AJ NJ Mutual Fund

A
SUMMER TRAINING REPORT

ON
“SCOPE FOR MUTUAL FUND ADVISORY BUSINESS IN
MODASA & BAYAD”
FOR
N.J. INDIAINVEST PVT.LTD
IN PARTIAL FULFILLMENT OF THE REQUIREMENT

UNDER MBA PROGRAMME BATCH NO. 2009-2011
SUBMITTED TO
GROW MORE FACULTY OF MANAGEMENT STUDIES
AHMEDABAD-UDDAIPUR HIGHWAY, AT.BERNA,
HIMMATNAGAR, DIST.S.K. GUJARAT-3830012.
(Affiliated to Gujarat Technological University, Ahmedabad)
SUBMITTED BY:
ANKIT CHAUHAN ROLL NO. 021
HARUNRASID MODASIYA ROLL NO. 059

NJ FUNDZ NETWORKS

PREFACE
The prosperity, development and success of any country depend upon

perfectness and properly structured in Management. In modern era, management
is the ‘Heart’ of fast industrial growth and development. Practical training is one
of the most important and unforgettable experience.
As a part of practical management, project work is very essential as it gives

a golden opportunity to students to verify application of thrones. Through this I
come to know different areas, people, culture etc. which enhance my knowledge
& experience for, this study I had selected much esteemed & well known
company named “NJ IndiaInvest Pvt. Ltd.
Practical study also develops my attitude towards business environment &

market scenario. Every business must be aware with each part of market in detail
which includes customers, competitors, media etc.
The beginning of this study is carried by “Market Research”. And in this

step process my fires step was “
Grow More Faculty Of Management Study, Himmatnagar

NJ FUNDZ NETWORKS


NJ FUNDZ NETWORKS

ACKNOWLEDGEMENT
Sometimes words fall short to show gratitude, the same happened with me during
this project. The immense help and support received from NJ India Invest Pvt Ltd.
overwhelmed me during the project.
My sincere gratitude to Mr. Mehul Shah (Sr. executive-sales), Mr. Sunil Patel ,and
Mr. Umesh Pithadiya (my college guide)whose co-operation and guidance proved
immensely helpful to me during the course of summer training.
I also wish to acknowledge my sincere thanks to the entire concern faculty for
their valuable advice and suggestions.
Last but not the least ; my heartfelt love for my parents, whose constant support
and blessings helped me throughout this project.

NJ FUNDZ NETWORKS

EXECUTIVE SUMMARY
 The objective of carrying out this proposal is concerned with the Indian financial
market and the role of mutual fund in these financial market.
 It also includes the enhancement of mutual fund investing, investors &

comparison with mutual fund in developed countries.
 It would also cover growth & performance of mutual fund which will include
the structure, types, growth & operational highlights of mutual fund & its
schemes.
 Also the invest management of mutual fund & investor protection will be
studied with the help of mutual fund regulation.

NJ FUNDZ NETWORKS

TABLE OF CONTENTS
Chapter Name
CH. NO. CONTENT PAGE NO.
1 Well come to NJ IndiaInvest Pvt. Ltd 1
2 Industry profile 2
1.Introduction 2
2.Characterists 4
3. History Of Indian mutual fund Industry 5
4 Growth In Assets Under Management 8
5 Mutual Fund Structure 10
6 Types Of Mutual Fund 15
7 Advantages Of Mutual Fund 23
8 Disadvantages Of Mutual Fund 25
9. Risk Involved In Mutual Fund 28
10 Factor Affecting Mutual Fund 33
11 Company Overview 41
1.Introduction 42
2.Vision & Mission Of NJ IindiaInvest Pvt. Ltd. 43

NJ FUNDZ NETWORKS

3.Philosophy 44
4.Management 46
5.People & Culture 48
6.Service Standard 50
52
7..Products
52
8..Service Provided to Client
59
9.360 degree Advisory Platform
12 Why Insurance Agent Should Sell Mutual Fund 62
13 Research Methodology 70
14 Analysis Of Survey 72
15 Summary OF Finding 80
16 Suggestion 81
17 Conclusion 82
18 Biblography 83
19 Annexure:Questionnaires 84

2010
1. WELL-COME TO NJ INDIAINVEST PVT. LTD.
Grow More Faculty Of Management Study, Himmatnagar Page 1

2010
2. INDUSTRY PROFILE
MUTUAL FUND
1.INTRODUCTION:-
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such as shares,
debentures and other securities. The income earned through these investments and the capital
appreciations realized are shared by its unit holders in proportion to the number of units owned by them.
Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a relatively low cost
The flow chart below describes broadly the working of a Mutual Fund.

2010
A Mutual Fund is a body corporate registered with the Securities and Exchange Board of India
(SEBI) that pools up the money from individual/corporate investors and invests the same on
behalf of the investors/unit holders, in Equity shares, Government securities, Bonds, Call Money
Markets etc, and distributes the profits. In the other words, a Mutual Fund allows investors to
indirectly take a position in a basket of assets. Mutual Fund is a mechanism for pooling the
resources by issuing units to the investors and investing funds in securities in accordance with
objectives as disclosed in offer document. Investments in securities are spread among a wide cross-
section of industries and sectors thus the risk is reduced. Diversification reduces the risk because all
stocks may not move in the same direction in the same proportion at same time. Investors of mutual
funds are known as unit holders.
The investors in proportion to their investments share the profits or losses. The mutual funds
normally come out with a number of schemes with different investment objectives which are
launched from time to time. A Mutual Fund is required to be registered with Securities
Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from
the public.

2010
2.Characteristics:
➢ A mutual fund actually belongs to the investors who have pooled their funds.
➢ A mutual fund is managed by investment professionals and other service providers, who earn
a fee for their services, from the fund.
➢ The pool of funds is invested in a portfolio of marketable investments. The value of the
portfolio is updated every day.
➢ The investor’s share in the fund is denominated by ‘units’. The value of the units changes with
change in the portfolio’s value, every day. The value of one unit of investment is called the Net
Asset Value or NAV.

2010
3. HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY
The mutual fund industry in India started in 1963 with the formation of Unit
Trust of India, at the initiative of the Government of India and Reserve Bank. Though the
growth was slow, but it accelerated from the year 1987 when non-UTI players entered the
Industry.
In the past decade, Indian mutual fund industry had seen a dramatic improvement,
both qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending
phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the fund
family raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it reached the height if
Rs. 1540 billion.
The Mutual Fund Industry is obviously growing at a tremendous space with the mutual
fund industry can be broadly put into four phases according to the development of the sector. Each
phase is briefly described as under.

2010
First Phase: 1964-1987
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve
Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development
Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first
scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 cores of
assets under management.
Second Phase: 1987-1993

(Entry of Public Sector Funds) In 1987 marked the entry of non-
UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India
(LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June1987followed by
Canara bank Mutual Fund (Dec87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC
established its mutual fund in June 1989 while GIC had set up its mutual fund in December
1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004
cores.

2010
Third Phase: 1993-2003

(Entry of Private Sector Funds) With the entry of private sector
funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a
wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations
came into being, under which all mutual funds, except UTI were to be registered and governed. The
erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector
mutual fund registered in July 1993. The industry now functions under the SEBI (Mutual Fund)
Regulations1996.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
n February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into
two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes.The second is the UTI Mutual Fund
Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the
Mutual Fund Regulations. The graph indicates the growth of assets over the years.

2010
4. GROWTH IN ASSETS UNDER MANAGEMENT

2010
Note:
Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the
Unit Trust of India effective from February 2003. The Assets under management of the Specified
Undertaking of the Unit Trust of India has therefore been excluded from the total assets industry as
a whole from February 2003 onwards.

