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TABLE OF CONTENTS
1. INTRODUCTION 1-28
1.1 Industry Overview 1
1.2 Range of products and services 2
1.3 Market Presence 14
1.4 Literature Review 15
1. RESEARCH METHODOLOGY 19-35

2.1 Research objectives 19
2.2 Scope of the Study 30

2.3 Research Design 32
2.4 Data sources 32
2.5 Questionnaire design formulation 33
2.6 Sample design 34
2.7 Limitations of the research 35
3 COMPANY PROFILE 36-54
3.1 SWOT Analysis 53
4 DATA ANALYSIS AND INTERPRETATION 55-68
5 FINDINGS / CONCLUSIONS 69-74
6 RECOMMENDATIONS 75-77
7 ANNEXURES 78-82
8 BIBLIOGRAPHY 83
1. INTRODUCTION
1.1 INDUSTRY OVERVIEW
The concept of mutual funds in India dates back to the year 1963. The era between 1963 and
1987 marked the existence 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 (AXIS).
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, Can bank 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 AXIS. 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.
1.2 RANGE OF PRODUCTS AND SERVICES
MUTUAL FUNDS INDUSTRY UNITHOLING PATTERN
From the data collected from the mutual funds, the following has been observed
i) As on March 31, 2003 there are a total number of 1.6 crore investors accounts (it is
likely that there may be more than one folio of an investor which might have been
counted more than once and actual number of investors would be less) holding units
of Rs. 79,601 crore. Out of this total number of investors accounts, 1.56 crore are
individual investors accounts, accounting for 97.42% of the total number of investors
accounts and contribute Rs.32,691 crore which is 41.07% of the total net assets. The
total number of investors account is lower in comparison with the total number of
investors accounts as on March 31, 2002 as the above data includes information only
of AXIS Mutual Fund (which is registered with SEBI on January 14, 2003). The data
of the Specified Undertaking of AXIS (not registered with SEBI) is not available with
us.
ii) Corporates and institutions who form only 2.04% of the total number of investors
accounts in the mutual funds industry, contribute a sizeable amount of Rs.45,470
crore which is 57.12% of the total net assets in the mutual funds industry.
iii) The NRIs/OCBs and FIIs constitute a very small percentage of investors accounts
(0.54%) and contribute Rs.1440.18crore (1.81%) of net assets.
UNITHOLDING PATTERN – PRIVATE/PUBLIC SECTOR MUTUAL FUNDS
From the analysis of data on unitholding pattern of Private Sector Mutual Funds and Public
Sector Mutual Funds, the following observations are made:-
1. Out of a total of 1.6 crore investors accounts in the mutual funds industry, (it is likely
that there may be more than one folio of an investor which might have been counted
more than once and therefore actual number of investors may be less) 42.93 lakh
investors accounts i.e 27% of the total investors accounts are in private sector mutual
funds whereas the 1.17 crore investors accounts ie.73% are with the public sector mutual
funds which includes AXIS Mutual Fund. However, the private sector mutual funds
manage 71.2% of the net assets whereas the public sector mutual funds own only 28.8%
of the assets
RISK FACTORS
Mutual Funds and securities investments are subject to market risks and there can be no
assurance or guarantee that the Schemes objectives will be achieved. As with any investment
in securities, the Net Asset Value of Units issued under the Schemes may go up or down
depending on the various factors and forces affecting the capital market. Past performance of
the Sponsors/ AMC/ Mutual Fund/ Schemes and its affiliates do not indicate the future
performance of the Schemes of the Mutual Fund. The Sponsors are not responsible or liable
for any loss or shortfall resulting from the operations of the Schemes beyond their
contribution of Rs.10,000/- each made by them towards setting of the Mutual Fund The
Names of the Schemes do not in any manner indicate either the quality of the Schemes or
their future prospects and returns. Investors in the Schemes are not being offered any
guarantee / assured returns. Please read the Offer Documents carefully before investing.
SEBI OKAYS FIDELITY PLANS
Fidelity Investments has received permission from SEBI to launch equity funds in India.
Fidelity has already filed a draft prospectus with SEBI for its maiden equity fund, Fidelity
Equity. The proposed fund will invest across sectors. The portfolio will comprise 60-80
stocks. The fund will ordinarily invest up to 95 per cent of its assets in equities, but may
invest up to 20 per cent in money market instruments.
⇒ SBI Mutual Fund has launched a mid-cap fund, Magnum MidCap Fund. It will invest in
stocks with a market capitalisation of Rs 200-2,000 crore. The minimum investment
amount is Rs 5,000. The fund offers dividend and growth options. The offer closes on
March 17.
⇒ Principal Mutual has declared dividend of 100 per cent on Principal Resurgent India
Equity Fund. The record date is February 24.
⇒ Sundaram Mutual has declared dividends of 20 per cent each on Sundaram Select Focus
and Sundaram Growth. The record dates are March 4 and March 11 respectively.
⇒ AXIS Mutual Fund has declared a maiden dividend of 12 per cent for AXIS Basic
Industries Fund and a dividend of 25 per cent for AXIS Growth and Value Fund. The
record date for both the dividend payments is March 10. The fund house has also
declared a dividend of 18 per cent for AXIS Balanced Fund. The record date is March 17.
⇒ Franklin Templeton Mutual Fund has proposed a dividend for Franklin India Taxshield.
The record date is March 18.
⇒ HDFC Mutual proposes to declare dividend on HDFC Prudence and HDFC Balanced
Fund. The record date for the dividend will be March 18.
⇒ Franklin Templeton Mutual has mopped up Rs 1,950 crore from the initial offering of
Franklin Flexicap. This is the largest amount mobilised by any open-end fund IPO. The
fund will be open for an ongoing basis from March 7.
SEBI'S NEW CHECKS AND BALANCES
Alliance Capital Advisor: Alliance Capital Management Holding LLP has appointed
Blackstone Group LP to advise it on its Indian operations. The latter will look at strategic
options for the mutual fund business. There have been indications that Alliance may want to
wind up its mutual fund operations in India.
AXIS BANK IS NEW NAME FOR UTI BANK
Axis Bank is the new name for UTI Bank. Axis Bank is born out of the pressure on UTI
Bank to shed its brand name after the split of the erstwhile UTI. Though UTI was a
government institution, its subsidiary UTI Bank has been categorized as a private sector
bank, according to RBI guidelines. The name change to Axis Bank means that UTI Bank will
have to undergo a re-branding exercise soon. The re-branding process was completed by
September 2007.
After the split of UTI, entities like UTI Securities, UTI MF and UTI Bank were all allowed
to retain the UTI brand name for a while. Now that it is time for UTI Bank to shed the brand
name, it has opted to go for the more modern-sounding Axis Bank. Axis Bank chairman will
be PJ Nayak, who is currently chairman and managing director of UTI Bank. Axis Bank, this
means, had to split the top post into two, as required by new corporate governance
regulations.
The recommendation for name change to Axis Bank had arisen from the existence of several
shareholder-unrelated entities using the UTI brand, and the consequent brand confusion that
this generates. The name took effect consequent to the approval of shareholders, Reserve
Bank of India and the Central Government (Registrar of Companies).
1.3 MARKET PRESENCE
MONEY MARKET DEVELOPMENTS
Mutual Funds
42. Resource mobilisation by Mutual Funds improved during 1997-98. The number of offer
documents of mutual funds filed with SEBI increased substantially from 32 in 1996-97 to 60
in 1997-98. The amount mobilised through new schemes and subscriptions to open ended
schemes including Unit 64 of AXIS also increased. Indeed the gross mobilisation of
resources by all mutual fund schemes during the year was around Rs. 13,000 crores which
was for the first time higher than the resources mobilised by the primary market. Even net of
redemptions in open ended schemes the resources mobilised by the mutual funds during the
year was higher than the resources raised through primary market. These improvements were
partly in response to the regulatory changes brought about by SEBI following the publication
of the Mutual Funds 2000 Report and the notification of new regulations. The emphasis of
these new regulations is on empowerment of investors, greater compliance of regulations by
mutual funds, obligations of trustees as frontline regulators, improved disclosure standards in
offer documents through the introduction of standard offer document, standardisation of
valuation norms for investments and computation of NVA. The regulations also sought to
address the areas of misuse of funds by introducing prohibitions and restrictions on affiliate
transactions and investment exposures to companies belonging to the group of sponsors of
mutual funds.
1.4 LITERATURE OF REVIEW
BY ALL accounts, 200 has been a wonderful year for investors in and managers of mutual
funds. There has been a considerable increase in the assets under management of equity
funds and profitability has thus increased for fund houses. Investors, too, have never had it so
good.
Many of the new mutual funds schemes in which investors poured substantial sums have
performed reasonably well. And the new schemes have not been stark under-performers, as
in earlier years. They have categorically reinforced the fact that mutual funds remain the
most suitable avenue for retail investors to build wealth.
Yet the mutual funds industry remains driven by the kind of marketing initiatives where the
interest of the brokers is paramount. There are no debates on what could be done to save
investors from the clutches of the brokers or on product development. Visibly, there are no
attempts to link product development to feedback from investors and market performance of
funds. Inefficient products are left unaddressed, suggesting a lack of research into product
performance. Notably, communication about assessment of fund performance is simplistic
and consequently, in many cases, misleading.
These may be a consequence of the small size of the industry as of now. As its size improves,
investor interests may regain their rightful place. There is, however, reason to believe that the
industry structure does not provide scope for developments. The mutual fund industry may
be forced to focus on doing simple things, mainly managing index funds better. Innovations
that matter may be driven into the fold of private equity unless the incentive structure is re-
worked.
three years. There is, however, no attempt to introduce index funds at least on BSE-100.
Inefficient products: A sore point about mutual funds is that inefficient products are just left
to languish. Substantial sums invested in sector funds, index funds, bond funds, balanced
funds and monthly income plans are under-performing. We are, however, yet to see the kind
of restructuring necessary to make them more suitable to an investor's portfolio.
For instance, indices such as BSE-100 and BSE-200 have consistently outperformed the
Sensex and the Nifty by about four percentage points per annum over the past three years.
There is, however, no attempt to introduce index funds at least on BSE-100.
Incentive structure: This is how it looks when you take a snapshot of the mutual fund
industry now. But it could change for the better. After all, the mutual fund industry even now
controls less than 2 per cent of household assets. The incentive structure for managers could
militate against such developments.
The mutual fund industry has been on a good run and, at least as of now, can boast of
extremely talented people in its ranks. The status quo is, however, not the recipe for
continuing the good show. SEBI, AMFI, fund-houses and investors need to usher in changes
that help the Indian mutual fund industry achieve a unique position in the world of investing.
The Government in order to protect the interests of 20-million-odd investors of Unit Trust of
India (AXIS) announced a structural reform package, covering a Rs 14,561-crore bail-out for
the US-64 and all assured return schemes and eventual privatisation of AXIS's schemes.
To start with, AXIS would be split into two entities - - AXIS-I and AXIS-II. AXIS-I would
cover the US-64 and the Monthly Income Plan (MIP) schemes, while the various net asset
value-based schemes will be hived off to AXIS-II. The latter would also include the units of
US-64 issued after January 2002, when the scheme became NAV-based.
Tax concessions will be extended for the US-64 scheme - - on dividend income and capital
gains - - to make it attractive for unit holders to remain within the scheme.
The Government will also reset the interest at a lower level in five MIP schemes, where only
the principal amount is assured and the dividend can be reset. Foreclosure of some of the
MIP schemes is also being considered, subject to this being permitted under SEBI
regulations.
"The Government is fencing out the liabilities in the US-64 scheme and other assured return
schemes. An investor who holds on to the US-64 unit beyond May 2003 can only sell it back
to the AXIS and it cannot be re-circulated in the market. We may, however, consider
allowing these units to be recalculated at NAV," said Dr Narayan.
Commenting on the decision of the Government Dr.Kurian, Chairman, Association of

