Académique Documents
Professionnel Documents
Culture Documents
CERTIFICATE
This is to certify that Mr. Devabrata Patra a student of Reformers Business School, Indore
has completed project work on “Performance of Mutual Funds and its Awareness among
I certify that this is an original work and has not been copied from any source.
Signature of Guide
Date-
Page |2
ACKNOWLEDGEMENT
With regard to my Project with Mutual Fund I would like to thank each and every one
“Performance of Mutual Funds and its Awareness among the Patrons in the
And lastly, I would like to express my gratefulness to my parent’s for being the torch
in my life.
DEVABRATA PATRA
Page |3
Objectives and
Research Methodology
Page |4
The objective of the research is to study and analyze the awareness level of investors of
mutual funds.
To measure the satisfaction level of investors regarding mutual funds.
An attempt has been made to measure various variable’s playing in the minds of investors in
terms of safety, liquidity, service, returns, and tax saving.
To get insight knowledge about mutual funds
Understanding the different ratios & portfolios so as to tell the distributors about these terms,
by this, managing the relationship with the distributors
To analyze the comparative study between other leading mutual funds in the present market.
Finding out ways and means to improve on the services by Anand Rathi.
Page |5
RESEARCH METHODOLOGY
My research project has a specified framework for collecting the data in an effective manner. Such
framework is called “RESEARCH DESIGN”. The research process which was followed by me
consisted following steps.
A. PROBLEM:
The problem at hand was to study and measure the awareness level of people regarding mutual funds
in the city.
2. RESEARCH INSTRUMENT
A close friend questionnaire was constructed for my survey. Questionnaire consisting of a set of
questions made to be filled by various respondents.
3. SAMPLING PLAN
The sampling plan calls for three decisions.
a) Sampling Unit: I have completed my survey in Banjara Hills, Hyderabad.
Page |6
b) Sample Size: The sample consisted of 100 respondents. The sample was drawn from walk in
customers of Anand Rathi Financial Services Ltd. The selection of the respondents was done
on the basis of simple random sampling.
c) Contact Methods
I have contacted the respondents through personal interviews.
E. PRESENTATIONS OF FINDINGS
This was the last step of the survey.
Page |7
SUMMARY
In few years Mutual Fund has emerged as a tool for ensuring one’s financial well
being. Mutual Funds have not only contributed to the India growth story but have also
helped families tap into the success of Indian Industry. As information and awareness
is rising more and more people are enjoying the benefits of investing in mutual funds.
The main reason the number of retail mutual fund investors remains small is that nine
in ten people with incomes in India do not know that mutual funds exist. But once
people are aware of mutual fund investment opportunities, the number who decide to
invest in mutual funds increases to as many as one in five people. The trick for
customer is to understand which of the potential investors are more likely to buy
mutual funds and to use the right arguments in the sales process that customers will
This Project gave me a great learning experience and at the same time it gave me
enough scope to implement my analytical ability. The analysis and advice presented
in this Project Report is based on market research on the saving and investment
practices of the investors and preferences of the investors for investment in Mutual
Funds. This Report will help to know about the investors’ Preferences in Mutual Fund
means Are they prefer any particular Asset Management Company (AMC), Which
type of Product they prefer, Which Option (Growth or Dividend) they prefer or
Page |8
Which Investment Strategy they follow (Systematic Investment Plan or One time
The first part gives an insight about Mutual Fund and its various aspects, the
Company Profile, Objectives of the study, Research Methodology. One can have a
brief knowledge about Mutual Fund and its basics through the Project.
The second part of the Project consists of data and its analysis collected through
survey done on 100 people. For the collection of Primary data I made a questionnaire
and surveyed of 100 people. I also taken interview of many People those who were
Mutual Funds and its awareness among the Patrons in the Present Market” The
data collected has been well organized and presented. I hope the research findings and
Company Profile
P a g e | 10
ANAND RATHI
ORGANIZATION HISTORY
• Company Profile
• Milestones
• AR Core Strengths
• Management Team
Anand Rathi (AR) is a leading full service securities firm providing the entire gamut of financial
services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan India presence as well as
an international presence through offices in Dubai and Bangkok. AR provides a breadth of financial
and advisory services including wealth management, investment banking, corporate advisory,
brokerage & distribution of equities, commodities, mutual funds and insurance, structured products -
all of which are supported by powerful research teams.