2010
5 .MUTUAL FUND STRUCTURE
The Structure Consists
The structure of mutual funds in India is governed by the SEBI Regulations, 1996. These
regulations make it mandatory for mutual funds to have a 3-tier structure of Sponsors- Trustee- AMC
(Asset Management Company). The Sponsor is the promoter of mutual fund, and appoints the
Trustee. The Trustees are responsible to the investors in the mutual funds, and appoint the AMC
for managing the investment portfolio. The AMC is the business face of the mutual funds, as it
manages all the affairs of mutual funds. The mutual funds and AMC have to be registered by the SEBI.

2010
Sponsor
A sponsor is a body corporate who establishes a mutual fund. It may be one person acting alone or
together with another body corporate. Sponsor must contribute at least 40% of the net worth of the
Investment Managed and meet the eligibility criteria prescribed under the Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any
loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by
it towards setting up of the Mutual Fund
Board of Trustee:
Mutual fund requires to have an independent board of Trustee, where two
third of the trustees should be independent person who are not associated with the sponsor in any
manner. The board of trustees of the trustee company holds the property of the mutual fund in trust
for the benefit of the unit holders. The board of trustees is responsible for protecting the unit holder’s
interest.
Asset Management Company (AMC) The role of asset Management Company is highly
significant in the mutual fund operation. The AMC is appointed by the Trustee. They are the fund
managers i.e. they invest the investors money in various securities ( equity, debt and money market
instruments) after proper research of market conditions and the financial performance of
individual companies and specific securities in the efforts to meet or beat average market return
and analysis. The AMC is required to be approved by the Securities and Exchange Board of India
(SEBI) to act as an asset management company of the Mutual Fund. At least 50% of the directors
of the AMC are independent directors who are not associated with the Sponsor in any manner. The
AMC must have a net worth of at least 10 crores at all times. They also look after the
administrative functions of a mutual fund for which they charge management fee.

2010
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the
Mutual Fund. The Registrar processes the application form, redemption requests and dispatches
account statements to the unit holders.
Custodian Mutual fund is required by law to protect their portfolio securities by splacing
them with a custodian. Nearly all mutual funds use qualified bank custodians. Only a registered
custodian under the SEBI regulation can act as a custodian to a mutual fund.A custodian handles
the investment back office of a mutual fund.
Fee structure:-
Custodian charges range between 0.15% to 0.20% on the net value of the
customer’s holding for custodian services space is one important factor which has fixed cost element.
RESPONSIBILITY OF CUSTODIANS: -
➢ Receipt and delivery of securities
➢ Holding of securities.
➢ Collecting income
➢ Holding and processing cost
➢ Corporate actions etc

2010
RATE OF RETURN ON MUTUAL FUNDS:-
An investor in mutual fund earns return from two sources:
➢ Income from dividend paid by the mutual fund.
Capital gains arising out of selling the units at a price higher than the
acquisition price
Formation and regulations:
➢ Mutual funds are to be established in the form of trusts under the Indian trusts act and are to
be operated by separate asset management companies (AMC s)
➢ AMC’s shall have a minimum Net worth of Rs. 5 crores;
➢ AMC’s and Trustees of Mutual Funds are to be two separate legal entities and that an
AMC or its affiliate cannot act as a manager in any other fund;
➢ Mutual funds dealing exclusively with money market instruments are to be regulated by the
Reserve Bank Of India

2010
➢ Mutual fund dealing primarily in the capital market and also partly money market
instruments are to be regulated by the Securities Exchange Board Of India (SEBI)
➢ All schemes floated by Mutual funds are to be registered with SEBI

2010
6. TYPES OF MUTUAL FUND
Diagram

2010
Schemes according to maturity period : -
mutual fund scheme can be classified into open-ended scheme or close ended scheme A
depending on its maturity period
Open ended fund/scheme:
An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes not have a fixed maturity period. Investors can conveniently buy
and sell units at Net Asset Value (NAV) related prices which are on a daily basis. The key feature of
open-end schemes is liquidity.
Close ended Fund/scheme:
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for
subscription only during a specified period at the time of launch of the scheme. Investors can invest in
the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the
scheme on the stock exchanges where the units are listed. In order to provide an exit route to the
investors some close ended funds give an option of selling back the units to the mutual fund
through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of
the two exit routes is provided to the investors i.e. either repurchase facility or through listing on
stock exchanges. These mutual funds schemes disclose NAV generally a weekly basis.

2010
Schemes according to investment objective:
A scheme can also be classified as growth scheme, income scheme, or balance scheme
considering its investment objective. Such schemes may be open-ended or close-ended scheme as
described earlier. Such schemes may be classified mainly as follows:
Equity funds: These funds invest in equities and equity related instruments. With
fluctuating share prices, such funds show volatile performance, even losses. However, short
term fluctuations in the market, generally smoothens out in the long term, thereby offering higher
returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation
as, historically, equities have outperformed all asset classes in the long term. Hence, investment in
equity funds should be considered for a period of at least 3-5 years. It can be further classified as:
1. Growth Fund: Aim to provide capital appreciations over the medium to long term. These
schemes normally invest a majority of their funds in equities and are willing to bear short term decline
in value for possible future appreciation. These schemes are not for investors seeking regular income or
needing their money back in the short term
2. Diversified Equity Fund: Diversified equity funds are the most popular among
investors. They invest in many stocks across many sectors, and because they have the freedom to
chop and churn their portfolios as they like, diversified equity funds are a good proxy to the stock
market. If a general exposure to equities is what you want, they are a good good option. They can
invest in all listed stocks, and even in unlisted stocks. They can invest in which ever sector they like,
in what ever ratio they like.

2010
3. Equity – Linked Savings Schemes (ELSS): Equity – linked savings schemes (ELSS) are
diversified equity funds that additionally offer income tax benefits to individuals. ELSS is one of the
many section 80c instruments, along with the more popular debt options like the PPF, NSC and
infrastructure bonds. In this Section 80c grouping. ELSS is unique. Being the only instrument to
offer a total equity exposure.
4. Index Fund: An index fund is a diversified equity fund; with a difference- a fund manager
has absolutely no say in stock selection. At all times, the portfolio of an index fund mirrors an index,
both in its choice of stocks and their percentage holding. As of March 2004, equity index funds
tracked either the Sensex or the Nifty. So, an index fund that mirrors the Sensex will invest only in the
30 Sensex stocks, which too in the same proportion as their weight age in the index.
5. Sector Fund: Sector funds invest in stocks from only one sector, or a handful of sectors.
The objective is to capitalize on the story in the sectors, and offer investors a window to profit
from such opportunities. It’s a very narrow focus, because of which sector funds are considered
the riskiest among all equity funds.
6. Mid – Cap Fund: These are diversified funds that target companies on the fast – growth
trajectory. In the long run, share prices are driven by growth in a company’s turnover and
profits. Market players refer to them as ‘mid-sized companies’ and ‘mid- cap stocks’ with size in
this context being benchmarked to a company’s market value. So, while a typical large cap stock
would have a market capitalization of over Rs 1,000 crores, a mid-cap stock would have a
market value of Rs 250-2,000 crores.

2010
Mutual Fund Equity schemes have delivered very attractive returns

in last 5 years, giving over 51% returns annually
DEBT FUNDS:-These Funds invest a major portion of their corpus in debt papers.
Government authorities, private companies, banks and financial institutions are some of the major
issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide
stable income to the investors.
Debt funds are further classified as:
1. Gilt Funds: Invest their corpus in securities issued by Government, popularly known as
GOI debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk.
These schemes are safer as they invest in papers backed by Government.
2. Income Funds: Income funds aim to maximize debt returns for the medium to longer term.
Invest a major portion into various debt instruments such as bonds, corporate debentures and
Government securities.

