories: public finance, corporate finance and personal finance.

Definition of FINANCE

“The system that includes the circulation of money, the granting of credit, the making of
investments, and the provision of banking facilities .”

SIGNIFICANCE:

Finance is the life blood of business. Before discussing the nature and scope of Financial
management, the meaning of ‘finance’ has to be explained. In fact, the Term, finance has to be
understood clearly as it has different meaning and Interpretation in various contexts. The time
and extent of the availability of Finance in any organization indicates the health of a concern.
Every Organization, May it be a company, firm, college, school, bank or university Requires
finance for running day to day affairs. As every organization previews Stiff competition, it
requires finance not only for survival but also for Strengthening themselves. Finance is said to
be the circulatory system of the Economy body, making possible the required cooperation
between the Innumerable units of activity.
DEFINITION OF FINANCE:

1. According to F.W.Paish, Finance may be defined as the:

“position of money at the Time it is wanted.”
2. In the words of John J. Hampton, the term finance can be defined as the:
“Management of the flows of money through an organization, whether it will be a
Corporation, school, bank or government agency.”
3. According to Howard and Upton:
“finance may be defined as that Administrative area or set of administrative functions in an
organization which Relates with the arrangement of each and credit so that the organization
may have the means to carry out the objectives as satisfactorily as possible.”

1.2 TYPES OF FINANCE:-

BUSINESS FINANCE:

The term ‘business finance’ is very comprehensive. It implies finances of business activities.
The term, ‘business’ can be categorized into three groups: commerce, industry and service. It
is a process of rising, providing and managing of all the money to be used in connection with
business activities.

It encompasses finance of sole proprietary organizations, partnership firms and corporate

organizations. No doubt, the aforesaid organizations have different characteristics, features,
distinct regulations and rules. And financial problems faced by them vary depending upon the
nature of business and scale of operations. However, it should be remembered that the same
principles of finance is applicable to large and small organizations, proprietary and non-
proprietary organizations.

Business finance deals with a broad spectrum of the financial activities of a business firm. It
refers to the raising and procurement of funds and their appropriate utilisation. It includes
within its scope commercial finance, industrial finance, proprietary finance corporation
finance and even agricultural finance.

The subject of business finance is much wider than that of corporation finance. However,
since corporation finance forms the lion's share in the business activity, it is considered almost
inter-changeable with business finance. Business finance, apart from the financial
environment and strategies of financial planning, covers detailed problems of company
promotion, growth and pattern. These problems of the corporate sector go a long way in
widening the horizon of business finance.
The finance manager has to assume the new responsibility of managing the total funds
committed to total assets and allocating funds to individual assets in consonance with the
overall objectives of the business enterprise.

DIRECT FINANCE:

The term 'direct', as applied to the financial organisation, signifies that savings are effected
directly from the saving-surplus units without the intervention of financial institutions such as
investment companies, insurance companies, unit trusts, and so on.

INDIRECT FINANCE:

The term 'indirect finance' refers to the flow of savings from the savers to the entrepreneurs
through intermediary financial institutions such as investment companies, unit trusts and
insurance companies, and so on.
Finance administers economic activities. The scope of finance is vast and determined by the
financial needs of the business enterprise, which have to be identified before any corporate
plan is formulated. This eventually means that financial data must be obtained and scrutinised.
The main purpose behind such scrutiny is to determine how to maintain financial stability.

PUBLIC FINANCE:

It is the study of principles and practices pertaining to acquisition of funds for meeting the
requirements of government bodies and administration of these funds by the government.

PRIVATE FINANCE:

It is concerned with procuring money for private organization and management of the money
by individuals, voluntary associations and corporations. It seeks to analyse the principles and
practices of managing one’s own daily affairs. The finance of non-profit organization deals
with the practices, procedures and problems involved in the financial management of
educational chartable and religions and the like organizations.

CORPORATION FINANCE:

Corporation finance deals with the financial problems of a corporate enterprise. These
problems include the financial aspects of the promotion of new enterprises and their
administration during their early period; the accounting problems connected with the
distinction between capital and income, the administrative problems arising out of growth and
expansion, and, finally, the financial' adjustments which are necessary to bolster up to
rehabilitate a corporation which has run into financial difficulties.
The term ‘corporation finance’ includes, apart from the financial environment, the different
strategies of financial planning. It includes problems of public deposits, inter-company loans
and investments, organised markets such as the stock exchange, the capital market, the money
market and the bill market. Corporation finance also covers capital formation and foreign
capital and collaborations.

1.3 NATURE OF FINANCE FUNCTION:-

The finance function is the process of acquiring and utilizing funds of a business. Finance
functions are related to overall management of an organization. Finance function is concerned
with the policy decisions such as like of business, size of firm, type of equipment used, use of
debt, liquidity position. These policy decisions determine the size of the profitability and
riskiness of the business of the firm.

Prof. K.M.Upadhyay has outlined the nature of finance functions as follows:

i) In most of the organizations, financial operations are centralized. This results in economies.
ii) Finance functions are performed in all business firms, irrespective of their sizes / legal
forms of organization.
iii) They contribute to the survival and growth of the firm.
iv) Finance function is primarily involved with the data analysis for use in decision making.
v) Finance functions are concerned with the basic business activities of a firm, in addition to
external environmental factors which affect basic business activities, namely, production and
marketing.
vi) Finance functions comprise control functions also.
vii) The central focus of finance function is valuation of the firm.

It is clear from the above, that, finance functions can be grouped as outlined
below:

i) FINANCIAL PLANNING
ii) FINANCIAL CONTROL
iii) FINANCING DECISION
iv) INVESTMENT DECISION
v) MANAGEMENT OF INCOME AND DIVIDEND DECISION
vi) INCIDENTAL FUNCTION

1.4 OBJECTIVES OF FINANCE:

The objective of finance function is to arrange as much funds for the business as are required
from time to time. This function has the following objectives.

1. ASSESING THE FINANCIAL REQUIREMENT:

Financial function is to assess the financial needs of an organization and then finding out
suitable sources for raising them. The sources should be commensurate with the needs of the
business. If funds are needed for longer periods then long-term sources like share capital,
debentures, term loans may be explored.

2. PROPER UTILISATION OF FUNDS:

Though raising of funds is important but their effective utilisation is more important. The
funds should be used in such a way that maximum benefit is derived from them. The returns
from their use should be more than their cost. It should be ensured that funds do not remain
idle at any point of time. The funds committed to various operations should be effectively
utilised. Those projects should be preferred which are beneficial to the business.

3. INCREASING PROFITABILITY:

The planning and control of finance function aims at increasing profitability of the concern. It
is true that money generates money. To increase profitability, sufficient funds will have to be
invested. Finance function should be so planned that the concern neither suffers from
inadequacy of funds nor wastes more funds than required. A proper control should also be
exercised so that scarce resources are not frittered away on uneconomical operations. The cost
of acquiring funds also influences profitability of the business.

4. MAXIMISING VALUE OF FIRM:

Finance function also aims at maximizing the value of the firm. It is generally said that a
concern's value is linked with its profitability.

1.5 SCOPE OF FINANCE FUNCTION:-

The scope of finance function is very wide. While accounting is concerned with the routine
type of work, finance function is concerned with financial planning, policy formulation and
control. Earnest W. Walker and William are of the opinion that the financial function has
always been important in business management. The financial organisation depends upon the
nature of the organization – whether it is a proprietary organisation, a partnership firm or
corporate body. The significance of the finance function depends on the nature and size of a
business firm. The role of various finance officers must be clearly defined to avoid conflicts
and the overlapping of responsibilities. The operational functions of finance include:

 Financial planning
 eciding the capital structure
 Selection of source of finance
 Selection of pattern of investment

i) FINANCIAL PLANNING:

The first task of a financial manager is to estimate short term and long-term financial
requirements of his business. For this purpose, he will prepare a financial plan for present as
well as for future. The amount required for purchasing fixed assets as well as needs of funds
for working capital will have to be ascertained. The estimations should be based on sound
financial principles so that neither there are inadequate nor excess funds with the concern. The
inadequacy of funds will adversely affect the day-to-day operations of the concern whereas
excess funds may tempt a management to indulge in extravagant spending or speculative
activities.

ii) DECIDING CAPITAL STRUCTURE:

The Capital structure refers to the kind and proportion of different securities for raising funds.
After deciding about the quantum of funds required it should be decided which type of
securities should be raised. It may be wise to finance fixed assets through long-term debts.
Even if gestation period is longer, then share capital may be most suitable. Long-term funds
should be raised. It may be wise to finance fixed assets through long-term debts. Even here if
gestation period is longer, then share capital may be most suitable. Long-term funds should be
employed to finance working capital also, if not wholly then partially. Entirely depending
upon overdrafts and cash creditors for meeting working capital needs may not be suitable. A
decision about various sources for funds should be linked to the cost of raising funds. If cost
of raising funds is very high then such sources may not be useful for long.

iii) SELECTION OF SOURCE OF FINANCE:

After preparing a capital structure, an appropriate source of finance is selected. Various

sources, from which finance may be raised, include: share capital, debentures, financial
institutions, commercial banks, public deposits, etc. If finances are needed for short periods
then banks, public deposits and financial institutions may be appropriate; on the other hand, if
long-term finances are required then share capital and debentures may be useful. If the
concern does not want to tie down assets as securities then public deposits may be a suitable
source. If management does not want to dilute ownership then debentures should be issued in
preference to share.

iv) SELECTION OF PATTERN OF INVESTMENT:

When funds have been procured then a decision about investment pattern is to be taken. The
selection of an investment pattern is related to the use of funds. A decision will have. to be
taken as to which assets are to be purchased? The funds will have to be spent first on fixed
assets and then an appropriate portion will be retained for Working Capital. The decision-
making techniques such as Capital Budgeting, Opportunity Cost Analysis, etc. may be applied
in making decisions about capital expenditures. While spending on various assets, the
principles of safety, profitability and liquidity should not be ignored. A balance should be
struck even in these principles.