The firm's philosophy is entirely client centric, with a clear focus on providing long term value
addition to clients, while maintaining the highest standards of excellence, ethics and professionalism.
The entire firm activities are divided across distinct client groups: Individuals, Private Clients,
Corporate and Institutions and was recently ranked by Asia Money 2006 poll amongst South Asia's
top 5 wealth managers for the ultra-rich.
In year 2007 Citigroup Venture Capital International joined the group as a financial partner.
P a g e | 11
Anand Rathi provides end-to-end equity solutions to institutional and individual investors. Consistent delivery of
high quality advice on individual stocks, sector trends and investment strategy has established us a competent and
reliable research unit across the country.
Clients can trade through us online on BSE and NSE for both equities and derivatives. They are supported by
dedicated sales & trading teams in our trading desks across the country. Research and investment ideas can be
accessed by clients either through their designated dealers, email, web or SMS
Milestones
1994:
1995:
1997:
1999:
2001:
2002:
2003:
2004:
Institutional equities business re-launched and senior research team put in place
2005:
2006:
AR Middle East, WOS acquires membership of Dubai Gold & Commodity Exchange (DGCX)
Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money 2006 poll
Ranked 6th in FY2006 for All India Broker Performance in equity distribution in the High Net worth Individuals
(HNI) Category
Ranked 9th in the Retail Category having more than 5% market share
Completes its presence in all States across the country with offices at 300+ locations within India
AR Core Strengths
Breadth of Services
In line with its client-centric philosophy, the firm offers to its clients the entire spectrum of financial services
ranging from brokerage services in equities and commodities, distribution of mutual funds, IPO’s and insurance
products, real estate, investment banking, merger and acquisitions, corporate finance and corporate advisory.
Clients deal with a relationship manager who leverages and brings together the product specialists from across the
firm to create an optimum solution to the client needs.
P a g e | 14
Management Team
AR brings together a highly professional core management team that comprises of individuals with extensive
business as well as industry experience.
In-Depth Research
Our research expertise is at the core of the value proposition that we offer to our clients. Research teams across the
firm continuously track various markets and products. The aim is however common - to go far deeper than others,
to deliver incisive insights and ideas and be accountable for results.
Management Team
The senior Management comprises a diverse talent pool that brings together rich experience from
across industry as well as financial services.
ACQUISITION:
Standard Chartered PLC is listed on both the London Stock Exchange and the Stock Exchange of
Hong Kong and is in the top 25 FTSE-100 companies, by market capitalization. Top 100 companies
list, no other bank present except Bank of America’s position 69th and position of standard chartered
bank is 74th.
Offices of ANANDRATHI are in 197 cities across 28 states & it has also branches in Dubai &
Bangkok with more than 44000 employees. It has daily turnover in excess of Rs.4bn. It has 1,
00,000+ clients nationwide. It is also leading distributor of IPO’s.
Andhra Pradesh
Assam
Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
P a g e | 16
Tamil Nadu
Uttar Pradesh
Uttaranchal
West Bengal
LIST OF PRODUCTS:
Demat Accounts
Mutual Funds
Derivatives
Commodities
Bonds
Trading Account
Insurance
P a g e | 17
MISSION
VISION
Introduction of Study
P a g e | 19
INTRODUCTION
What is a Mutual fund?
Mutual fund is an investment company that pools money from shareholders and invests in a variety
of securities, such as stocks, bonds and money market instruments. Most open-end Mutual funds
stand ready to buy back (redeem) its shares at their current net asset value, which depends on the
total market value of the fund's investment portfolio at the time of redemption. Most open-end
Mutual funds continuously offer new shares to investors. Also known as an open-end investment
company, to differentiate it from a closed-end investment company. Mutual funds invest pooled cash
of many investors to meet the fund's stated investment objective. Mutual funds stand ready to sell
and redeem their shares at any time at the fund's current net
Asset value: total fund assets divided by shares outstanding.
In Simple Words, 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 across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the
same direction in the same proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of Mutual funds are known as unit
holders. The profits or losses are shared by the investors in proportion to their investments. The
Mutual funds normally come out with a number of schemes with different investment objectives
which are launched from time to time. In India, A Mutual fund is required to be registered with
P a g e | 20
Securities and Exchange Board of India (SEBI) which regulates securities markets before it can
collect funds from the public. In Short, a Mutual fund is a common pool of money in to which
investors with common investment objective place their contributions that are to be invested in
accordance with the stated investment objective of the scheme. The investment manager would
invest the money collected from the investor in to assets that are defined/ permitted by the stated
objective of the scheme. For example, an equity fund would invest equity and equity related
instruments and a debt fund would invest in bonds, debentures, gilts etc. Mutual fund is a 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.