2010
3. MIPs: Invests around 80% of their total corpus in debt instruments while the rest of the
portion is invested in equities. It gets benefit of both equity and debt market. These scheme ranks
slightly high on the risk-return matrix when compared with other debt schemes.
4. Short Term Plans (STPs): Meant for investors with an investment horizon of 3-6 months.
These funds primarily invest in short term papers like Certificate of Deposits (CDs) and
Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.
5. Liquid Funds: Also known as Money Market Schemes, These funds are meant to provide
easy liquidity and preservation of capital. These schemes invest in shortterm instruments like
Treasury Bills, inter-bank call money market etc. These funds are meant for short-term cash
management of corporate houses and are meant for an investment horizon of 1day to 3 months.
These schemes rank low on risk-return
6. matrix and are considered to be the safest amongst all categories of mutual funds.
7. Floating Rate Funds: These income funds are more insulated from interest rate than their
conventional peers. In other words, interest rate changes, which cause the NAV of a conventional debt
fund to go up or down, have little, or no, impact on NAVs of floating rate funds.

2010
HYBRID FUNDS:-
1. BALANCED FUNDS:-These funds, as the name suggests, are a mix of both equity
and debt funds. The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion indicated in
their offer documents. These are appropriate for investors looking for moderate growth.
They generally invest 40-60% in equity and debt instruments. These funds are also affected
because of fluctuations in shares prices in the stock markets. However, NAVs of such funds are
likely to be less volatile compared to pure equity funds. Following are balanced funds classes:-
a. Debt-oriented funds -Investment below 65% in equities.
b. Equity-oriented funds -Invest at least 65% in equities, remaining in debt.
2. Growth and Income Fund: Funds that combine features of growth funds and income
funds are known as Growth-and-Income Funds. These funds invest in companies having
potential for capital appreciation and those known for issuing high dividends.The level of risks
involved in these funds is lower than growth funds and higher than income funds.
3. Asset Allocation Fund: Mutual funds may invest in financial assets like equity, debt,
money market or non-financial (physical) assets like real estate, commodities etc.. Asset
allocation funds adopt a variable asset allocation strategy that allows fund managers to switch
over from one asset class to another at any time depending upon their
4. outlook for specific markets. In other words, fund managers may switch over to equity if
2010
they expect equity market to provide good returns and switch over to debt if they expect debt
market to provide better returns.

2010
7 . ADVANTAGES OF MUTUAL FUND
1. Portfolio Diversification
Mutual Funds invest in a well-diversified portfolio of securities which enables investor to hold a
diversified investment portfolio (whether the amount of investment is big or small).
2. Professional Management
Fund manager undergoes through various research works and has better investment
management skills which ensure higher returns to the investor than what he can manage on his
own.
3. Less Risk
Investors acquire a diversified portfolio of securities even with a

small investment in a Mutual Fund. The risk in a diversified portfolio is lesser than investing
in merely 2 or 3 securities.
4. Low Transaction Costs
Due to the economies of scale (benefits of larger

volumes), mutual funds pay lesser transaction costs. These benefits are passed on to the investors.
5. Liquidity
An investor may not be able to sell some of the shares held by him very easily and quickly,
whereas units of a mutual fund are far more liquid.

2010
6. Choice of Schemes
Mutual funds provide investors with various schemes with different investment objectives.
Investors have the option of investing in a scheme having a correlation between its
investment objectives and their own financial goals. These schemes further have different
plans/options
7. Transparency
Funds provide investors with updated information pertaining to the markets and the
schemes. All material facts are disclosed to investors as required by the regulator.
8. Flexibility
Investors also benefit from the convenience and flexibility offered by Mutual Funds.
Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa. Option
of systematic (at regular intervals) investment and withdrawal is also offered to the investors in
most open-end schemes.
9. Safety
Mutual Fund industry is part of a well-regulated investment environment where the interests of the
investors are protected by the regulator. All funds are registered with SEBI and complete
transparency is forced.

2010
8. DISADVANTAGE OF MUTUAL FUND
1. Costs Control Not in the Hands of an Investor
Investor has to pay investment management fees and fund distribution costs as a
percentage of the value of his investments (as long as he holds the units), irrespective of the
performance of the fund.
2. No Customized Portfolios
The portfolio of securities in which a fund invests is a decision taken by the fund manager.
Investors have no right to interfere in the decision making process of a fund manager, which some
investors find as a constraint in achieving their financial objectives.
3. Difficulty in Selecting a Suitable Fund Scheme
Many investors find it difficult to select one option from the plethora of funds /
schemes / plans available. For this, they may have to take advice from financial planners in
order to invest in the right fund to achieve their objectives.
4. Delay in Redemption:
The redemption of the funds though has liquidity in 24-hours to 3 days takes formal application as
well as needs time for redemption. This becomes cumbersome for the investors.

2010
5. Non-availability of loans: Mutual funds are not accepted as security against loan. The investor
cannot deposit the mutual funds against taking any kind of bank loans though they may be his
assets.

2010
RISK V/S. RETURN:

2010
9. RISK INVOLVED IN MUTUAL FUND :
THE RISK-RETURN TRADE-OFF
The most important relationship to understand is the risk-return trade-off. Higher the risk
greater the returns/loss and lower the risk lesser the returns/loss. Hence it is up to you, the
investor to decide how much risk you are willing to take. In order to do this you must first be aware
of the different types of risks involved with your investment decision.

2010
MARKET RISK:
Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting the
market in general lead to this. This is true, may it be big corporations or smaller mid-sized
companies. This is known as Market Risk. A Systematic Investment Plan (“SIP”) that works on the
concept of Rupee Cost Averaging (“RCA”) might help mitigate this risk.
CREDIT RISK:
The debt servicing ability (may it be interest payments or repayment of principal) of a company
through its cash flows determines the Credit Risk faced by you. This credit risk is measured by
independent rating agencies like CRISIL who rate companies and their paper. An ‘AAA’ rating is
considered the safest whereas a ‘D’ rating is considered poor credit quality. A well-diversified portfolio
might help mitigate this risk.
INFLATION RISK:
Things you hear people talk about: “Rs. 100 today is worth more than Rs. 100 tomorrow.”
“Remember the time when a bus ride costed 50 paisa?”“Mehangai Ka Jamana Hai.”The root
cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times people make
conservative investment decisions to protect their capital but end up with a sum of money that can
buy less than what the principal could at the time of the investment. This happens when inflation
grows faster than the return on your investment. A well diversified portfolio with some investment in
equities might help mitigate this risk.

2010
INTEREST RATE RISK:

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

Changes in government policy and political decision can change the investment environment.
They can create a favorable environment for investment or vice versa.
LIQUIDITY RISK: Liquidity risk arises when it becomes difficult to sell the securities that
one has purchased. Liquidity Risk can be partly mitigated by diversification, staggering of
maturities as well as internal risk controls that lean towards purchase of liquid securities.

2010
NET ASSET VALUE
Net Asset Value (NAV) The net asset value of the fund is the cumulative market value of
the assets fund net of its liabilities. In other words, if the fund is dissolved or liquidated, by selling off
all the assets in the fund, this is the amount that the shareholders would collectively own. This
gives rise to the concept of net asset value per unit, which is the value, represented by the ownership
of one unit in the fund. It is calculated simply by dividing the net asset value of the fund by the
number of units. However, most people refer loosely to the NAV per unit as NAV, ignoring the "per
unit". We also abide by the same convention.
Definition of NAV
Asset Value, or NAV, is the sum total of the market value of all the shares held in the
portfolio Net including cash, less the liabilities, divided by the total number of units outstanding.
Thus, NAV of a mutual fund unit is nothing but the 'book value.'
Calculation of NAV The most important part of the calculation is the valuation of the assets
owned by the fund. Once it is calculated, the NAV is simply the net value of assets divided by the
number of units outstanding. The detailed methodology for the calculation of the asset value is given
below.

