Summer Internship Project Report

On
A comparative study on mutual funds and Ulips in Delhi NCR
By
Sourav Sarkar
(A0101918131)
MBA (GENERAL) – BATCH 2020

Under the supervision of

Prof Anurupa B.Singh
Professor Marketing
Department of Marketing
In partial fulfilment of the requirements for the degree of
Master’s in Business Administration
At AMITY BUSINESS SCHOOL, AMITY UNIVERSITY UTTARPRADESH
SECTOR 125, NOIDA – 201303
UTTARPRADESH, INDIA

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 DECLARATION

Title of project report:

A comparative study on mutual funds and Ulips in Delhi NCR

I Declare
a) That the work presented for assessment in summer internship is my own, that it has not
previously been presented for another assessment and that me debts ( data, arguments
and ideas) have been appropriately acknowledged
b) That the work confirms to the guidelines for presentation and style set out in the relevant
documentation

(c) The Plagiarism in the report is 11% ( permissible limit is 15 % )

a) Date: …22/07/19…………

Date:

Sourav Sarkar A0101918131

MBA GENERAL
Batch 2020

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 ACKNOWLEDGMENT

I am glad to present a report on my dissertation project titled ‘A Comparative study on Mutual

funds and Ulips in Delhi NCR’. I have put in my sincere efforts for the project. However it
would not have been accomplished without the support and help of the wonderful people and
professionals of Bridge Group solutions who led me through this internship period.
I am using this opportunity to express my deepest gratitude and special thanks to the MD of
Bridge Group Solutions, Mr. Love Sehrawat, who in spite of being extraordinarily busy with
his duties, took time to guide and keep me on the correct path and allowing me to carry out my
project at their esteemed organization.

I express my deepest thanks to Mr. Kashish Jerath, Training Head for taking part in useful
decision & giving necessary advices and guidance and arranged all facilities to make my
internship easier. I choose this moment to acknowledge his contribution gratefully.

I owe a big thanks to Prof. Anurupa B.Singh for giving me the opportunity to undergo this
project. I further thank her for lending a helpful hand when it came to solving my problem
related to the project. This project would not have been possible without her valuable time and
support.

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 CERTIFICATE
I Dr. Anurupa B.Singh hereby certify that Sourav Sarkar, student of Masters of Business
Administration at
Amity Business School , Amity University Uttar Pradesh has completed the project report on
“ A comparative study on mutual funds and ULIP’s in Delhi NCR”
under my guidance.

Prof Dr.Anurupa B.Singh

Professor Marketing
Department of Marketing

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CERTIFICATE FROM COMPANY

Scanned with CamScanner

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 TABLE OF CONTENTS
CHAPTER Particulars Page No.
NO

I. INTRODUCTION 8 – 16
1.1 Unit linked insurance plan 8
1.2 History of ULIP 8
1.3 Advantage and Disadvantage of ULIP’s 9
1.4 Mutual Fund 10
1.5 History of Mutual Funds 10
1.6 Advantages and Disadvantages of mutual 13
funds 15
1.7 Comparative Chart

II. REVIEW OF LITERATURE 16 – 18

III. COMPANY PROFILE 20 – 24

3.1 Overview of financial industries 20

3.2 About Bridge Group Solutions 21
3.3 SWOT analysis 24

IV. RESEARCH METHODOLOGY 25 – 26

Objectives of research 25
4.1 Research Design 25
4.2 Data collection 25
4.3 Questionnaire structure 25
4.4 Sampling 25

V. DATA ANALYSIS 27 – 36

5.1 Descriptive analysis 27

5.2 Inferential analysis 34
VI. CONCLUSIONS & RECOMMENDATIONS 37 – 38

6.1 Objective wise conclusion 37

6.2 Recommendations 37
6.3 Limitations and future scope of study 37

References
39
Annexure
40

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 ABSTRACT
Purpose:
The purpose of this project is to study investor’s perception on ULIPs and Mutual fund. This
study investigates the objective of investment by individual investors, parameters on which
investor’s choose between different investment avenues,.

Methodology:
Descriptive research design has been used for this project. Descriptive research design was
used for the collection of primary data with the help of a structured questionnaire.

Findings:
Mutual funds emerged as the preferred choice of investors as it way more popular than ULIP
plan and the investor is well educated about it as compared to ULIP plan.

Research Limitations:
Due to the constraints of time and resources, the study was conducted on a limited sample size
and was limited to the geographical region of Delhi NCR only.
The middle-class people do not know basic concept of ULIP so creating awareness is a big
challenge for me.
Narrow minded thinking of middle-class people as investment is not their cup of tea.
The respondents hesitated

Originality/Value:
This study offers fresh insights into the factors that influence investment decisions and various
parameters on which investors compare various investment options. These findings can be used
by various mutual fund companies to introduce new features in their products/services to attract
new customers.

Keywords:
Investment, Mutual funds, Ulips, Maxlife insurance

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 LIST OF FIGURES

Figure No. Topic Page No.

1 Do respondents prefer investing 27

2 Type of investments investors prefer 28

3 Reason for investing 28

4 Are investors aware about ULIP’s 29

5 Have they purchased any ULIP insurance 29

6 Are investors aware about Mutual funds 30

7 Have they purchased any mutual funds 30

8 Where do the investors generally invest 31

9 Basis for selecting investment companies 31

10 Company preferred by investors for 32

investments
11 Are they aware about max life insurance 32
products
12 Are investors willing to invest in max life 33

13 Rating of max life ULIP 33

14 Main reason for investment in max life 34

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 CHAPTER 1
INTRODUCTION

1.1 Unit Linked Insurance Plan (ULIP)

A unit coupled insurance arrange (ULIP) is an investment product that has for insurance pay-
out advantages. ULIP offerings are primarily targeted in Asian nation. The investment
vehicle needs a premium payment that is endowed in investment merchandise for capital
appreciation.

A unit linked insurance plan can be used for different advantage payouts including disaster
protection, retirement, training and that's just the beginning. A ULIP offers differing
arrangements to the financial specialist as advantages. A ULIP is commonly opened by a
financial specialist looking to give inclusion to recipients. It is paid into by the proprietor inside
the assortment of premiums, with the aim of the arrangement's cost to be paid out at a such
time-outline for a specific reason. With a protection ULIP, the recipient would get instalments
following the proprietor's passing. Plans will grasp variable arrangements for activating
instalments.