• Professional Management.
The major advantage of investing in a mutual fund is that you get a professional money
manager to manage your investments for a small fee. You can leave the investment decisions
to him and only have to monitor the performance of the fund at regular intervals.
• Diversification.
Considered the essential tool in risk management, mutual funds make it possible for even
small investors to diversify their portfolio. A mutual fund can effectively diversify its
portfolio because of the large corpus. However, a small investor cannot have a well-
diversified portfolio because it calls for large investment. For example, a modest portfolio of
10 bluechip stocks calls for a few a few thousands.
• Convenient Administration.
Mutual funds offer tailor-made solutions like systematic investment plans and systematic
withdrawal plans to investors, which is very convenient to investors. Investors also do not
have to worry about investment decisions; they do not have to deal with brokerage or
depository, etc. for buying or selling of securities. Mutual funds also offer specialized
schemes like retirement plans, children’s plans, industry specific schemes, etc. to suit
personal preference of investors. These schemes also help small investors with asset
allocation of their corpus. It also saves a lot of paper work.
• Costs Effectiveness
A small investor will find that the mutual fund route is a cost-effective method (the AMC fee
is normally 2.5%) and it also saves a lot of transaction cost as mutual funds get concession
from brokerages. Also, the investor gets the service of a financial professional for a very
small fee. If he were to seek a financial advisor's help directly, he will end up paying
significantly more for investment advice. Also, he will need to have a sizeable corpus to offer
for investment management to be eligible for an investment adviser’s services.
P a g e | 22
• Liquidity.
You can liquidate your investments within 3 to 5 working days (mutual funds dispatch
redemption cheques speedily and also offer direct credit facility into your bank account i.e.
Electronic Clearing Services).
• Transparency.
Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on a
regular basis. They also send quarterly newsletters, which give details of the portfolio,
performance of schemes against various benchmarks, etc. They are also well regulated and
Sebi monitors their actions closely.
• Tax benefits.
You do not have to pay any taxes on dividends issued by mutual funds. You also have the
advantage of capital gains taxation. Tax-saving schemes and pension schemes give you the
added advantage of benefits under section 88.(ELSS)
• Affordability
Mutual funds allow you to invest small sums. For instance, if you want to buy a portfolio of
blue chips of modest size, you should at least have a few lakhs of rupees. A mutual fund
gives you the same portfolio for meager investment of Rs.1,000-5,000. A mutual fund can do
that because it collects money from many people and it has a large corpus.
P a g e | 23
• Professional Management- Did you notice how we qualified the advantage of professional
management with the word "theoretically"? Many investors debate over whether or not the
so-called professionals are any better than you or I at picking stocks. Management is by no
means infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll
talk about this in detail in a later section.
• Costs - Mutual funds don't exist solely to make your life easier--all funds are in it for a profit.
The Mutual fund industry is masterful at burying costs under layers of jargon. These costs are
so complicated that in this tutorial we have devoted an entire section to the subject.
• Dilution - It's possible to have too much diversification (this is explained in our article
entitled "Are You Over-Diversified?"). Because funds have small holdings in so many
different companies, high returns from a few investments often don't make much difference
on the overall return. Dilution is also the result of a successful fund getting too big. When
money pours into funds that have had strong success, the manager often has trouble finding a
good investment for all the new money.
• Taxes - When making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gain tax
is triggered, which affects how profitable the individual is from the sale. It might have been
more advantageous for the individual to defer the capital gains liability.
Equity funds, if selected in the right manner and in the right proportion, have the ability to play an
important role in achieving most long-term objectives of investors in different segments. While the
selection process becomes much easier if you get advice from professionals, it is equally important
to know certain aspects of equity investing yourself to do justice to your hard earned money.
P a g e | 24
P a g e | 25
1. BY STRUCTURE
• Open – Ended Schemes.
• Close – Ended Schemes.
• Interval Schemes.
2. BY INVESTMENT OBJECTIVE
• Growth Schemes.
• Income Schemes.
• Balanced Schemes.
3. OTHER SCHEMES
• Tax Saving Schemes.