1.6 ORGANIZATION OF THE FINANCE FUNCTION:-

Today, finance function has obtained the status of a science and an art. As finance function has
far reaching significance in overall management process, structural organization for further
function becomes an outcome of an important organization problem. The ultimate
responsibility of carrying out the finance function lies with the top management. However,
organization of finance function differs from company to company depending on their
respective requirements. In many organizations one can note different layers among the
finance executives such as Assistant Manager (Finance), Deputy Manager (Finance) and
General Manager (Finance). The designations given to the executives are different. They are

 Chief Finance Officer (CFO)

 Vice-President (Finance)
 Financial Controller
 General Manager (Finance)

FINANCE OFFICERS:

Finance, being an important portfolio, the finance functions is entrusted

to top management. The Board of Directors, who are at the helm of affairs?
normally constitute a ‘Finance Committee’ to review and formulate financial
policies. Two more officers, namely ‘treasurer’ and ‘controller’ – may be
appointed under the direct supervision of CFO to assist him/her. In larger
companies with modern management, there may be Vice-President or Director
of finance, usually with both controller and treasurer. The organization of
finance function is portrayed below:
ORGANIZATION OF FINANCE FUNCTION:

It is evident from the above that Board of Directors is the supreme body
under whose supervision and control Managing Director, Production Director,
Personnel Director, Financial Director, Marketing Director perform their
respective duties and functions. Further while auditing credit management,
retirement benefits and cost control banking, insurance, investment function
under treasurer, planning and budgeting, inventory management, tax
 Board of Directors
 Managing Directors
 Production Director
 Purchase Director
 Finance Director
 Personnel Director
 Marketing Director
 Treasurer Controller
 Auditing Credit Analysis
 Planning & Budgeting
 Cost and inventory
 Pension management
 Cost management

ORGANIZATION OF FINANCE FUNCTION

 Board of
directors

Managing
director

Production Purchase Finance Personnel Marketing

directors directors director director director
It is evident from the above that Board of Directors is the supreme body under whose
supervision and control Managing Director, Production Director, Personnel Director, Financial
Director, Marketing Director perform their respective duties and functions. Further while
auditing credit management, retirement benefits and cost control banking, insurance,
investment function under treasurer, planning and budgeting, inventory management, tax
administration, performance evaluation and accounting functions are under the supervision of
controller.

MEANING OF CONTROLLER AND TREASURE:

The terms ‘controller’ and ‘treasurer’ are in fact used in USA. This pattern is not popular in
Indian corporate sector. Practically, the controller / financial controller in India carried out the
functions of a Chief Accountant or Finance Officer of an organization. Financial controller
who has been a person of executive rank does not control the finance, but monitors whether
funds so augmented are properly utilized. The function of the treasurer of an organization is to
raise funds and manage funds. The treasures functions include forecasting the financial
requirements, administering the flow of cash, managing credit, flotation of securities,
maintaining relations with financial institutions and protecting funds and securities. The
controller’s functions include providing information to formulate accounting and costing
policies, preparation of financial reports, direction of internal auditing, budgeting, inventory
control payment of taxes, etc. According to Prof. I.M. Pandey, while the controller’s functions
concentrate the asset side of the balance sheet, the treasurer’s functions relate to the liability
side.

FINANCE FUNCTION:

The designation Finance Manager or Director (Finance) is very popular in Indian Corporate
sector. The key function of any financial manager in India is management of funds. It means
given the constraints, he must ensure optimum utilization of funds. The financial managers
have significant involvement in injecting financial discipline in corporate management
processes. They are responsible for emphasizing the need for rational use of funds and the
necessity for monitoring the operations of the firm to achieve expected results. The finance
functions of augmenting resources and utilisation of funds, no doubt, have a significant impact
on other functions also. Infect, between finance on one side and production, marketing and
other functions on the other side, an inseparable relationship exists. The Board of Directors
have been bestowed with the onerous responsibility of reviewing financial procedures,
formulation of financial policies, selection of right finance personnel with professional
capabilities like Chartered Accountant, Cost Accountant and Company Secretaries. The Board
of Directors with counsel and direction given by the financial manager finalise decisions
pertaining to formulation of new projects, diversification of projects, expansion of
undertaking, introduction of new products, widening the branch areas, diversification of new
product lines. It should be remembered that the financial controller, in fact, does not control
finance. For management control and planning, the financial controller develops uses and
interprets information.
Chapter 3: INTRODUCTION OF MUTUAL FUNDS.

3.1 Structure of a Mutual Fund.

3.2 Advantages of the Mutual Fund.
3.3 Disadvantages of Investing through a Mutual Fund.
3.4 Net Asset Value (NAV).
3.5 Mutual Fund Fees and Expenses.
3.6 Types of Returns on Mutual Fund.
3.7 Risk Factors of Mutual Fund.

The mutual fund collects money directly or through brokers from investors. The money is
invested in various instruments depending on the objective of the scheme. The income
generated by selling securities or capital appreciation of these securities is passed on to the
investors in proportion to their investment in the scheme. The investments are divided into
units and the value of the units will be reflected in Net Asset Value or NAV of the unit. NAV is
the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net
asset value of the scheme divided by the number of units outstanding on the valuation date.
Mutual fund companies provide daily net asset value of their schemes to their investors. NAV
is important, as it will determine the price at which you buy or redeem the units of a scheme.
Depending on the load structure of the scheme, you have to pay entry or exit load.

STRUCTURE OF A MUTUAL FUND:

India has a legal framework within which Mutual Fund have to be constituted. In India
open and close-end funds operate under the same regulatory structure i.e. as unit Trusts. A
Mutual Fund in India is allowed to issue open-end and close-end schemes under a common
legal structure. The structure that is required to be followed by any Mutual Fund in India is
laid down under SEBI (Mutual Fund) Regulations, 1996.

The Fund Sponsor:

Sponsor is defined under SEBI regulations as any person who, acting alone or in
combination of another corporate body establishes a Mutual Fund. The sponsor of the fund is
akin to the promoter of a company as he gets the fund registered with SEBI. The sponsor
forms a trust and appoints a Board of Trustees. The sponsor also appoints the Asset
Management
Company as fund managers. The sponsor either directly or acting through the trustees will
also
appoint a custodian to hold funds assets. All these are made in accordance with the regulation
and guidelines of SEBI.
As per the SEBI regulations, for the person to qualify as a sponsor, he must contribute at

least 40% of the net worth of the Asset Management Company and possesses a sound
financial track record over 5 years prior to registration.

Mutual Funds as Trusts:

A Mutual Fund in India is constituted in the form of Public trust Act, 1882. The Fund
sponsor acts as a settlor of the Trust, contributing to its initial capital and appoints a trustee to
hold the assets of the trust for the benefit of the unit-holders, who are the beneficiaries of the
trust. The fund then invites investors to contribute their money in common pool, by scribing to
“units” issued by various schemes established by the Trusts as evidence of their beneficial
interest in the fund.
It should be understood that the fund should be just a “pass through” vehicle. Under the
Indian Trusts Act, the trust of the fund has no independent legal capacity itself, rather it is the
Trustee or the Trustees who have the legal capacity and therefore all acts in relation to the
trusts are taken on its behalf by the Trustees. In legal parlance the investors or the unit-holders
are the beneficial owners of the investment held by the Trusts, even as these investments are
held in the name of the Trustees on a day-to-day basis. Being public trusts, Mutual Fund can
invite any number of investors as beneficial owners in their investment schemes.

Trustees:
A Trust is created through a document called the Trust Deed that is executed by the fund
sponsor in favour of the trustees. The Trust- the Mutual Fund – may be managed by a board of
trustees- a body of individuals, or a trust company- a corporate body. Most of the funds in
India are managed by Boards of Trustees. While the boards of trustees are governed by the
Indian Trusts Act, where the trusts are a corporate body, it would also require to comply with
the Companies Act, 1956. The Board or the Trust company as an independent body, acts as a
protector of the of the unit-holders interests. The Trustees do not directly manage the portfolio
of securities. For this specialist function, the appoint an Asset Management Company. They
ensure that the Fund is managed by ht AMC as per the defined objectives and in accordance
with the trusts deeds and SEBI regulations.
The Asset Management Companies:

The role of an Asset Management Company (AMC) is to act as the investment manager
of the Trust under the board supervision and the guidance of the Trustees. The AMC is
required to be approved and registered with SEBI as an AMC. The AMC of a Mutual Fund
must have a net worth of at least Rs. 10 Crores at all times. Directors of the AMC, both
independent and nonindependent, should have adequate professional expertise in financial
services and should be individuals of high morale standing, a condition also applicable to
other key personnel of the AMC. The AMC cannot act as a Trustee of any other Mutual Fund.
Besides its role as a fund manager, it may undertake specified activities such as advisory
services and financial consulting, provided these activities are run independent of one another
and the AMC’s resources (such as personnel, systems etc.) are properly segregated by the
activity. The AMC must always act in the interest of the unit-holders and reports to the
trustees with respect to its activities.

Custodian and Depositories:

Mutual Fund is in the business of buying and selling of securities in large volumes.
Handling these securities in terms of physical delivery and eventual safekeeping is a
specialized activity. The custodian is appointed by the Board of Trustees for safekeeping of
securities or participating in any clearance system through approved depository companies on
behalf of the Mutual Fund and it must fulfill its responsibilities in accordance with its
agreement with the Mutual Fund. The custodian should be an entity independent of the
sponsors and is required to be registered with SEBI. With the introduction of the concept of
dematerialization of shares the dematerialized shares are kept with the Depository participant
while the custodian holds the physical securities. Thus, deliveries of a fund’s securities are
given or received by a custodian or a depository participant, at the instructions of the AMC,
although under the overall direction and responsibilities of the Trustees.

Bankers:
A Fund’s activities involve dealing in money on a continuous basis primarily with respect
to buying and selling units, paying for investment made, receiving the proceeds from sale of
the investments and discharging its obligations towards operating expenses. Thus the Fund’s
banker plays an important role to determine quality of service that the fund gives in timely
delivery of remittances etc.

Transfer Agents:
Transfer agents are responsible for issuing and redeeming units of the Mutual Fund and
provide other related services such as preparation of transfer documents and updating investor
records. A fund may choose to carry out its activity in-house and charge the scheme for the
service at a competitive market rate. Where an outside Transfer agent is used, the fund
investor will find the agent to be an important interface to deal with, since all of the investor
services that a fund provides are going to be dependent on the transfer agent.

ADVANTAGES OF THE MUTUAL FUNDS

If mutual funds are emerging as the favorite investment vehicle, it is because of the many
advantages they have over other forms and the avenues of investing, particularly for the
investor who has limited resources available in terms of capital and the ability to carry out
detailed research and market monitoring. The following are the major advantages offered by
mutual funds to all investors:

1. Portfolio Diversification:
Each investor in the fund is a part owner of all the fund’s assets, thus enabling him to
hold a diversified investment portfolio even with a small amount of investment that would
otherwise require big capital.