Unit linked insurance plan investors can make changes to their fund preferences throughout
the duration of their investment. The assets offer moving adaptability. Various venture choices
are likewise accessible including stock assets, security assets and expanded assets.

1.2 History of ULIP’s

The first ULIP was launched by Unit Trust of India (UTI) With the Government of India
opening up the protection segment to outside financial specialists in 2001and the ensuing issue
of real rules for ULIPs by the Insurance Regulatory and Development Authority (IRDA),
presently Insurance Regulatory and Development Authority of India (IRDAI), in 2005, a few
insurance agencies forayed into the ULIP business prompting an excess of ULIP plans being
propelled to serve the speculation needs of those hoping to put resources into a venture cum
protection item.

How does ULIP’S work?

When you build AN investment in ULIP, the insurer invests a part of the premium in
shares/bonds etc. and therefore the balance quantity is employed in
providing AN insurance cowl.

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Why you should invest in ULIP’s?

 Life cover: First and foremost, with ULIPs you get a life cover coupled with
investment. It offers security that a citizen's family can fall back on if there should be
an occurrence of crises like the inopportune passing of the citizen, and so forth.
 Income tax benefits: Not many are aware that the premium paid towards a ULIP is
eligible for a write-off below Section 80C. in addition, the returns out of the policy
on maturity square measure exempt fromtax below Section 10(10D) of the
Income-tax Act. will be} a twin profit that you just can claim with this policy.
 Finance Long Term Goals: If you have long-term goals like buying a house, a new
car, marriage, etc., then ULIP is a good investment option because the money gets
compounded. As a result, the net returns are generally more. This stands genuine
regardless of whether you need to exit after the multi-year lock-in period in contrast
with not having contributed the sum at all and holding it in a savings account or in the
form of an FD. But, under ULIP, the mantra is to always keep the policy going for a
longer time horizon to reap the best out of it.
 The flexibility of a portfolio switch: As already mentioned, ULIPS area unit
sometimes designed during an approach that they permit you to change your portfolio
between debt and equity supported your risk appetence yet as your data of however the
market is acting. Insurance firms, on the opposite hand, permit a really few numbers of
switches freed from price

There are four types of ULIP Fund options :

1. Equity Fund
These are high-risk avenues that allocate funds in shares. The expected
returns from this kind of policy are huge and can be ideal for long term
wealth creation opportunities.

2. Balanced Fund
Such a fund distributes a part of the premium toward high-risk equity units
and the rest towards fixed interest units. It contains medium risk because the
high risks of the equity units are balanced by the lower risk of the fixed
interest units.

3. Debt Fun
These invest the premium in corporate bonds, government securities, and
other fixed-income instruments. As a consequence, these have a medium
risk

4. Secure Fund ULIPs

This type of fund carries an incredibly low risk. The funds are invested in
instruments like cash and bank deposits. Returns from these plans are
comparatively low.

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 1.3 Advantages and Disadvantages of investing in ULIPS

Advantages

1.It provides mortality insurance cover. So, if the policy holder dies, the
nominee can claim the amount 3. ULIP investment provides flexibility, wherein
the policy holder can shift from one policy to another depending on how the
market functions.. If you are looking for a long term investment, then ULIP is
best suited for you, as share market is never for someone who wishes to play for
the short term.

2. If you are looking for a long term investment, then ULIP is best suited for
you, as share market is never for someone who wishes to play for the short term

Disadvantages

1.One of the biggest disadvantages of an ULIP is that the returns cannot be

guaranteed. For example, if you have chosen an ULIP that invests bulk of the money
in equities and the shares are not doing well, chances of losing money cannot be ruled
out. This is one of the biggest risk and perhaps the only disadvantage that one can see
from an ULIP.

2. One of the other disadvantages of the ULIP is that returns are very poor. This is
because there are a host of charges that are associated with the scheme, including
administrative charges, mortality charges etc.

1.4 MUTUAL FUNDS

A mutual fund is a type of financial vehicle made up of a pool of money collected from many
investors to put resources into protections, for example, stocks, securities, currency market
instruments, and different resources. Shared assets are worked by expert cash administrators,
who allot the reserve's advantages and endeavor to create capital increases or salary for the
store's financial specialists. A common reserve's portfolio is organized and kept up to match
the speculation targets expressed in its outline.

Mutual funds give small or individual investors access to professionally managed arrangement
of values, bonds and different protections. Every investor, in this way, partakes relatively in
the additions or misfortunes of the reserve. Shared assets put resources into an immense
number of protections, and execution is normally followed as the adjustment in the complete
market top of the store—determined by the conglomerating execution of the fundamental
ventures.

KEY TAKEAWAYS

 A mutual fund is a type of investment vehicle comprising of an arrangement of stocks,

bonds or different protections.
 Mutual funds give small or individual investors access to diversified, professionally
managed portfolios at a low price.

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  Mutual funds are divided into several kinds of categories, representing the kinds of
securities they invest in, their investment objectives, and the type of returns they seek.
 Mutual funds charge yearly charges (called cost proportions) and, at times,
commissions, which can influence their general returns.

1.5 History of mutual funds

In Europe

The mutual fund was born from a financial crisis that staggered Europe in the early 1770s.The
British East India Company had borrowed heavily during the preceding boom years to support
its ambitious colonial interests, particularly in North America where unrest would culminate
in revolution in a few short years. As costs expanded and income from frontier undertakings
fell, the East India Company looked for a bailout in 1772 from the officially focused on British
treasury. It was the "first too huge to bomb enterprise" and the repercussions were felt over the
mainland and without a doubt around the world.At a similar time, the Dutch were facing their
own challenges, expanding and exploring like the British and taking “copy-cat risks” in a
pattern that has drawn parallels to the banking crisis of 2008.

The first mutual fund

Against this backdrop, a Dutch merchant, Adrian van Ketwich, had the foresight to pool money
from a number of subscribers to form an investment trust – the world’s first mutual fund – in
1774. The financial risk to the mainly small investors was spread by diversifying across a
number of European countries and the American colonies, where investments were backed by
income from plantations, an early version of today’s mortgage-backed securities.