• Special Schemes.
Index Schemes.
Sector Specific Schemes.
sell units on the stock exchanges where they are listed. Unlike open-ended schemes, the unit capital
in closed-ended schemes usually remains unchanged. After an initial closed period, the scheme may
offer direct repurchase facility to the investors. Closed-ended schemes are usually more illiquid as
compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends
towards the NAV closer to the maturity date of the scheme.
3. INTERVAL SCHEMES
These schemes combine the features of open-ended and closed-ended schemes. They may be traded
on the stock exchange or may be open for sale or redemption during pre-determined intervals at
NAV based prices.
4. GROWTH SCHEMES
These schemes, also commonly called Equity Schemes, seek to invest a majority of their funds in
equities and a small portion in money market instruments. Such schemes have the potential to
deliver superior returns over the long term. However, because they invest in equities, these schemes
are exposed to fluctuations in value especially in the short term.
5. INCOME SCHEMES
These schemes, also commonly called Debt Schemes, invest in debt securities such as corporate
bonds, debentures and government securities. The prices of these schemes tend to be more stable
compared with equity schemes and most of the returns to the investors are generated through
dividends or steady capital appreciation. These schemes are ideal for conservative investors or those
not in a position to take higher equity risks, such as retired individuals. However, as compared to the
money market schemes they do have a higher price fluctuation risk and compared to a Gilt fund they
have a higher credit risk.
6. BALANCED SCHEMES
These schemes are commonly known as Hybrid schemes. These schemes invest in both equities as
well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of
income and moderate capital appreciation and are ideal for investors with a conservative, long-term
orientation.
P a g e | 27
8. INDEX SCHEMES
The primary purpose of an Index is to serve as a measure of the performance of the market as a
whole, or a specific sector of the market. An Index also serves as a relevant benchmark to evaluate
the performance of mutual funds. Some investors are interested in investing in the market in general
rather than investing in any specific fund. Such investors are happy to receive the returns posted by
the markets. As it is not practical to invest in each and every stock in the market in proportion to its
size, these investors are comfortable investing in a fund that they believe is a good representative of
the entire market. Index Funds are launched and managed for such investors.
If the complaints remain unresolved, the investors may approach SEBI for facilitating redressal of
their complaints. On receipt of complaints, SEBI takes up the matter with the concerned Mutual fund
and follows up with it regularly. Investors may send their complaints to:
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of
Unit Trust of India, functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the
erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management
and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund
Regulations, and with recent mergers taking place among different private sector funds, the
mutual fund industry has entered its current phase of consolidation and growth. As at the end of
September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.
WHAT IS THE PROCEDURE FOR REGISTERING A MUTUAL FUND WITH SEBI?
An applicant proposing to sponsor a Mutual fund in India must submit an application in Form A
along with a fee of Rs.25, 000. The application is examined and once the sponsor satisfies certain
conditions such as being in the financial services business and possessing positive net worth for
the last five years, having net profit in three out of the last five years and possessing the general
reputation of fairness and integrity in all business transactions, it is required to complete the
remaining formalities for setting up a Mutual fund. These include inter alia, executing the trust
deed and investment management agreement, setting up a trustee company/board of trustees
comprising two- thirds independent trustees, incorporating the asset management company
(AMC), contributing to at least 40% of the net worth of the AMC and appointing a custodian.
Upon satisfying these conditions, the registration certificate is issued subject to the payment of
registration fees of Rs.25.00 lakhs for details; see the SEBI (Mutual funds) Regulations, 1996.
EVALUATING PORTFOLIO PERFORMANCE
It is important to evaluate the performance of the portfolio on an ongoing basis. The following
factors are important in this process: Consider long-term track record rather than short-term
performance. It is important because long-term track record moderates the effects which
unusually good or bad short-term performance can have on a fund's track record. Besides,
longer-term track record compensates for the effects of a fund manager's particular investment
style. Evaluate the track record against similar funds. Success in managing a small or in a fund
focusing on a particular segment of the market cannot be relied upon as an evidence of
anticipated performance in managing a large or a broad based fund. Discipline in investment
approach is an important factor as the pressure to perform can make a fund manager susceptible
to have an urge to change tracks in terms of stock selection as well as investment strategy.
The objective should be to differentiate investment skill of the fund manager from luck and to
identify those funds with the greatest potential of future success.