2. Professional Management:
Even if an investor has a big amount of capital available to him, he benefits from the
professional management skills brought in by the fund in the management of the investor’s
portfolio. The investment management skills, along with the needed research into available
investment options, ensure a much better return than what an investor can manage on his own.
Few investors have the skill and resources of their own to succeed in today’s fast moving,
global and sophisticated markets.
3. Reduction/Diversification Of Risk:
When an investor invests directly, all the risk of potential loss is his own, whether he
places a deposit with a company or a bank, or he buys a share or debenture on his own or in
any other from. While investing in the pool of funds with investors, the potential losses are
also shared with other investors. The risk reduction is one of the most important benefits of a
collective investment vehicle like the mutual fund.

4. Reduction Of Transaction Costs:

What is true of risk as also true of the transaction costs. The investor bears all the costs of
investing such as brokerage or custody of securities. When going through a fund, he has the
benefit of economies of scale; the funds pay lesser costs because of larger volumes, a benefit
passed on to its investors.

5. Liquidity:
Often, investors hold shares or bonds they cannot directly, easily and quickly sell. When
they invest in the units of a fund, they can generally cash their investments any time, by
selling their units to the fund if open-ended, or selling them in the market if the fund is close-
end. Liquidity of investment is clearly a big benefit.

6. Convenience And Flexibility:

Mutual fund management companies offer many investor services that a direct market
investor cannot get. Investors can easily transfer their holding from one scheme to the other;
get updated market information and so on.

7. Tax Benefits:
Any income distributed after March 31, 2002 will be subject to tax in the assessment of
all Unit holders. However, as a measure of concession to Unit holders of open-ended
equityorientedfunds, income distributions for the year ending March 31, 2003, will be taxed at
a concessional rate of 10.5%.
In case of Individuals and Hindu Undivided Families a deduction upto Rs. 9,000 from the
Total Income will be admissible in respect of income from investments specified in Section
80L, including income from Units of the Mutual Fund. Units of the schemes are not subject to
Wealth-Tax and Gift-Tax.

8. Choice of Schemes:
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.

9. Well Regulated:
All Mutual Funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of investors. The operations of Mutual Funds are
regularly monitored by SEBI.

10. Transparency:
You get regular information on the value of your investment in addition to disclosure on the
specific investments made by your scheme, the proportion invested in each class of assets
and the fund manager's investment strategy and outlook.

DISADVANTAGES OF INVESTING THROUGH MUTUAL

FUNDS:

1. No Control Over Costs:

An investor in a mutual fund has no control of the overall costs of investing. The investor
pays investment management fees as long as he remains with the fund, albeit in return for the
professional management and research. Fees are payable even if the value of his investments
is declining. A mutual fund investor also pays fund distribution costs, which he would not
incur in direct investing. However, this shortcoming only means that there is a cost to obtain
the mutual fund services.

2. No Tailor-Made Portfolio:
Investors who invest on their own can build their own portfolios of shares and bonds and
other securities. Investing through fund means he delegates this decision to the fund
managers.
The very-high-net-worth individuals or large corporate investors may find this to be a
constraint in achieving their objectives. However, most mutual fund managers help investors
overcome this constraint by offering families of funds- a large number of different schemes-
within their own management company. An investor can choose from different investment
plans and constructs a portfolio to his choice.

3. Managing A Portfolio Of Funds:

Availability of a large number of funds can actually mean too much choice for the
investor. He may again need advice on how to select a fund to achieve his objectives, quite
similar to the situation when he has individual shares or bonds to select.

4. The Wisdom Of Professional Management:

That's right, this is not an advantage. The average mutual fund manager is no better at
picking stocks than the average nonprofessional, but charges fees.

5. No Control:
Unlike picking your own individual stocks, a mutual fund puts you in the passenger seat
of somebody else's car

6. Dilution:
Mutual funds generally have such small holdings of so many different stocks that
insanely great performance by a fund's top holdings still doesn't make much of a difference in
a mutual fund's total performance.

7. Buried Costs:
Many mutual funds specialize in burying their costs and in hiring salesmen who do not
make those costs clear to their clients.
NET ASSET VALUE (NAV):
Since each owner is a part owner of a mutual fund, it is necessary to establish the value of
his part. In other words, each share or unit that an investor holds needs to be assigned a value.
Since the units held by investor evidence the ownership of the fund’s assets, the value of the
total assets of the fund when divided by the total number of units issued by the mutual fund
gives us the value of one unit. This is generally called the Net Asset Value (NAV) of one unit
or one share. The value of an investor’s part ownership is thus determined by the NAV of the
number of units held.

Calculation of NAV:
Let us see an example. If the value of a fund’s assets stands at Rs. 100 and it has 10
investors who have bought 10 units each, the total numbers of units issued are 100, and the
value of one unit is Rs. 10.00 (1000/100). If a single investor in fact owns 3 units, the value of
his ownership of the fund will be Rs. 30.00(1000/100*3). Note that the value of the fund’s
investments will keep fluctuating with the market-price movements, causing the Net Asset
Value also to fluctuate. For example, if the value of our fund’s asset increased from Rs. 1000
to 1200, the value of our investors holding of 3 units will now be (1200/100*3) Rs. 36. The
investment value can go up or down, depending on the markets value of the fund’s assets.

MUTUAL FUND FEES AND EXPENSES

Mutual fund fees and expenses are charges that may be incurred by investors who hold
mutual funds. Running a mutual fund involves costs, including shareholder transaction costs,
investment advisory fees, and marketing and distribution expenses. Funds pass along these
costs to investors in a number of ways.

1. TRANSACTION FEES
i) Purchase Fee:
It is a type of fee that some funds charge their shareholders when they buy shares.
Unlike a front-end sales load, a purchase fee is paid to the fund (not to a broker) and is
typically imposed to defray some of the fund's costs associated with the purchase.

ii) Redemption Fee:

It is another type of fee that some funds charge their shareholders when they sell
or redeem shares. Unlike a deferred sales load, a redemption fee is paid to the fund (not
to a broker) and is typically used to defray fund costs associated with a shareholder's
redemption.

iii) Exchange Fee:

Exchange fee that some funds impose on shareholders if they exchange (transfer)
to another fund within the same fund group or "family of funds."

2. PERIODIC FEES
i) Management Fee:
Management fees are fees that are paid out of fund assets to the fund's investment
adviser for investment portfolio management, any other management fees payable to the
fund's investment adviser or its affiliates, and administrative fees payable to the
investment adviser that are not included in the "Other Expenses" category. They are also
called maintenance fees.
ii) Account Fee:
Account fees are fees that some funds separately impose on investors in
connection with the maintenance of their accounts. For example, some funds impose an
account maintenance fee on accounts whose value is less than a certain dollar amount.

3. OTHER OPERATING EXPENSES

Transaction Costs:
These costs are incurred in the trading of the fund's assets. Funds with a high
turnover ratio, or investing in illiquid or exotic markets usually face higher transaction
costs. Unlike the Total Expense Ratio these costs are usually not reported.

LOADS
Definition of a load
Load funds exhibit a "Sales Load" with a percentage charge levied on purchase or sale of
shares. A load is a type of Commission (remuneration). Depending on the type of load a
mutual fund exhibits, charges may be incurred at time of purchase, time of sale, or a mix of
both. The different types of loads are outlined below.

Front-end load:
Also known as Sales Charge, this is a fee paid when shares are purchased. Also known as
a "front-end load," this fee typically goes to the brokers that sell the fund's shares. Front-end
loads reduce the amount of your investment. For example, let's say you have Rs.10,000 and
want to invest it in a mutual fund with a 5% front-end load. The Rs.500 sales load you must
pay comes off the top, and the remaining Rs.9500 will be invested in the fund. According to
NASD rules, a front-end load cannot be higher than 8.5% of your investment.
Back-end load:
Also known as Deferred Sales Charge, this is a fee paid when shares are sold. Also
known as a "back-end load," this fee typically goes to the brokers that sell the fund's shares.
The amount of this type of load will depend on how long the investor holds his or her shares
and typically decreases to zero if the investor holds his or her shares long enough.

Level load / Low load:

It's similar to a back-end load in that no sales charges are paid when buying the fund.
Instead a back-end load may be charged if the shares purchased are sold within a given time
frame. The distinction between level loads and low loads as opposed to back-end loads, is that
this time frame where charges are levied is shorter.

No-load Fund:
As the name implies, this means that the fund does not charge any type of sales load. But,
as outlined above, not every type of shareholder fee is a "sales load." A no-load fund may
charge fees that are not sales loads, such as purchase fees, redemption fees, exchange fees, and
account fees.
Types of Returns on Mutual Funds:
There are three ways, where the total returns provided by mutual funds can be enjoyed by
investors:
 Income is earned from dividends on stocks and interest on bonds. A fund pays out
nearly
all income it receives over the year to fund owners in the form of a distribution.
 If the fund sells securities that have increased in price, the fund has a capital gain.
Most funds also pass on these gains to investors in a distribution.
If fund holdings increase in price but are not sold by the fund manager, the fund's shares
increase in price. You can then sell your mutual fund shares for a profit. Funds will also
usually give you a choice either to receive a check for distributions or to reinvest the earnings
and get more shares.

Risk Factors Of Mutual Funds:

1. The Risk-Return Trade-Off:
The most important relationship to understand is the risk-return trade-off. Higher the risk
greater the returns / loss and lower the risk lesser the returns/loss.
Hence it is upto you, the investor to decide how much risk you are willing to take. In
order to do this you must first be aware of the different types of risks involved with your
investment decision.

2. Market Risk:
Sometimes prices and yields of all securities rise and fall. Broad outside influences
affecting the market in general lead to this. This is true, may it be big corporations or smaller
mid-sized companies. This is known as Market Risk. A Systematic Investment Plan (“SIP”)
that works on the concept of Rupee Cost Averaging (“RCA”) might help mitigate this risk.

3. Credit Risk:
The debt servicing ability (may it be interest payments or repayment of principal) of a
company through its cashflows determines the Credit Risk faced by you. This credit risk is
measured by independent rating agencies like CRISIL who rate companies and their paper. A
‘AAA’ rating is considered the safest whereas a ‘D’ rating is considered poor credit quality. A
well-diversified portfolio might help mitigate this risk.