The first modern-day mutual fund, Massachusetts Investors Trust, was made on March 21,
1924. It was the principal common store with an open-end capitalization, taking into
consideration the ceaseless issue and recovery of offers by the venture organization.. After just
one year, the fund grew to $392,000 in assets from $50,000. The fund went public in 1928 and
eventually became known as MFS Investment Management.

The growth of Canadian mutual funds

Four years later, in 1932, the first Canadian fund, Canadian Investment Fund Ltd. (CIF), was
established and by 1951 had assets of $51 million. It changed its name to Spectrum United
Canadian Investment Fund in November 1996 and to CI Canadian Investment Fund in August
2002.

The growth of mutual funds and their effect on putting resources into general was out and out
progressive. Just because, conventional financial specialists with negligible capital could pool
their assets in an expertly oversaw, broadened bin of ventures, as opposed to going the more
costly course of purchasing individual supplies of fluctuating dangers. This was viewed as a
monster venture in the democratization of speculations for the normal individual.

The first major sign of growth and popularity of mutual funds in Canada took place in the early
1960s when total assets doubled from $540 million in 1960 to more than $1 billion by the end
of 1963. But the largest influx into mutual funds in Canada came during the 1990s when

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double-digit interest rates that had lured Canadian savers into GICs tumbled and investors
moved into investments with the potential for higher returns.

Mutual funds clearly represented the fastest-growing segment of the Canadian monetary
administrations industry during the 1990s and through the turn of the century with the
estimation of advantages under administration expanding by 1,700 percent – from $25 billion
in December 1990 to $426 billion by December 2001. These advantages were overseen in
around 1,800 distinctive shared finances held in excess of 50 million unit holder accounts.

In India

The mutual fund industry in India started in 1963 with the development of Unit Trust of India,
at the activity of the Government of India and Reserve Bank of India. The historical backdrop
of common assets in India can be extensively partitioned into four particular stages
First Phase - 1964-1987
Unit Trust of India (UTI) was set up in 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and worked under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-associated from the RBI and the Industrial
Development Bank of India (IDBI) expected power over the managerial and administrative
control rather than RBI. The chief arrangement moved by UTI was Unit Scheme 1964. Toward
the finish of 1988 UTI had Rs. 6,700 crores of advantages under administration.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
1987 signified the section of non-UTI, open part shared sponsors set up by open portion 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 developed in June 1987 sought
after by Can bank 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 set up its mutual hold in June 1989 while GIC had set up its basic store in December 1990.
Around the completion of 1993, the common save industry had assets under organization of
Rs. 47,004 crores. .
Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private part resources in 1993, some other time started in the Indian Mutual
store industry, giving the Indian money related pros a progressively broad choice of save
families. Also, 1993 was the year wherein the fundamental Mutual Fund Regulations showed
up, under which each and every regular store, except for UTI were to be enrolled and spoken
to. The ongoing Kothari Pioneer (by and by met with Franklin Templeton) was the essential
private section shared save enrolled in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by an inexorably extensive and
changed Mutual Fund Regulations in 1996. The business by and by works under the SEBI
(Mutual Fund) Regulations 1996.

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The quantity of shared store houses continued expanding, with numerous outside common
subsidizes setting up assets in India and furthermore the business has seen a few mergers and
acquisitions. As toward the finish of January 2003, there were 33 shared assets with complete
resources of Rs. 1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of advantages
under administration was route in front of other mutual funds.
Fourth Phase - since February 2003
In February 2003, after the annulment of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate substances. One is the Specified Undertaking of the Unit Trust of India with
assets under organization of Rs. 29,835 crores as close to the completion of January 2003,
addressing completely, the benefits of US 64 contrive, ensured return and certain various plans.
The Specified Undertaking of Unit Trust of India, working under an official and under the rules
restricted by Government of India and does not go under the space of the Mutual Fund
Regulations.

How Mutual Funds Work

A mutual fund is both an investment and an actual company. This double nature may appear
to be odd, yet it is the same as how a portion of AAPL is a portrayal of Apple, Inc. At the point
when a financial specialist purchases Apple stock, he is purchasing part responsibility for
organization and its advantages. Correspondingly, a shared reserve financial specialist is
purchasing part responsibility for common store organization and its benefits. The thing that
matters is that Apple is in the matter of making cell phones and tablets, while a shared reserve
organization is in the matter of making speculations.

Types of Mutual Funds

Mutual funds are divided into several kinds of categories, representing the kinds of securities
they have targeted for their portfolios and the type of returns they seek.

1.Equity Funds
The largest category is that of equity or stock funds. As the name implies, this sort of fund
invests principally in stocks. Within this group is various sub-categories. Some equity funds
are named for the size of the companies they invest in small-, mid- or large-cap. Others are
named by their investment approach: aggressive growth, income-oriented, value, and others.
Equity funds are also categorized by whether they invest in domestic (U.S.) stocks or foreign
equities.

2.Fixed-Income Funds
Another big group is the fixed income category. A fixed income mutual fund focuses on
investments that pay a set rate of return, such as government bonds, corporate bonds, or other
debt instruments. The idea is that the fund portfolio generates interest income, which then
passes on to shareholders.

3.Index Funds
Another group, which has become extremely popular in the last few years, falls under the
moniker "index funds." Their investment strategy is based on the belief that it is very hard, and
often expensive, to try to beat the market consistently. In this way, the file subsidize chief
purchases stocks that compare with a noteworthy market file, for example, the S&P 500 or the
Dow Jones Industrial Average (DJIA). This technique requires less research from experts and
counsellors, so there are less costs to gobble up returns before they are passed on to investors. .
These funds are often designed with cost-sensitive investors in mind.

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1.6 Advantage and Disadvantage of Mutual funds

Advantages
There are a variety of reasons that mutual funds have been the retail financial specialist's
vehicle of decision for a considerable length of time. The dominant part of cash in business
supported retirement plans goes into Mutual funds.

1.Diversification
Diversification, or the mixing of investments and assets within a portfolio to reduce risk, is one
of the advantages of investing in mutual funds. Buying individual company stocks and
offsetting them with industrial sector stocks, for example, offers some diversification.
However, a truly diversified portfolio has securities with different capitalizations and industries
and bonds with varying maturities and issuers.