Before you take a decision to invest in equity funds, it is important to assess your risk tolerance.
Risk tolerance depends on certain factors like emotional temperament, attitude and investment
experience. Remember, while ascertaining the risk tolerance, it is crucial to consider one's desire
to assume risk as the capacity to assume the risk. It helps to understand different categories of
overall risk tolerance, i.e. Conservative, moderate or aggressive. While a conservative investor
will accept lower returns to minimise price volatility, a moderate investor would be all right with
greater price volatility than conservative risk tolerances to pursue higher returns. An aggressive
investor wouldn't mind large swings in the NAV’s to seek the highest returns. Though
identifying the desire for risk is a tough job, it can be made easy by defining one's comfort zone.
2. Don't have too many schemes in your portfolio
While it is true that diversification helps in earning better returns with a lower level of
fluctuations, it becomes counterproductive when one has too many funds in the portfolio. For
example, if you have 15 funds in your portfolio, it does not necessarily mean that your portfolio
is adequately diversified. To determine the right level of diversification, one has to consider
factors like size of the portfolio, type of funds and allocation to different asset classes. Therefore,
it is possible that a portfolio having 5 schemes may be adequately diversified whereas another
one with 10 schemes may have very little diversification. Remember, to have a well-balanced
equity portfolio, it is important to have the right level of exposure to different segments of the
equity market like large cap, mid-cap and small cap. In addition, for a decent portfolio size, it is
all right to have some exposure in the sector and specialty funds.
As an equity fund investor, you need to understand that volatility is an integral part of the stock
market. However, if you remain focused on the long-term objectives and follow a disciplined
approach to investing, you can not only handle volatility properly but also turn it to your
advantage.
'Good performance' is a subjective thing. Ideally, to analyze performance, one should consider
returns as well as the risk taken to achieve those returns. Besides, consistency in terms of
performance as well as portfolio selection is another factor that should play an important part
While analyzing the performance. Therefore, if an investment in a Mutual fund scheme takes you
past your risk tolerance while providing you decent returns; it cannot always be termed as good
performance. In fact, at times to ensure that your investment remains within the parameters
defined in the investment plan, you may to be forced to exit from that scheme. In other words,
you need to assess as to how much risk did the fund manger subject you to, and did he give you
an adequate reward for taking that risk. Besides, you also need to consider whether own risk
profile allows you to accept the revised level of risk
There is no standard formula to determine the right time to sell an investment in Mutual fund or
for that matter any investment. However, you can definitely benefit by following certain
guidelines while deciding to sell an investment in a Mutual fund scheme. Here are some of them:
You may consider selling a fund when your investment plan calls for a sale rather than doing so
for emotional reasons. You need to hold a fund long enough to evaluate its performance over
a complete market cycle, i.e. around three years or so. Many of us make the mistake of either
holding on to funds for too long or exit in a hurry. It is important to do a thorough analysis
before taking a decision to sell. In other words, if you take a wrong decision, there is always a
risk of missing out on good rallies in the market or getting out too early thus missing out on
Potential gains. You should consider coming out of a fund if its performance has consistently
lagged its peers for a period of one year or so. It doesn't make sense to hold a fund when it no
longer meets your needs. If you have made a proper selection, you would generally be required
to make changes only if the fund changes its objective or investment style, or if your needs
change.
The choice between funds that have a diversified and a concentrated portfolio largely depends
upon your risk profile. As discussed earlier, a well - diversified portfolio helps in spreading the
investments across different sectors and segments of the market. The idea is that if one or more
stocks do badly, the portfolio won't be affected as much. At the same time, if one stock does very
well, the portfolio won't reap all the benefits. A diversified fund, therefore, is an ideal choice for
someone who is looking for steady returns over the longer term. A concentrated portfolio works
exactly in the opposite manner. While a fund with a concentrated portfolio has a better chance of
providing higher returns, it also increases your chances of underperforming or losing a large
portion of your portfolio in a market downturn. Thus, a concentrated portfolio is ideally suited
for those investors who have the capacity to shoulder higher risk in order to improve the chances
of getting better returns.
It is always a good idea to review your portfolio periodically. For example, you may begin
reviewing your portfolio on a half-yearly basis. Besides, you may be required to review your
portfolio in greater detail when your investments goals or financial circumstances change.
Any kind of investment we make is subject to risk. In fact we get return on our
investment purely and solely because at the very beginning we take the risk of parting
with our funds, for getting higher value back at a later date. Partition itself is a risk.