4. Inflation Risk:
Things you hear people talk about:
"Rs. 100 today is worth more than Rs. 100 tomorrow."
"Remember the time when a bus ride costed 50 paise?"
"Mehangai Ka Jamana Hai."
The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times
people make conservative investment decisions to protect their capital but end up with a sum
of money that can buy less than what the principal could at the time of the investment. This
happens when inflation grows faster than the return on your investment. A well-diversified
portfolio with some investment in equities might help mitigate this risk.

5. Interest Rate Risk:

In a free market economy interest rates are difficult if not impossible to predict. Changes
in interest rates affect the prices of bonds as well as equities. If interest rates rise the prices of
bonds fall and vice versa. Equity might be negatively affected as well in a rising interest rate
environment. A well-diversified portfolio might help mitigate this risk.

6. Political / Government Policy Risk:

Changes in government policy and political decision can change the investment
environment. They can create a favorable environment for investment or vice versa.

7. Liquidity Risk:
Liquidity risk arises when it becomes difficult to sell the securities that one has
purchased. Liquidity Risk can be partly mitigated by diversification, staggering of maturities
as well as internal risk controls that lean towards purchase of liquid securities.
Chapter 4: Introduction of Mutual Funds In India.

4.1 History of Mutual Funds in India.

4.2 Mutual Funds in India.
4.3 Types of Mutual Fund Schemes in India.
4.4 Association of Mutual Funds in India.
4.5 Mutual Fund Companies in India.

HISTORY OF MUTUAL FUNDS IN INDIA:

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

FIRST PHASE: 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set
up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from
the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory
and administrative control in place of RBI. The first scheme launched by UTI was Unit
Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management

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 Corporation 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 Canbank Mutual Fund (Dec 87), Punjab National
Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun
90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June
1989 while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of
Rs.47,004 crores.

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 investors 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 Fund 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 mergers 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: (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 assets under management of Rs.29,835 crores as at the end of January
2003, representing broadly, the assets of US 64 scheme, assured return and certain
other schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, 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 assets under management and with the setting up of a UTI Mutual Fund, conforming
to the SEBI Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth. As at the end of March, 2006, there were 29 funds.

Mutual Funds In India:

In 1963, the day the concept of Mutual Fund took birth in India. Unit Trust of India
invited investors or rather to those who believed in savings, to park their money in UTI
Mutual Fund.
For 30 years it goaled without a single second player. Though the 1988 year saw some
new mutual fund companies, but UTI remained in a monopoly position.
The performance of mutual funds in India in the initial phase was not even closer to
satisfactory level. People rarely understood, and of course investing was out of question. But
yes, some 24 million shareholders were accustomed with guaranteed high returns by the
beginning of liberalization of the industry in 1992. This good record of UTI became
marketing tool for new entrants. The expectations of investors touched the sky in profitability
factor. However, people were miles away from the preparedness of risks factor after the
liberalization.
The net asset value (NAV) of mutual funds in India declined when stock prices started
falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into
alternative investments. There was rather no choice apart from holding the cash or to further
continue investing in shares. One more thing to be noted, since only closed-end funds were
floated in the market, the investors disinvested by selling at a loss in the secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992 stock market
scandal, the losses by disinvestments and of course the lack of transparent rules in the
whereabouts rocked confidence among the investors. Partly owing to a relatively weak stock
market performance, mutual funds have not yet recovered, with funds trading at an average
discount of 1020 percent of their net asset value.
The securities and Exchange Board of India (SEBI) came out with comprehensive
regulation in 1993 which defined the structure of Mutual Fund and Asset Management
Companies for the first time.
The supervisory authority adopted a set of measures to create a transparent and
competitive environment in mutual funds. Some of them were like relaxing investment
restrictions into the market, introduction of open-ended funds, and paving the gateway for
mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving.
The more the variety offered, the quantitative will be investors.
Several private sectors Mutual Funds were launched in 1993 and 1994. The share of the
private players has risen rapidly since then. Currently there are 34 Mutual Fund organizations
in India managing 1,02,000 crores.
At last to mention, as long as mutual fund companies are performing with lower risks and
higher profitability within a short span of time, more and more people will be inclined to
invest until and unless they are fully educated with the dos and don’ts of mutual funds.
Mutual fund industry has seen a lot of changes in past few years with multinational
companies coming into the country, bringing in their professional expertise in managing funds
worldwide. In the past few months there has been a consolidation phase going on in the
mutual fund industry in India. Now investors have a wide range of Schemes to choose from
depending on their individual profiles.
TYPES OF MUTUAL FUNDS SCHEMES IN INDIA
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. thus mutual funds has Variety of flavors,
Being a collection of many stocks, an investors can go for picking a mutual fund might be
easy.
There are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual
funds in categories, mentioned below.

A). BY STRUCTURE

1. Open - Ended Schemes:

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
2. Close - Ended Schemes:

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.

3. Interval Schemes:

Interval Schemes are that scheme, which combines the features of open-ended and closeended
schemes. The units may be traded on the stock exchange or may be open for sale or
redemption during pre-determined intervals at NAV related prices.
B). BY NATURE

1. Equity Fund:

These funds invest a maximum part of their corpus into equities holdings. The structure
of the fund may vary different for different schemes and the fund manager’s outlook on
different
stocks. The Equity Funds are sub-classified depending upon their investment objective, as
follows:
 Diversified Equity Funds
 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on
the risk-return matrix.

2. Debt Funds:

The objective of these Funds is to invest in debt papers. Government authorities, private
companies, banks and financial institutions are some of the major issuers of debt papers. By
investing in debt instruments, these funds ensure low risk and provide stable income to the
investors. Debt funds are further classified as:
 Gilt Funds: Invest their corpus in securities issued by Government, popularly known
as Government of India debt papers. These Funds carry zero Default risk but are
associated
with Interest Rate risk. These schemes are safer as they invest in papers backed by
Government.
 Income Funds: Invest a major portion into various debt instruments such as bonds,
corporate debentures and Government securities.
 MIPs: Invests maximum of their total corpus in debt instruments while they take
minimum exposure in equities. It gets benefit of both equity and debt market. These
scheme ranks slightly high on the risk-return matrix when compared with other debt schemes.
 Short Term Plans (STPs): Meant for investment horizon for three to six months.
These funds primarily invest in short term papers like Certificate of Deposits (CDs)
and Commercial Papers (CPs). Some portion of the corpus is also invested in
corporate debentures.

 Liquid Funds: Also known as Money Market Schemes, These funds provides easy
liquidity and preservation of capital. These schemes invest in short-term instruments like
Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for
short-term cash management of corporate houses and are meant for an investment
horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are
considered to be the safest amongst all categories of mutual funds.

3. Balanced Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in both
equities and fixed income securities, which are in line with pre-defined investment objective
of the scheme. These schemes aim to provide investors with the best of both the worlds.
Equity part provides growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment
parameter , viz Each category of funds is backed by an investment philosophy, which is pre-
defined in the objectives of the fund. The investor can align his own investment needs with
the funds objective and invest accordingly.
C). BY INVESTMENT OBJECTIVE:

Growth Schemes:
Growth Schemes are also known as equity schemes. The aim of these schemes is to
provide capital appreciation over medium to long term. These schemes normally invest a
major part of their fund in equities and are willing to bear short-term decline in value for
possible future appreciation.
Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to provide
regular and steady income to investors. These schemes generally invest in fixed income
securities such as bonds and corporate debentures. Capital appreciation in such schemes may
be limited.
Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically distributing a
part of the income and capital gains they earn. These schemes invest in both shares and fixed
income securities, in the proportion indicated in their offer documents (normally 50:50).
Money Market Schemes:
Money Market Schemes aim 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.
Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time you
buy or sell units in the fund, a commission will be payable. Typically entry and exit loads
range from 1% to 2%. It could be worth paying the load, if the fund has a good performance
history.
No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no
commission is payable on purchase or sale of units in the fund. The advantage of a no load
fund is that the entire corpus is put to work.
OTHER SCHEMES:

Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time
to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked
Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that
constitute the index. The percentage of each stock to the total holding will be identical to the
stocks index weightage. And hence, the returns from such schemes would be more or less
equivalent to those of the Index.

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or industries
as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer
Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the
performance of the respective sectors/industries. While these funds may give higher returns,
they are more risky compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time.
ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI):
With the increase in mutual fund players in India, a need for mutual fund association in
India was generated to function as a non-profit organisation. Association of Mutual Funds in
India (AMFI) was incorporated on 22nd August, 1995.
AMFI is an apex body of all Asset Management Companies (AMC) which has been
registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are
its members. It functions under the supervision and guidelines of its Board of Directors.
Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to
a professional and healthy market with ethical lines enhancing and maintaining standards. It
follows the principle of both protecting and promoting the interests of mutual funds as well as
their unit holders.

The Objectives of Association of Mutual Funds in India:

The Association of Mutual Funds of India works with 30 registered AMCs of the
country. It has certain defined objectives which juxtaposes the guidelines of its Board of
Directors. The objectives are as follows:
 This mutual fund association of India maintains high professional and ethical
standards in
all areas of operation of the industry.
 It also recommends and promotes the top class business practices and code of conduct
which is followed by members and related people engaged in the activities of mutual
fund and asset management. The agencies who are by any means connected or
involved
in the field of capital markets and financial services also involved in this code of
conduct
of the association.
 AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual
fund
industry.
 Association of Mutual Fund of India do represent the Government of India, the
Reserve
 Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
 It develops a team of well qualified and trained Agent distributors. It implements a
programme of training and certification for all intermediaries and other engaged in the
mutual fund industry.
  AMFI undertakes all India awareness programme for investors in order to promote
proper
understanding of the concept and working of mutual funds.
 At last but not the least association of mutual fund of India also disseminate
informations
on Mutual Fund Industry and undertakes studies and research either directly or in
association with other bodies.
AMFI Publications:
AMFI publish mainly two types of bulletin. One is on the monthly basis and the other is
quarterly. These publications are of great support for the investors to get intimation of the
knowhow of their parked money.