2.Easy Access
Trading on the major stock exchanges, mutual funds can be bought and sold with relative ease,
making them highly liquid investments.

3.Economies of Scale
Mutual funds also provide economies of scale. Buying one spares the investor of the numerous
commission charges needed to create a diversified portfolio. Buying only one security at a time
leads to large transaction fees, which will eat up a good chunk of the investment. Also, the
$100 to $200 an individual investor might be able to afford is usually not enough to buy a
round lot of the stock, but it will purchase many mutual fund shares.

Disadvantages
Liquidity, diversification, and professional management, all these factors make mutual funds
attractive options for a younger, novice, and other individual investors who don't want to
actively manage their money. However, no asset is perfect, and mutual funds have drawbacks
too.

1.Fluctuating Returns
Like many other investments without a guaranteed return, there is always the possibility that
the value of your mutual fund will depreciate. Equity mutual funds experience price
fluctuations, along with the stocks that make up the fund. The Federal Deposit Insurance
Corporation (FDIC) does not back up mutual fund investments, and there is no guarantee of
performance with any fund. Of course, almost every investment carries risk. It is especially
important for investors in money market funds to know that, unlike their bank counterparts,
these will not be insured by the FDIC.

2.Heavy Cash Supplies

Mutual funds pool money from thousands of investors, so every day people are putting money
into the fund as well as withdrawing it. To maintain the capacity to accommodate withdrawals
funds typically have to keep a large portion of their portfolios in cash. Having ample cash is
excellent for liquidity, but money is sitting around as cash and not working for you and thus is
not very advantageous.

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3.High Costs
Mutual funds provide investors with professional management, but it comes at a cost—those
expense ratios mentioned earlier. These fees reduce the fund's overall payout, and they're
assessed to mutual fund investors regardless of the performance of the fund. As you can
imagine, in years when the fund doesn't make money, these fees only magnify losses.

1.8 comparative chart

ULIPS MUTUAL FUNDS

Investment Determined by the investor and can be Minimum investment amounts

amounts modified as well Are determined by the funds house

Expenses No upper limits, expenses determined Investors have been set by the
by the insurance company regulator

Portfolio Not mandatory Quarterly disclosures are

disclosure mandatory

Tax Benefits Section 80c benefits are available on all Section 80c benefits are available
ULIP investments only on investments in tax saving
funds

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 CHAPTER 2
REVIEW OF LITERATURE

The debate between SEBI and IRDA was first studied in detail by Varghese, J. (2010) in his
paper ‘Unit Linked Insurance Products (ULIPs) and Regulatory Tangle’. He argued that the
main point of dispute was whether the ULIPs are insurance products or “collective investment
scheme” as defined in Section 2(ba)1 read with Section 11 AA2 of Securities and Exchange
Board of India Act, 1992 (SEBI Act). Even in the traditional life insurance products, the
investment aspect and the payout on maturity happens by liquidating the value of the collective
investment, through a complex actuarial calculation, and if the logic adopted by SEBI in its
order dated April 9, 2010 is applied, all life insurance products would come within the purview
of SEBI. (J, Aug 2010)

In this paper, the author states that regulatory competition at least in the case of ULIPs was
perfectly unavoidable had SEBI took into account all aspects of law and regulation. However,
it should not go unseen that existence of multiple regulatory bodies will create such scenes in
future, since regulation means control and control means power. Hence it is important to create
an appropriate dispute resolution mechanism, which would pre-empt regulatory issues and
resolve them before those issues go ugly. The most appropriate mechanism should be a higher
body, with legal experts in board, which would judiciously decide on issues of regulatory
competition taking all the parties into confidence and which has powers to withhold the orders
before they are issued. It would be only appropriate that such issues are resolved before it goes
public since the impact of such regulatory issues would be much higher on individual investor
than any of the regulators can imagine. (Varghese, J., 2010).

Venkatesh (2007) in their paper ‘Life-style Wraps: Cost-efficient Alternative to ULIPs’ argue
that ULIPs in India have higher deductions for insurance & mortality charges and have higher
investment content, when compared to traditional term insurance. The paper tries to convey
the idea that ULIPs are viewed as an investment vehicle with a small element of insurance
content. The idea discussed in the paper is that ULIPs in India are more investment product
with a supplemental insurance content. The ULIPs have lower insurance content than
traditional term insurance plans, and that former have more investment content. (Venkatesh,
2007)

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Dr. Ranjit Singh, Dr. Anurag Singh and Dr. H. Ramananda Singh ( 2011), have done research
on Positioning of Mutual Funds among Small Town and Sub-Urban Investors. In the recent
past the significant proportion of the investment of the urban investor is being attracted by the
mutual funds. This has led to the saturation of the market in the urban areas. In order to increase
their investor base, the mutual fund companies are exploring the opportunities (Dr Ranjit singh,
Aug 2011)in the small towns and sub-urban areas. But marketing the mutual funds in these
areas requires the positioning of the products in the minds of the investors in a different way.
The product has to be acceptable to the investors, it should be affordable to the investors, it
should be made available to them and at the same time the investors should be aware of it. The
present paper deals with all these issues. It measures the degree of influence on acceptability,
affordability, availability and awareness among the small town and sub-urban investors on their
investment decisions.

Hemanth N C (2014), have studied Performance of Selected Equity Growth Mutual Funds in
India: An Empirical Study during 1st June 2010 To 31st May 2013. The study evaluates
performance of selected growth equity funds in India, carried out using portfolio performance
evaluation techniques such as Sharpe and Treynor measure. S&P CNX NIFTY has been taken
as the benchmark. The study conducted with 15 equity growth Schemes (NAV ) were chosen
from top 10 AMCs ( based on AUM) for the period 1st June 2010 to 31st may 2013(3 years).
(N.C, Feb 2014)

N. Sharma (2012), has done research on Indian Investor’s Perception towards Mutual Funds.
This paper attempts to investigate the reasons responsible for lesser recognition of mutual fund
as a prime investment option. It inspects the financial specialist's observation with reference to
particular highlights given by shared reserve organizations to pull in them for putting resources
into explicit assets/plans. The examination utilizes head segment investigation as an apparatus
for factor decrease. The paper investigated three components named as store/conspire related
characteristics, financial advantages and support's connected properties (having individually
six, four and four factors) which might be offered to speculators for verifying their support.
The outcomes are relied upon to give productive knowledge to shared reserve organizations
for fitting their offers appropriate to provide food the necessities and desires for Indian
speculators(Sharma, Aug 2012)