Mutual Funds in India (AMFI) and former trustee of AXIS. in an interview to Business Line
Correspondent on 08.09.2002 has stated as under:
The AXIS development is a welcome one and gives a positive signal to the industry,
investors and market because the uncertainty with regard to solving the problem of the
institution is over. Since 1998, AXIS has been passing through a difficult situation. Than
came the 2001 problem. Now, various committees and recommendations later, the problem
has been solved. I think it is to the credit of the Government even though it has taken a pretty
long time to do so.
AXIS Mutual Fund has come into existence with effect from 1st February 2003. AXIS Asset
Management Company presently manages 42 NAV based domestic SEBI compliant schemes
and 4 Offshore funds having a corpus Rs.15,243 crore from about 10 million investor
accounts.
The Important Follow-ups for AXIS Mutual Funds are
Adherence to best practices: Status and Future Agenda
The IOSCO has set out three objectives--protection of investors, ensuring fair, transparent
and efficient market and reduction of systemic risk--which securities regulations need to
address. Further, to enhance the ability of the regulatory system to attain these objectives, the
IOSCO has also laid down a set of guiding principles. (see Annexure II). As we have
discussed in the last section, the reform initiatives taken in the past decade have addressed
these objectives in varying degrees, which have resulted in the emergence of a more modern
and competitive securities market. In this section, we attempt to evaluate the existing
regulatory framework broadly using the IOSCO principles as criteria and to identify problem
areas, which call for future reform initiatives to strengthen the current system. This chapter is
divided into five sections. The second section deals with regulatory issues: the regulators'
mandate, their autonomy, powers and capacity to enforce regulation and their coordination to
make regulations effective. Self-regulation as well as prudential issues are also discussed
under this section. The third section outlines the legal issues concerning the securities
market. The fourth section deals with crosscutting themes relating to the regulated market,
namely, market infrastructure, and issues relating to primary market and transparency. The
challenges facing the mutual fund industry are discussed in the fifth section. The discussion
in this chapter provides some examples of current practices, recognizing that these practices
will and should change as the markets change and as technology and improved coordination
among regulators make other strategies available.
REGULATORY ISSUES
The Regulator
The regulatory responsibility of the securities market is vested in the SEBI, the RBI, and two
government departments--Department of Company Affairs and Department of Economic
Affairs.The SEBI, established under the SEBI Act, is the apex regulatory body for the
securities market. As the manager of public debt, the RBI is responsible for primary issues of
Government Securities. The RBI's mandate also includes the regulation of all contracts in
government securities, gold related securities, money market securities and in securities
derived from these securities. To foster consistency of the regulatory processes, the SEBI is
mandated to regulate the trading of these securities on recognized stock exchanges in line
with the guidelines issued by RBI. Although there is a clear division of regulatory
responsibilities between RBI and SEBI, and efforts have been made to make the regulatory
process consistent, the distribution of regulatory responsibilities among a number of
institutions can potentially create confusion among the regulated as to which body is
responsible for a particular area of regulation.
ENFORCEMENT OF SECURITIES REGULATION
The SEBI has powers to carry out routine inspections of market intermediaries to ensure
compliance with prescribed standards. It also has investigation powers similar to that of a
civil court in terms of summoning persons and obtaining information relevant to its enquiry.
Action is taken on the basis of investigation. The enforcement powers of SEBI include
issuance of directions, imposition of monetary penalties, cancellation of registration and even
prosecution of market intermediaries
While SEBI has powers of direct surveillance of the stock exchanges, members of stock
exchanges and other market intermediaries registered with it, SEBI has no powers over listed
companies. Further, the present penalty levels in many cases are not high enough to
effectively deter market players from regulatory violations. In particular, the amount of
monetary penalty for non-compliance with respect to disclosure, information requirements,
insider trading and market manipulation is very inadequate. To cite an example, a maximum
monetary penalty of only Rs.1, 000/- can be imposed in case of failure to comply with the
provisions of listing agreement. Similarly, under the SEBI Act the penalty for insider trading
and non-disclosure of acquisition of shares and takeovers is only Rs.5 lakh. The Group
believes that there is a need to allow SEBI enhanced authority
Cooperation in Regulation
Various segments of the domestic financial market are getting increasingly integrated. There
have also been progressive linkages between the domestic and international capital markets.
As a result, the regulatory interventions or their absence in one market tend to have
repercussions in other markets that are more serious and more widespread than in the past.
Further, with the emergence of more and more financial supermarkets and growing
complexity of financial transactions, there are increasing instances of the same market
intermediary coming under the purview of multiple regulatory bodies. These factors have
raised the potential for regulatory gaps as well as overlaps, thereby underlining the need for
greater cooperation among various regulators.
Self-Regulation
The SEBI Act provides for promotion and regulation of SROs (i.e., stock exchanges). The
stock exchanges are empowered to make rules and regulations for their members and for
regulating the conduct of respective members. However, self-regulation is not always
effective, because the current ownership and governance structures of many stock exchanges
allow scope for conflict of interest. These exchanges are owned and managed by members
who enjoy exclusive trading rights. In the broker-owned exchanges, brokers elect their
representatives to regulate activities of the exchange, including those of the brokers
themselves..
Further, the slow evolution of the Association of Mutual Funds of India (AMFI) as a SRO
has meant continuation of substantial regulatory burden on SEBI. In this regard, the Group
suggests that SEBI assist the AMFI to develop into a full-fledged SRO. Similarly, in money
and government securities markets, Fixed Income Money Market and Derivatives
Association of India (FIMMDA) and Primary Dealers Association of India (PDAI) are
operating as industry level associations, who are gradually taking on the role of SROs. There
is as yet no regulatory oversight of the RBI over these emerging SROs.
Prudential issues
With a view to contain risk, secure market integrity and protect the interest of investors, the
regulators have prescribed elaborate margining and capital adequacy standards. In addition,
intra-day trading limit and exposure limits have been prescribed. Brokers are subject to
various types of margins, viz., daily margins, marked-to-market margin, ad hoc margin and
volatility margin. In case of excessive volatility or perceived higher risk, exchanges have
been given the flexibility of imposing higher margins.
http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?FromDate=05/14/ - F11
However, one lacuna that continues relates to the absence of margin requirement for
institutional trades. The Group recommends that this lacuna be addressed.
LEGAL ISSUES
Institution-specific regulations
The legal framework constrains the RBI from exercising uniform powers vis-a-vis different
groups of players, even though the activity regulated is the same because of a peculiar legal
arrangement. The amended Securities Contract Regulation Act (SCRA) has conferred on the
RBI the responsibility of regulation of Government securities and money markets, but not the
necessary enforcement powers to regulate these markets. To regulate these markets, the RBI
therefore resorts to its regulatory authority over the major participants in these markets such
as banks, financial institutions and primary dealers through separate institution-specific
legislation. With respect to banks, the RBI has statutory powers of inspection, investigation,
surveillance and enforcement under Banking Regulation Act, 1949. As regards financial
institutions, the regulatory powers are available to the RBI under the RBI Act 1934.
MARKET ISSUES
It is important to recognize the trade-off between over-regulation and high cost of

compliance. Over-regulation may minimize market friction, but can potentially kill a market.
To dilute this tradeoff, it is important to modernize the microstructure. (Microstructure
relates to the manner in which a market is organized and the trading and post-trading
technology the market adopts.) As regulations become more and more complex, certain
regulatory objectives can be more easily attained through changes in microstructure rather
than further addition to regulatory law.
Market Infrastructure
Screen-Based Trading System

As enunciated in Chapter II, the equities market has witnessed a quantum improvement in
trading technology during the 1990s as it moved away from the open-outcry system of
trading to a computer screen-based trading. The new technology has not only increased
transparency in trading, but also facilitated the integration of different trading centers into a
single trading platform. Permitting of internet trading has enabled investors across the globe
to route orders through the internet for execution on the Indian stock exchanges. In contrast
to the equities market, the government securities market and the market for money market
instruments are largely negotiated markets.
Rolling Settlement The stock exchanges in India have traditionally followed account
period settlement system, which tends to distort the price discovery process
since it combines the features of cash as well as futures markets. In contrast, the current
international practice is predominantly rolling
Further, the view that rolling settlement per se will drain liquidity from the market is not
borne out by international experience. The Group also suggests that RBI and SEBI expedite
their scrutiny of the recent recommendations made by the joint task force of IOSCO and BIS
on securities settlement systems, for early implementation.
Depositories and dematerialization
To ensure transferability of securities with speed, accuracy and security, the Depositories Act
was passed in 1996, which provided for the establishment of securities depositories and
allowed securities to be dematerialized. Following the legislation, two depositories (NSDL
and CDSL) have so far been established. Further, the compulsory dematerialization of shares
for trading purpose has been introduced in a phased manner with the aim of synchronizing
the settlement of trade and transfer of securities irrespective of geographical locations, and
eliminating the ills associated with paper-based securities system such as delay in transfer,
bad delivery, theft and forgery.The RBI has taken a step in the right direction by allowing
NSDL and CDSL to have a second SGL account for depository participants who in turn can
hold in custody government securities on behalf of the final investors. This will facilitate
holding of government securities in demat form.
Primary Issues and Transparency
Private Placement Market
High costs of regulatory compliance associated with public issues of debt have made issuers
prefer the private placement market. Once investors have used the private placement route,
they cannot signal their changing evaluation of the business prospects of the issuers, because
there is no market in which they can sell.
Corporate disclosure
With a view to enabling investors to take informed decisions as well as to promote

transparency, regulations have over the years become more stringent by requiring disclosure
to be more frequent and wider in scope. Currently, disclosure in India extends to material
having a bearing on the price of a security, and entities who either have significant interest in
a company or seek management control. A company offering securities is required to make a
public disclosure of all relevant information through its offer documents. Moreover, the
disclosure of material information, which could have a bearing on the performance of the
company, has to be made available to the public immediately.
Transparency in the debt market
As regards transparency in trading, the debt market is lagging behind the equity market. The
cash market in debt securities throughout the world prefers to operate through negotiated
deals either through telephone or an electronic dealing system like Bloomberg. This is
because unlike the equity market, the bond market participants are generally wholesale
institutional investors who put in large deals at a time, which may not always be possible
through the screen based order driven system. It is only in the futures market that the
principles of anonymity, price time priority, nationwide market and settlement guarantee are
known to work. As stated earlier, wholesale institutional investors have yet to show adequate
inclination to use the anonymous order matching system for executing their debt securities
transactions.
2. RESEARCH METHODOLOGY
The AXIS Mutual funds seek to earn extraordinary return from their investments. For this,
generally they employ innovative methods of fund management and at the same time they try
to keep their strategies a closely guarded secret. In India, an additional point to keep in mind
is the limited number of AXIS Mutual funds in operation of AXIS Mutual funds in operation.
The important component of research methodology such as formulation of hypothesis,

method of data collection, tools for processing of the data and reporting format of the study,
are enumerated as follows:
2.1 RESEARCH OBJECTIVE

The present study has been undertaken with the following objectives:-
⇒ To analysis the conceptual issues pertaining to AXIS Mutual funds with their
implications for a developing country like India.
⇒ To examine the theoretical framework of AXIS Mutual fund in India to provide clues for
growth strategies of AXIS Mutual industry in India.
⇒ To study the role of AXIS Mutual in the economic development of the country, so as to
bring out the biases and inadequacy of the government policy related to the Mutual funds
in the country.
⇒ To study the legal and regulatory frame work of AXIS Mutual fund in India;
⇒ To study the working of AXIS Mutual fund industry in India in terms of its practices,
procedures and constraints within which, it has been operating;
2.2 SCOPE OF THE STUDY

• AXIS Mutual fund is related to such divers topic as corporate finance, leverage buyouts,
merchant banking financing of start-ups, small business management, entrepreneurship
development, business incubators, technology transfers, and economic development. The
present study is confined to a specific aspect of AXIS Mutual. Appraisal of working of
AXIS Mutual in developing country like India for proper perspective; the scope of the
study has been widened to include the practices and experiences of the developed and
some developing countries. The AXIS Mutual is relatively small and emerging activity.
2.3 DATA COLLECTION

• The present study contemplated an exploratory research. Secondary data has been used
which is collected through venture activity reports, journals, magazines, newspapers
reports prepared by research scholars, universities and internet.
2.4 IMPORTANCE OF THE STUDY
The concept of AXIS Mutual was introduced in India with the objective of
commercialization of the indigenously developed technologies. It is an important objective in
itself and there is nothing wrong to pursue it vigorously. In the developed countries
particularly in the U.S.A., there has been a close linkage between AXIS Mutual financing
and commercial exploitation of new invariably high technology related industries. The origin
of the concept of AXIS Mutual has been associated with the funding of untried technology in
the USDA in 1940's by American Research & Development Corporation. (ARDC) the first
formal AXIS Mutual fund in the world. The rules announced by SEBI in 1996 to regulate
the AXIS Mutual funds in India have relaxed the eligibility criteria for investment by AXIS
Mutual funds. And the condition of financing for untried technology by AXIS Mutual funds
has been done away with. Still in mindset in concerned quarters remain bounded to the same
old concept.
2.5 RESEARCH DESIGN
Type of Research: - Descriptive research

Descriptive research includes Surveys and fact-finding enquiries of different kinds. The main
characteristic of this method is that the researcher has no control over the variables; he can
only report what has happened or what is happening.
2.6 DATA SOURCES

There are two types of data.
PRIMARY DATA
The data that is collected first hand by someone specifically for the purpose of facilitating the
study is known as primary data. So in this research the data is collected from respondents
through questionnaire.
SECONDARY DATA.
For the company information I had used secondary data like brochures, web site of the
company etc.
The Method used by me is Survey Method as the research done is Descriptive Research.
RESEARCH INSTRUMENTS
Selected instrument for Data Collection for Survey is Questionnaire.
2.7 QUESTIONNAIRE DESIGN/FORMULATION
Questionnaire: - A questionnaire consists of a set of questions presented to respondent for

their answers. It can be Closed Ended or Open Ended
Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret
and Tabulate.
Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.
TYPES OF QUESTION INCLUDED:
DICHOTOMOUS QUESTIONS
Which has only two answers “Yes” or “No”.
MULTIPLE CHOICE QUESTION
Where respondent is offered more than two choices.
IMPORTANCE SCALE
A scale that rates the importance of some attribute.
RATING SCALE
A scale that rates some attribute from “highly satisfied ” to “highly unsatisfied “ and “very
inefficient” to “very efficient”
2.8 SAMPLE DESIGN

Who is to be surveyed? The marketing researcher must define the target population that will
be sampled.
The sample Unit taken by me; General public of different age group, different gender and
different profession
EXTENT:-
Where the survey should be carried out?
I have covered entire residential area of Delhi city for the survey
TIME FRAME:-
When the survey should be conducted?
I conducted my survey for 8weeks from 10th may to 10th july
SAMPLING FRAME:-
The source from which the sample is drawn
Sampling Technique: -
How should the respondent be chosen?
In the Project sampling is done on basis of Probability sampling . Among the probability
sampling design the sampling design chosen is stratified random sampling.
Because in this survey I had stratified the sample in different age group, different gender and
different proffesion
Sample Size/ Population Size: - How many people should be surveyed?
My sample size is 80
2.9 LIMITATIONS OF THE RESEARCH
As far as limitations are concerned present research work has been completed in the face of
following major constraints.
The date used in my research study is secondary data.
Latest data and information about AXIS Mutual is very less. The data is available till the year
2003 in most of the cases.
Limited analytical techniques have been used due to the nature of data available on the
subject.
3. COMPANY PROFILE
AXIS Mutual Fund, the largest private sector Mutual Fund company in India with an asset
base of Rs 25,500 crores, will be the leading Fund Manager for Government of India's newly
created National Investment Fund (NIF).
Announcing this AXIS Asset Management Company Managing Director and Chief
Executive Officer(CEO) U K Sinha told newsmen here this evening that besides the AXIS
Mutual Fund, the other two leading financial institutions which were shortlisted for the
massive job were State Bank of India(SBI) and the Life Insurance Corporation(LIC) of India.
He said the new fund had been created by the Centre with a view to investing the entire
disinvestment fund into the NIF corpus and reinvest them in health, education and other
social causes through a calculated manner.
Since the scheme was still in its preliminary stage, the government was yet to create a
separate corpus for the fund, which was announced only last month.
Referring to the corporate plan of AXIS Mutual Fund whose ownership had recently changed
hands following the purchase of its 25 per cent stake each by the country's four leading banks
and financial institutions like SBI, Bank of Baroda(BOB), Punjab National Bank(PNB) and
the LIC last month with a total capital infusion of Rs 1236 crores, Mr Sinha said under the
new management they were planning to leverage their own capabilities with a much higher
target oriented growth.
AXIS AMC CEO, however, categorically ruled out the possibility of any clash of interest
among the new stake holders of the company in view of their similar business intereste in
terms of Mutual Fund.
Replying to a related query he said though each of these institutions had their own mutual
fund businesses, it would not clash in any manner with that of AXIS mutual Fund since the
agreement among them would prevent them from doing so.
In the wake of over 33 per cent growth in the Indian Mutual Fund industry since April this
year, Mr Sinha said it had enabled the AXIS Mutual Fund to increase its Asset base by over
Rs 5,500 crores during this period from Rs 20,000 crores achieved till March. " We are
confident to maintain a similar growth path in the coming years too." About the huge
potential and the actual position, Mr Sinha claimed that AXIS Mutual Fund had already been
enjoying about 67 per cent domestic market share of the country's around one crore investors
in mutual fund products.
AXIS Asset Management Company became a private company last month with the four
sponsors, Life Insurance Corporation of India, State Bank of India, Punjab National Bank
and Bank of Baroda paying back the government its equity worth Rs 1,236.95 crore in the
company. Each sponsor now owns a 25 per cent stake in the company and under the terms of
the new agreement, the owners will not be allowed to change their shareholding pattern.
“We are also keen to increase our exposure in the overseas market through the offshore
funds,” said Sinha.
“AXIS Mutual Fund is also exploring investment opportunities in emerging sectors like the
knowledge process outsourcing, textiles and biotech through the private equity and venture
capital arm, AXIS Venture Funds,” said D. S. R. Murthy, executive director, AXIS Asset
Management Company.
And, the move has also started paying off. “IBM has struck a preferred relationship with us
because of our investments in the technology products and companies,” said Rajakumar,
managing director and chief executive officer, AXIS Venture Funds. The computer giant is
also weighing options to pick up a stake in AXIS Venture Funds.
AXIS Venture Funds floated a $150-million fund in April. The fund has received
encouraging responses from top investors across West Asia, Singapore and Europe. “The
fund has mobilized $140 million as soft commitment from the investors and we are expecting
to close it with a total collection of $180 million by March next year,” Raja Kumar added.
The Government of India has short listed AXIS, along with LIC and SBI, as the fund
managers for the National Investment Fund — a composite fund constructed with the
proceeds disinvestment of public sector units. The returns generated by this fund will be used
for social sector projects.
MUTUAL FUNDS - INVESTMENT OBJECTIVES AND VALUATION POLICIES
What are Mutual Funds?

A Mutual fund is an organization that invests in a diversified portfolio of financial securities
on behalf of a pool of subscribers to its schemes. These securities can be in the form of
equity, debt instruments, money market instruments etc., or a mix of these securities,
depending on the scheme objectives.
Why is it such a good idea to invest in Mutual Funds?
Diversification: Mutual Funds invest their corpus in diversified portfolio’s which reduces
the risk contained in the investment. This also means that you can invest a small sum of
Rs.5000/- and still be a part of a portfolio where the market value of single scrip might be
much more than the total investment.
Research: These mutual funds perform an extensive research of the company before making
an investment decision giving you the benefit of expert advice.
Liquidity: These funds are extremely liquid, some of them even have features like across-
the-counter redemption. This feature is especially useful at times when the market is rising or
falling.
Professionally Managed: These funds are managed by professionals who have the required
expertise in buying and selling stocks. As a result they make better decisions on entering and
exiting a particular stock, which is very crucial for the overall performance of a portfolio.
Moreover, mutual fund investment also rids the investor of maintaining records, eliminates
hassles with the broker for payment, delivery and other arduous back office tasks.
Savings on transaction costs: As purchases and sales are done in bigger quantities, the
funds also get the advantages of lesser brokerage and other reduced transaction costs.
Advantages: In India these funds become even more attractive because of the tax
advantages, like indexation benefits , long term capital gains tax , tax free dividends and
much more.
INVESTMENT OBJECTIVE (REGULATION: 43)
The moneys collected under any scheme of a mutual fund shall be invested only in
transferable securities in the money market or in the capital market or in privately placed
debentures or securities debts.
Provided that moneys collected under any money market scheme of a mutual fund shall be
invested only in money market instruments in accordance with directions issued by the
Reserve Bank of India;
Provided further that in case of securities debts such fund may invest in asset backed
securities and mortgaged backed securities.
Mutual Funds - Scope for Growth and Development in India
Mutual Fund Industry in its true spirit rooted in a free market and oriented towards
competitive functioning with the dedicated goal of service to the investors can be said to
have settled in India only in 1993. However the industry took its roots much earlier with the
setting up of the Unit Trust In India (AXIS) in 1964 by the Government of India. During the
last 36 years, AXIS has grown to be a dominant player in the industry with assets of over
Rs.72,333.43 Crores as of March 31, 2000. The AXIS is governed by a special legislation,
the Unit Trust of India Act, 1963. In 1987 public sector banks and insurance companies were
permitted to set up mutual funds and accordingly since 1987, 6 public sector banks have set
up mutual funds. Also the two Insurance companies LIC and GIC established mutual funds.
Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993,
which for the first time established a comprehensive regulatory framework for the mutual
fund industry. Since then several mutual funds have been set up by the private and joint
sectors.
The Unit Trust of India Chairman M. Damodaran today ruled out the possibility of dumping
equities in its flagship scheme US-64 as it might have an adverse effect on the market, but
threatened to sell non-performing shares to competitor companies at a higher price.
“AXIS will not dump the shares it is holding just to achieve that objective (increasing the
debt exposure in US-64), but was working out schemes to get maximum returns from both
non-performing and performing assets,” Damodaran told NRI investors here.
“One of the factors holding the market down now may be the feeling that AXIS may
download shares to meet redemptions once it accepts NAV-based listing next month. But we
are not going to sell to meet fund demands,” he said.
The AXIS chief, however, threatened to sell unattractive shares to their competitors at
attractive prices.
AXIS will offer its stake in companies yielding nothing, to their rivals if these companies
themselves did not buy back the shares, he said, adding that “we are concerned only with
investors’ interests.”
GROWTH OF MUTUAL FUND BUSINESS IN INDIA
The Indian Mutual fund business has passed through three phases. The first phase was
between 1964 and 1987, when the only player was the Unit Trust of India, which had a total
asset of Rs. 6,700/- crores at the end of 1988. The second phase is between 1987 and 1993
during which period 8 funds were established (6 by banks and one each by LIC and GIC).
The total assets under management had grown to Rs. 61,028/- crores at the end of 1994 and
the number of schemes were 167. The third phase began with the entry of private and foreign
sectors in the Mutual fund industry in 1993. Kothari Pioneer Mutual fund was the first fund
to be established by the private sector in association with a foreign fund. The share of the
private players has risen rapidly since then.
Within a short period of seven years after 1993 the growth statistics of the business of Mutual
Funds in India is given in the table below:
NET ASSETS OF MUTUAL FUNDS AS AT 3L.03.2000 [SOURCE: WEBSITE OF

SEBI]
The net assets of all domestic schemes of mutual funds were Rs.1,07,946.10 crores as on
March 31, 2000 as against Rs. 68,193.08 crores as on March 31, 1999 . The details are given
below:
Amount Percentage
(Rs Crs) (%)
AXIS 72,333.43 67.00
Public Sector 10,444.78 9.68
Private Sector 25,167.89 23.32
Total 1,07,946.10 100.00
During the year 2009-2010, the share of AXIS in the total assets of the mutual funds industry
has declined to 67% from 77.9% in 2009-99. Net assets of other public sector mutual funds
have also shown a decline from 12.09% in 2009-10 to 9.68% in 2009-10. However, net
assets of private sector mutual funds have increased from 9.97% in 2009-10 to 23.32% in the
year 2009-10.
There are 34 private Mutual Funds in the fray and they have seized about 25% of the market
share in the brief period of 7 years, mobilising above Rs.25000 Crores from the public
SCOPE FOR DEVELOPMENT OF MUTUAL FUND BUSINESS IN INDIA
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. India has a burgeoning population of middle class now estimated around
300 million. A typical Indian middle class family can have liquid savings ranging from Rs.2
to Rs.10 Lacs today. Investments in Banks are liquid and safe, but with the falling rate of
interest offered by Banks on Deposits, it is no longer attractive. At best a part can be saved in
bank deposits, but what is the other sources of investment for the common man? Mutual
Fund is the ready answer. Viewed in this sense globally India is one of the best markets for
Mutual Fund Business, so also for Insurance business. This is the reason that foreign
companies compete with one another in setting up insurance and mutual fund business units
in India. The sheer magnitude of the population of educated white collar employees provides
unlimited scope for development of Mutual Fund Business in India.
The alternative to mutual fund is direct investment by the investor in equities and bonds or
corporate deposits. All investments whether in shares, debentures or deposits involve risk:
share value may go down depending upon the performance of the company, the industry,
state of capital markets and the economy; generally, however, longer the term, lesser the risk;
companies may default in payment of interest/ principal on their debentures/bonds/deposits;
the rate of interest on an investment may fall short of the rate of inflation reducing the
purchasing power. While risk cannot be eliminated, skillful management can minimise risk.
Mutual Funds help to reduce risk through diversification and professional management. The
experience and expertise of Mutual Fund managers in selecting fundamentally sound
securities and timing their purchases and sales, help them to build a diversified portfolio that
minimises risk and maximises returns.
THE ADVANTAGES OF INVESTING IN A MUTUAL FUND
The advantages of investing in a Mutual Fund are:
1. Professional Management
The investor avails of the services of experienced and skilled professionals who are backed
by a dedicated investment research team which analyses the performance and prospects of
companies and selects suitable investments to achieve the objectives of the scheme.
2. Diversification
Mutual Funds invest in a number of companies across a broad cross-section of industries and
sectors. This diversification reduces the risk because seldom do all stocks decline at the same
time and in the same proportion. You achieve this diversification through a Mutual Fund
with far less money than you can do on your own.
3. Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as
bad deliveries, delayed payments and unnecessary follow up with brokers and companies.
Mutual Funds save your time and make investing easy and convenient.
4. Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher return as
they invest in a diversified basket of selected securities.
5. Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing in
the capital markets because the benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.
6. Liquidity
In open-ended schemes, you can get your money back promptly at net asset value related
prices from the Mutual Fund itself. With close-ended schemes, you can sell your units on a
stock exchange at the prevailing market price or avail of the facility of direct repurchase at
NAV related prices which some close-ended and interval schemes offer you periodically.
7. 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.
8. Flexibility
Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, you can systematically invest or withdraw funds according to your needs
and convenience.
9. Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
10. 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.
In the following chapters we propose to discuss all relevant information about Mutual Funds
in India, the regulatory and legal structure governing them that a common investor ought to
know. The literature is mostly drawn from the website of SEB, but suitably tabulated to
provide ready information.
BRIEF HISTORY:
FIRST PHASE - 1964-87
Unit Trust of India (AXIS) 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 AXIS 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 AXIS was Unit Scheme 1964. At the end of 1988
AXIS had Rs.6,700 crores of assets under management.
SECOND PHASE - 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS)
Entry of non-AXIS mutual funds. SBI Mutual Fund was the first 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 in 1989
and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under management.
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 AXIS 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 - SINCE FEBRUARY 2003
The second is the AXIS 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 AXIS which had in March 2000 more than Rs.76,000 crores of AUM and
with the setting up of a AXIS 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 September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under
421 schemes
CONCEPT:
There are many entities involved and the diagram below illustrates the organisational set up
of a mutual fund:
Organization of a Mutal Fund
FEATURES:
Unique Features of AXIS their Impact on its Functioning [Extract from the Report of
"Corporate Positioning" Committee]
In the initial stages, AXIS had been performing a hybrid role of both a financial institution
and a mutual fund. However, over the last few years, its role as a financial institution has
significantly diminished and it has positioned itself purely as the largest mutual fund in the
country. There is also a significant trend emerging which suggests that financial institutions
will gradually wither away or merge into universal banks. In this scenario, commercial banks
and mutual funds will emerge as the primary institutions for the mobilisation of household
savings. This reinforces the need for AXIS to evolve as a pure mutual fund. At the same
time, consideration has to be given to the fact that AXIS has promoted and holds controlling
interest in a number of institutions outside the pure mutual fund industry.
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 a 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 inorder 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
information on Mutual Fund Industry and undertakes studies and research either
directly or in association with other bodies.
The consorters of Association of Mutual Funds in India
BANK SPONSORED
• SBI Fund Management Ltd.
• BOB Asset Management Co. Ltd.
• Can bank Investment Management Services Ltd.
• AXIS Asset Management Company Pvt. Ltd.
INSTITUTIONS
• GIC Asset Management Co. Ltd.
• Jeevan Bima Sahayog Asset Management Co. Ltd.
PRIVATE SECTOR INDIAN:-
• BenchMark Asset Management Co. Pvt. Ltd.
• Cholamandalam Asset Management Co. Ltd.
• Credit Capital Asset Management Co. Ltd.
• Escorts Asset Management Ltd.
• JM Financial Mutual Fund
• Kotak Mahindra Asset Management Co. Ltd.
• Reliance Capital Asset Management Ltd.
• Sahara Asset Management Co. Pvt. Ltd
• Sundaram Asset Management Company Ltd.
• Tata Asset Management Private Ltd.
PREDOMINANTLY INDIA JOINT VENTURES:-
• Birla Sun Life Asset Management Co. Ltd.
• DSP Merrill Lynch Fund Managers Limited
PREDOMINANTLY FOREIGN JOINT VENTURES:-
• ABN AMRO Asset Management (I) Ltd.
• Alliance Capital Asset Management (India) Pvt. Ltd.
• Deutsche Asset Management (India) Pvt. Ltd.
• Fidelity Fund Management Private Limited
• Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.
• HSBC Asset Management (India) Private Ltd.
• ING Investment Management (India) Pvt. Ltd.
• Morgan Stanley Investment Management Pvt. Ltd.

• Principal Asset Management Co. Pvt. Ltd.
• Prudential ICICI Asset Management Co. Ltd.
• Standard Chartered Asset Mgmt Co. Pvt. Ltd
• AXIS Mutual Fund ties up with Dena Bank for distributing its MF schemes
• AXIS Mutual Fund (AXIS MF) and Dena Bank today announced a strategic tie-up for
distribution of AXIS MF schemes. Under the agreement, Dena Bank will offer the entire
bouquet of AXIS MF's schemes across the bank's selected branches
September 12, 2005: AXIS Mutual Fund (AXIS MF) and Dena Bank today announced a
strategic tie-up for distribution of AXIS MF schemes. Under the agreement, Dena Bank will
offer the entire bouquet of AXIS MF's schemes across the bank's selected branches.
Presently AXIS MF (with assets under management of over Rs.25000 crore) reaches out to
its investors through its wide distribution network comprising 65 Financial Centers (UFCs),
271 Chief Representative offices, 58 Chief Agents, over 19000 AMFI certified Financial
Advisors and through tie-ups with several Banks and Department of Post.
With today's tie-up, AXIS MF is further enhancing its distribution capabilities. AXIS MF
will now also be offering its schemes initially through 80 branches of Dena Bank including
41 FinMart branches across India .
Announcing the AXIS MF's tie-up with Dena Bank, Dr R H Patil , Chairman, AXIS AMC
said, "This initiative reflects AXIS MF's strategy to rapidly expand in the retail market and
value-add its access network to complement the Mutual Fund's growth strategy in the Indian
mutual fund sector. With this tie-up millions of customers of Dena Bank will get an
opportunity to invest in various schemes of AXIS MF closer to their doorstep at the branches
where they do their banking transactions."
"Dena Bank has got a dominant presence in Gujarat and Maharashtra which happen to be
important retail markets for AXIS MF." he added
DEFINITION OF IMPORTANT TERMS/CONCEPTS IN MUTUAL FUND
INDUSTRY
Before proceeding to consider the salient provisions of SEBI regulations governing mutual
funds, it is necessary to get familiar with the basic terms and phraseology used in Mutual
Fund literature.
Net Asset Value ("NAV"): The performance of a particular scheme of a mutual fund is
denoted by Net Asset Value (NAV). Mutual funds invest the money collected from the
investors in securities markets. In simple words, Net Asset Value is the market value of the
securities held by the scheme. Since market value of securities changes every day, NAV of a
scheme also varies on day to day basis. The NAV per unit is the market value of securities of
a scheme divided by the total number of units of the scheme on any particular date. For
example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and the
mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit
of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis -
daily or weekly - depending on the type of scheme.
Why should one invest in Mutual Funds through AXIS Bank?
We meet your needs: We believe that every one has specific needs and priorities. Your
needs could vary from buying a house, getting your daughter married to providing for your
child’s education. You might even want to travel the world. All your needs are very
important for us. We can help to fulfill your needs to reality by helping you select schemes,
which would be consonance with your needs.
We work towards building an ‘Investment Culture’: It would be our constant endeavor to

inculcate saving and organized investing habits in you. We will help you plan your
investments and build a healthy mutual fund portfolio, which would be an optimal solution
for your needs. Cultivating an investment culture will not only help you but also your family.
With AXIS Bank- Mutual Fund services, you can consult with your own Investment
Advisor and invest in a Mutual Fund Scheme that is right for you. A great opportunity, to get
organized and make your investment more in line with your real needs.
Risk Factors: All the investments in the securities market are subject to market risks and the
NAV of schemes/plans may go up or down depending upon the factors and forces affecting
securities market. Past performance is not necessarily indicative of the future.
Please read the offer document before investing
3.1 SWOT ANALYSIS OF INDUSTRY
STRENGTH AND WEAKNESS OF AXIS MUTUAL FUND

AXIS is a statutory corporation established under the Unit Trust of India, Act 1963 with a
view to encouraging saving and investment and participation in the income, profits and gains
accruing to the Corporation from the acquisition, holding, management and disposal of
securities. The Act came into force on 1st February 1964.
The initial capital of AXIS was Rs.5 crores which has been contributed as under:
⇒ Reserve Bank of India (RBI) Rs.2.50 crores
⇒ Life Insurance Corporation of India (LIC) Rs.0.75 crores
⇒ State Bank of India (SBI) and its subsidiary banks Rs.0.75 crores
⇒ Scheduled banks (other than SBI and its subsidiary banks) and notified financial
institutions Rs.1.00 crore
The initial capital forms part of US-64 and the subscribers hold units in that Scheme. In
1975, the AXIS Act was amended and by virtue of the amendment, the Industrial
Development Bank of India (IDBI) took over the rights and responsibilities of RBI under the
Act and the share of the initial capital held by RBI was transferred to and vested in IDBI.
UNIQUE STRENGTH & WEAKNESS OF AXIS
AXIS is the largest player in the mutual fund industry with total investible funds of domestic
schemes (at Market Value) as at 30th June, 2001 of Rs.56,057 crores constituting about 57%
of the total investible funds of the industry. US 64 with a total unit capital as at 30th June
2001 of Rs.12,786 crores had a substantial share of these investible funds. It has certain
unique strengths notable amongst them being :-
⇒ Its large size with consequential economies of scale;
⇒ Its nation-wide well entrenched distribution network and consequently its wide reach
and capacity to mobilise large resources;
⇒ Its brand image arising out of a public Its large size with consequential economies of
scale;
⇒ Its nation-wide well entrenched distribution network and consequently its wide reach
and capacity to mobilize large resources;
⇒ Its brand image arising out of a public perception that the safety of funds is assured
by its pseudo Government character, which may not be entirely unjustified.
⇒ The fact that it does not have an AMC to whom management fees would have to be
paid which results in higher returns available to unit holders.
4. DATA ANALYSIS & INTERPRETATION
COMPONENT MATRIX(A)
Component
1 2 3
Mode_Payment .089 .756 -.038

Scheme -.643 -.045 -.026
Time_for_payment .013 .283 .840
Customer_Serv -.023 .783 -.054
Discount_Offered .552 -.232 .374
Annual_charges .753 -.050 .169
Reachability_of_card -.645 -.131 .557
Extraction Method: Principal Component Analysis.
a 3 components extracted.
100
90
80
70
60
UTI BANK
50
ICICI BANK
40
30
20
10
0
1 2 3 4 5
If we analyze the aggregate satisfaction level, satisfaction level of GE-SBI Credit Card
SBI BANK in ”convenience in opening the account” is 5.5% more than Axis Bank .
EASE IN ACCESSING THE ACCOUNT
AXIS BANK
SATISFACTION LEVEL OF CUSTOMERS NO. OF

PERSONS
(A) VERY DISSATISFIED 2
(B) DISSATISFIED 5
(C) NEUTRAL 11
(D) SATISFIED 108
(E) VERY SATISFIED 74
TOTAL:200
ICICI BANK
SATISFACTION LEVEL OF CUSTOMERS NO. OF

PERSONS
(B) DISSATISFIED 7
(C) NEUTRAL 13
(D) SATISFIED 106
TOTAL:200
GRAPHICAL REPRESENTATION
120
100
80
UTI BANK
60
ICICI BANK
40
20
0
1 2 3 4 5
If we analyze the aggregate satisfaction level, satisfaction level of AXIS BANK in

”ease in accessing the account” is 1.5% more than ICICI BANK
IN- BRANCH SERVICES AXIS BANK
SATISFACTION LEVEL OF NO. OF

CUSTOMERS PERSONS
(B) DISSATISFIED 10
(C) NEUTRAL 23
(D) SATISFIED 92
TOTAL:200
ICICI BANK
SATISFACTION LEVEL OF NO. OF

CUSTOMERS PERSONS
(B) DISSATISFIED 9
(C) NEUTRAL 22
(D) SATISFIED 93
TOTAL:200
GRAPHICAL REPRESENTATION
ANALYSIS
If we analyze the aggregate satisfaction level, satisfaction level of ICICI BANK in ”IN-
Branch services” is 1.5% more than AXIS BANK and dissatisfaction level is less than AXIS
BANK.
REPRODUCED CORRELATIONS
Mode_ Time_f Discou Annual Reacha

Payme Sche or_pay Custom nt_Offe _charge bility_o
nt me ment er_Serv red s f_card
Reproduced Mode_Paym
.581(b) -.090 .183 .592 -.141 .022 -.177
Correlation ent
Scheme .
-.090 416( -.043 -.019 -.354 -.486 .406
b)
Time_for_p
.183 -.043 .787(b) .176 .255 .137 .423
ayment
Customer_S
.592 -.019 .176 .617(b) -.215 -.066 -.118
erv
Discount_Of
-.141 -.354 .255 -.215 .499(b) .491 -.118
fered
Annual_char
.022 -.486 .137 -.066 .491 .597(b) -.384
ges
Reachability
-.177 .406 .423 -.118 -.118 -.384 .742(b)
_of_card
Residual(a) Mode_Paym
-.002 -.109 -.321 .095 -.035 .109
ent
Scheme -.002 -.030 .102 .210 .237 -.131
Time_for_p
-.109 -.030 -.065 -.187 -.050 -.197
ayment
Customer_S
-.321 .102 -.065 .130 .054 .014
erv
Discount_Of .095 .210 -.187 .130 -.170 .026
fered
Annual_char
-.035 .237 -.050 .054 -.170 .081
ges
Reachability
.109 -.131 -.197 .014 .026 .081
_of_card
1. Residuals are computed between observed and reproduced correlations. There are 15
(71.0%) nonredundant residuals with absolute values greater than 0.05.
2. Reproduced communalities
ROTATED COMPONENT MATRIX(A)
Component
1 2 3
Mode_Payment .037 .761 .022

Scheme -.627 -.091 .118
Time_for_payment .195 .207 .840
Customer_Serv -.077 .781 .035
Discount_Offered .637 -.222 .210
Annual_charges .773 -.008 -.014
Reachability_of_card -.487 -.229 .673
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser
Normalization.
a Rotation converged in 5 iterations.

COMPONENT TRANSFORMATION MATRIX
Componen
t 1 2 3
1 .970 .076 -.229

2 -.053 .993 .105
3 .236 -.089 .968
Normalization.
Component Plot in Rotated Space
1.0 Customer_Serv
Mode_Payment
0.5
Time_for_payment
Annual_charges
0.0 Scheme
Discount_Offered
m
C
-0.5
t2
e
n
p
o
-1.0
-1.0
-1.0 -0.5
-0.5 0.0 0.0
0.5 0.5
Comp 1.0 1.0
3
onent onent
1 Comp
ADD ON CARDS
(FACTOR ANALYSIS USING SEMANTIC DIFFERENTIAL SCALE)
Factor Analysis
Correlation Matrix(a)
Credit_Li Annual_Cha Number_of_ Schemes_Of

mit rges Addon_Card fered
Correlation Credit_Limit 1.000 -.115 .407 .035
Annual_Charges -.115 1.000 -.319 .416
Number_of_Add
.407 -.319 1.000 -.199
on_Card
Schemes_Offere
.035 .416 -.199 1.000
d
Sig. (1-tailed) Credit_Limit .191 .001 .396
Annual_Charges .191 .007 .000
Number_of_Add
.001 .007 .064
on_Card
Schemes_Offere
.396 .000 .064
d
a Determinant = .605
Inverse of Correlation Matrix
Credit_Limi Annual_Char Number_of_ Schemes_Off

t ges Addon_Card ered
Credit_Limit 1.220 .044 -.514 -.163

Annual_Charges .044 1.303 .301 -.484
Number_of_Addon_Car
-.514 .301 1.337 .158
d
Schemes_Offered -.163 -.484 .158 1.239
KMO AND BARTLETT'S TEST
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .557
Bartlett's Test of Sphericity Approx. Chi-Square 28.535

df 6
Sig. .000
Communalities
Initial Extraction
Credit_Limit 1.000 .788

Annual_Charges 1.000 .680
Number_of_Addon_Card 1.000 .700
Schemes_Offered 1.000 .740
TOTAL VARIANCE EXPLAINED
Extraction Sums of Rotation Sums of

Initial Eigenvalues Squared Loadings Squared Loadings
% of % of % of
ompo Varian Cumula Varian Cumula Varian Cumula
nent Total ce tive % Total ce tive % Total ce tive %
1 1.73 1.73 1.48

43.478 43.478 43.478 43.478 37.177 37.177
9 9 7
2 1.17 1.17 1.42
29.238 72.716 29.238 72.716 35.539 72.716
0 0 2
3 .559 13.981 86.697
4 100.00
.532 13.303
0

Scree Plot
1.75
1.50
1.25
1.00
lu
nE
ig
a
v
e
0.75
0.50
1 2 3 4
Component Number
COMPONENT MATRIX(A)
Component
1 2
Credit_Limit -.505 .731

Annual_Charges .742 .359
Number_of_Addon_Card -.759 .353
Schemes_Offered .598 .618
a 2 components extracted.
COMPONENT TRANSFORMATION MATRIX
Component 1 2
1 .747 -.665
2 .665 .747
Normalization.
Component Plot in Rotated Space
1.0
Credit_Limit
Number_of_Addon_Card
0.5
Schemes_Offered
0.0
Annual_Charges
m
C
n
p
o
t2
e
-0.5
-1.0
-1.0 -0.5 0.0 0.5 1.0

Component 1
5. FINDINGS
& CONCLUSION
The advantages of investing in a Mutual Fund are:
Diversification: The best mutual funds design their portfolios so individual investments will
react differently to the same economic conditions. For example, economic conditions like a
rise in interest rates may cause certain securities in a diversified portfolio to decrease in
value. Other securities in the portfolio will respond to the same economic conditions by
increasing in value. When a portfolio is balanced in this way, the value of the overall
portfolio should gradually increase over time, even if some securities lose value.
Professional Management:Most mutual funds pay topflight professionals to manage their

investments. These managers decide what securities the fund will buy and sell.
Regulatory oversight: Mutual funds are subject to many government regulations that protect
investors from fraud.
Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and
you've got the cash.
Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet.
Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment.
Expenses for Index Funds are less than that, because index funds are not actively managed.
Instead, they automatically buy stock in companies that are listed on a specific index
• Transparency
• Flexibility
• Choice of schemes
• Tax benefits
• Well regulated
REGULATION: GETTING BETTER
Through trial and error, Sebi has steadily improved its regulation of the mutual fund industry.
Corporate governance is better than before, but the last mile has still to be negotiated before
investor confidence can be taken for granted
How well is the Indian mutual funds industry regulated? If you were to look at media
headlines over the last couple of years, the regulator’s report card might well have carried
this comment: Needs improvement.
Till recently, the industry played host to several questionable practices – late trading (where
big corporate investors got to invest at favourable prices of the previous day), scheme
switching (shifting investments between schemes within the same fund) and excessive
incentivisation for selling mutual fund schemes, among others.
Add the peccadilloes of Alliance Mutual Fund’s star CIO Samir Arora, which got Sebi quite
worked up, and the picture doesn’t look too good.
But if you were to ask Sebi chairman G.N.Bajpai, he is certain that things are not as bad as
the media paints them. “Whenever instances of malpractice have come to our notice, we take
action,” he says.
And to be fair to the regulator, the mutual fund business has not seen any major upheaval of
the kind where investors have actually ended up losing money. The only case which came
close to this is that of the Unit Trust of India (AXIS), but the fact is that the government
stepped in to prevent investors from losing too much.
A majority of private sector mutual funds have managed to outperform their benchmarks,
drawing little ire from investors. Some of them do, in fact, charge fairly high fees, but good
market performance has made the case for lower fees not as compelling as in America.
Even in the case of late trading – which has been more or less the norm in an industry where
big corporates and distributors negotiate terms with mutual funds on a regular basis –
malpractices have not been as rampant as in America.
The conclusion: While the mutual fund industry, thanks to its relatively small size till
recently, has a bias towards large corporate investors, governance standards overall have
improved, aided undoubtedly by significant regulatory changes over the last few years.
The only thing to complain about is that Sebi plugged the holes in the system by following a
trial-and-error approach, and not necessarily proactively. The regulatory regime was
tightened bit by bit, aided by Sebi’s experiences and market forces. The pace of regulation
has actually accelerated in the last few years.
During 2002-03, for example, the regulator put out detailed guidelines on corporate
governance practices for asset management companies (AMCs). One of these was the
introduction of compulsory benchmarking of a fund’s performance against any chosen index.
Further, the trustees of funds were also entrusted with the responsibility of reviewing the
performance of various schemes against the benchmark index.
Besides, everyone, including the trustees, have been brought under the insider trading
regulations. Trustees now have to hold meetings at least once in two months as against four
times a year previously.
This year, Sebi has also made it mandatory for the board of trustees to have two-thirds of its
strength as independent directors – that is, those who are not associates of the sponsors.
Consultants have also been brought under this definition.
At the operational level, AMCs have been asked to put in place risk management systems for
fund management, operations, and so on – with detailed guidelines being issued.
Most importantly, Sebi has issued clear-cut guidelines for valuing bond instruments –
traditionally a grey area – non-performing assets, and illiquid and unlisted securities. The
Association of Mutual Funds of India (AMFI) has also helped in making product
comparisons easy for investors by mandating funds to follow uniform sector classifications,
as established by AMFI. Disclosure standards have also been improved substantially –
though by no means perfect.
“There will always be loopholes in any system and it will be difficult for any regulator to
plug all the holes,” admits Bajpai. Just as a chain is only as good as its weakest link, a system
is only as good as the quality of people who man it. The weak links, close observers of the
industry say, may be more outside the immediate control of AMCs – in the largely
unsupervised distribution chain. Sebi has, of course, prescribed a code of conduct for mutual
fund distributors.
All of them have to be registered with the Association of Mutual Funds of India. Distributors
also have to mandatorily pass a certification exam before they are allowed to sell any mutual
fund products. But then, the onus is on the fund managements to ensure that their agents and
distributors do indeed follow the practices laid down in the code of conduct.
Another issue that Sebi and the industry association have dealt with some amount of success
is the practice of rebating commissions back to investors. To hardsell a fund scheme,
distributors often share a part of their distribution commission with brokers and retail
investors as an incentive.
This amounts to promoting/selling schemes for the wrong reasons and may end up
misleading the investor. Sebi has put the onus on the fund houses to monitor their distributors
and stop incentivising investors. Despite all the laws that are on paper, given the extended
area of operations of distributors, Sebi’s writ may not run beyond a point.
The only way the issue can really be tackled is to give professional intermediaries larger
space in investment decisions.
Says Ranjit Mudholkar of the Association of Financial Planners: “Financial planners can
make a significant difference to the entire value chain. First, they would have a fiduciary
responsibility towards their clients and would service them accordingly. Secondly, investing
in the right product would be part of the financial planning process rather than the result of
mere pushing by the broker.”
But, quite clearly, there is a case for Sebi to take a second look at the role of the distribution
segment. In the absence of financial planners – investors are still to use them in sufficient
numbers – distributors are vital intermediaries between AMCs and investors.
In some other areas, Sebi could have done better, faster. Take late trading. Under this
practice, mutual funds oblige their big investors by allowing them to purchase units at the
previous day’s NAV, enabling them to take advantage of any appreciation in market prices
since then.
While late trading has been rampant for several years now, Sebi took corrective action only a
few months ago by introducing uniform cut-off timings for equity and debt funds.
It also asked AMCs to set up time-stamping machines that would keep track of the date and
time when applications and cheques were received to curb late trading. Better late than never.
Sebi could also have taken a closer look at the actual operations of funds. While there have
presumably been no flagrant violations of rules, some funds have been exploiting loopholes.
Fixed maturity plans are a case in point. Investments under such schemes are usually made in
the debt instruments of banks and corporates.
Fund houses have taken the easy way out and are investing a large portion of the funds
mobilised through such schemes in bank fixed deposits. When asked about this practice, one
Sebi director wondered what was wrong with investing in bank deposits. While there is
nothing in the mutual fund regulations to prohibit investments in bank instruments, the moot
point is whether the fund is doing investors any great service.
When investors entrust their money to experts and apparently knowledgeable fund managers,
you would expect them to do more than just rush to the nearest bank counter to make a
deposit. Bajpai, however, agrees that there should be some limit on how much money can be
parked in bank fixed deposits.
Another area of long-term concern is share switching. Sebi has not, so far, found a foolproof
way to prevent mutual funds from switching securities between schemes.
Prudential-ICICI Mutual Fund made switching famous, but few people probably know that
switching securities between schemes without their investors knowing it is more widespread
than one is led to believe.
Since funds declare their scheme-wise assets only at the end of the month, there is a lot of
scope for switching around investments from one scheme to another – depending on which
scheme the fund wants to show a higher NAV.
According to industry circles, such movements need not always leave an audit trail. Bajpai
says that all decisions pertaining to the industry are taken in consultation with the
participants.
“We regularly hold talks with AMFI and, in addition to that, we have a mutual fund advisory
committee consisting of people who are not drawn from the mutual fund sector,” he says.
With barely two per cent of household savings going into mutual funds, the segment has a lot
of catching up to do. With post-office administered schemes and bank deposits offering
competition, more investors can be enticed to the mutual fund industry only if it is steadily
seen as very investor-friendly. Initiatives have set the industry in the right direction, but the
final destination is still some distance away.
The structure of AXIS should be in line with SEBI regulations as applicable to mutual funds.
Accordingly there should be a Sponsor, A Trustee Company and An Asset Management
Company (AMC). The Sponsor should be a Sponsoring Company in which 40% of the share
capital should be held by the institutions which hold the initial capital of AXIS of Rs.5 crores
and which have made in 1999, the additional contribution of Rs.445.5 crores pursuant to the
Deepak Parekh Committee recommendations.(the Sponsoring Institutions). 60% of the share
capital of the Sponsoring Company should be held by a Strategic Partner who is a recognised
player in the market and whose reputation and competence are expected to give the required
degree of confidence to the unitholders. The field for the selection of the Strategic Partner
need not be restricted to Indian entities. The suggested share capital of the Sponsoring
Company should be Rs.550 crores of which Rs.220 crores will be subscribed by the
Sponsoring Institutions and Rs.330 crores by the Strategic Partner. To make the desired
contributions, each of the Sponsoring Institutions should convert part or whole of their
existing holdings in Unit-64 forming part of the initial capital of Rs.5 crores and the
additional contribution of Rs.445.5. crores into shares of the Sponsoring Company. As some
of the Sponsoring Institutions also own AMCs which manage mutual funds competing with
AXIS, no single Sponsoring Institution should hold more than 25% of the share capital of the
Sponsoring Company. To ensure that the confidence of the unit-holders should not be
adversely affected by a sudden withdrawal of the Government umbrella, there should be a
'lock-in' period of three years during which the Sponsoring Institutions may transfer their
shareholding in the Sponsoring Company amongst themselves but not to the Strategic Partner
or to third parties.
6. RECOMMENDATIONS/ SUGGESTION
Initial contributors to AXIS should infuse permanent funds of atleast Rs.500 crores.
The PSU portfolio should be transferred at book value to a Special Unit Scheme (SUS 99) to
be subscribed for by GOI by the issue of dated GOI securities.
US-64 should make a strategic sale of its significant equity holdings by negotiation to the
highest bidder to ensure fetching the best value for the unit holder. The investment sub-limit
of Rs.10,000 for tax benefit on Equity Linked Savings Schemes should be removed and
benefit should be extended to US-64 and all schemes investing more than 50% in equity.
Income distributed by US-64 and schemes investing more than 50% in equity should be
exempt from tax. New schemes for investing in growth stocks in IT, Pharma and FMCG
sectors should be launched, to be subscribed for by banks. The size of the AXIS Board
should be increased to 15, with additional five members being co-opted by the Board.
Trustees should assume higher degree of responsibility and exercise greater authority.
The remuneration of Trustees should be increased and their attendance record be published in
the Annual Report. There should be a separate Asset Management Company for US-64 with
an independent Board of Directors. Chinese walls should be created by appointing separate
and independent fund managers for each scheme.
Inter-scheme transfers must be based on independent decisions and requirements of

concerned fund managers and at market determined prices. There should be an independent
fund manager for US-64 with full responsibility and accountability.
The fund manager should be helped by a strong research team and the research capability
should be strengthened. Investment/dis-investment decisions should be based on research
analysts' recommendations who should have the authority and responsibility of making the
recommendations. The fund manager should have the final authority and responsibility in
decision making based on his perception of the market and research inputs. The focus on
small investors should be strengthened and the lilt towards corporate investors reduced.
US-64 should be NAV driven within three years.
If at the end of the three year period, the re-purchase price and the NAV are not in line, the
Trust will be left with no alternative but to seek GOI support once again the provide the
difference between the NAV and the repurchase price. Only a clear commitment from the
GOI to stand by US-64 till it finally assumes the character of a NAV driven scheme will
instill the required confidence in the US-64 investors.
The spread between sale and repurchase prices should be gradually increased to deter short
term investors.
The dividend distribution policy needs to follow a more conservative approach to build up
sufficient reserves during periods of good performances.
As a rule, dividends need to be curtailed when there is inadequate income.
The rate of return offered to investors needs to be reviewed on a periodic basis. The yield
offered on US-64 is excessively high as compared to other comparable instruments.
The composition of the portfolio needs to be changed to provide for more weightage to debt
consistent with the objectives of the Scheme.
The operations of US-64 should be brought under SEBI purview at the earliest.
An independent professional firm should be commissioned for a detailed review of asset

management processes including back office, inter scheme transfer and investor servicing.
Mutual funds have their drawbacks and may not be for everyone:
No Guarantees: No investment is risk free. If the entire stock market declines in value, the
value of mutual fund shares will go down as well, no matter how balanced the portfolio.
Investors encounter fewer risks when they invest in mutual funds than when they buy and
sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of
losing money.
Fees and commissions: All funds charge administrative fees to cover their day-to-day
expenses. Some funds also charge sales commissions or "loads" to compensate brokers,
financial consultants, or financial planners. Even if you don't use a broker or other financial
adviser, you will pay a sales commission if you buy shares in a Load Fund.
Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to
70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you
will pay taxes on the income you receive, even if you reinvest the money you made.
Management risk: When you invest in a mutual fund, you depend on the fund's manager to
make the right decisions regarding the fund's portfolio. If the manager does not perform as
well as you had hoped, you might not make as much money on your investment as you
expected. Of course, if you invest in Index Funds, you forego management risk, because
these funds do not employ managers
AXIS should list five ways in which one can buy the fund units.
7. ANNEXURE
QUESTIONNAIRE
CREDIT CARD SURVEY
Q1) Please tick against your sex
Male
Female
Q2) Which card do you use?
Master card
Visa
Q3) Which bank’s credit card do you use?
Standard Chartered
Citibank
HSBC
Other
Q4) Do you think a credit card makes you spend more than you ordinarily would
(Tick the box under the option that you think is appropriate)
Strongly Agree Neutral Disagree Strongly

Agree Disagree
Q5) Do you think that the interest on your card is an added financial burden for
you?

Agree Disagree
Q6) Does your card cover a satisfactory number of merchant outlets?

Agree Disagree
Q7) Your choice of credit card was affected by the reputation of the bank, which
issues the card.

Agree Disagree
Q8) Your card application decision was affected by the interest charged on the card.

Agree Disagree
Q9) Are you satisfied with your card on the following aspects?
Aspect Very Somewhat Neutral Somewhat Very

satisfie satisfied dissatisfied dissatisfied
d
Available
modes of
Payment
Schemes
Time allowed
for payment
Customer
Service
Annual Charge
Discount
Offered
Coverage of
merchant outlets
Q10) If you have never taken a credit card by choice, please rank your reason for that.
Rank between 1 to 5, with 5 being the lowest and 1 being the highest
Reason Rank
Prefer Cash
Fear of getting into Debt
Not Interested
Never thought about it
Prefer a Debit Card
Q11) If you have previously held a credit card, and then discontinued that, please
rank the reason for that.
Rank between 1 to 5, with 5 being the lowest and 1 being the highest
Reason Rank
Poor Customer Service
Increase in Interest Rate
Discontinuation of attractive schemes
Needed to get back finances in order
My finances improved, that’s why didn’t feel the need for a
credit card anymore
HAVE I INVESTED IN THE RIGHT FUNDS?
1. Get in touch with the Asset Management Company
The first step is to track the AMC -- as fund houses are known -- online.
Once you get onto their Web site, you will get their office addresses, phone numbers and a
contact e-mail address. You will even be able to transact online with some of them mutual
fund Web sites allow you to invest online. However, you must check if you have an account
with the banks they have partnered with.
For example, Prudential ICICI Mutual Fund allows you to buy funds online if you have a
banking account with any of the following banks: Centurion Bank, HDFC Bank, ICICI Bank,
IDBI Bank and AXIS Bank.
You can buy units of SBI Mutual Fund's schemes only if you have an account with the State
Bank of India or HDFC Bank.
Under the heading Investors Zone, you will find another one called ARN Search. This refers
to the AMFI Registration Number.
Click on it and you will arrive at a search page. You can locate an agent in your vicinity by
just putting in your PIN code or name of your city.
Do you have an online trading account? Then you could check if they also sell mutual funds
online.
If you do not have an online trading account and are considering opening one, you could look
for a player that offers both.
Some like ICICI Direct sell funds online. But you must have a trading account with them.
Others, like India Bulls and Motilal Oswal, do not have this facility online but if you call and
leave your contact details, they will send an agent over.
8. BIBLIOGRAPHY
BOOKS
PHILIP KOTLER, MARKETING MANAGEMENT, Volume -6th, ACCESS IN 10TH JULY

2007
MONEY, BANKING AND FINANCE – RC SHARMA, BSC PUBLICATION, ACCESS

IN 15TH JUNE 2007
JOURNALS
ICFAI UNIVERSITY PRESS JOURNALS
WEB SITES
• www.axisbank.com
• www.mutualfundsindia.com
• www.google.com
• www.gemoney.in
Fact Sheets of various Mutual Funds December 2006

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TABLE OF CONTENTS

1.3 Market Presence 14

1.4 Literature Review 15

1. RESEARCH METHODOLOGY 19-35

2.2 Scope of the Study 30

3 COMPANY PROFILE 36-54

3.1 SWOT Analysis 53

4 DATA ANALYSIS AND INTERPRETATION 55-68

5 FINDINGS / CONCLUSIONS 69-74

1.1 INDUSTRY OVERVIEW

MUTUAL FUNDS INDUSTRY UNITHOLING PATTERN

UNITHOLDING PATTERN – PRIVATE/PUBLIC SECTOR MUTUAL FUNDS

SEBI OKAYS FIDELITY PLANS

SEBI'S NEW CHECKS AND BALANCES

MONEY MARKET DEVELOPMENTS

Commenting on the decision of the Government Dr.Kurian, Chairman, Association of

The Important Follow-ups for AXIS Mutual Funds are

Adherence to best practices: Status and Future Agenda

ENFORCEMENT OF SECURITIES REGULATION

It is important to recognize the trade-off between over-regulation and high cost of

Screen-Based Trading System

Depositories and dematerialization

Private Placement Market

With a view to enabling investors to take informed decisions as well as to promote

Transparency in the debt market

The important component of research methodology such as formulation of hypothesis,

2.1 RESEARCH OBJECTIVE

2.2 SCOPE OF THE STUDY

2.3 DATA COLLECTION

2.4 IMPORTANCE OF THE STUDY

2.5 RESEARCH DESIGN

Type of Research: - Descriptive research

2.6 DATA SOURCES

Selected instrument for Data Collection for Survey is Questionnaire.

2.7 QUESTIONNAIRE DESIGN/FORMULATION

Questionnaire: - A questionnaire consists of a set of questions presented to respondent for

TYPES OF QUESTION INCLUDED:

Which has only two answers “Yes” or “No”.

MULTIPLE CHOICE QUESTION

Where respondent is offered more than two choices.

A scale that rates the importance of some attribute.

2.8 SAMPLE DESIGN

Where the survey should be carried out?

When the survey should be conducted?

I conducted my survey for 8weeks from 10th may to 10th july

The source from which the sample is drawn

How should the respondent be chosen?

The date used in my research study is secondary data.

What are Mutual Funds?

Why is it such a good idea to invest in Mutual Funds?

Mutual Funds - Scope for Growth and Development in India

GROWTH OF MUTUAL FUND BUSINESS IN INDIA

NET ASSETS OF MUTUAL FUNDS AS AT 3L.03.2000 [SOURCE: WEBSITE OF

Public Sector 10,444.78 9.68

Private Sector 25,167.89 23.32

Total 1,07,946.10 100.00

The advantages of investing in a Mutual Fund are:

10. Well Regulated

FIRST PHASE - 1964-87

SECOND PHASE - 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS)

THIRD PHASE - 1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS)

FOURTH PHASE - SINCE FEBRUARY 2003