MUTUAL FUND COMPANIES IN INDIA:

The concept of mutual funds in India dates back to the year 1963. The era between 1963
and 1987 marked the existance of only one mutual fund company in India with Rs. 67bn
assets under management (AUM), by the end of its monopoly era, the Unit Trust of India
(UTI). By the end of the 80s decade, few other mutual fund companies in India took their
position in mutual
fund market.
The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank
Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India
Mutual Fund.
The succeeding decade showed a new horizon in Indian mutual fund industry. By the end
of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds started
penetrating the fund families. In the same year the first Mutual Fund Regulations came into
existence with re-registering all mutual funds except UTI. The regulations were further given
a revised shape in 1996.
Kothari Pioneer was the first private sector mutual fund company in India which has now
merged with Franklin Templeton. Just after ten years with private sector players penetration,
the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund companies in India.
Major Mutual Fund Companies in India:

For the first time in the history of Indian mutual fund industry, Unit Trust of India Mutual

Fund has slipped from the first slot. Earlier, in May 2006, the Prudential ICICI Mutual Fund
was ranked at the number one slot in terms of total assets.
In the very next month, the UTIMF had regained its top position as the largest fund house
in India.
Now, according to the current pegging order and the data released by Association of
Mutual Funds in India (AMFI), the Reliance Mutual Fund, with a January-end AUM of Rs
39,020 crore has become the largest mutual fund in India
On the other hand, UTIMF, with an AUM of Rs 37,535 crore, has gone to secomd
position. The Prudential ICICI MF has slipped to the third position with an AUM of Rs 34,746
crore.
It happened for the first time in last one year that a private sector mutual fund house has
reached to the top slot in terms of asset under management (AUM). In the last one year to
January, AUM of the Indian fund industry has risen by 64% to Rs 3.39 lakh crore.
According to the data released by Association of Mutual Funds in India (AMFI), the
combined average AUM of the 35 fund houses in the country increased to Rs 5,512.99 billion
in April compared to Rs 4,932.86 billion in March
Reliance MF maintained its top position as the largest fund house in the country with Rs
74.25 billion jump in AUM to Rs 883.87 billion at April-end.
The second-largest fund house HDFC MF gained Rs 59.24 billion in its AUM at Rs 638.80
billion.
ICICI Prudential and state-run UTI MF added Rs 46.16 billion and Rs 57.35 billion re
respectively to their assets last month. ICICI Prudential`s AUM stood at Rs 560.49 billion at
the end of April, while UTI MF had assets worth Rs 544.89 billion.
The other fund houses which saw an increase in their average AUM in April include
-Canara Robeco MF, IDFC MF, DSP BlackRock, Deutsche MF, Kotak Mahindra MF and LIC
MF.
REGULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA:
The structure of mutual funds in India is guided by the SEBI. Regulations, 1996.These
regulations make it mandatory for mutual fund to have three structures of sponsor trustee and
asset Management Company. The sponsor of the mutual fund and appoints the trustees. The
trustees are responsible to the investors in mutual fund and appoint the AMC for managing the
investment portfolio. The AMC is the business face of the mutual fund, as it manages all the
affairs of the mutual fund. The AMC and the mutual fund have to be registered with SEBI.

SEBI REGULATIONS:

As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual
funds to protect the interest of the investors.
SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored
by private sector entities were allowed to enter the capital market.
The regulations were fully revised in 1996 and have been amended thereafter from time to
time.
SEBI has also issued guidelines to the mutual funds from time to time to protect the interests
of investors.
All mutual funds whether promoted by public sector or private sector entities including
those promoted by foreign entities are governed by the same set of Regulations. The risks
associated with the schemes launched by the mutual funds sponsored by these entities are of
similar type. There is no distinction in regulatory requirements for these mutual funds and all
are subject to monitoring and inspections by SEBI.
SEBI Regulations require that at least two thirds of the directors of trustee company or
board of trustees must be independent i.e. they should not be associated with the sponsors.
Also, 50% of the directors of AMC must be independent. All mutual funds are required to be
registered with SEBI before they launch any scheme.
Further SEBI Regualtions, inter-alia, stipulate that MFs cannot gurarnatee returns in any
scheme and that each scheme is subject to 20 : 25 condition [I.e minimum 20 investors per
scheme and one investor can hold more than 25% stake in the corpus in that one scheme].
Also SEBI has permitted MFs to launch schemes overseas subject various restrictions and
also to launch schemes linked to Real Estate, Options and Futures, Commodities, etc.
Chapter: 4
RELIANCE MUTUAL FUND Vs UTI MUTUAL FUND

RELIANCE MUTUAL FUND

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882.
The
sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the
Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which was
changed
on March 11, 2004. Reliance Mutual Fund was formed for launching of various schemes
under
which units are issued to the Public with a view to contribute to the capital market and to
provide
investors the opportunities to make investments in diversified securities.

RMF is one of India’s leading Mutual Funds, with Average Assets Under Management
(AAUM) of Rs. 88,388 crs (AAUM for 30th Apr 09) and an investor base of over 71.53 Lacs.
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the
fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of
products to meet varying investor requirements and has presence in 118 cities across the
country.

Reliance Mutual Fund constantly endeavors to launch innovative products and customer
service initiatives to increase value to investors. "Reliance Mutual Fund schemes are managed
by
Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which
holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by
minority shareholders."
Sponsor : Reliance Capital Limited.
Trustee : Reliance Capital Trustee Co. Limited.
Investment Manager : Reliance Capital Asset Management Limited.

The Sponsor, the Trustee and the Investment Manager are incorporated under the
Companies Act 1956.

Vision Statement
“To be a globally respected wealth creator with an emphasis on customer care and a
culture of good corporate governance.”
Mission Statement
To create and nurture a world-class, high performance environment aimed at delighting
our customers.

The Main Objectives Of The Trust:

 To carry on the activity of a Mutual Fund as may be permitted at law and formulate
and
devise various collective Schemes of savings and investments for people in India and
abroad and also ensure liquidity of investments for the Unit holders;
 To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on
their savings and
 To take such steps as may be necessary from time to time to realise the effects without
any limitation.
SCHEMES
A). EQUITY/GROWTH SCHEMES:
The aim of growth funds is to provide capital appreciation over the medium to longterm.
Such schemes normally invest a major part of their corpus in equities. Such funds have
comparatively high risks. Growth schemes are good for investors having a long-term outlook
seeking appreciation over a period of time.

1. Reliance Infrastructure Fund(Open-Ended Equity):

The primary investment objective of the scheme is to generate long term capital
appreciation by investing predominantly in equity and equity related instruments of
companies engaged in infrastructure (Airports, Construction, Telecommunication,
Transportation) and infrastructure related sectors and which are incorporated or have their
area of primary activity, in India and the secondary objective is to generate consistent
returns
by investing in debt and money market securities.

Investment Strategy:
The investment focus would be guided by the growth potential and other economic
factors of the country. The Fund aims to maximize long-term total return by investing in
equity and equity-related securities which have their area of primary activity in India.

2. Reliance Quant Plus Fund/Reliance Index Fund (Open-Ended Equity):

The investment objective of the Scheme is to generate capital appreciation through
investment in equity and equity related instruments. The Scheme will seek to generate
capital
appreciation by investing in an active portfolio of stocks selected from S & P CNX Nifty
on
the basis of a mathematical model.
An investment fund that approach stock selection process based on quantitative
analysis.
3. Reliance Natural Resources Fund (Open-Ended Equity):
The primary investment objective of the scheme is to seek to generate capital
appreciation & provide long-term growth opportunities by investing in companies
principally
engaged in the discovery, development, production, or distribution of natural resources and
the secondary objective is to generate consistent returns by investing in debt and money
market security
Natural resources may include, for example, energy sources, precious and other
metals, forest products, food and agriculture, and other basic commodities.

4. Reliance Equity Linked Saving Fund (A 10 Year Close-Ended Equity ):

The primary objective of the scheme is to generate long-term capital appreciation
from a portfolio that is invested predominantly in equities along with income tax benefit.
The scheme may invest in equity shares in foreign companies and instruments
convertible into equity shares of domestic or foreign companies and in derivatives as
may be permissible under the guidelines issued by SEBI and RBI.

5. Reliance Equity Advantage Fund (Open-Ended Diversified Equity):

The primary investment objective of the scheme is to seek to generate capital
appreciation & provide long-term growth opportunities by investing in a portfolio
predominantly of equity & equity related instruments with investments generally in S & P
CNX Nifty stocks and the secondary objective is to generate consistent returns by investing
in debt and money market securities.

6. Reliance Equity Fund (Open-Ended Diversified Equity) :

The primary investment objective of the scheme is to seek to generate capital
appreciation & provide long-term growth opportunities by investing in a portfolio constituted
of equity & equity related securities of top 100 companies by market capitalization & of
companies which are available in the derivatives segment from time to time and the
secondary objective is to generate consistent returns by investing in debt and money market
securities.
7. Reliance Tax Saver (ELSS) Fund (Open-Ended Equity):
The primary objective of the scheme is to generate long-term capital appreciation
from a portfolio that is invested predominantly in equity and equity related instruments.

Tax Benefits:
 Investment upto Rs 1 lakh by the eligible investor in this fund would enable you to
avail the benefits under Section 80C (2) of the Income-tax Act, 1961.
 Dividends received will be absolutely TAX FREE.
 The dividend distribution tax (payable by the AMC) for equity schemes is also NIL

8. Reliance Growth Fund (Open-Ended Equity):

The primary investment objective of the Scheme is to achieve long term growth of
capital by investment in equity and equity related securities through a research based
investment approach.

9. Reliance Vision Fund (Open-Ended Equity) :

The primary investment objective of the Scheme is to achieve long term growth of
capital by investment in equity and equity related securities through a research based
investment approach.

10. Reliance Equity Opportunities Fund (Open-Ended Diversified Equity):

The primary investment objective of the scheme is to seek to generate capital
appreciation & provide long-term growth opportunities by investing in a portfolio constituted
of equity securities & equity related securities and the secondary objective is to generate
consistent returns by investing in debt and money market securities.

11. Reliance NRI Equity Fund (Open-Ended Diversified Equity):

The Primary investment objective of the scheme is to generate optimal returns by
investing in equity or equity related instruments primarily drawn from the Companies in the
BSE 200 Index.
12. Reliance Long Term Equity Fund (Open-Ended Diversified Equity):
The primary investment objective of the scheme is to seek to generate long term
capital appreciation & provide long-term growth opportunities by investing in a portfolio
constituted of equity & equity related securities and Derivatives and the secondary objective
is to generate consistent returns by investing in debt and money market securities.
It is a 36-month close ended diversified equity fund with an automatic conversion
into an open ended scheme on expiry of 36-months from the date of allotment. It aims to
maximize returns by investing 70-100% in Equities focusing in small and mid cap
companies.