K. HemaDivya ( 2012), has done A Comparative study on Evaluation of Selected Mutual Funds
in India. Mutual Funds industry has grown up by leaps & bounds, particularly during the last

17
2 decades of the 20th century. Proper assessment of fund performance would facilitate the peer
comparison among investment managers, help average investors successfully identify skilled
managers. Further the growing competition in the market forces the fund managers to work
hard to satisfy investors & management. Therefore regular performance evaluation of mutual
funds is essential for investors and fund managers also. The present study is confined to
evaluate the performance of mutual funds on the basis of yearly returns compared with BSE
Indices. (K.Hemadivya, Apr 2012)

Siddiqui (2008) in his paper ‘Indian Life Insurance Sector: An Overview’ has observed the
status of Indian life insurance sector and also studied various economic indicators related to
life insurance companies. This report has been based on the secondary data available. From the
research report, the author says that life insurance sector in India has enlarged by more than
twice after the formation of IRDA. It is also observed that LIC is losing its market share in
favors of new entrants or private companies. While analyzing the data of various countries, a
clear picture has emerged that developed countries have higher rate of insurance penetration
whereas developing and under developed nations have relatively lesser rate of it. Being the
largest insurance company in India, It is obvious that LIC has the largest strength of insurance
agents. (Siddiqui, 2008)

Ippolito’s (1989) results and ends were pertinent and reliable with the hypothesis of
effectiveness of educated financial specialists. He assessed that hazard balanced return for the
shared store industry was more prominent than zero and credited positive alpha before burden
charges and distinguished that reserve execution was not identified with costs and turnover as
anticipated by proficiency contentionss. (Ippolito's, 1989)
Karuna (2009) highlighted on ‘Relevance of ULIPs as a good investment tool’ to
observe traditional life insurance plans offered by LIC took care of only the insurance
needs of people. However, with the ever changing demands of customers a new product
called ULIP was launched which combines the benefits of insurance, investment and tax
benefits. The author observed that ULIPs were better suited to investors who have 15-
20 years as their time horizon to spread the expense over the longer period and reap the
benefits. (Karuna, 2009)

Kanchu, T.,(2011), conducted a study on growth of ULIP Policies in life insurance sector of
India by comparing traditional (Life Fund + Pension & General Annuity + Group Fund) and

18
ULIP Policies. The objective of the study was to observe the evolution of ULIPs in India, the
growth of ULIPs over traditional Policies, risk factors involved in ULIPs over traditional
policies and to suggest various measures to develop and stabilize the growth of ULIPs. The
period from 2007 to 2009 was shrouded in the investigation. The examination thought about 5
organizations to look at development, to be specific, LICI, HDFC Standard Life, ICICI
Prudential Life, SBI Life and Bajaj Allianz Life. It was uncovered from the examination that
there was amazing development in ULIP contrasted with customary arrangements as the new
private participants focused on ULIPs for market entrance. (Kanchu.T, 2011)

Sinha, R.P.(2009) compared the public and private sector life insurance companies on the basis
of investment funds. The period covered in the study was from 2002-03 to 2006-07. The study
revealed that the private sector insurance companies collected more funds from unit-linked
plans that LICI and therefore, were more exposed to stock market. During the years 2005-06
and 2006-07 the arrival on speculation was observed to be higher for the private players
contrasted with LICI inferable from light securities exchange conditions. The investigation
likewise recommended that the private players probably won't rehash this in later years because
of securities exchange emergency. (R.P, 2009)

Nair, K.K.(2009), conducted a study on Unit Linked insurance plans (ULIP) based on
secondary data available on its emergence, concepts, parameters, benefit, current position and
future outlook. The study suggested that India has a plethora of opportunities for insurance
companies because three-fourth of the population was uninsured also majority of the investing
population were small and medium investors and greater part of the speculators came up short
on the ability to legitimately enter the securities exchange and procure great returns. The Study
underscored the about certainties to be the explanations behind expanded significance of ULIP.
The examination saw that ULIP will keep on being a wise venture choice for the financial
specialists as it joins the multi parts of protection, speculation and tax benefit. (K.K, 2009)

Venugopalan, K.,V.(2011), conducted a study on global financial crisis and Life insurance
sector in India by undertaking a comparative study of LIC with Private Sector. The impact of
the Global Financial Crisis of 2007 to the Indian Life Insurance Sector is measured by using
the following variables insurance penetration, insurance density, number of insurance policies
issued, number of insurance premiums collected, total premium collected, profit obtained. The
period covered in the study was from 2004-05 to 2010-11.. (Venugopalan, 2011)

19
 CHAPTER 3
COMPANY PROFILE

3.1 OVERVIEW OF FINANCIAL PLANNING INDUSTRIES

The Financial Planning Industry comprises business establishments engaged in financial

planning and providing advice to clients including superannuation and retirement advice,
investment advice and management, self-managed super fund advice, tax advice, etc. Major
industry services include: financial investment advisory services, financial planning
Investment advisory services, and financial asset investment consulting services

Objectives of Financial Planning

Financial Planning has got many objectives to look forward to:

 Ensuring availability of funds: Financial planning majorly excels in the area of generating
funds as well as making them available whenever they are required. This also includes
estimation of the funds required for different purposes, which are, long-term assets and
working capital requirements.

 Estimating the time and source of funds: Time is a game-changing factor in any business
venture. Delivering the funds at the right time at the right place is very much crucial. It is
as vital as the generation of the amount itself. While time is an important factor, the sources
of these funds are necessary as well.

Importance of Financial Planning

Financial Planning is process of framing objectives, policies, procedures, programmes and

budgets regarding the financial activities of a concern. This ensures effective and adequate
financial and investment policies. The importance can be outlined as-

1. Adequate funds have to be ensured.

2. Financial Planning helps in ensuring a reasonable balance between outflow and inflow
of funds so that stability is maintained.
3. Monetary Planning guarantees that the providers of assets are effectively putting
resources into organizations which exercise budgetary arranging.
4. Money related Planning helps in making development and extension programs which
aides in long-run survival of the organization.