2010
Asset value is equal to
Sum of market value of shares/debentures

Liquid assets/cash held, if any
+ Dividends/interest accrued Amount due on
Unpaid assets Expenses accrued but not paid
Other liabilities
NAV per unit = ------------------------------------------------------------------

No. of units outstanding of the scheme
NAV and its impact on the returns We feel that a MF with lower NAV will give better
returns. This again is due to the wrong perception about NAV. An example will make it clear that
returns are independent of the NAV. Say; you have Rs 10,000 to invest. You have two options,
wherein the funds are same as far as the portfolio is concerned. But say one Fund X has an NAV of
Rs 10 and another Fund Y has NAV of Rs 50. You will get 1000 units of Fund X or 200 units of
Fund Y. After one year, both funds would have grown equally as their portfolio is same, say by 25%.
Then NAV after one year would be Rs 12.50 for Fund X and Rs 62.50 for Fund Y. The value of
your investment would be 1000*12.50 = Rs 12,500 for Fund X and 200*62.5 = Rs 12,500 for Fund
Y. Thus your returns would be same irrespective of the NAV. It is quality of fund, which would
make a difference to your returns. In fact for equity shares also broadly this logic would apply.

2010
10. FACTORS AFFECTING MUTUAL FUND
1. Governmental Influences Mutual fund business is a highly regulated business throughout

the world as it seeks to ensure that quality and fairly priced schemes are available. Governmental
intervention thus in mutual fund market usually is most needed to ensure that insurers are reliable.
And in the developing countries the additional goal may be promotion of domestic mutual fund
industry and ensuring the national mutual fund industry contributes to overall economic
development. In a non technical sense mutual fund is purchased in a good faith so the duty of
government intervention in mutual fund industry is to ensure that this principle of mutual fund is
never defeated. The ideology of government plays an important role in mutual fund industry also.
For example in the past during 1991, the P .V Narsimha Rao government strongly believed in
liberalization also liberalized the mutual fund sector which helped to allow private players in the
industry from
1993 and enhancing joint ventures with foreign companies. The present government with more
focuses on foreign direct investments has declared to favor the rise FDI in mutual fund to 49% which
further enhances competition in the industry.
2. Taxation Policy
Social equity being one of the motives behind tax collections, government give certain
exemptions from such levying. One such exemption is deduction incurred by taxpayers towards
investment in mutual fund coverage. Similarly, capital invested in infrastructure bonds etc is offered
with certain concession under tax laws. The central idea behind such exemptions is that the capitals so
allocated by individuals reduce the ultimate burden on the public infrastructure or helps in creating

2010
such infrastructural facilities. The income tax rules related to the mutual fund transactions can be
classified under:
[A] Exemptions available to companies or businesses

[B] Exemptions available to insured individuals
[A] Exemptions available to companies
Expenses deductible from commission earned by distributor, banker, national

distributor.
Tax concessions under risk management practices of an enterprise
In growth option equity schemes there no long term capital gain by company.
In dividend option equity schemes there no tax.
Return received by charitable trust is total exempted from tax.
Else schemes give to advantage of tax saving, growth potential and return.
[B] Tax rules governing investment by individuals
education in respect of ELSS schemes (sec 80C):

Investment in this fund would enable you to avail the benefits under clause (xiii) of a section
80C of the Income Tax Act investment made in the schemes up to 1 lakh by the eligible investor
for deduction under this section of the Act. Since it will be an income deduction an investment of Rs
1 lakh in this fund can save off Rs.
33600 from your tax payable liability (assuming you are in the highest tax bracket) Investor will
receive tax free dividend in above case. Investor will also receive tax free dividend by investing
2010
equity schemes in dividend option Investors also receive tax free return by investing equity
schemes in growth option for long term capital gain.
C Tax planning
An individual can think of health ELSS schemes purchase as a tool of tax planning exercise. For
example people who are marginally affected by tax liability can be as well purchase a ELSS fund
get benefits of Rs. 33600 from tax. In this way tax burden is become less by purchasing ELSS
fund. Thus tax law offer benefit to individuals/companies by way of
exemptions/deductions of expenditure incurred towards purchase of mutual fund various
schemes coverage from total taxable income.
3. Foreign Trade Regulations
With the vast potential for mutual fund in India due its large population in the country many
foreign companies are ready to enter into the Indian market. But companies can be permitted in India
through joint ventures with an Indian partner as well as come separately and the foreign equity shall
be restricted to only 25%. Another statement also tells that Indian subsidiaries of foreign companies
shall not be allowed to participate in banking sector unless they entered in to joint ventures with the
Indian partners. But at present the mutual fund regulator is in favor of hike in FDI cap from 25% to
49%, and is finalizing a report that will be submitted to the government for a comprehensive
legislation for the industry. The security exchange board of India and association of mutual fund
India have been advocating a hike in FDI limit for mutual fund companies so that the foreign partners
can infuse additional funds in these companies to sustain their growth. The government will need to
amend the separate mutual fund Act for FDI capital as well as domestic company as this is the
statutory provision unlike sectors like civil aviation and telecom, which have come through
notification.

2010
4. National Income
The relative importance of the mutual fund Market within a country will also be dependent
upon economic development. With greater rates of economic growth, consumption of
investment should increase as a result of increased income, and an increased stock of assets
requiring mutual fund. Furthermore, the development of mutual fund is likely to facilitate greater
economic growth, implying that economic growth may be endogenous. Consistent with these
arguments, studies find that the level of financial development and economic development are
positively related to the level of mutual fund across emerging markets.
5. Consumptions and Savings
The gross capital formation of any country is important for indication of its growth in the
future years. It is quite necessary to set up the rate of capital formation so that a large stock of
machines, tools and equipments are accumulated in a country. Experience of development in other
countries suggests that a high rate of capital formation was achieved to trigger rapid rate of economic
growth. With the hike in foreign capital coming to India the rate of capital formation is
becoming boom to insurers, which has given them opportunities. It is heartening to them to note that
latest savings rate of 28% is highest till now and with the growth rate near to
8% is bringing a pool of buyer’s purchasing power. This directly influences the demand for
mutual fund products.
6. Employment
The effect of employment on mutual fund industry is as direct as that on economic
development of any country. With the rising levels of employment the effect on mutual fund
industry is positive because employment adds to the insured properties and assets from every
2010
prospective be it due to organized or unorganized.
7. Inflation
The midterm policy review the strong macroeconomic indicators and RBI has revised
its GDP growth estimates to the upper limit of the earlier projection range 8% inflation (WPI) has been
steadily moving up in recent times and RBI has highlighted that primary articles prices have been on
of the key contributors. However one needs to keep in mind that
recent increase in global oil prices.

2010
8. Money supply
The central banks has indicated that credit growth and money supply number
are likely to be above its prosecution for the current fiscal year, the statement “to consider
promptly all possible measures as appropriate to the evolving global and domestics situation “is
indicative of phased increase in FII limits for gilt investment could help in depending the securities
market and is part of the road map towards fuller convertibility.
9. Interest
Interest is major factor for investment when a person find less return from investment
tool than people move towards the higher returns tool of investment.
10. Risk factor

All investments in Mutual Fund and securities are subject to market risks and the
NAV of the fund may go up or down depending on the factors and forces affecting the security
market. There can be no assurance that the fund’s objective will be achieved. Past performance of
the sponsors/Mutual fund/schemes/AMC is not necessarily indicative of the future results. The name of
the schemes does not in any manner indicate their quality, their future prospects or returns. The specific
risk would be credit, market, illiquidity, judgmental error, interest rate, swaps and forward rates.