13.Reliance Regular Savings Fund (Open-Ended Equity):

Reliance Regular Savings Fund provides you the choice of investing in Debt, Equity
or Hybrid options with a pertinent investment objective and pattern for each option. Invest as
little as Rs.100/-every month in the Reliance Regular Savings Fund.
For the first time in India, your mutual fund offers instant cash withdrawal facility on
your investment at any VISA-enabled ATM near you. With a choice of three investment
options, the fund is truly, the smart new way to invest.

B). DEBT/INCOME SCHEMES:

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,
Government securities and money market instruments. Such funds are less risky compared to
equity schemes. These funds are not affected because of fluctuations in equity markets.
However, opportunities of capital appreciation are also limited in such funds. The NAVs of
such
funds are affected because of change in interest rates in the country. If the interest rates fall,
NAVs of such funds are likely to increase in the short run and vice versa. However, long term
investors may not bother about these fluctuations.
1. Reliance Monthly Income Plan :
(An Open Ended Fund, Monthly Income is not assured & is subject to the availability
of distributable surplus) The Primary investment objective of the Scheme is to generate
regular income in order to make regular dividend payments to unit holders and the secondary
objective is growth of capital.

2. Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt
Plan : (Open-ended Government Securities Scheme) The primary objective of the Scheme is
to generate optimal credit risk-free returns by investing in a portfolio of securities issued and
guaranteed by the central Government and State Government.

3. Reliance Income Fund :

(An Open-ended Income Scheme) The primary objective of the scheme is to generate
optimal returns consistent with moderate levels of risk. This income may be complemented
by capital appreciation of the portfolio. Accordingly, investments shall predominantly be
made in Debt & Money market Instruments.

4. Reliance Medium Term Fund :

(An Open End Income Scheme with no assured returns) The primary investment
objective of the Scheme is to generate regular income in order to make regular dividend
payments to unit holders and the secondary objective is growth of capital

5. Reliance Short Term Fund :

(An Open End Income Scheme) The primary investment objective of the scheme is to
generate stable returns for investors with a short investment horizon by investing in Fixed
Income Securities of short term maturity.

6. Reliance Liquid Fund :

(Open-ended Liquid Scheme) The primary investment objective of the Scheme is to
generate optimal returns consistent with moderate levels of risk and high liquidity.
Accordingly, investments shall predominantly be made in Debt and Money Market
Instruments.

7. Reliance Floating Rate Fund :

(An Open End Liquid Scheme) The primary objective of the scheme is to generate
regular income through investment in a portfolio comprising substantially of Floating Rate
Debt Securities (including floating rate securitised debt and Money Market Instruments and
Fixed Rate Debt Instruments swapped for floating rate returns). The scheme shall also invest
in fixed rate debt Securities (including fixed rate securitised debt, Money Market Instruments
and Floating Rate Debt Instruments swapped for fixed returns.

8. Reliance NRI Income Fund :

(An Open-ended Income scheme) The primary investment objective of the Scheme is
to generate optimal returns consistent with moderate levels of risks. This income may be
complimented by capital appreciation of the portfolio. Accordingly, investments shall
predominantly be made in debt Instruments.

9. Reliance Liquidity Fund :

(An Open - ended Liquid Scheme) The investment objective of the Scheme is to
generate optimal returns consistent with moderate levels of risk and high liquidity.
Accordingly, investments shall predominantly be made in Debt and Money Market
Instruments.

10.Reliance Interval Fund :

(A Debt Oriented Interval Scheme) The primary investment objective of the scheme
is to seek to generate regular returns and growth of capital by investing in a diversified
portfolio

11.Reliance Liquid Plus Fund:

(An Open-ended Income Scheme) The investment objective of the Scheme is to
generate optimal returns consistent with moderate levels of risk and liquidity by investing in
debt securities and money market securities.

12.Reliance Fixed Horizon Fund–I:

(A closed ended Scheme) The primary investment objective of the scheme is to seek
to generate regular returns and growth of capital by investing in a diversified portfolio.

13. Reliance Fixed Horizon Fund –II:

(A closed ended Scheme.) The primary investment objective of the scheme is to seek
to generate regular returns and growth of capital by investing in a diversified portfolio.

14. Reliance Fixed Horizon Fund –III:

(A Close-ended Income Scheme.) The primary investment objective of the scheme is
to seek to generate regular returns and growth of capital by investing in a diversified
portfolio.

15.Reliance Fixed Tenor Fund :

(A Close-ended Scheme) The primary investment objective of the Plan is to seek to
generate regular returns and growth of capital by investing in a diversified portfolio.

16.Reliance Fixed Horizon Fund -Plan C :

(A closed ended Scheme.) The primary investment objective of the scheme is to seek
to generate regular returns and growth of capital by investing in a diversified portfolio.

17. Reliance Fixed Horizon Fund - IV:

(A Close-ended Income Scheme.) The primary investment objective of the scheme is
to seek to generate regular returns and growth of capital by investing in a diversified
portfolio.
18.Reliance Fixed Horizon Fund - V:
(A Close-ended Income Scheme.) The primary investment objective of the scheme is
to seek to generate regular returns and growth of capital by investing in a diversified
portfolio of:
Central and State Government securities and
Other fixed income/ debt securities normally maturing in line with the time profile of the
scheme with the objective of limiting interest rate volatility

19. Reliance Fixed Horizon Fund – VI :

(A Close-ended Income Scheme) The primary investment objective of the scheme is
to seek to generate regular returns and growth of capital by investing in a diversified
portfolio of: -
Central and State Government securities and
Other fixed income/ debt securities normally maturing in line with the time profile of the
series with the objective of limiting interest rate volatility

20. Reliance Fixed Horizon Fund – VII :

(A Close-ended Income Scheme.) The primary investment objective of the scheme is
to seek to generate regular returns and growth of capital by investing in a diversified
portfolio of: -
Central and State Government securities and
Other fixed income/ debt securities normally maturing in line with the time profile of the
series with the objective of limiting interest rate volatility.

C). SECTOR SPECIFIC SCHEMES:

These are the funds/schemes which invest in the securities of specified sectors or
industries e.g. Pharmaceuticals, Software, FMCG, Petroleum stocks, etc. The returns in these
funds are dependent on the performance of the respective sectors/industries. While these funds
may give higher returns, they are more risky compared to diversified funds.
1. Reliance Banking Fund :
Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the
primary investment objective to generate continuous returns by actively investing in equity /
equity related or fixed income securities of banks.

2. Reliance Diversified Power Sector Fund :

Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme.
The primary investment objective of the Scheme is to seek to generate consistent returns by
actively investing in equity / equity related or fixed income securities of Power and other
associated companies.

3. Reliance Pharma Fund :

Reliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary
investment objective of the Scheme is to generate consistent returns by investing in equity /
equity related or fixed income securities of Pharma and other associated companies.

4. Reliance Media & Entertainment Fund :

Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment
sector scheme.
The primary investment objective of the Scheme is to generate consistent returns
by investing in equity / equity related or fixed income securities of media & entertainment
and other associated companies.

D). RELIANCE GOLD EXCHANGE TRADED FUND:

(An open-ended Gold Exchange Traded Fund) The investment objective is to seek to provide
returns that closely correspond to returns provided by price of gold through investment in
physical Gold (and Gold related securities as permitted by Regulators from time to time).
However, the performance of the scheme may differ from that of the domestic prices of Gold
due to expenses and or other related factors.
UNIT TRUST OF INDIA MUTUAL FUND

'Unit Trust of India was created by the UTI Act passed by the Parliament in 1963. For
more than two decades it remained the sole vehicle for investment in the capital market by the
Indian citizens. In mid- 1980s public sector banks were allowed to open mutual funds. The
real vibrancy and competition in the MF industry came with the setting up of the Regulator
SEBI and its laying down the MF Regulations in 1993.UTI maintained its pre-eminent place
till 2001, when a massive decline in the market indices and negative investor sentiments after
Ketan Parekh scam created doubts about the capacity of UTI to meet its obligations to the
investors. This was further compounded by two factors; namely, its flagship and largest
scheme US 64 was sold and re-purchased not at intrinsic NAV but at artificial price and its
Assured Return Schemes had promised returns as high as 18% over a period going up to two
decades.
In order to distance Government from running a mutual fund the ownership was
transferred to four institutions; namely SBI, LIC, BOB and PNB, each owning 25%. UTI lost
its market dominance rapidly and by end of 2005,when the new share-holders actually paid
the consideration money to Government its market share had come down to close to 10%.
A new board was constituted and a new management inducted. Systematic study of its
problems role and functions was carried out with the help of a reputed international
consultant.
Once again UTI has emerged as a serious player in the industry. Some of the funds have won
famous awards, including the Best Infra Fund globally from Lipper. UTI has been able to
benchmark its employee compensation to the best in the market.
Besides running domestic MF Schemes UTI AMC is also a registered portfolio manager
under the SEBI (Portfolio Managers) Regulations.
This company runs two successful funds with large international investors being active
participants. UTI has also launched a Private Equity Infrastructure Fund along with HSH
Nord Bank of Germany and Shinsei Bank of Japan
Vision:
To be the most Preferred Mutual Fund.
Mission:
• The most trusted brand, admired by all stakeholders.
• The largest and most efficient money manager with global presence
• The best in class customer service provider
• The most preferred employer
• The most innovative and best wealth creator
• A socially responsible organisation known for best corporate governance
Assets Under Management: UTI Asset Management Co. Ltd
Sponsor:
· State Bank of India
· Bank of Baroda
· Punjab National Bank
· Life Insurance Corporation of India
Trustee: UTI Trustee Co. Limited.
Reliability
UTIMF has consistently reset and upgraded transparency standards. All the branches,
UFCs and registrar offices are connected on a robust IT network to ensure cost-effective quick
and efficient service. All these have evolved UTIMF to position as a dynamic, responsive,
restructured, efficient and transparent entity, fully compliant with SEBI regulations.
SCHEMES

A). EQUITY FUND

1. UTI Energy Fund (Open Ended Fund):

Investment will be made in stocks of those companies engaged in the following are:
a) Petro sector - oil and gas products & processing
b) All types of Power generation companies.
c) Companies related to storage of energy.
d) Companies manufacturing energy development equipment related ( like petro and
power )
e) Consultancy & Finance Companies

2. UTI Transportation And Logistics Fund (Auto Sector Fund) (Open Ended
Fund): Investment Objective is “capital appreciation” through investments in stocks of the
companies engaged in the transportation and logistics sector. At least 90% of the funds will
be invested in equity and equity related instruments. Atleast 80% of the funds will be
invested in equity and equity related instruments of the companies principally engaged in
providing transportation services, companies principally engaged in the design, manufacture,
distribution, or sale of transportation equipment and companies in the logistics sector. Upto
10% of the funds will be invested in cash/money market instruments.