Well known economist and Nobel Prize recipient William Sharpe tried to segregate the
total risk faced in any kind of investment into two parts - systematic (Systemic) risk and
unsystematic (Unsystemic) risk.
Systematic risk is that risk which exists in the system. Some of the biggest examples of
systematic risk are inflation, recession, war, political situation etc.
Inflation erodes returns generated from all investments e.g. If return from fixed deposit is
8 per cent and if inflation is 6 per cent then real rate of return from fixed deposit is
reduced by 6 per cent.
Similarly if returns generated from equity market is 18 per cent and inflation is still 6 per
cent then equity returns will be lesser by the rate of inflation. Since inflation exists in the
system there is no way one can stay away from the risk of inflation.
Economic cycles, war and political situations have effects on all forms of investments.
Also these exist in the system and there is no way to stay away from them. It is like
learning to walk.
Anyone who wants to learn to walk has to first fall; you cannot learn to walk without
falling. Similarly anyone who wants to invest has to first face systematic risk; there can
never make any kind of investment without systematic risk.
Another form of risk is unsystematic risk. This risk does not exist in the system and
hence is not applicable to all forms of investment. Unsystematic risk is associated with
particular form of investment.
Suppose we invest in stock market and the market falls, then only our investment in
equity gets affected OR if we have placed a fixed deposit in particular bank and bank
goes bankrupt, than we only lose money placed in that bank.
While there is no way to keep away from risk, we can always reduce the impact of risk.
Diversification helps in reducing the impact of unsystematic risk. If our investment is
distributed across various asset classes the impact of unsystematic risk is reduced.
If we have placed fixed deposit in several banks, then even if one of the banks goes
bankrupt our entire fixed deposit investment is not lost.
Similarly if our equity investment is in Tata Motors, HUL, Infosys, adverse news about
Infosys will only impact investment in Infosys, all other stocks will not have any impact.
Minimum
Subscription Rs.5000/-
Amount
Minimum
Subscription 5000
Amount
Investment needs?
From the above graph it is clear that there are many people who have participated in the
survey and the major portion of the survey indicates that the people are interested in
investing in mutual funds for the sake of their family financial security. From the above
graph it also reveals that the minor portion of the graph that is to build a corpus for
retirement does not play a major role in the investment decisions.
These are the findings from the survey which include the number of participants and the
type of the participants. This survey includes all types of participants which may give exact
results for the evaluation
Which of the following do you think as a tax saving scheme?
This also represents the trend of the previous years. This data is collected by collecting the
NAV values of the previous one and half year their average is taken monthly and a graph is
drawn on the basis of the average values.
In the same manner as explained above the remaining three graphs of Tata Growth fund,
SBI Magnum Global fund, reliance global fund is been drawn. This graph is the result of
the daily NAV’s of the Franklin Templeton India prima plus scheme for the last one and
half year. This also represents the trend of the previous years.
This data is collected by collecting the NAV values of the previous one and half year their
average is taken monthly and a graph is drawn on the basis of the average values.
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of Franklin India Prima Plus
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of Reliance Growth Fund.
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of Tata Growth Fund.
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of SBI Magnum Global Fund.
The Graph is based on the income of the consumer and their investment in various
schemes.
Income Vs Investment Scheme
100%
80%
Tax Saving
60%
Money market
40% Balance
Growth
20%
Income
0%
Below 2 2 lac to 4 lac to 6 lac to Above 8
Lac 4 lac 6 lac 8 lac lac
Interpretation
I. Lower income group of below 2 lakh are more attracted towards the income and money
market Schemes as they cannot afford to take too much of risk.
II. Balanced scheme is more popular with the income group of 2 lakh to 6 lakh. This group
is even inclined towards growth Schemes to certain extent.
III. Persons with a salary of 6 lakh and above are fascinated by tax saving and money market
schemes.
The Graph is showing the influential factor among the consumer.
Influential Factor
35
30
No.of People
25
20
Series1
15
10
5
0
T.V
Internet
paper/Magazine
Friends/Family
Banners
News
Interpretation
I. Major chunk are fascinated by the Newspapers/ Magazine.
II. Second best instrument to fascinate the customer is the internet. Because internet provide
the easy and quickest way to get the information.
Which factor influence you most to invest through Anand Rathi Financial Services ltd?