2010
11. Demographic environment

The demographic environment significantly affects the demand for
the mutual fund industry. Factors like the average age of the population, levels of education, household
structures income distribution, life style and the extent of industrialization as well as
urbanization terribly influences the demand of mutual fund schemes In India the average age of the
population is at an increasing trend following the improved medical technology and better awareness of
health care requirements As a result, the risk of investment death is decreasing while
connectivity is increasing. Simultaneously the demand for pension funds and income fund is expected
to grow. For example at the time of independence the average age of dying for Indians was 45.
Presently it has increased to 65 following better healthcare, improvements in medical science and
more health consciousness among the common man. By 2010 it is expected to rise to 75. Hence risk
profile is also changing. Earlier people are thanking about safely but at present people thinking about
capital growth.
12. Social Factors

The social environment covers the customs, habits, level of education, tastes and
standard of living of people in the society. Today’s social environment is greatly influenced to a major
extent by the changes in technological aspects. With the rapid progress in technology and economic
liberalization, the physical boundaries are gradually vanishing. As a result, the social life of the people
and their views towards risk and uncertainty of life and health are gradually changing. These factors of
social life are affecting human motivations and emotions related to the physical and mental incapacities,
loss of health and death. In general there are extremes apprehensions of one’s death, though it is
certain. The perception of an individual toward risk and capital growth depends on the social
culture and religious belief. In the urbanized area people does think about investment and capital
growth. These beliefs ultimately influence the buying behavior of a consumer.

2010
13. Education
Education is major factor of demand for mutual fund product. if the education
levels is higher than the people know the benefits of mutual fund the use mutual fund as investment
tool and also take rise capital growth.

2010
11. COMPANY OVERVIEW

2010
1. INTRODUCTION:-
“Success is a journey, not a destination.” If we look for examples to prove this quote then we can
find many but there is none like that of NJ India Invest Pvt. Ltd. Back in the year 1994, two person
created history by establishing NJ India Invest Pvt. Ltd leading advisors and distributors of financial
products and services in India.
NJ has over a decade of rich exposure in financial investments space and portfolio advisory
services. From a humble beginning, NJ over the years has evolved out to be a professionally
managed quality conscious and customer focused financial/ investment advisory & distribution firm.
NJ prides in being a professionally managed, quality focused and customer centric organization.
The strength of NJ lies in the strong domain knowledge in investment consultancy and the
delivery of sustainable value to clients with support from cutting-edge technology platform,
developed in-house by NJ.
At NJ we believe in …
➢ having single window, multiple solutions that are integrated for simplicity and sapience
➢ making innovations, accessions, value-additions, a constant process
➢ providing customers with solutions for tomorrow which will keep them above the curve,
today

2010
NJ has over INR 76 billion* of mutual fund assets under advice with a wide presence in over 110
locations* in 20 states* and 1000 employees and 12 lacs customer in India. The numbers are
reflections of the trust, commitment and value that NJ shares with its clients
NJ Wealth Advisors, a division of NJ, focuses on providing financial planning and portfolio
advisory services to premium clients of high net-worth. At NJ Wealth Advisors, we have
developed processes that focus on providing the best in terms of the advice and the ongoing
management of your portfolio and financial plans.
First in Indian mutual fund industry to offer a complete business platform to advisors.
PRODUCT ON OFFER TO PARTNERS
* mutual fund – All AMCs,All Schemes.
*Company fixed diposits.
*Real Estate.
2. VISION & MISSION OF NJ India invest:-
Vision
To be the leader in our field of business through,

➢ Total Customer Satisfaction

2010
➢ Commitment to Excellence
➢ Determination to Succeed with strict adherence to compliance
➢ Successful Wealth Creation of our Customers
Mission
Ensure creation of the desired value for our customers, employees and associates, through
constant improvement, innovation and commitment to service & quality. To provide solutions which
meet expectations and maintain high professional & ethical standards along with the adherence to
the service commitments
3. PHILOSOPHY:-
At NJ our Service and Investing philosophy inspire and shape the thoughts, beliefs, attitude,
actions and decisions of our employees. If NJ would resemble a body, our philosophy would be our
spirit which drives our body.
Service Philosophy:
Our primary measure of success is customer satisfaction … We are committed to provide our
customers with continuous, long-term improvements and value-additions to meet the needs in an
exceptional way. In our efforts to consistently deliver the best service possible to our customers, all
employees of NJ will make every effort to:
think of the customer first, take responsibility, and make prompt service to the customer a
priority

2010
deliver upon the commitments & promises made on time
anticipate, visualize, understand, meet, exceed our customer’s needs
bring energy, passion & excellence in everything we do.
be honest and ethical, in action & attitude, and keep the customer’s interest supreme
strengthen customer relationships by providing service in a thoughtful & proactive

manner and meet the expectations, effectively.
Investing Philosophy:
We aim to provide Need-based solutions for long-term wealth creation We aim to provide all
customers of NJ, directly or indirectly, with true, unbiased, need-based solutions and advice that best
meets their stated & un-stated needs. In our efforts to provide quality financial & investment advice,
we believe that
Clients want need-based solutions, which fits them

Long-term wealth creation is simple and straight
Asset-Allocation is the ideal & the best way for long-term wealth creation
Educating and disclosing all the important facets which the customer needs to be aware
of, is important
The solutions must be unbiased, feasible, practical, executable, measurable and flexible
Constant monitoring and proper after-sales service is critical to complete the ongoing
process.
At NJ our aim is to earn the trust and respect of the employees, customers, partners, regulators,
2010
industry members and the community at large by following our service and investing
philosophy with commitment and without exceptions.
4. MANAGEMENT:-
The management at NJ brings together a team of people with wide experience and knowledge in the
financial services domain. The management provides direction and guidance to the whole
organisation. The management has strong visions for NJ as a globally respected company
providing comprehensive services in financial sector.
The 'Customer First' philosophy in deeply ingrained in the management at NJ. The aim of the
management is to bring the best to the customers in terms of -
Range of products and services offered
Quality Customer Service

All the key members of the organisation put in great focus on the processes & systems under the
diverse functions of business. The management also focuses on utilizing technology as the key
enabler for all the activities and to leverage the technology for enhancing overall customer
experience.

2010
The key members of the management are:
Mr. Neeraj Choksi Jt. Managing Director

Mr. Jignesh Desai Jt. Managing Director
Key Sales Team:

Mr. Misbah Baxamusa National Head
Mr. Naveen Rathod V.P. (Sales)
Mr. Kulbhushan Nandwani A.V.P. (Marketing
Mr. Prashant Kakkad A.V.P. (Sales)
Key Executive Team :

Mr. Shirish Patel Information Technology
Mr. Abhishek Dubey Business Process
Mr. Vinayak Rajput Operations
Mr. Dhaval Desai Human Resources
Mr. Col. Dixit Administration
Mr. Tejas Soni Finance
Mr. Viral Shah Research
Mr. Rakesh Tokarkar Compliance

2010
5. People & culture:-
People:
Enthusiasm, Enterprise, Education and Ethics form the four pillars at NJ. At NJ one can
witness the vibrant energy, enthusiasm and the enterprising drive to excel flowing freely
throughout the organization. At NJ can also experience the creativity, one-to-one
responsiveness, collaborative approach and passion for delivering value.
At NJ people evolve to be more effective, efficient, and result oriented. Knowledge is inherent
due to the education-centric approach and the experience in handling different clients groups
across diverse product profiles.
NJ understands that the people are the most important assets of the company and it is not the
company that grows but the people. NJ hence undertakes rigorous training and educational
activities for enhancing the entire team at NJ . NJ also believes in the ‘Learning through
Responsibility’ concept for its employees.
For people at NJ success is not a new word, but is a regular stepping - stone to
realizing the one vision that everyone shares.