3. UTI Banking Sector Fund (Open Ended Fund):

An open-ended equity fund with the objective to provide capital appreciation through
investments in the stocks of the companies/institutions engaged in the banking and financial
services activities.

4. UTI Infrastructure Fund (Open Ended Fund):

An open-ended equity fund with the objective to provide Capital appreciation through
investing in the stocks of the companies engaged in the sectors like Metals, Building
materials, oil and gas, power, chemicals, engineering etc. The fund will invest in the stocks
of the companies which form part of Infrastructure Industries

5. UTI Equity Tax Savings Plan (Open Ended Fund):

An open-ended equity fund investing a minimum of 80% in equity and equity related
instruments. It aims at enabling members to avail tax rebate under Section 80C of the IT Act
and provide them with the benefits of growth.

6. UTI Growth Sector Fund – Pharma (Open Ended Fund):

An open-ended fund which exclusively invests in the equities of the Pharma &
Healthcare sector companies. This fund is one of the growth sector funds aiming to invest in
companies engaged in business of manufacturing and marketing of bulk drug, formulations
and healthcare products and services.

7. UTI Growth Sector Fund – Services (Open Ended Fund):

An open-ended fund which invests in the equities of the Services Sector companies of
the country. One of the growth sector funds aiming to provide growth of capital over a period
of time as well as to make income distribution by investing the funds in stocks of companies
engaged in service sector such as banking, finance, insurance, education, training, telecom,
travel, entertainment, hotels, etc.

8. UTI Growth Sector Fund – Software (Open Ended Fund):

An open-ended fund which invests exclusively in the equities of the Software Sector
companies. One of the growth sectors funds aiming to invest in equity shares of companies
belonging to information technology sector to provide returns to investors through capital
growth as well as through regular income distribution.

9. UTI Master Equity Plan Unit Scheme (Close Ended Fund):

The scheme primarily aims at securing for the investors capital appreciation by
investing the funds of the scheme in equity shares of companies with good growth prospects.
10. UTI Master Plus Unit Scheme (Open Ended Fund):
An open-ended equity fund with an objective of long-term capital appreciation
through investments in equities and equity related instruments, convertible debentures,
derivatives in India and also in overseas markets.

11. UTI Master Value Fund (Open Ended Fund):

An open-ended equity fund investing in stocks which are currently undervalued to
their future earning potential and carry medium risk profile to provide 'Capital Appreciation'.

12. UTI Equity Fund (Open Ended Fund):

UTI Equity Fund is open-ended equity scheme with an objective of investing at least
80% of its funds in equity and equity related instrument with medium to high risk profile and
upto 20% in debt and money market instruments with low to medium risk profile.

13. UTI Top 100 Fund (Open Ended Fund):

An open-ended equity fund for investment in equity shares, convertible & nonconvertible
debentures and other capital and money market instruments with a provision to
invest upto 50% of its corpus in PSU's equities and equity related products. The fund aims to
provide unit holders capital appreciation & income distribution.

14. UTI Mastershare Unit Scheme (Open Ended Fund):

An Open-end equity fund aiming to provide benefit of capital appreciation and
income distribution through investment in equity.

15. UTI Mid Cap Fund (Open Ended Fund):

An open-ended equity fund with the objective to provide 'Capital appreciation' by
investing primarily in mid cap stocks.
16. UTI MNC Fund (Open Ended Fund):
An open-ended equity fund with the objective to invest predominantly in the equity
shares of multinational companies in diverse sectors such as FMCG, Pharmaceutical,
Engineering etc.

17. UTI Dividend Yield Fund (Open Ended Fund):

It aims to provide medium to long term capital gains and/or dividend distribution by
investing predominantly in equity and equity related instruments which offer high dividend
yield.

18. UTI Opportunities Fund (Open Ended Fund):

This scheme seeks to generate capital appreciation and/or income distribution by
investing the funds of the scheme in equity shares and equity-related instruments. The focus
of the scheme is to capitalise on opportunities arising in the market by responding to the
dynamically changing Indian economy by moving its investments amongst different sectors
as prevailing trends change.

19. UTI Leadership Equity Fund (Open Ended Fund):

This scheme seeks to generate capital appreciation and / or income distribution by
investing the funds in stocks that are "Leaders" in their respective industries / sectors /
subsector.

20. UTI Contra Fund (Open Ended Fund):

An open ended equity scheme with the objective to provide long term capital
appreciation/dividend distribution through investments in listed equities & equity related
instruments. The fund offers an opportunity to benefit from the impact of non- rational
investors' behaviour by focussing on stocks that are currently undervalued because of
emotional & behavioural patterns present in the stock market.
21. UTI SPREAD Fund (Open Ended Fund):
The investment objective of the scheme is to provide capital appreciation and
dividend distribution through arbitrage opportunities arising out of price differences between
the cash and derivative market by investing predominantly in equity & equity related
securities, derivatives and the balance portion in debt securities. However, there can be no
assurance that the investment objective of the scheme will be realised.

22. UTI Wealth Builder Fund (Close Ended Fund):

The objective of the scheme is to achieve long term capital appreciation by investing
predominantly in a diversified portfolio of equity and equity related instruments.

23. UTI Long Term Advantage Fund - Series I (Close Ended Fund):
The investment objective of the scheme is to provide medium to long term capital
appreciation along with income tax benefit.

24. UTI India Lifestyle Fund (Close Ended Fund):

The investment objective of the scheme is to provide long term Capital appreciation
and / or income distribution from a diversified portfolio of equity and equity related
instruments of companies that are expected to benefit from changing Indian demographics,
Indian Lifestyle and rising consumption pattern. However, there can be no assurance that the
investment objective of the scheme will be achieved.

A). INDEX FUND:

1. UTI Master Index Fund (Open Ended Fund):
UTI MIF is an open-ended passive fund with the primary investment objective to invest
in securities of companies comprising the BSE sensex in the same weightage as these
companies have in BSE sensex. The fund strives to minimise performance difference with
the sensex by keeping the tracking error to the minimum.
2. UTI Gold Exchange Traded Fund (Open Ended Fund):
To endeavour to provide returns that, before expenses, closely track the performance and
yield of Gold. However the performance of the scheme may differ from that of the
underlying asset due to racking error. There can be no assurance or guarantee that the
investment objective of UTI-Gold ETF will be achieved.

3. UTI Sunder (Open Ended Fund):

To provide investment returns that, before expenses, closely correspond to the
performance and yield of the basket of securities underlying the S & P CNX Nifty Index.

C). ASSETS FUND

UTI Variable Investment Scheme:
UTI VIS-ILP is an open ended scheme with the objective of providing the investors with
a product that would enable them to diversify their risks through a suitable allocation
between debt and equity asset classes and thereby generate superior risk-adjusted returns
through a dynamic asset allocation process.

D). BALANCED FUND:

1. UTI Mahila Unit Scheme (Open Ended Fund):
To invest in a portfolio of equity/equity related securities and debt and money market
instruments with a view to generate reasonable income with moderate capital appreciation.
The asset allocation will be Debt : Minimum 70%, Maximum 100% Equity : Minimum 0%,
Maximum 30%.

2. UTI Balanced Fund (Open Ended Fund):

An open-ended balanced fund investing between 40% to 75% in equity /equity related
securities and the balance in debt (fixed income securities) with a view to generate regular
income together with capital appreciation.
3. UTI Retirement Benefit Pension Fund (Open Ended Fund):
The objective of the scheme is to provide pension to investors particularly selfemployed
persons after they attain the age of 58 years, in the form of periodical cash flow
upto the extent of repurchase value of their holding through a systematic withdrawal plan.

4. UTI Unit Link Insurance Plan (Open Ended Fund):

To provide return through growth in the NAV or through dividend distribution and
reinvestment thereof

5. UTI CCP (Children Career Plan) Advantage Fund (Open Ended Fund):
An open ended balanced fund with 70-100% investment in Equity. Investment can be
made in the name of the children upto the age of 15 years so as to provide them, after they
attain the age of 18 years, a means to receive scholarship to meet the cost of higher education
/ or help them in setting up a profession, practice or business or enabling them to set up a
home or finance, the cost of other social obligations.

6. UTI Charitable, Religious Trust And Registered Society (Open Ended

Fund): Open-ended debt oriented Income scheme with an objective of investing not more
than 30% of the funds in equity related instruments and the balance in debt and money
market instruments with low to medium risk profile. The scheme is catering to the
Investment needs of Charitable, Religious and Educational Trusts as well as Registered
societies with the goal of providing regular income.

E). INCOME FUND (DEBT FUND)

1. UTI Bond Fund (Open Ended Fund):
Open-end 100% pure debt fund, which invests in rated corporate debt papers and
government securities with relatively low risk and easy liquidity.
2. UTI Floating Rate Fund STP (Open Ended Fund):
To generate regular income through investment in a portfolio comprising
substantially of floating rate debt / money market instruments and fixed rate debt / money
market instruments.

3. UTI Gilt Advantage Fund LTP(Open Ended Fund):

To generate credit risk-free return through investments in sovereign securities issued
the Central and / or a State Government.

4. UTI Gilt Advantage Fund STP (Open Ended Fund):

To generate credit risk-free return through investment in sovereign securities issued
the Central and / or a State Government.

5. UTI G-SEC STP (Open Ended Fund):

An open-end Gilt-Fund with the objective to invest only in Central Government
securities including call money, treasury bills and repos of varying maturities with a view to
generate credit risk free return with a stated objective of maintaining the average maturity of
the portfolio at less than 3 years.

6. UTI G-Sec-Investment Plan (Open Ended Fund):

An open-end Gilt-Fund with the objective to Invests only in Central government
securities including call money, treasury bills and repos of varying maturities with a view to
generatie credit risk free return. While selecting the maturity profile of the investment in
government securities the need for maximisation of the returns and meeting of the liquidity
requirements of the scheme is kept in view.