FACTORS PERCENTAGE
Bank Services 20%
Safety 42%
Word Of Mouth 14%
Advertisement 6%
Past Experience 18%
INTERPRETATION
When asked that what factor affects most while investing in Mutual Funds through Anand Rathi
Financial services Ltd than wide preference is given to safety. 42% investors choose safety.20%
bank services, 18% past experience, 14% word of mouth and 6% advertisement.
To how much extent are you satisfied with the services offered by Anand Rathi Financial
Services ltd.?
80%
Extremely Satisfied
Satisfied To Lesser Extent 10%
Dissatisfied To Lesser Extent 5%
Extremely Dissatisfied 5%
INTERPRETATION
Out of the respondents 80% are extremely satisfied with the services offered by Anand Rathi
Financial services ltd. 10% are satisfied to lesser extent, 5%are extremely dissatisfied.
INTERPRETATION
As FII’s have entered Indian markets Sensex have crossed 10000 mark and investors have
earned a lot in last financial year. Indians are becoming aware of various investment options.
People have started taking risk as they want to book profits. Investors prefer more equity
schemes than debt schemes, around 60% of the investors invest in equity schemes and
balanced schemes. Investors want to take risk as they want to yield better returns. Investors
want high returns, liquidity, safety and tax benefit. Among all investors gives want to have
safety for their money. Around 91% of the investors prefer open ended schemes rather than
close ended schemes as there is flexibility in open ended schemes.
Investors prefer both systematic investment plan and lump sum. It depends upon the
availability of funds that the investor wants to invest in SIP or as lump sum. Some of the
investors invest in both ways i.e. through SIP as well as lump sum. Basically it depends upon
the availability of fund. When questions were asked about the performance of mutual funds
in future 50% of investors said strong future, 35% of the investors said very strong future and
15% of the investors said moderate future.
SUGGESTIONS AND
CONCLUSION
RECOMMENDATIONS AND SUGGESTIONS:
Customer education of the salaried class individuals is far below standard. Thus
Asset Management Company’s need to create awareness so that the salaried class
people become the prospective customer of the future.
Early and mid earners bring most of the business for the Asset Management
Company’s. Asset Management Company’s thus needed to educate and develop
schemes for the person’s who are at the late earning or retirement stage to gain
the market share.
Return’s record must be focused by the sales executives while explaining the
schemes to the customer. Pointing out the brand name of the company repeatedly
may not too fruitful.
The target market of salaried class individual has a lot of scope to gain business,
as they are more fascinated to Mutual Funds than the self employed.
Schemes with high equity level need to be targeted towards self employed and
professionals as they require high returns and are ready to bear risk.
Salary class individuals are risk averse and thus they must be assured of the
advantage of “risk – diversification” in Mutual Funds.
There should be given more time & concentration on the Tier-3 distributors.
The resolution of the queries should be fast enough to satisfy the distributors.
Regular activities like canopy should be done so as to get more interaction with
the distributors.
Should have to provide more advertisements, canopies in the shopping mall, main
markets because no. of people visiting these places are mostly of service classes
and they have to save tax, hence there is more opportunity of getting more no. of
applications.
CONCLUSION
Understanding the different ratios & portfolios so as to tell the distributors about these
terms, by this, managing the relationship with the distributors
To analyze the comparative study between other leading mutual funds in the present
market.
Finding out ways and means to improve on the services by Anand Rathi financial Services ltd.
1. Complete insight knowledge about the mutual funds were mentioned in the project
2. Different ratios with complete graphical representation were explained in the project
3. To know the performance levels of the project I have done the comparative analysis of the
project using the four major leading mutual fund companies using different parameters.
4. To know the consumer awareness I have done the survey using different customers so as to
analyse the views about the mutual funds and perception of the customer in the present scenario.
5. To evaluate the ways and means to improve Anand Rathi Financial Services ltd. I have
mentioned various suggestions that are listed above.
ANNEXURE
QUESTIONNAIRE
PERSONAL DETAILS:
Name:
Mobile Number:
Address: _______________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_______________________________
Occupation: _____________________
Age: ____________________________
a. Mutual funds
b. Fixed deposit
c. Insurance
d. PF
e. All of the above
a. Yes b. No
a. Mutual fund
b. Fixed deposit
c. Direct equity
d. Life insurance
e. Postal office deposit
6. To how much extent are you satisfied with the services offered by Anand Rathi Financial
Services ltd. regarding mutual funds?
a) Extremely satisfied.