2010
Culture
At NJ we believe in transforming the lives of our customers. We exist to create a difference a

change towards a better life. The culture at NJ reflects this responsibility, this dream of transforming
lives. And we at NJ are always excited and enthused in doing so. We believe in keeping ‘You
First’, providing you with products and services that meet your stated and unstated needs. Client
satisfaction and client service is the Mantra we constantly recite. This service oriented philosophy
runs throughout the organization, from top to bottom.
Employees are given ample freedom in their work. The objective is to keep an open, healthy
environment with ample scope for enterprise, improvement, innovations and out-of-the box
solutions
Our efforts are constantly engaged in improving our existing services, offering new and
innovative solutions that go beyond your expectations. This focus has made us one of the most
respected and preferred service providers, especially in the mutual fund industry.

2010
6. SERVICE STANDARDS:-
Service in words, service in action
Service is the key to unlocking customer satisfaction, which again is key for
sustainability Business. At NJ we understand this very well. NJ has set strict processes
in place to delivered service to customers. AT NJ strict quality service standards are set and a
well defined established and followed religiously by our quality customer service team.
Performance evaluated on a frequent basis and glitches are iron out.
But quality service also involves quality people in addition to processes. NJ gives
Significant the proper training and development of the people involved in the service
delivery chain.

2010
Further We:
Have well-defined “Privacy Policy” to keep clients information confidential & internal done
on the same at regular intervals.
Receive various statistics which are analyzed on an ongoing basis To improve the
standards.
We are committed to improve and enhance our services and undertake new Services
initiative and other services differentiate us with other services providers in the industry.
Our service commitment…..
he service commitments are to guide the actions of the people at NJ. Clearly stated Customers
can freely communicate any such action /events wherein they feel that any Of the commitments
have been breached/ compromised . At NJ we desire to honors Our commitments all points of the
time and to all our customers without any bias.
➢ To provide customer-focused need-based valued services.

➢ To provide reliable, accurate and timely information.
➢ To maintain all records in privacy.
➢ To develop and grow the customers business.
➢ To provide constructive after sales service.
➢ To honour our service commitments.
As NJ Wealth Advisor’s Global Private Client, you get

comprehensive set of services that ensure you stay informed, insightful, in command, of your
investments at all times.
2010
7. PRODUCTS:-
Life Vista
Life is counted not in years, but in moments. Moments of truth, joy, achievement and
satisfaction. Of peace, tranquillity, and freedom. At NJ, we bring such moments to life.
How we can help you?
We will do a detailed study of your goals and objectives in life and would help you by devising a
comprehensive plan to help you achieve them. We would also regularly monitor your plans to make
sure that you are always on track to achieve your goals.
Asset Vista Wealth is not an end. Neither is it a beginning. Wealth is a process, a journey. A
journey of power, achievement and responsibility .
At NJ we ensure that this journey continues and grows.
w we can help you? We will seek to manage and monitor your portfolio as per your objectives and
your risk profile. We would manage your portfolio the Asset Allocation way which is the most
effective & ideal way to manage investments. You would also have access to consolidated portfolio
reports that enable you to see all your investments into multiple avenues at a single place.
8. SERVICES PROVIDED TO CLIENT:-
As NJ Wealth Advisor’s Global Private Client, you get comprehensive set of services that ensure
you stay informed, insightful, in command, of your investments at all times.
2010
comprehensive Financial Planning:- We all have many responsibilities and goals in our lives. We
have dreams and aspirations for a better future. But quite often we are not sure as to how we will
fulfill these goals and aspirations. Life changes over time. We may never be sure what today holds
for us tomorrow. What if something goes wrong? How do we make sure that we get what we wish?
A comprehensive Financial Plan is what you need. At NJ Wealth Advisors we offer you with
Comprehensive Financial Planning solutions which would involve …
A detailed study of your goals

Preparation of a comprehensive Financial Plan
Monitoring of the Financial Plan on an on-going basis

2010
At NJ Wealth Advisors we offer you with comprehensive Financial Planning Services under the
product – Life Vista.

2010
Quality Portfolio Advisory:- Making money is easy. Managing money is difficult. And managing
money in today’s complex financial markets with multiple products on an ongoing basis becomes even
more difficult.
As investors we often may feel the lack of time and energy to undertake monitoring and
managing of our investments in multiple avenues. This requires both dedicated efforts and skills in
portfolio management.
At NJ Wealth Advisors we realize the need for quality, unbiased portfolio advisory services. At NJ
we would aim to manage your portfolio with a superior, time tested and much effective way of Asset
Allocation keeping in mind your risk profile.
At NJ Wealth Advisors we offer you with quality Portfolio Advisory Services under the product
– Asset Vista.
Consolidated Reporting:-
Quality online Wealth Account:
As a premium client you would have access to one of the best online investment accounts that
offer comprehensive reports, many of which are unique in nature and give valuable insights on our
investments
Our online Wealth Account covers almost all the investment avenues that you may have:
Mutual Funds – All AMCs, All Schemes
Direct Equity
Life Insurance
Physical Assets – Gold and Property

2010
Private Equity – Business
Debt Products
➢ Bank Deposits and Company Deposits

➢ RBI / Infrastructure Bonds
➢ Postal Savings – KVP, MIS, NSC
➢ Debentures
➢ Small Savings – PPF, NSS

2010
QUALITY CUSTOMER SERVISE
NJ realizes the true importance of quality customer service. The service commitments are to guide the
actions taken at NJ. Clearly stated, customers can freely communicate any such actions/events wherein they
feel that the following commitments have been breached. At NJ we desire to honour our commitments at
all points of time and to all customers without any bias.
Quality Service:
Highlights-
You will receive regular portfolio reports in hard copies to serve as record
All records are maintained for the plans and recommendations and minutes of all the meetings
are kept.
Dedicated Account Manager directly oversees the operational support to your Quality.
Advisory.
True, unbiased recommendations.
Each plan is unique in nature to suit your needs and profile.
Defined Process followed in investment consultancy / portfolio management.
All the plans are prepared and/or approved in line with the set process by Chief

2010
Portfolio Manager with inputs from the Research Team.
Quality Communications support:
Daily market update Email

Daily MF tracker-for sort term debt fund Email
Weekly performance report Email/ Hard
copy Comprehensive monthly fact sheet Hardcopy
Research articles and reports Email / Hardcopy

2010
9. 360° – ADVISORY PLATFORM:-

2010
With this philosophy, we try to offer all possible products, services and support which an
Advisor would need in his business.
The support functions are generally in the following areas …
Business Planning and Strategy

Training and Development – Self and of employees
Products and Service Offerings
Business Branding
Marketing
Sales and Development
Technology
Advisors Resources - Tools, Calculators, etc..
Research
Communications With this comprehensive supporting platform, the NJ Fundz Partners stays
ahead of the curve in each respect compared to other Advisors/competitors in the market.
Recognitions
Some of the awards & recognitions that we have received in past …
Year 2000:
For Outstanding Performance presented by Chairman, Prudential Plc. at London.
Year 2002:
For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London.

2010
Year 2003:
For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London.
Year 2004:
Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh,
Scotland.
Year 2004:
For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia.
Year 2006:
Award for mobilizing the Highest Number of SIPs at National Level by Fidelity Mutual
Fund Plc at Mumbai.
Year 2006: Award –

Vietnam

2010
12. WHY INSURANCE AGENTS SHOULD SELL MUTUAL FUND?
Reason 1: Easy to make more clients …
The Penetration of Mutual Funds is very low …
Whereas relatively,
The Penetration of Insurance is very high ….
Opportunity for you to acquire more clients …
Now no call of yours should get waste
Reason 2: Low competition of mutual fund advisor
Lack of competition represents a very big opportunity to grow your business anywhere in India.