20
3.2 COMPANY PROFILE OF BRIDGE GROUP SOLUTIONS

Bridge Group Solutions is an emerging leader in the highly unorganized and diversified
Financial Sector and aims to provide best investment solutions to the customers and also
establish its footprint in this sector, with its strong research capabilities and a robust team of
Expert, we provide you solutions that will stand straight in each test. We are here not just to
build a customer base but to leave a legacy behind in the minds of our customers. We at
Bridgegroup Solutions help our customers foresee upcoming risks and help them reduce it and
at the same time maximise returns and take well planned and calculated investment decisions
through a well-trained team and its in-depth analysis and extensive research. Bridge Group
Solutions is promoted by a group of like-minded young professionals having deep knowledge
in providing investment solutions and consulting.

Bridge Solutions Private Limited is a Private incorporated on 18 July 2014. It is classified as

Non-govt company and is registered at Registrar of Companies, Delhi. Its authorized share
capital is Rs. 100,000 and its paid up capital is Rs. 100,000.

Directors of Bridge Solutions Private Limited are Kumar Samrendra and Vijay Garg

"Our vision as a firm focuses to help our customers and communities realize their dreams by
anticipating, understanding and meeting financial needs"

21
 As a firm, We strive to provide financial peace of mind by delivering tailored objective
advice designed to give clients the confidence to pursue their own passion, dreams and
talents. We help our customers in financial and investment planning

Integrity: Provide professional services with integrity.

Objectivity: Provide professional services objectively.
Competence: Maintain the knowledge and skill necessary to provide professional services
competently.
Professionalism: Act in a manner that demonstrates exemplary professional conduct.

3.3 PRODUCTS OFFERED BY BRIDGE GROUP SOLUTIONS

1. LIFE INSURANCE
Life Insurance is the safest and the most secure way to protect your family or
dependents against financial contingencies that may arise post the unfortunate event of
your untimely demise. Under a Life Insurance Contract in India, the insurer assures to
pay a definite sum to the policyholder’s family on his demise during the policy term.

Life Insurance Policy Types

1. Term Insurance
2. Endowment Policy
3. ULIP - Unit Linked Insurance Plan
4. Money Back Life Insurance
5. Whole Life Insurance

Term Insurance
Term Insurance :It is the simplest and cheapest form of insurance that is designed to
offer financial protection for a specified tenure, say 15 or 20 years.IT ensures that your
family gets a large lump sum amount, i.e. sum assured after your death to lead a
financially stable life. However, if you survive the term, the insurer pays nothing.

22
Endowment Policy
It offers the dual benefit of insurance and investment. A specific part of the premium is
assigned towards the sum assured, while the remaining part of the premium gets
invested in asset markets— equities and debt. It pays a lump sum amount for the
specified duration or on the death of the policyholder, whichever is earlier. An
endowment policy may declare bonus periodically, which is paid, either on maturity or
on the death of the insured.

Unit Linked Insurance Plan (ULIP)

IN ULIP, a portion of the premium goes towards providing the life cover, while the
residual portion is invested in equities and debts. The investment portion in ULIP is
subject to market volatility. Investing in ULIP inculcates regular saving habit in a
person, which is imperative for the creation of wealth.

Money Back Life Insurance

It offers periodical payment of partial survival benefits during the tenure of the policy
as long as the policyholder is alive. In the event of the death of the insured, the insurance
company pays the full sum assured along with survival benefits.

Whole Life Insurance

Offering the dual benefit of insurance and investment, whole life insurance plans offer
insurance cover for the whole life of the person or up to 100 years whichever is earlier.
Also, the life insurance company calculates bonus on the sum assured, which is paid to
the nominee after the death of the policyholder.

Child Insurance
The increasing education cost is causing uneasiness among parents. Therefore, it is best
to invest in a good child insurance plan to give secured life to your child even in your
absence. A child life insurance plan offers a lump-sum amount to the beneficiary (i.e.
child) on the death of the policyholder. Here, the policy doesn’t end. In this case, Life
Insurance Company exempts all future premiums and pays the money to the child at
specified intervals as planned out by the policyholder.
Pension Plans

Also called pension plans, these are offered by life insurance companies to help an
individual build a retirement corpus. This cash causes an individual to lead a monetarily
verified life even after retirement. If there should be an occurrence of a lamentable
demise of the policyholder, the candidate can either take a singular amount or get an
ordinary benefits for the remainder of the strategy residency. These life coverage plans
are incredible to develop a retirement corpus; most extra security organizations in India
give a wide cluster of designs for individuals to put something aside for their retirement.

2. HEALTH INSURANCE

Health Insurance is an insurance policy that guarantees that you get cashless treatment
or cost repayment, on the off chance that you become sick. A health care coverage
strategy repays the guaranteed for medicinal and careful costs emerging from a sickness
or damage that prompts hospitalization. The insurance agency furnishes the guaranteed
with the office of cashless hospitalization at a system medical clinic or gives a

23
repayment to the caused costs. Besides, medical coverage cost is sponsored to the
guaranteed as expense exclusion under area 80D of Income Tax Act, 1961.

Individual Plans Cashless Hospitalization: Medical expenses are sky-rocketing! Get

health insurance policies for your medical outlay. With cashless facility, stay tension-
free and cure yourself faster. Approved by IRDAI, we helps you compare and find the
best plan.
· Individual Health Insurance Plan from Top Insurers
· Lowest Premium On Medical Insurance
· Compare Policies Instantly

Importance of Health Insurance in India

There is no debating the importance of having insurance in a country like India that
ranks very low on human life index. Everyone must buy a good health insurance policy
that includes medical outlay, hospitalisation costs, medication and laboratory test costs,
including critical illness.

The major competitors of bridge group solutions are:

 Motilal Oswal
 Angel Broking
 SMC Global
 Capital first
 Wise finserv

3.4 SWOT ANALYSIS

STRENGTH:
 Efficient wealth management skills for customers
 High degree of customer satisfaction
 Good place to work

WEAKNESS:
 Need Brand recognition

OPPURTUNITY:
 New Markets
 Growing Demand
 Growing rates

THREATS:
 Great risk involved
 Dependency on global economy

24
 CHAPTER 4
RESEARCH METHODOLOGY

OBJECTIVES OF RESEARCH
 To understand consumers perception on mutual funds and ULIPs.
 To find out the preference of customer about ULIP plan with mutual funds

 Research methodology is a systematic way to solve a problem. It is a science of

studying how research is to be carried out. Essentially, the procedures by which
researchers go about their work of describing, explaining, and predicting phenomena
are called research methodology. It is also defined as the study of methods by which
knowledge is gained. Its aim is to give the work plan of research.