7. UTI Treasury Advantage Fund (Open Ended Fund):

It aims to generate attractive returns consistent with capital preservation and liquidity
8. UTI Monthly Income Scheme (Open Ended Fund):
This is an open-end debt oriented scheme with no assured returns. The scheme aims
at distributing income, if any, periodically.

9. UTI Mis Advantage Plan (Open Ended Fund):

Endeavours to make periodic income distribution to unitholders through investments
in fixed income securities and equity & equity related instruments.

10.UTI Short Term Income Fund (Open Ended Fund):

The Scheme seeks to generate steady & reasonable income with low risk & high level
of liquidity from a portfolio of money market securities & high quality debt.

11.UTI Capital Protection Oriented Scheme (Open Ended Fund):

The investment objective of the scheme is to endeavour to protect the capital by
investing in high quality fixed income securities as the primary objective and generate capital
appreciation by investing in equity and equity related instruments as secondary objective.

F). LIQUID FUND ( DEBT FUND) :

1. UTI Liquid Cash Plan (Open Ended Fund):
The scheme seeks to generate steady & reasonable income with low risk & high level
of liquidity from a portfolio of money market securities & high quality debt.

2. UTI Money Market Fund (Open Ended Fund):

An open-ended pure debt liquid plan seeking to provide highest possible current
income by investing in a diversified portfolio of short-term money market securities.
 RELIANCE MUTUAL
FUND
When started? Established in 1995,
Currently, number one
company in India.
How they came into Registered with SEBI as
business trust under Indian Trusts
Act, 1882
Minimum investment. Rs. 500
Investment. Equity
Bank: 8-15%
Software: 8-19%
Petroleum Products: 4-8%
Pharmaceuticals: 6-10%
invest in 12-20 sectors
which include:
Auto , Auto Ancillaries,
Finance,
Industrial Capital Goods,
Telecom-
Services, Power,
Construction
Project, Hotels, Retailing,
Media &
Entertainment, Transportation
etc
Main Funds. UTI Dividend yield Fund,
UTI Opportunity Fund,
Type of fund offered Equity Fund, Debt Fund,
UTI MUTUAL FUND
Established in 1964.
First mutual fund company in
India
By the UTI Act passed by the
Parliament in 1963.
Rs.1000
Equity
Financial Service: 16-22%
Energy: 12-18%
Consumer goods: 08-14%
invest in 7-15 sectors which
include:
IT, Telecom, Automobile,
Cement Products, Derivatives,
Textile, Metals etc
Reliance Diversified Fund,
Reliance Equity Opportunity
Fund,
Reliance Regular Saving
Funds
Equity Fund, Index Fund,
 Sector Specific Fund and
Gold Exchange Traded
Fund.
Numbers of schemes 106 schemes
Offered
Distribution · Online and internet based
distribution.
· Reliance outlets and
branches.
Is any other venture? · Life Insurance
· General Insurance
· Broking & Distribution
· Consumer Finance
· Private Equity
· Assets Reconstruction.
Asset Fund, Balanced Fund,
Debt Fund (Income, Liquid)
107 schemes.
· Tie-up with Post offices
branches.
· UTI outlets and branches.
· UTI Bank
· Pan card
· Bank Recruitment
· ULIP
 RESEARCH METHODOLOGY

Research as a care full investigation or enquiry especially through search for a new facts in
any branch of knowledge” Research is an academic activity and such as the term should be
used in technical sense. The manipulation of things , concepts or symbols for the purpose of
generalizing to extend, correct or verify knowledge ,whether that knowledge through
objective.

ANALYTICAL RESERCH:

In this project work, analytical research is used. In this project has to use facts or
information .Already used available, and analyze these to make a critical evolution of the
material.

METHODS OF DATA COLLECTION:

In this project work primary and secondary data sources of data has been used.

Primary data: Primary data collect through questionnaire, or through direct communication
or doing experiments.

Secondary data: Secondary data means already available through books, journals,
magazines, newspaper.

ANALYSIS: For the proper analysis of data Quantitative Technique such as percentage
method was used.
 DATA ANALYSIS AND INTERPRETATION:

Q.1 Which Banking mutual fund do you prefer for mutual Fund?

Company Name Percentages of respondents

Reliance Money 25

Other 10

UTI 15

25

20

15

10

0
Reliance Other UTI

INTERPRETATION: 50% of respondent have Reliance Money, 30% of respondent have

UTI and 20% others.

Q.2 Which banking mutual fund offer you good investment plan?

Company Name Percentage of respondent

Reliance 22

Other 21

UTI 7

25

20

15

10

0
RELIANCE Other UTI

INTERPRETATION: 44% respondent for Reliance, 32 % for other, 14% for UTI.
Q.3 Which banking mutual fund offer a lot of tax saving?

Company Name Percentage of respondent

Reliance 20

Other 15

UTI 15

20
18
16
14
12
10
8
6
4
2
0
Reliance Other UTI

INTERPRETATION: 40% respondent for Reliance, 30%for UTI, 30% for other.
Q.4 which banking mutual fund offers you a large number of product & services?

Company Name Percentage of respondent

Reliance 18

Other 16

UTI 16

18

17.5

17

16.5

16

15.5

15
Reliance Other UTI

INTERPRETATION: 36% respondent for Reliance, 32%for UTI and 32% for other.

Q.5 In which type of Mutual Fund schemes you have invested?

 Schemes Percentage of respondent
Debt Schemes 40
Equity based schemes 60

Percentage of respondent

Debt Schemes
40.00% Equity based schemes

60.00%

Q.6 which type of schemes do you prefer to invest?

Schemes Percentage of respondent

Close Ended 48
Open Ended 52
 Percentage of respondent

Close Ended;
Open Ended; 48.00%
52.00%

Close Ended Open Ended

Q.7 Your overall experience with Reliance Mutual Funds?

Reliance Mutual Funds Percentage of respondent

Highly Satisfactory 40
Satisfactory 24
Average 10
Dissatisfactory 16
Highly Dissatisfactory 10
Highly
Dissati
sfactor
Dissati y;
Percentage
sfactor 10.00of respondent
y; %
16.00 Highly
% Satisfa
ctory;
40.00
Averag
%
e;
10.00
%
Satisfa
ctory;
24.00
%

Highly Satisfactory Satisfactory Average

Dissatisfactory Highly Dissatisfactory
Q.8 Your overall experience with UTI Mutual Funds?

UTI Mutual Funds Percentage of respondent

Highly Satisfactory 34
Satisfactory 20
Average 14
Dissatisfactory 18
Highly Dissatisfactory 14

Highly
Dissatis
Percentage
factory; of respondent
Highly
14.00% Satisfac
tory;
34.00%
Dissatis
factory;
18.00%

Average
; Satisfac
14.00% tory;
20.00%

Highly Satisfactory Satisfactory Average

Dissatisfactory Highly Dissatisfactory

Q.9 Which AMC will you prefer to invest?

Company: Percentage of respondent

Reliance 46
UTI 40
Others 14
 Percentage of respondent
Others;
14.00%

Reliance;
46.00%

UTI;
40.00%

Reliance UTI Others

Q.10 How do you come to know about Mutual Fund?

Percentage of respondent
Advertisement 38
Peer Group 20
Banks 14
Financial Advisors 28

Percentage of respondent
Financial
Advisors;
28.00%
Advertise
ment;
38.00%

Banks;
14.00%
Peer
Group;
20.00%
Advertisement Peer Group
Banks Financial Advisors
 SUGGESTION:

 Reliance Money and UTI have to add some extra features in it with aggressive
marketing promotional strategy.

 Advertisement on television is the main source of attraction so the company must

advertise its products heavily.

 Product must be improved.

 There should be provision of complain suggestion boxes at each branch.

 CONCLUSION

Mutual Funds now represent perhaps most appropriate investment opportunity for most
investors. As financial markets become more sophisticated and complex, investors need a
financial intermediary who provides the required knowledge and professional expertise on
successful investing. As the investor always try to maximize the returns and minimize the risk.
Mutual fund satisfies these requirements by providing attractive returns with affordable risks.
The fund industry has already overtaken the banking industry, more funds being under mutual
fund management than deposited with banks. With the emergence of tough competition in this
sector mutual funds are launching a variety of schemes which caters to the requirement of the
particular class of investors. Risk takers for getting capital appreciation should invest in
growth, equity schemes. Investors who are in need of regular income should invest in income
plans.
The stock market has been rising for over three years now. This in turn has not only
protected the money invested in funds but has also to helped grow these investments.
This has also instilled greater confidence among fund investors who are investing more
into the market through the MF route than ever before.
Reliance India mutual funds provide major benefits to a common man who wants to
make his life better than previous.
India's largest mutual fund, UTI, still controls nearly 80 per cent of the market. Also, the
mutual fund industry as a whole gets less than 2 per cent of household savings against the 46
percent that go into bank deposits. Some fund managers say this only indicates the sector's
potential.
"If mutual funds succeed in chipping away at bank deposits, even a triple digit growth is
possible over the next few years.
 ANNEXURE: QUESTIONNAIRE

Q.1 Which Banking mutual fund do you prefer for mutual Fund?

Reliance Money

Other

UTI

Q.2 Which banking mutual fund offer you good investment plan?

Reliance

Other

UTI

Q.3 Which banking mutual fund offer a lot of tax saving?

Reliance

Other

UTI
Q.4 which banking mutual fund offers you a large number of product & services?

Reliance

Other

UTI

Q.5 In which type of Mutual Fund schemes you have invested?

Debt Schemes

Equity based schemes

Q.6 which type of schemes do you prefer to invest?

Close Ended

Open Ended

Q.7 Your overall experience with Reliance Mutual Funds?

Highly Satisfactory

Satisfactory

Average

Dissatisfactory

Highly Dissatisfactory
Q.8 Your overall experience with UTI Mutual Funds?

Highly Satisfactory

Satisfactory

Average

Dissatisfactory

Highly Dissatisfactory

Q.9 Which AMC will you prefer to invest?

Reliance

UTI

Others

Q.10 How do you come to know about Mutual Fund?

Advertisement

Peer Group

Banks

Financial Advisors
 BIBLIOGRAPHY

REFERENCE BOOK:
FINANCIAL MARKET AND SERVICES
-Gordon and Natarajan

WEBSITE:
www.mutualfundindia.com
www.utimf.com
www.reliancemutual.com
www.amfiindia.com

SEARCH ENGINE:
www.google.com
www.altavista.com
www.yahoo.com