2010
> 22 Lacs Insurance Advisors
V/S
< 70,000 Mutual Fund Advisors
(Very Few Financial Advisors)
(>35 Insurance Advisors V/s 1 Mutual Fund Advisor)
A huge DEMAND of Quality Mutual Fund Agents …
There is a genuine need for more than 2 lakh mutual fund advisors in India
…(our estimates)
Reason 3: More satisfaction to your clients
If you are not selling mutual funds then you must not be aware of what they truly are
and the possibilities that they offer in providing solutions that meet the diverse needs of different
clients.
With mutual funds in your offering, you are in a much better position to fully meet the
client’s financial and investment needs.

2010
Your client would ideally like you to do that and will be happy once to offer him
multiple solutions.
Reason 4: Additional source of income
Mutual fund is one product today that potentially has no limits to the volumes that you can
generate.
The important differentiation here with insurance is that you income is not based on
the premium you collect but on the entire AUM (assets under management) that
you have mobilized to counter the low rates.
An agent’s AUM running into crores in quite common in the industry. The income
Form mutual funds can complement your earnings from insurance and may even substitute
them in future …
Reason 5: Leveraging existing clientele base
How to get more out of what you already have?
Well, mutual fund is just the perfect answer to that question.

The truth is that there is a lot of potential to generate further income from
2010
your existing clientele base.
Much of the investment needs of clients are unexplored and unfulfilled that you can
satisfy.
Reason 6: Strong industry growth ahead
There is a very strong growth of mutual funds ahead …

The reasons are many – good product, low penetration, huge
market, growing income, changing mindset, lack of other attractive
investment products, etc.
In US, almost every third household invests in mutual funds.

The US MF industry size is about 67% of the US GDP and is 1.5 times of the bank
deposits in US.
The situation is though almost opposite in India with the MF industry size here equal to
6% of GDP and bank deposits are 10.50 times of the total industry size.
The potential is huge and India is expected to follow in on the lines of the more developed
countries.

2010
Reason 7: Retention and loyalty of clients
The underlying logic can be found in the growth of multiplexes, shopping malls, after all
the human nature is basically the same …
People today look for easy, fast, and single service point that provides them with
solutions that meets their multiple needs.
your client would probably invest in mutual funds some day or later …
Why not you do the same before anyone else gets to your client?

2010
Reason 8: Greater choice of products
Till now we haven’t really talked about what choices you can offer to your clients … In fact,
you can offer cash-flow management, to long-term goal oriented planning to your clients.
Your basket would include pure equity funds (Diversified / Sectoral / Index Funds) to pure
debt funds (Gilt / Income / Short Term Plans / Floating / Liquid Funds) to hybrid funds (MIPs /
Balance / Arbitrage Funds) to the tax saving ELSS.
With a vast range of Fund houses and many more schemes – the choices are
virtually endless, and one is sure to find what one needs.
Reason 9: Be a Complete Financial Advisor …
What next to Insurance?
There is an opportunity for you to transcend to the next level and offer ‘real solutions’
that will truly add value to your clients.
You should develop yourself and grow more as a ‘Financial’ advisor rather than just
‘Insurance’ agent.
The learning can extend beyond products to markets, to equities, debt, economy, etc to
understanding real financial planning, funds management, etc

2010
Reason 10: Helps in selling ULIPs …
If your focus is also selling ULIPS then, dealing in mutual funds should also help you in
better understanding and helping communicate the same to your clients.
It is a general observation in western countries that as an economy progresses, term plans
and ULIPs have increasing % of fresh investments from clients as far as insurance is considered.
Your presence in mutual funds would be an advantage to you going forward.
Reason 11: Market potential of mutual funds.
Low Penetration of Mutual Funds in INDIA
Few people have been exposed to the idea & advantages of mutual funds and even fewer
actually invest in mutual funds, because of lack of adequate no. of advisors
Opportunity to offer such products to clients …
Every person can be a customer!!

2010
Reason12 : EXCELLENT PAST PERFORMANCE
Mutual Fund Equity schemes have delivered very attractive returns in last 5 years, giving over
51% returns annually
Opportunity for you to offer your clients with such equity- related products for long-term
wealth creation

2010
13. RESEARCH METHODLOGY.
OBJECTIVE OF STUDY
1. Understanding Mutual Funds
2. Understanding Market Potential of Mutual funds.
3. Understanding the awareness of mutual fund in rural &semi urban region.
4. Understanding how mutual fund better than other financial product.
METHOD OF STUDY-
Data collection:-
1. Primary data
2. Secondary data:- Book , Internet, Magazines
NOTE:-Data for the study was collected by the survey method with the accessories
questionnaire Keeping in mind the objectives. The primary data was for attaining the objective
while the Secondary data were used to write the literature & get the information.
Primary data
Primary data can be obtained through direct communication with respondents or through
personal interaction. There are several method of collecting primary data through survey &
descriptive research. I have used questioner from as for collecting primary data. Which have been

2010
very helpful for me to analyze the exact market potential of and awareness of mutual fund and mutual
fund advisors.
Secondary data:
Secondary data means, the data has already collected and analyzed by someone else. Various
sources of secondary data are as follow……
Books
Magazines
Internet
Newspaper
Reports
Projects etc
Data sources
The study is based on primary data only. For this, A questionnaire was prepared consisting of both
open and closed ended questions. Answers are collected by personal interview with the insurance
advisors of different insurance company by formal and informal talks.
Sample size :
The sample size of my project was limited to 200 people only
Limitation of the study:
Due the constraints, survey was conducted at Modasa & Bayad in Himmatnagar branch. So result
can’t represent the whole market.

2010
14. ANALYSIS OF SURVEY

1. Being a financial advisor, how many years of experience you are having?
Less than 1 year ( ) 1 to 3 years ( )
3 to 5 years ( ) 5 to 10 years ( )
More than 10 year ( )
Percentage (%)
Less than 1 year 15%
1 to 3 years 20%
3 to 5 years 45%
5 to 10 years 05%
More than 10 year 15%

2010
2. In Which Financial Segment you are working?
Mutual Fund [ ] Insurance [ ]
Equity [ ] Post [ ]
Tax advisor [ ] others [ ]
LIC [ ]
Percentage (%)
Mutual Fund 3%
Insurance 25%
Equity 30%
Post 10%
Tax advisor 1.5%
LIC 11%
Others 19.5%

2010
3. Are you aware about Mutual Fund?
Yes [ ] No. [ ]
Percentage (%)
Yes 17%
No 83%
17%
Yes
No
83%

2010
4. Are you agree about mf easy way to earn compare to other?
Yes [ ] No. [ ]
Percentage (%)
Yes 14%
No 86%

2010
5. If yes, then why?
Tex benefits [ ] More Trustable [ ]
Easy to convey [ ] Good schemes [ ]
More returns [ ] Less competitors [ ]
Percentage (%)
Tex benefits 12.5%
More Trustable 7.5%
Easy to convey 17.5%
Good schemes 12.5%
More returns 15%
Less competitors 35%

2010
6. If No, then why? What your expectation?
Because public don’t know about mutual fund.

Because it’s Depend upon Stock Market Index & Market have no Guaranty
7. Have you passed out the AMFI exam?

Yes [ ] No. [ ]
Percentage (%)
Yes 06%
No 94%
6%
Yes
No
94%

2010
8. Would you like to give AMFI exam?
Yes [ ] No. [ ]
Percentage (%)
Yes 11%
No 89%

2010
9.Would you like to joint N.J funds network?
Yes [ ] No [ ]
Percentage (%)
Yes 10%
No 90%
10. If no, please give reason?
Advisor have no time for new business.
It’s More expensive.
People don’t want to leave current segmentation.