4.1 RESEARCH DESIGN:

Descriptive and exploratory research design have been used for this research. Exploratory
research was used to study the existing available research work on this subject which helped
to define the objectives and scope of this study. After that, descriptive research design was used
for the collection of primary data with the help of a structured questionnaire.

4.2 DATA COLLECTION:

The data type for the research is of primary data. The primary data for the purpose of research
were collected through a structured questionnaire which was circulated in Delhi NCR. The
survey was successfully operated with the help of questionnaire.

4.3 QUESTIONNAIRE STRUCTURE:

A structured disguised questionnaire with close ended questions are used. Respondents were
offered a set of questionnaire to be answered which is called as multiple choice questionnaire
as well as scaling questions were used for ranking the factors.

4.4 SAMPLING:
Target Population:

25
The population for the project work comprises of customer base of age diversity from 18 years
and above. The target population comprises of members who are aware of different investment
avenues.

Sample Selection:
Non probability convenience sampling was used to collect the data for the study. This
technique was chosen because of the large size of the population size.
Sample size and composition:
The sample size of the study comprised of approximately 100 respondents. The sample
population belonged to the age group of 18 years and above, out of which maximum lied
between 18-25 years.

Field work:
Online questionnaire was circulated amongst the population sample to collect the primary data
for research.

LIMITATIONS
 The middle-class people do not know basic concept of ULIP so
creating awareness is a big challenge for me.
 Narrow minded thinking of middle-class people as investment is not
 Many customers think that investments in share market is very risky.
As ULIP and Mutual fund both are related to share market

 Due to the constraints of time and resources, the study was conducted

on a limited sample size and was limited to the geographical region of

Delhi NCR only.

26
 CHAPTER 5
DATA ANALYSIS

To analyse and interpret the data, descriptive and inferential analysis method has been used.
Descriptive analysis is used to summarize the data and derive basic information. It also shows
the demographics of the population. Inferential analysis shows from the sample data what
population might think.
5.1 DESCRIPTIVE ANALYSIS

Figure 1: Do people prefer investing or not

Figure 1 shows that out of 100 respondents 63% prefer investing and the rest
29% do not prefer investing. Some of the respondents are not into investments
because they prefer savings and they think that investments are a risky option
compared to savings.

27
Figure 2: What type of investments do investors prefer

Figure 2 shows that Mutual funds are the most popular choice for investing
followed by Gold as returns on them are very high if there is no risk during that
time. Investors have also preferred Insurance as it is also a popular choice
among gold and mutual funds.

Figure 3: Why do people invest

Where it comes to why people invest we can clearly see that their main
objective for Investment in getting long term capital gains and we can also see
that respondents/investors have a motive of tax saving and asset creation.

28
Figure 4: Are investors aware of ULIP insurance

Figure 4 shows that majority of the investors that is around 69% are not aware
about ULIP insurance and only few of the respondents that is around 31% are
aware about ULIPs. We can see that most of the investors are not aware/
educated about ULIP insurance.

Figure 5: have the investors purchased any ULIP insurance

Here we can clearly see that almost 83% investors have not yet purchased any ULIP as they
are not fully aware about it and only few investors that is 17% have purchased ULIP
insurance.

29
Figure 6: Are the investors aware about Mutual funds

Figure 6 shows that 89% of the investors are aware about Mutual funds and this is because
through advertisements and social media the investors are well aware of investing in mutual
funds and 11% of respondents are not fully aware of Mutual funds because most of them are
into savings so they never needed to understand about Mutual funds.

Figure 7: Have they purchased any mutual funds

Where it comes to investing in mutual funds we can see that 58% of investors have not
invested in mutual funds and that is because of the market risks which are attached to mutual
funds and the rest 42% have invested in mutual funds because they prefer in investing rather
than buying insurance for themselves because mutual funds can double their invested money
as compared to insurance.

30
Figure 8: Investment options where investors generally invest their savings

Figure 8 shows that investors first preference for investing among different options is Mutual
funds followed by ULIPs and only a few people have chosen FD, gold and shared.

Figure 9: Basis of selecting investment companies

The above figure shows that investors consider the ‘return on investment’ factor the mostly
while investing followed by ‘past performance’ of the investment company. We can see that
size of the company does not matter for investors.

31
Figure 10: Company preferred by investors for investment

Here maximum number of respondents/investors that is 34% prefer ICICI insurance as their
preferred company for investment, 28% of respondents have preferred SBI, 19% have
preferred Max life insurance and the rest 18% have preferred HDFC life insurance. ICICI
turns out to be the most preferred company for investing in insurance because of the trust
factors they have created among clients and it guarantees the returns within shorter period of
time.

Figure 11: Are the investors aware about different investment options available at max
life?

Here we can see that maximum number of investors that is 49% are not aware about
investment options available at max life insurance and only a handful of investors that is 25%
are aware about it

32
Figure 12: Are the investors willing to invest in max life insurance?

Figure 12 shows that majority of the respondents are not sure whether they will invest in max
life or not and only few investors are willing to invest in max life insurance

Figure 13: Rating of max life insurance ULIP?

Here 44% of the investors/respondents have rated max life as average because of some bad
experience which the clients have faced from max life insurance, 31% of the
respondents/investors have rated it to be fair because of its popularity and commitment and
25% of the investors/respondents have rated max life good as they are the loyal customers of
max life insurance.

33
Figure 14: Main reason for investment in Max life?

Figure 14 shows that 69% of the investors have not yet invested in max life because here
the investors prefer mutual funds for investment or the competitors of max life because
there have been a few cases where the people have not received any insurance money or
returns.

5.2 INFERENTIAL ANALYSIS

Correlations

Why do you
Your Age invest?

Your Age Pearson Correlation 1 .128

Sig. (1-tailed) .106

N 97 97
Why do you invest? Pearson Correlation .128 1

Sig. (1-tailed) .106

N 97 99
Ho: There is no significant difference between age and reason for investment

H1: There is a significant difference between age and reason for investment

Interpretation:
The correlation was conducted between independent variable age ad dependent variable i.e
why do they generally invest.
From the above table we can see that it is greater than .05 so null hypothesis is accepted

34
 Correlations

Annual
Household
Mutual funds income?

Mutual funds Pearson Correlation 1 -.093

Sig. (1-tailed) .190

N 99 92
Annual Household income? Pearson Correlation -.093 1

Sig. (1-tailed) .190

N 92 92

Ho: There is no significant difference between annual income and choosing of mutual funds

H1: There is a significant difference between annual income and choosing of mutual funds

Interpretation:
The correlation was conducted between independent variable Annual household income and
dependent variable i.e Investors prefer mutual funds or not.

From the above table we can see that it is greater than .05 so null hypothesis is accepted

35
 Correlations

Annual
Household
income? ULIPs

Annual Household income? Pearson Correlation 1 -.186*

Sig. (1-tailed) .038

N 92 92
ULIPs Pearson Correlation -.186* 1

Sig. (1-tailed) .038

N 92 99

Ho: There is no significant difference between annual income and choosing of ULIP’s

H1: There is a significant difference between annual income and choosing of ULIP’s
Interpretation:
The correlation was conducted between independent variable Annual household income and
dependent variable i.e Investors prefer ULIP’s or not.

From the above table we can see that it is greater than .05 so null hypothesis is accepted
And we can say that there is a significant difference between annual household income of the
individual and

36
 CHAPTER - 6
CONCLUSIONS & RECOMMENDATIONS

6.1 OBJECTIVE WISE CONCLUSION

1) To understand consumers perception on mutual funds and ULIPs.
Consumers perceive mutual funds and insurance as a risky venture because although being
aware about both of them investors still think that it is risky to invest in mutual funds as it is
subjected to market risk and whereas for ULIP insurance most of the investors are not a well
aware of ULIP plans available in the market

2) To find out the preference of customer about ULIP plan with Mutual funds.
As per my study majority of the respondents/investors have preferred mutual funds over ULIPs
as they are because Awareness on ULIPs is still absent in the investment market whereas for
mutual funds investors are educated about different offerings that mutual funds gives them.

6.2 RECOMMENDATIONS

 ULIPs companies should undertake short-term programs to educate investors in

following areas:
 Product features
 Risk-return
 Comparison between various investment options
 Methods of designing a balanced portfolio
 Also Mutual fund companies should take regular feedback from the customers and
work towards improving the existing products and designing new and innovative
products. They should motivate the investors for investing in various types of mutual
funds and creating awareness about the benefits and return of it.
 Max life insurance should make a good marketing strategy to promote and advertise
their product as investors/respondents are not aware about.

6.3 LIMITATIONS AND FUTURE SCOPE OF STUDY:

 The middle-class people do not know basic concept of ULIP so creating awareness is a
big challenge for me.
 Due to the constraints of time and resources, data could only be collected from 100
respondents. Further research may be done on a larger sample size.
 Many customers think that investments in share market is very risky. As ULIP and
Mutual fund both are related to share market.

37
 Market situations change over a period of time and with the change in the market
situations, preferences, need and patterns of the investors may also change. Further
studies may also be conducted at regular time intervals.
 Majority of respondents were under the age of 18-25 years, everyone under this age are
not financially capable enough to invest or take any decision on their own

38
 REFERENCES

References
V. J. (2010). Unit linked insurance products and regulatory Tangle.

Venkatesh, S. a. (2007). Lifestyle wraps : Cost effecient alternative to ULIP's.

Dr Ranjit singh, D. A. (Aug 2011). Positioning of Mutual funds among small towns .

N.C, C. Y. (Feb 2014). Performnce of selected equity growth mutual funds.

Sharma, D. N. (Aug 2012). Indian investors perception towards Mutual funds.

K.Hemadivya, M. (Apr 2012). Acomparative study on evaluation of selected Mutual funds in

india.

Siddiqui. (2008). Indian life insurance sector.

Ippolito's. (1989). effeciency of informed investors.

Karuna. (2009). Relevance of Ulip's as a good investment tool.

Kanchu.T, A. a. (2011). Growth of Ulip policies in life insurance sector.

R.P, S. (2009). Comparison between public and private sector life insurance.

K.K, N. (2009). ULIP based on secondary data.

Venugopalan, K. (2011). Global financial crisis and life insurance sector in india undertaking
a comparative study of LIC with private sector.
(n.d.).

39
 ANNEXURE

QUESTIONNAIRE

Q1) Do you prefer investing?

 Yes.

 No

 Maybe

Q2) What type of investment will you prefer?

 Equity

 Debt

 Mutual funds

 Ulips

 Gold

 Insurance

Q3) Why do you invest?

 For Long term capital gains

 For Tax savings

 For Child education

 For asset creation

 For retirement options

Q4) Do you know about ULIP insurance?

40
  Yes

 No

Q5) Do you have taken any ULIP insurance?

 Yes

 No

Q6) Do you know about Mutual funds?

 Yes

 No

Q7) Do you have taken any mutual funds?

 Yes
 No

Q8) Whom do you prefer first for investment?

 ULIP

 Mutual Fund

Q9) What are the basis of selecting the investment companies? (rate according to your
preference)

41
 1 2 3 4 5
Size of the company.

Reputation

Product/service

Quality of management

Past performance

Return on investment

Q10) Out of the following, which one will you prefer investing in?

 Max life Insurance

 ICICI PRUDENTIAL LIFE INSURANCE

 HDFC LIFE

 SBI LIFE INSURANCE

Q11) Are you aware about the different investment options available with Max life?

 Yes

 No

 Maybe

Q12) Would you invest in Max Life Insurance?

 Yes

 No

 Maybe

42
Q13) How would you rate Max life insurance ULIP?

 Fair

 Average

 Good

 Best

Q14) What is the main Reason to invest in Max Life Insurance ULIPs?

 Good returns

 Good Brand Name

 Good Marketing strategy

 I have not yet invested

Your Name

Your Age

Average Annual Income of family

UP TO 6,00,000

6,00,000 – 10,00,000

10,00,000 – 12,00,000

12,00,000 – 15,00,000

15,00,000 Above

43