AMC
The AMC is the corporate entity, which markets and manager and manages a mutual fund
scheme and in return receives a management fee from the fund corpus. SEBI specifies that an
AMC must be separate entity the trust that manages it.
NAV
It is the value of unit of a Mutual Fund scheme and represents its true worth. NAV is arrived at
by dividing total value of all investment made under the scheme by number of units of the
scheme. NAV is critical yardstick of the funds performance.
UNITS
Units in a mutual fund scheme are similar to shares of a joint company. These are always in
denominations of Rs. 10 each the sum total of all the units constitutes corpus of mutual fund.
SPONSORS
Sponsor of a mutual fund are those who establish the mutual fund trust and the AMC they
constitute the shareholders of the AMC and receive dividends on profits made by the AMC.
SEBI rules stipulate that mutual fund trust as well as the AMC must maintain an arms length
relationship with the sponsors to avoid any conflict to interests, which may affect the unit
holders.
INCOME FUND
These Funds invest largely in fixed income securities like bonds and debentures. Such funds earn
returns more regularly than a growth fund but level of returns over longer periods normally lag
behind those offered by growth funds while returns in such funds may be regular, their scale may
fluctuate depending upon the prevalent interest rates and credit quality of the debt securities.
GROWTH FUNDS
Growth funds predominantly invest in stock market securities and carry risks larger than income
funds. Since stock markets travel through a natural cycle of boom and bursts one should
normally stay invested inequity funds for a longer times to earn higher returns.
Equity funds may earn higher but they also carry larger risks. For risk taking investor equity are
best suited.
BALANCED FUNDS
A balanced fund is the mixture of income fund and growth fund invested partly in equity to
achieve a trade-of between risk and return.
CLOSE ENDED
In a close-ended fund an investor is allowed to subscribe only during the period of the initial
offer. Close-ended funds mature after a specified period.
LOCK IN PERIOD
Time period during which investor can neither redeem nor they transfer their holdings to others.
Lock in period is imposed to allow fund manager to deploy money for an adequate period of
time to earn a reasonable return premature withdrawals may destabilize the fund & are not
beneficial to the interests of investors.
MANAGEMENT FEES
An AMC that mangers & markets a mutual fund scheme is entitled to a management fee@ 1% to
25% of the total funds managed, it could be charged to the scheme irrespective of the
performance of the scheme.
REDEMPTION
Disbursement of unit capital on the maturity of that particular scheme to all its existing unit
holders.
MARKET PRICE
The price at which units of mutual funds are quoted in stock exchange where they are listed.
REGISTRAR
Organization appointed by an AMC to the schemes it is registered, monitored, and regulated by
SEBI, it provides required services like system capabilities back up, accepts and processes
investors applications in informs AMC about amounts received/disbursed for subscription/
purchase/ redemption it also handles communications with investors, perform data entry services
and dispatches account statements.
CUSTODAIN
Banking organization that keeps in safe custody all the securities & other instruments belonging
to the fund to insure smooth inflow & outflow of securities. It is also approved regulated and
registered with SEBI.
EXIT LOAD
Value of deduction from NAV on the date when one choose to withdraw from a fund, load is
imposed because withdrawals carry transaction cost to AMC it can not be more than 6% of NAV
of corpus as prescribed by SEBI many schemes offer redemption facility without exit load.
ENTRY LOAD
Charge paid by unit holder when he invests an amount in the scheme. Mutual funds incur many
expenses during an issue, which are charged to the scheme. Such load is called entry load.
LIQUIDITY
Ability of investors to change its unit into cash within minimum time as and when he needs
money.
TRANSPARENCY
Basic feature of mutual funds is transparency, their functioning is very efficient, well monitored
& transparent working of AMC is regulated by SEBI it is audited weekly, it has to work under
strict guidelines issued by SEBI, and its NAV is calculated and published daily so that there is no
chance of any default in the working of Mutual Funds.
BIBLIOGRAPHY
WEBLIOGRAPHY
WWW.RATHIONLINE.COM
WWW.VALUERESEARCHONLINE.COM
WWW.MONEYCONTROL.COM
WWW.INVESTOPEDIA.COM
WWW.AMFIINDIA.COM
WWW.MUTUALFUNDSINDIA.COM
WWW.WIKIPEDIA.COM