2010
15. SUMMARY OF FINDING
• It was found that awareness of mutual fund among other financial in semi-urban area is very
low.
• Advisors haven’t knowledge about mutual fund & they have misconception that in mutual
fund They is only related to equity market.
• It found that customer are prefer safe financial product in Modasa & Bayad. They do not take
risk.
• Semi urban people like only guarantee return financial product.
• Some of people interesting but they have bad experience because they was invested then market
gone down.
• Through this research it found than mostly youth insurance advisor interested
become mutual fund advisor and want to add up a new product in their selling
basket
• LIC agents were not ready to sell “Mutual fund” because Return have guaranteed in LIC.
• They were considered and ready to come to meeting or BOP program for becoming mutual fund
advisor..

2010
16. SUGGESTIONS
Most leads complain about its fees that are Rs.

8000/Rs.6900. they said that it is too much amount to complete AMFI exam
and become NJ partner. I know it is nothing in spite of our company gives them.
Consideration can be made to reduce the fee to stop de motivating from taking
our services.
NJ has almost 25% market stake of mutual fund advisor

(almost 14500 MF advisors are partner of NJ. whereas total MF advisors are
70,000 in India.) but NJ is lacking somewhere in its marketing. NJ needs to
advertise its brand to gain the image of a mutual fund distributer in the minds of
insurance advisors who are more concern with RR and other mutual fund
distributors.
NJ Fundz should give AMFI exam material in Gujarati to increase the ratio of advisors of NJ
IndiaInvest Pvt. Ltd.

2010
17. CONCLUSION
1. Advisory Point Of View::
• Fees are more than other competitor in NJ Fundz Network.
• Now, Entry load is zero because of that Advisors are not interesting in mutual fund.
• Advisor cannot take private from investor because they are relative & friend.
• People do not know better English in Semi Urban region.
2 Investor Point Of View::

• Investors have no more time for daily seen the equity market because they are
investing in Mutual Fund.
• Low transaction for mutual fund.
• Investors money is diversify in different company.
• Mutual funds have risk because it depends on equity market.

2010
18. Bibliography
Website-
http://www.njindiainvest.com
http://www.moneycontrol.com
http://www.amfiindia.com
http://www.indiainfoline.com
http://www.equityresearch.com
http://www.valueresearchonline.com
http://www.rediffmoney.com
http://www.bseindia.com
http://www.nseindia.com
http://www.investopedia.com
http://www.theeconomoctimes.com
Book::-
Friedman, A.G. (1992) 'How Mutual Fund Works' - Management &
Working.

2010
19.ANNEXURE: QUESTIONNAIRE
I, Student of Masters of Business Administration am conducting a research for the purpose of
knowing the “SCOPE FOR MUTUAL FUND ADVISIORY BUSINESS IN MODASA &
BAYAD”. Here with I assure you that data given by you will be used only for research purpose.
Personal Details:-
• Name:-__________________________________________________________
• Mobile no.:-_______________________________________________________
• Email:-___________________________________________________________
• Qualification :
S.S.C [ ] H.S.C [ ]
GRADUATION [ ] POSTGRADUATIO [ ]
1. Being a financial advisor, how many years of experience you are having?
Less than 1 year ( ) 1 to 3 years ( )
3 to 5 years ( ) 5 to 10 years ( )
More than 10 year ( )
2. In Which Financial Segment you are working?
Mutual Fund [ ] Insurance [ ]
Equity [ ] Post [ ]
Tax advisor [ ] others [ ]
LIC [ ]

2010
3. Are you aware about Mutual Fund?
Yes [ ] No. [ ]
4. Are you agree about mf easy way to earn compare to other?
Yes [ ] No. [ ]
5. If yes, then why?
Tex benefits [ ] More Trustable [ ]
Easy to convey [ ] Good schemes [ ]
More returns [ ] Less competitors [ ]
6. If No, then why? What your expectation?
_________________________________________________________________
7. Have you passed out the AMFI exam?
Yes [ ] No. [ ]
8. Would you like to give AMFI exam?
Yes [ ] No. [ ]
9. Would you like to joint N.J funds network?
Yes [ ] No [ ]
10. If no, please give reason?
__________________________________________________________________
Thank You

AJ NJ Mutual Fund

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

AJ NJ Mutual Fund

Transféré par

Droits d'auteur :

Formats disponibles

A

SUMMER TRAINING REPORT

IN PARTIAL FULFILLMENT OF THE REQUIREMENT

The prosperity, development and success of any country depend upon

As a part of practical management, project work is very essential as it gives

Practical study also develops my attitude towards business environment &

The beginning of this study is carried by “Market Research”. And in this

 It also includes the enhancement of mutual fund investing, investors &

1 Well come to NJ IndiaInvest Pvt. Ltd 1

3. History Of Indian mutual fund Industry 5

4 Growth In Assets Under Management 8

5 Mutual Fund Structure 10

6 Types Of Mutual Fund 15

7 Advantages Of Mutual Fund 23

8 Disadvantages Of Mutual Fund 25

9. Risk Involved In Mutual Fund 28

10 Factor Affecting Mutual Fund 33

2.Vision & Mission Of NJ IindiaInvest Pvt. Ltd. 43

5.People & Culture 48

12 Why Insurance Agent Should Sell Mutual Fund 62

1. WELL-COME TO NJ INDIAINVEST PVT. LTD.

Grow More Faculty Of Management Study, Himmatnagar Page 1

Grow More Faculty Of Management Study, Himmatnagar Page 2

Grow More Faculty Of Management Study, Himmatnagar Page 3

Grow More Faculty Of Management Study, Himmatnagar Page 4

3. HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

Grow More Faculty Of Management Study, Himmatnagar Page 5

First Phase: 1964-1987

Second Phase: 1987-1993

Grow More Faculty Of Management Study, Himmatnagar Page 6

Third Phase: 1993-2003

Fourth Phase – Since February 2003

Grow More Faculty Of Management Study, Himmatnagar Page 7

4. GROWTH IN ASSETS UNDER MANAGEMENT

Grow More Faculty Of Management Study, Himmatnagar Page 8

Grow More Faculty Of Management Study, Himmatnagar Page 9

5 .MUTUAL FUND STRUCTURE

The Structure Consists

Grow More Faculty Of Management Study, Himmatnagar Page 10

Grow More Faculty Of Management Study, Himmatnagar Page 11

➢ Receipt and delivery of securities

➢ Holding and processing cost

➢ Corporate actions etc

Grow More Faculty Of Management Study, Himmatnagar Page 12

RATE OF RETURN ON MUTUAL FUNDS:-

An investor in mutual fund earns return from two sources:

➢ Income from dividend paid by the mutual fund.

Formation and regulations:

➢ AMC’s shall have a minimum Net worth of Rs. 5 crores;

Grow More Faculty Of Management Study, Himmatnagar Page 13

➢ All schemes floated by Mutual funds are to be registered with SEBI

Grow More Faculty Of Management Study, Himmatnagar Page 14

6. TYPES OF MUTUAL FUND

Grow More Faculty Of Management Study, Himmatnagar Page 15

Schemes according to maturity period : -

Open ended fund/scheme:

Close ended Fund/scheme:

Grow More Faculty Of Management Study, Himmatnagar Page 16

Schemes according to investment objective:

Grow More Faculty Of Management Study, Himmatnagar Page 17

Grow More Faculty Of Management Study, Himmatnagar Page 18

Mutual Fund Equity schemes have delivered very attractive returns

Debt funds are further classified as: