COMPARISON BETWEEN PERFORMANCE IN

MUTUAL FUND

Submitted in Partial Fulfillment in Award Of Degree

of PGDM

Submitted to:
MS.SANA MOID

Submitted by
KAUSHLESH SINGH

SHERWOOD BUSINESS SCHOOL

1
 ACKNOWLEDGEMENT
I would like to begin in the name of “GOD” - THE ALMIGHTY

without of whose grace and blessing, the present work would not have

taken this shape.

I would like to express my deep gratitude and sincere regards for

all those people who helped in the completion of this report.

I own the opportunity to thank my parents, family members and

friends for supporting me at every step and bearing with me.

2
3
 CONTENT

1. INTRODUCTION

2. MUTUAL FUNDS

3. MAJOR PLAYERS

4. RESEARCH METHODOLOGY

5. CONCLUSION

6. SUGGESTION

7. LIMITATION

4
 INTRODUCTION

MUTUAL FUND

A Mutual Fund is a body corporate registered with SEBI (Securities

Exchange Board of India) that pools money from individuals/corporate

investors and invests the same in a variety of different financial

instruments or securities such as equity shares, Government securities,

Bonds, debentures etc.Mutual funds can thus be considered as financial

intermediaries in the investment business that collect funds from the

public and invest on behalf of the investors. Mutual funds issue units to

the investors.The appreciation of the portfolio or securities in which the

mutual fund has invested the money leads to an appreciation in the value

of the units held by investors.The investment objectives outlined by a

Mutual Fund in its prospectus are binding on the Mutual Fund scheme.

The investment objectives specify the class of securities a Mutual Fund

can invest in. Mutual Funds invest in various asset classes like equity,

bonds, debentures, commercial paper and government securities. The

schemes offered by mutual funds vary from fund to fund. Some are pure

equity schemes; others are a mix of equity and bonds. Investors are also

5
 given the option of getting dividends, which are declared periodically by

the mutual fund, or to participate only in the capital appreciation of the

scheme.

Evolution of Mutual Fund

The first investment trust (now called mutual fund) began in the Netherlands

in the early 1800s. The first in the U.S. was the New York Stock Trust,

which started in 1889. Since Boston was the economic center of the nation

until the turn of the century, the majority of funds started there—Fidelity,

Pioneer and Putnum Fund, to name a few. A fund that was comprised of

both stocks and bonds (the Wellington Fund) started in 1928 and is still part

of Vanguard. As the 20's crashed to a close, there were 10 mutual funds in

the nation.

The Sixties saw the growth in aggressive (high risk) funds that were labeled,

in the vernacular of the times, "hot-shot" or "go-go" funds. They were sexy

and fast, there were a hundred of them by the late Sixties and a lot of

people dumped a lot of money in them until the bearish times of 1969

freaked everybody out: investors yanked out their money and have been

kicking themselves ever since, because some funds increased in value by

more than 9,000%.

6
Until this time, people had been paying sales commissions on their funds. In

the '70s, no-load funds were invented, and the biggest today. Vanguard

Funds, wasfounded in 1977. At the end of the Sixties, there were nearly 250

different mutual funds;today, they number over 6,000. But here's the thing:

the last time a mutual fund went bankrupt was 1940. And mutual funds often

outperform the stock market.

Benefits involved in investing Mutual Fund

There are several benefits from investing in a Mutual Fund:

Small investments

Mutual funds help you to reap the benefit of returns by a portfolio spread

across a wide spectrum of companies with small investments.

Professional Fund Management

Professionals having considerable expertise, experience and resources

manage the pool ofmoney collected by a mutual fund. They thoroughly

analyse themarkets and economy to pick good investment opportunities.

Spreading Risk

An investor with limited funds might be able to invest in only one or two

stocks/bonds, thus increasing his or her risk. However, a mutual fund will

7
spread its risk by investing a number of sound stocks or bonds. A fund

normally invests in companies across a wide range of industries, so the risk

is diversified.

Transparency

Mutual Funds regularly provide investors with information on the value of

their investments. Mutual Funds also provide complete portfolio disclosure

of the investments made by various schemes and also the proportion

invested in each asset type.

Choice

The large amount of Mutual Funds offer the investor a wide variety to

choose from. An investor can pick up a scheme depending upon his risk/

return profile.

Regulations

All the mutual funds are registered with SEBI and theyfunction within the

provisions of strict regulation designed to protect the interests of the

investor.

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9
 TYPES OF MUTUAL FUNDS

Mutual funds are classified in the following manner:

(a) On the basis of Objective

Equity Funds/ Growth Funds

Funds that invest in equity shares are called equity funds. They carry the

principal objective of capital appreciation of the investment over the

medium to long-term. They are best suited for investors who are seeking

capital appreciation. There are different types of equity funds such as

Diversified funds, Sector specific funds and Index based funds.

Diversified funds

These funds invest in companies spread across sectors. These funds

are generally meant for risk-averse investors who want a diversified

portfolio across sectors.

Sector funds

These funds invest primarily in equity shares of companies in a

particular business sector or industry. These funds are targeted at

investors who are bullish or fancy the prospects of

a particular sector.

Index funds

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These funds invest in the same pattern as popular market indices like

S&P CNX Nifty or CNX Midcap 200. The money collected from the

investors is invested only in the stocks, which represent the index. For

e.g. a Nifty index fund will invest only in the Nifty 50 stocks.

The objective of such funds is not to beat the market but to give a return

equivalent to the market returns.

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Tax Saving Funds

These funds offer tax benefits to investors under the Income Tax Act.

Opportunities provided under this scheme are in the form of tax rebates

under the Income Tax act.

Debt/Income Funds

These funds invest predominantly in high-rated fixed-income-bearing

instruments like bonds, debentures, government securities, commercial

paper and other money market instruments. They are best suited for the

medium to long-term investors who are averse to risk and seek capital

preservation. They provide a regular income to the investor.

Liquid Funds/Money Market Funds

These funds invest in highly liquid money market instruments. The

period of investment could be as short as a day. They provide easy

liquidity. They have emerged as an alternative for savings and shortterm

fixed deposit accounts with comparatively higher returns. These funds

are ideal for corporates,institutional investors and business houses that

invest their funds for very short periods.

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Gilt Funds

These funds invest in Central and State Government securities. Since

they are Government backed bonds they give a secured return and also

ensure safety of the principal amount. They are best suited for the

medium to long-term investors who are averse to risk.

Balanced Funds

These funds invest both in equity shares and fixed-income-bearing

instruments (debt) in some proportion. They provide a steady return and

reduce the volatility of the fund while providing some upside for capital

appreciation. They are ideal for medium to long-term investors who are

willing to take moderate risks.

b) On the basis of Flexibility

Open-ended Funds

These funds do not have a fixed date of redemption. Generally they are

open for subscription and redemption throughout the year. Their prices

are linked to the daily net asset value (NAV). From the investors'

perspective, they are much more liquid than closed-ended funds.

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Close-ended Funds

These funds are open initially for entry during the Initial Public Offering

(IPO) and thereafter closed for entry as well as exit. These funds have a

fixed date of redemption. One of the characteristics of the close-ended

schemes is that they are generally traded at a discount to

NAV; but the discount narrows as maturity nears. These funds are open

for subscription only once and can be redeemed only on the fixed date

of redemption. The units of these funds are listed on stock exchanges

(with certain exceptions), are tradable and the subscribers to the fund

would be able to exit from the fund at any time through the secondary

market.

Different investment plans that Mutual Funds offer

The term ’investment plans’ generally refers to the services that the

funds provide to investors offering different ways to invest or

reinvest.The different investment plans are an important consideration in

the investment decision, because they determine the flexibility available

to the investor. Some of the investment plans offered by mutual funds in

India are:

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Growth Plan and Dividend Plan

A growth plan is a plan under a scheme wherein the returns from

investments are reinvested and very few income distributions, if any, are

made. The investor thus only realizes capital appreciation on the

investment. Under the dividend plan, income is distributed from time to

time. This plan is ideal to those investors requiring regular income.

Dividend Reinvestment Plan

Dividend plans of schemes carry an additional option for reinvestment of

income distribution. This is referred to as the dividend reinvestment plan.

Under this plan, dividends declared by a fund are reinvested in the

scheme on behalf of the investor, thus increasing the number of units

held by the investors.

Rights that are available to a Mutual Fund holder in India

As per SEBI Regulations on Mutual Funds, an investor is entitled

to:

1. Receive Unit certificates or statements of accounts confirming your

title within 6 weeks from the date your request for a unit certificate is

received by the Mutual Fund.

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2. Receive information about the investment policies, investment

objectives, financial position and general affairs of the scheme.

3. Receive dividend within 42 days of their declaration and receive the

redemption or repurchase proceeds within 10 days from the date of

redemption or repurchase.

4. The trustees shall be bound to make such disclosures to the unit

holders as are essential in order to keep them informed about any

information, which may have an adverse bearing on their investments.

5. 75% of the unit holders with the prior approval of SEBI can terminate

the AMC of the fund.

6. 75% of the unit holders can pass a resolution to wind-up the scheme.

7. An investor can send complaints to SEBI, who will take up the matter

with the concerned Mutual Funds and follow up with them till they are

resolved.

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 ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the

organisational set up of a mutual fund:

Mutual funds have a typical organisation in which five key parlies or

players or special bodies or constituents are involved. They are:

• The sponsors, the Board of Trustees (EOT) or Trust Company

(TC)

• The Asset Management Company (AMC)

• The custodian, and

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• The unit-holders

They are usually formed by an investment adviser or manager or

sponsor who selects and appoints a BOT, which, in turn, hires or

contracts a separate AMC which is run by professional managers.

The AMC conducts the necessary research, and based on it,

manages the fund or portfolio. It is responsible for floating, managing,

redeeming the schemes; it also handles the administrative chores. It

receives the fees for the services rendered by it. The custodian is

responsible far coordination with brokers, the actual transfer and

storage of stocks, and handling the property of the trust. He is

answerable to the AMC.As per the current regulations in force in

India, every MF proposed by a sponsor has to be setup as a trust

under the Indian Trust Act, 1882 (and not as a company under the

Companies Act, 1956). The UT1, however, was set up under a

special UTI Act, 1963. All MFs have to be registered with the SEBI. It

is required that the first four constituents of the MF should maintain

an arm's length relationship among themselves in order to reduce

conflict of interests, and to safeguard the interests of the

investors.Mutual funds can sell their units directly to the investors or

they may employ the sales forced brokers and agents for that

18
purpose. Some MFs in the US charge their investors a sales fee for

the costs involved in selling the fund, and they are known as "load

funds". Those who do not charge, such a fee arc known as "no-load

funds". All funds charge their shareholders a management fee which

is paid out of the fund's income.

Sponser

The sponsor is the promoter of the mutual fund. He sponsor

establishes the mutual fund

• Sponsor appoints the trustees .custodians and the AMC with prior

approval of SEB1,and in and registers the same with

SEB1.accordance with regualation.

• Sponsor must have at least 5 years track record of business

interest in the financial markets,

• Sponsor must have been profit making in at least 3 of the above 5

years-

• Sponsor must contribute at least 40% of the capital of the AMC.

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Trustee

The mutual fund, which is a trust,is managed either by a trust

companies or a board of trustees and governed by the provisions of

the Indian Trust Act. The AMC and other functionaries are functially

accountable to trustees.

• The sponsor executes and registers a trust deed in favour of the

trustees .the third schedule of SEB1 regulation specifies the

contents of the trust deed.

• The appointment of all trustees has to be done with prior approval

of SEB1

• There must be at least 4 members in the board of trustees must be

independent.

• Trustees of one mutual fund cannot be trustees of another mutual

fund, unless he is an independent trustees in both cases, and has

the approval of both the boards.

Asset Management Company

The trustees on the advise of the sponsors, usually appoint the AMC.

The AMC has to be SEB1 registered entity and should have a

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minimum net worth management agreement with the AMC.which

spells out the functions of the AMC.

The following are various types of AMC's we have in India:

• AMC's owned by banks.

• AMC's owned by the Indian private sector companies

• AMC's owned by the financial institutions.

• AMC's owned by the foreign institution investors.

• AMC's owned jointly by Indian and foreign sponsors.

AUDIT

Legal advisor advise mutual fund on regulatory and taxation issues.

Every mutual fund has an employee designated as compliance

officer, who works under the advise of the legal advisor. The AMC

aiso has its accounts and annual reports, these two sets of accounts

are required to be statutory audited. SEB1 regulation stipulate that

auditors of the fund can not also be the auditors of the AMC- the two

sets of accounts have to be

audited by to separate auditing firms. audotors charge a fee from the

mutual fund for these services.

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Transfer

As the fund stands ready to redeem the unit on any working day, the

transfer facility is found redundant. However, if a transferee becomes

a holder of scheme's units in an official capacity by operation of law

or is a scheduled bank/ financial institution upon enforcement of a

pledge, then the trustee shall subject to production of necessary

evidence, procide to affect the transfer, if the intended transferee is

otherwise in line with terms of the schemes -In case any

pledge/charge over the scheme's units is the registered with the

trustee, transfer will be affected in accordance with the procedure

outlined in the detailed offer document.

BANKERS

A Fund's activities involve dealing with money on a continuous basis

primarily with respects to buying and selling units, paying for

investment made, receiving the proceeds on sale of investment and

discharging its obligations towards operating expenses. A fund's

bankers therefore play.

22
STRUCTURE OF A MUTUAL FUND

Sponsor

Trustee Mutual
s fund

ASSET
MANAGEME
NT
COMPANY

Custodi Regist
an rar

23
 HOW MUTUAL FUND WORKS

The flow chart below describes broadly the working of a mutual

fund.

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 Regulatory Aspect
1) Investment in debt instrument should be only in rated debt instrument not

below investment grade rated by a credit rating agency authorized to carry

such activity under the act.

2) No mutual fund under all its scheme should own more than 10 % of any

company’s paid up capital carrying voting rights.

3) Transfers of investment from one scheme to another in the same mutual fund

shall be allowed only if

a) Such transfers are done at the prevailing market price for quoted

instrument on spot basis.

b) The securities so transfers shall be in conformity with the

investment objective of the scheme to which such transfer has been

made.

4) A scheme may invest in another scheme under the same AMC or any other

mutual fund without charging any fees, provided that aggregate interscheme

investment made by all scheme under the same management or in scheme

under the management of any other AMC shall not exceed five per cent of

the NAV of the mutual fund.

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5) The initial issue expenses in respect of any scheme may not exceed six per

cent of the funds raised under the scheme.

6) Every mutual fund shall get the securities purchased or transferred in the

name of the mutual fund on account of the concerned scheme, wherever

investment are intended to be of long-term nature.

7) Pending deployment of funds of a scheme in securities in terms of

investment objectives of the scheme, a mutual fund can invest the funds of

the scheme in short term deposits of scheduled commercial banks.

8) Every mutual fund shall be buy and sell securities on the basis of deliveries,

and shall in all cases of purchases take delivery of relative securities, and in

all cases of sale deliver the securities, and shall in no case put itself in a

position whereby it has to make short sale or carry forward transaction or

engage in badla finance.

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 Who can invest in mutual funds in India?
The following people can invest in Mutual funds in India:

• Residents including:

Resident Indian Individuals

Indian Companies

Indian Trusts / Charitable Institutions

Banks

Non-Banking Finance Companies

Insurance Companies

Provident funds

• Non Residents including

Non Residents Indian

Other Corporate Bodies (OCBs)

• Foreign Entities, viz.

Foreign Institutional Investors (FIIS) registered with SEBI.

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 Advantages of Investment in Mutual Fund
Mutual Funds offer several benefits to an investor that unmatched by the

other investment options. The major benefits are good post-tax returns and

reasonable safety, the other benefits in investing in Mutual Funds are

PROFESSIONAL MANAGEMENT:

Mutual Funds employ the services of experienced and skilled professionals

and dedicated investment research team. The whole team analyses the

performance and balance sheet of companies and selects them to achieve the

objectives of the scheme.

POTENTIAL RETURN:

Mutual Funds have the potential to provide a higher return to an investor

than any other option over a reasonable period of time.

DIVERSIFICATION:

Mutual Funds invest in a number of companies across a wide cross section

of industries and sectors.

LIQUIDITY:

The investor can get the money promptly at the net asset value related prices

from the Mutual Funds open-ended schemes. In close-ended schemes, the

units can be sold on a stock exchange at the prevailing market price.

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TRANSPARENCY:

Mutual Funds have to disclose their holdings, investment pattern and the

necessary information before all investors under a regulation framework.

FLEXIBILITY:

Investment in Mutual Funds offers a lot of flexibility with features of

schemes such as regular investment plan, regular withdrawal plans and

dividend reinvestment plans enabling systematic investment or withdrawal

of funds.

AFFORDABILITY:

Small investors with low investment fund are unable to high-grade or blue

chip stocks. An investor through Mutual Funds can be benefited from a

portfolio including of high priced stock..

WELL REGULATED:

All Mutual Funds are registered with SEBI, and SEBI acts a watchdog, so

the Mutual Funds are well regulated

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 Disadvantages of Mutual Funds

FLUCTUATING RETURNS:

Mutual funds are like many other investments without a guaranteed return.

There is always the possibility that the value of your mutual fund will

depreciate. Unlike fixed-income products, such as bonds and Treasury bills,

mutual funds experience price fluctuations along with the stocks that make

up the fund.

DIVERSIFICATION:

Although diversification is one of the keys to successful investing, many

mutual fund investors tend to over diversify. The idea of diversification is to

reduce the risks associated with holding a single security; over

diversification (also known as diworsification) occurs when investors

acquire many funds that are highly related and so don't get the risk reducing

benefits of diversification.

CASH, CASH AND MORE CASH:

Mutual funds pool money from thousands of investors, so everyday

investors are putting money into the fund as well as withdrawing

investments. To maintain liquidity and the capacity to accommodate

withdrawals, funds typically have to keep a large portion of their portfolio as

30
cash. Having ample cash is great for liquidity, but money sitting around as

cash is not working for you and thus is not very advantageous.

COSTS:

In mutual funds the fees are classified into two categories: shareholder fees

and annual fund-operating fees.

The shareholder fees, in the forms of loads and redemption fees are paid

directly by shareholders purchasing or selling the funds. The annual fund

operating fees are charged as an annual percentage - usually ranging from 1-

3%. These fees are assessed to mutual fund investors regardless of the

performance of the fund. When the fund doesn't make money these fees only

magnify losses.

MISLEADING ADVERTISEMENTS:

The misleading advertisements of different funds can guide investors down

the wrong path. Some funds may be incorrectly labeled as growth funds,

while others are classified as small-cap or income.

EVALUATING FUNDS:

Another disadvantage of mutual funds is the difficulty they pose for

investors interested in researching and evaluating the different funds. Unlike
stocks, mutual funds do not offer investors the opportunity to compare the
P/E ratio, sales growth, earnings per share, etc.

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 TAX ASPECT OF MUTUAL FUND

DIVIDEND MADE TAX-FREE

Dividend received from a domestic company and income distributed

by UTI-I or any MF, to its unit holders has been made tax-free from

1.4.03 onwards. However, dividend declared, distributed or paid by

such sources shall be charged a distribution tax of @16.995% flat.

This distribution tax is in addition to the normal income tax payable by

them.

CAPITAL GAIN TAX:

Capital gains are generated through the sale of stocks, bonds and

other investments, which have appreciated in value, from the fund’s

portfolio. There are no capital grain tax on MF and stock market.

While STCG are subject to Tax@10% even traded through stock

exchange and security from action tax has been paid. Unquated

shares/ MF are subject to tax at normal rate of tax.

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INCOME RECEIVED FROM MUTUAL FUND:

The Internal Revenue Service might depend upon the nature of your

mutual fund investment. Generally, most income generated from a

mutual fund account, with the exception of tax-exempt money market

or municipal bond funds, is subject to federal taxes as ordinary

income or capital gains

WEALTH TAX:

Under sec 2(1)(e) of Wealth tax Act it is not treated as an asset.

Therefore this is exempted from tax liability.

GIFT TAX:

Mutual Fund may be given as a gift and no tax is applicable by doner

or donee

TDS ON REDEMPTION:

No TDS is required to be deducted from capital gain at the time of

redemption in case of mutual fund.

TAX BENEFITS ON INVESTMENT IN MUTUAL FUND:

(1)100% Income Tax Exemption on all Mutual Fund dividends.

(2)Capital Gains tax to be lower of –

10% on the capital gains without factoring indexation benefits and

20% on the capital gains after factoring indexation benefits.

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(3)Open-end funds with equity exposure of more than 50% are

exempt of dividend tax for a period of 3 years from 1999-2000.

Another Investment Avenue featuring in the list of “eligible”

instruments is the Equity Linked Saving Scheme or tax saving funds.

Simply put, these are mutual fund schemes wherein investment upto

Rs 100,000 qualify for Section 80 benefits. Investors are given the

unique opportunity to invest in an equity-linked product and still claim

tax benefits on the same; which is quite a departure from

conventional tax saving instruments. Tax saving funds have a

mandatory 3-Yr lock in period, which distinguishes them from

conventional equity-oriented funds, which have no constraints on

liquidity.

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 Tax saving funds: Smart long-term performers!

Tax Saving Funds NAV (Rs) 1-Yr 3-Yr 5-Yr SD SR

HDFC LONG TERM 0.76
46.63 41.52% 68.36% - 6.17%
ADV. %
0.62
BIRLA 35.50 19.55% 55.01% 12.10% 7.23%
%
0.64
UTI 32.45 47.12% 51.95% 0.13% 7.96%
%
0.59
PRU ICICI TAX 41.91 30.89% 51.93% 15.76% 7.93%
%
0.78
HDFC TAX SAVER 61.15 42.46% 51.40% - 5.72%
%

(Source: Credence Analytics. NAV data as on 2007 fsys trwuitr.

Growth over 1-Yr is compounded annualized)

(The Sharpe Ratio is a measure of the returns offered by the

fund vis-à-vis those offered by a risk-free instrument) (Standard

deviation highlights the element of risk associated with the

fund.)

35
MUTUAL FUNDS IN INDIA

36
 SIX AMC’S IN MUTUAL FUNDS

UTI MUTUL FUND

BIRLA MUTUL FUND

HDFC MUTUL FUND

RELIANCE MUTUL FUND

ICICI PRU. MUTUL FUND

37
 UTI MUTUL FUND

Introduction

Vision

To be the most Preferred Mutual Fund.

Our mission is to make UTI Mutual Fund:

• The most trusted brand, admired by all stakeholders

• The largest and most efficient money manager with global

presence

• The best in class customer service provider

• The most preferred employer

• The most innovative and best wealth creator

• A socially responsible organisation known for best corporate

governance

38
Genesis

January 14, 2003 is when UTI Mutual Fund started to pave its path

following the vision of UTI Asset Management Co. Ltd. (UTIAMC),

which was appointed by UTI Trustee Co, Pvt. Ltd. for managing the

schemes of UTI Mutual Fund and the schemes transferred/migrated

from the erstwhile Unit Trust of India.

UTIAMC provides professionally managed back office support for all

business services of UTI Mutual Fund in accordance with the

provisions of the Investment Management Agreement, the Trust

Deed, the SEBI (Mutual Funds) Regulations and the objectives of

the schemes. State-of-the-art systems and communications are in

place to ensure a seamless flow across the various activities

undertaken by UTIMF.

Since February 3, 2004, UTIAMC is also a registered portfolio

manager under the SEBI (Portfolio Managers) Regulations, 1993 for

undertaking portfolio management services. UTIAMC also acts as

the manager and marketer to offshore funds through its 100 %

subsidiary, UTI International Limited, registered in Guernsey,

Channel Islands.

39
Assets Under Management

UTIAMC presently manages a corpus of over Rs. 67,978 Crores* as

on 30th June 2009 (source: www.amfiindia.com). UTI Mutual Fund

has a track record of managing a variety of schemes catering to the

needs of every class of citizens. It has a nationwide network

consisting 114 UTI Financial Centres (UFCs) and UTI International

offices in London, Dubai and Bahrain. With a view to reach to

common investors at district level, 1 satellite office have also been

opened.

UTIAMC has a well-qualified, professional fund management team,

which has been fully empowered to manage funds with greater

efficiency and accountability in the sole interest of the unit holders.

The fund managers are ably supported by a strong in-house

securities research department. To ensure investors’ interests, a

risk management department is also in operation.

Reliability

UTIMF has consistently reset and upgraded transparency standards.

All the branches, UFCs and registrar offices are connected on a

robust IT network to ensure cost-effective quick and efficient service.

40
All these have evolved UTIMF to position as a dynamic, responsive,

restructured, efficient and transparent entity, fully compliant with

SEBI regulations.

s received by UTI Mutual Fund

UTI MF CNBC Award 2009...more

UTI Mutual Fund sweeps ICRA mutual fund Award 2009...

UTI MF wins the Best Debt Fund House Award...

Golden Peacock Innovative Product/Service Award-2008...

Loyalty Awards - 2009 ...

Lipper Fund Awards09-UTI Mahila Unit-5 yrs...

Lipper Fund Awards09-UTI Mahila Unit-3 yrs...

Reader’s Digest Trusted Brand 2008...

Lipper Fund Awards - Gulf 2008...

Top Performing Infrastructure Fund - Income ...

Brand loyalty Awards 2008...

Four ICRA 7 Star Gold Award...

Four ICRA 5 Star Award...

41
 ICRA Mutual Fund Award 2007...

Lipper Fund Awards 2007...

CRISIL-CNBC-TV18-Mutual Fund of the year Award

2007...

ICRA Mutual Fund Award 2006...

Lipper Fund Awards...

CNBC-TV18-BNP Par-ibas Mutual Fund of the year Award

2006...

CNBC-TV18-BNP Par-ibas Mutual Fund of the year

Award...

ICRA online Mutual Fund Award: UTI NIFTY INDEX FUND

won the award for the year 2004...

CNBC India Mutual Fund of the Year Award...

UTI Nifty Index Fund wins Gold at ICRA Online...

UTI Dynamic Equity Fund wins Silver at ICRA Online...

UTI Growth Value Fund has been ranked by CRISIL...

Investment Philosophy

42
UTI Mutual Fund’s investment philosophy is to deliver

consistent and stable returns in the medium to long term with

a fairly lower volatility of fund returns compared to the broad

market. It believes in having a balanced and well-diversified

portfolio for all the funds and a rigorous in-house research

based approach to all its investments. It is committed to adopt

and maintain good fund management practices and a process

based investment management.

UTI Mutual Fund follows an investment approach of giving as

equal an importance to asset allocation and sectoral

allocation, as is given to security selection while managing

any fund. It combines top-down and bottom-up approaches to

enable the portfolios/funds to adapt to different market

conditions so as to prevent missing an investment

opportunity.

In terms of its funds performance, UTI Mutual Fund aims to

consistently remain in the top quartile vis-à-vis the funds in

the peer group.

43
Mumbai

1st Feb 2003

44
Sponsors

Three leading public sector banks – Bank of Baroda, Punjab National

Bank and State Bank of India and Life Insurance Corporation of India

(LIC), the largest public financial investment institution and life insurer

in India are the sponsors of UTI Mutual Fund.

Bank of Baroda:-

Bank of Baroda is a commercial bank performing activities in terms of

Banking Companies (Acquisition and Transfer of Undertakings Act

1970) under which the Undertaking of the Bank was taken over by

the Central Government. During the period since inception, it has

always maintained its practice of sound value based banking to

emerge as one of the premier public sector Banks of the country

today. It has a track record of uninterrupted profits since inception in

1908. The financial strength of the Bank and its long tradition of

efficient customer service are drawn substantially from the extensive

reach of its 2732 strong branch network (as of 31.03.2007) covering

almost every State and Union Territory in the Country. The Bank is

also one of the few Indian Banks with a formidable presence

45
overseas with 40 branches. Thus, the total branch network is 2,772

as at 31.03.2007.

Life Insurance Corporation of India

Life Insurance Corporation of India (LIC) is amongst the largest

insurance companies in the world, with 2048 branches and having a

Fund size of Rs.-5,60,806.33 crore.

Punjab National Bank

Punjab National Bank is a commercial bank performing activities in

terms of Banking Companies (Acquisition and Transfer of

Undertakings Act 1970) under which the Undertaking of the Bank was

taken over by the Central Government. The main object of the bank

under the said Act is as below:- An act to provide for the acquisition

and transfer of the undertaking of certain banking companies, having

regard to their size, resources coverage and organisation, in order to

further to control the heights of the economy, to meet progressively

and serve better, the needs of the development of the economy and

to promote the welfare of the people, in conformity with the policy of

the State towards securing the principles laid down in clause (b) and

46
(c) of Article 39 of the Constitution of India and for matter connected

therewith or incidental therein. As on 31.03.2007 Punjab National

Bank has 4539 domestic offices including 421 extension counters, 2

subsidiaries and a deposit size of Rs.1, 39,860 crores.

State Bank of India:

The State Bank of India is the largest public sector bank in India with

9517 branches in India and 83 offices in 32 countries worldwide. In

addition to this, SBI also has 21 subsidiaries.

The sponsors are not responsible nor liable for any loss resulting

from the operation of the scheme beyond the contribution of an

amount of Rs.10,000/- made by them towards setting up of the

Mutual Fund.

47
UTI Asset Management Co. Ltd. (UTIAMC) is a company incorporated

under The Companies Act, 1956.

UTIAMC was appointed as the Asset Management Company of the UTI

Mutual Fund in terms of the Investment Management Agreement

executed between UTI Trustee Co. Ltd. and UTIAMC on December 9,

2002. UTIAMC was registered by SEBI to act as the asset

management company for UTI Mutual Fund vide its letter of January 14,

2003.

The paid up capital of UTIAMC has been subscribed equally by four

sponsors: State Bank of India, Life Insurance Corporation of India, Bank

of Baroda and Punjab National Bank. UTIAMC, apart from managing

the schemes of UTI Mutual Fund, also manages the schemes

transferred/migrated from the erstwhile Unit Trust of India, in

accordance with the provisions of the Investment Management

Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations and

the objectives of the schemes.

UTIAMC has also entered into a service agreement with the

Administrator of the Specified Undertaking of the Unit Trust of India

48
(SUUTI) to provide them with back office support for business

processes.

UTIAMC is also a registered Portfolio Manager under the SEBI

(Portfolio Managers) Regulations, 1993 since February 3, 2004 for

undertaking portfolio management services.

Subsidiaries

UTI International Ltd. (UTIIL) is a 100% subsidiary of UTIAMC,

registered in Guernsey, Channel Islands, which acts as the manager to

offshore funds and markets these offshore funds abroad. Towards

expansion of its activities, UTIIL has signed a joint venture agreement

with Shinsei Bank Ltd. of Japan to set up UTI International (Singapore)

Pvt. Ltd.

UTIIL is focussed on investment management and distribution of

financial products in the South East Asian region. UTIIL also manages

funds investing in other jurisdictions.

UTI Retirement Solutions Ltd. (UTIRSL), is a 100% subsidiary of

UTIAMC which was incorporated in December, 2007 and started

operations w.e.f. March, 2008. UTIRSL has been set up to carry out the

operations as a Pension Fund Manager under the New Pension

49
System set up by Pension Fund Regulatory and Development Authority

(PFRDA).

UTIRSL was initially appointed by the NPS to manage the pension

funds of the government employees. In March, 2009, the Company has

also been appointed by NPS for management of pension funds for non-

government employees.

Directors of UTIAMC

Shri U. K. Sinha

Chairman & Managing Director

UTIAMC Ltd.

UTI Tower, ‘Gn’ Block

Bandra Kurla Complex

Bandra (East)

Mumbai - 400 051

Shri S. C. Bhargava

Non-Executive Chairman

OTC Exchange of India

Flat No.14, Queens Court

Maharshi Karve Road

50
Churchgate

Mumbai 400 020

Dr. K. C. Mishra

Director

National Insurance Academy

B2-32, Elite Empire

Balewadi

Pune - 411 045

Ms. Anita Ramachandran

Director & CEO

Cerebrus Consultants Pvt. Ltd.

13, Navroze Apartments

Bhulabhai Desai Road

Mumbai - 400 026

Shri Prithvi Haldea

Chairman & Managing Director

Praxis Consulting & Information

Services Pvt. Ltd.

C-101, Rishi Apartments

Alaknanda

New Delhi-110 019

51
Shri P. R. Khanna

Chartered Accountant

70, Sundar Nagar

New Delhi - 110 003

52
 RELIANCE MUTUAL FUND

Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds,

with Assets Under Management (AUM) of Rs. 93,532 crore (AUM as

on 29th Feb 08) and an investor base of over 65.73 Lakhs. Reliance

Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is

one of the fastest growing mutual funds in the country. RMF offers

investors a well-rounded portfolio of products to meet varying investor

requirements and has presence in 115 cities across the country.

Reliance Mutual Fund constantly endeavors to launch innovative

products and customer service initiatives to increase value to

investors. "Reliance Mutual Fund schemes are managed by Reliance

Capital Asset Management Limited., a subsidiary of Reliance Capital

Limited, which holds 93.37% of the paid-up capital of RCAM, the

balance paid up capital being held by minority shareholders."Reliance

Capital Ltd. is one of India’s leading and fastest growing private

sector financial services companies, and ranks among the top 3

private sector financial services and banking companies, in terms of

net worth. Reliance Capital Ltd. has interests in asset management,

53
life and general insurance, private equity and proprietary investments,

stock broking and other financial services.

Vision Statement

To be a globally respected wealth creator with an emphasis on

customer care and a culture of good corporate governance.

Mission Statement

To create and nurture a world-class, high performance

environment aimed at delighting our customers.

Corporate Governance

Our Corporate Governance Policy:

Reliance Capital Asset Management Ltd. has a vision of being a

leading player in the Mutual Fund business and has achieved

significant success and visibility in the market. However, an

imperative part of growth and visibility is adherence to Good Conduct

in the marketplace.

At Reliance Capital Asset Management Ltd., the implementation and

observance of ethical processes and policies has helped us in

standing up to the scrutiny of our domestic and internationalinvestors.

54
Management :

The management at Reliance Capital Asset Management Ltd. is

committed to good Corporate Governance, which includes

transparency and timely dissemination of information to its investors

and unit holders. The Board of Directors of RCAM is a professional

body, including well-experienced and knowledgeable Independent

Members. Regular Audit Committee meetings are conducted to

review the operations and performance of the company.

Employees :

Reliance Capital Asset Management Ltd. has at present, a code of

conduct for all its officers. It has a clearly defined prohibition on

insider trading policy and regulations. The management believes in

the principles of propriety and utmost care is taken while handling

public money, making proper and adequate disclosures. All personnel

at Reliance Capital Asset Management Ltd are made aware of their

rights, obligations and duties as part of the Dealing Policy laid down

in terms of SEBI guidelines. They are taken through a well-designed

HR program, conducted to impart work ethics, the Code of Conduct,

information security, Internet and e-mail usage and a host of other

issues. One of the core objectives of Reliance Capital Asset

55
Management Ltd. is to identify issues considered sensitive by global

corporate standards, and implement policies/guidelines in conformity

with the best practices as an ongoing process. Reliance Capital Asset

Management Ltd. gives top priority to compliance in true letter and

spirit, fully understanding its fiduciary responsibilities.

56
 HDFC MUTUL FUND

About Us

HDFC Asset Management Company Limited (AMC)

HDFC Asset Management Company Ltd (AMC) was incorporated

under the Companies Act, 1956, on December 10, 1999, and was

approved to act as an Asset Management Company for the HDFC

Mutual Fund by SEBI vide its letter dated July 3, 2000.

The registered office of the AMC is situated at Ramon House, 3rd

Floor, H.T. Parekh Marg, 169, Backbay Reclamation, Churchgate,

Mumbai - 400 020.

In terms of the Investment Management Agreement, the Trustee has

appointed the HDFC Asset Management Company Limited to

manage the Mutual Fund. The paid up capital of the AMC is Rs.

25.161 crore.

The present equity shareholding pattern of the AMC is as follows :

Particulars % of the paid up equity capital

57
 Housing Development Finance Corporation Limited 60

Standard Life Investments Limited 40

Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual

Fund, following a review of its overall strategy, had decided to divest

its Asset Management business in India. The AMC had entered into

an agreement with ZIC to acquire the said business, subject to

necessary regulatory approvals.

On obtaining the regulatory approvals, the following Schemes of

Zurich India Mutual Fund have migrated to HDFC Mutual Fund on

June 19, 2003. These Schemes have been renamed as follows:

Former Name New Name

Zurich India Equity Fund HDFC Equity Fund

Zurich India Prudence Fund HDFC Prudence Fund

Zurich India Capital Builder Fund HDFC Capital Builder Fund

Zurich India TaxSaver Fund HDFC TaxSaver

Zurich India Top 200 Fund HDFC Top 200 Fund

Zurich India High Interest Fund HDFC High Interest Fund

Zurich India Liquidity Fund HDFC Cash Management Fund

Zurich India Sovereign Gilt Fund HDFC Sovereign Gilt Fund*

58
*HDFC Sovereign Gilt Fund has been wound up in March 2006

The AMC is managing 24 open-ended schemes of the Mutual Fund

viz. HDFC Growth Fund (HGF), HDFC Balanced Fund (HBF), HDFC

Income Fund (HIF), HDFC Liquid Fund (HLF), HDFC Long Term

Advantage Fund (HLTAF), HDFC Children's Gift Fund (HDFC CGF),

HDFC Gilt Fund (HGILT), HDFC Short Term Plan (HSTP), HDFC

Index Fund, HDFC Floating Rate Income Fund (HFRIF), HDFC

Equity Fund (HEF), HDFC Top 200 Fund (HT200), HDFC Capital

Builder Fund (HCBF), HDFC TaxSaver (HTS), HDFC Prudence Fund

(HPF), HDFC High Interest Fund (HHIF), HDFC Cash Management

Fund (HCMF), HDFC MF Monthly Income Plan (HMIP), HDFC Core

& Satellite Fund (HCSF), HDFC Multiple Yield Fund (HMYF), HDFC

Premier Multi-Cap Fund (HPMCF), HDFC Multiple Yield Fund . Plan

2005 (HMYF-Plan 2005), HDFC Quarterly Interval Fund (HQIF) and

HDFC Arbitrage Fund (HAF).

The AMC is also managing 13 closed ended Schemes of the HDFC

Mutual Fund viz. HDFC Long Term Equity Fund, HDFC Mid-Cap

Opportunities Fund, HDFC Infrastructure Fund, HDFC Fixed Maturity

Plans, HDFC Fixed Maturity Plans - Series II, HDFC Fixed Maturity

59
Plans - Series III, HDFC Fixed Maturity Plans - Series IV, HDFC

Fixed Maturity Plans - Series V, HDFC Fixed Maturity Plans - Series

VI, HFDC Fixed Maturity Plans - Series VII, HFDC Fixed Maturity

Plans - Series VIII, HFDC Fixed Maturity Plans - Series IX and HFDC

Fixed Maturity Plans - Series X.

The AMC is also providing portfolio management / advisory services

and such activities are not in conflict with the activities of the Mutual

Fund. The AMC has renewed its registration from SEBI vide

Registration No. - PM / INP000000506 dated December 8, 2006 to

act as a Portfolio Manager under the SEBI (Portfolio Managers)

Regulations, 1993. The Certificate of Registration is valid from

January 1, 2007 to December 31, 2009.

60
 HDFC

HDFC

HDFC was incorporated under the Companies Act, 1956, on

December 10, 1999, and was approved to act as an Asset

Management Company for the HDFC Mutual Fund by SEBI vide its

letter dated June 30, 2000.

The registered office of the AMC is situated at Ramon House, 3rd

Floor, H.T. Parekh Marg, 169, Backbay Reclamation, Churchgate,

Mumbai - 400 020.

In terms of the Investment Management Agreement, the Trustee has

appointed the HDFC Asset Management Company Limited to

manage the Mutual Fund. The paid up capital of the AMC is Rs.

25.161 crore.

The present equity shareholding pattern of the AMC is as follows :

Particulars % of the paid up equity

capital

Housing Development Finance Corporation Limited 60

Standard Life Investments Limited 40

61
Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual

Fund, following a review of its overall strategy, had decided to divest

its Asset Management business in India. The AMC had entered into

an agreement with ZIC to acquire the said business, subject to

necessary regulatory approvals.

On obtaining the regulatory approvals, the following Schemes of

Zurich India Mutual Fund have migrated to HDFC Mutual Fund on

June 19, 2003. These Schemes have been renamed as follows:

Former Name New Name

Zurich India Capital Builder Fund HDFC Capital Builder Fund

Zurich India Equity Fund HDFC Equity Fund

Zurich India High Interest Fund HDFC High Interest Fund

Zurich India Liquidity Fund HDFC Cash Management Fund

Zurich India Prudence Fund HDFC Prudence Fund

Zurich India Sovereign Gilt Fund HDFC Sovereign Gilt Fund*

Zurich India TaxSaver Fund HDFC TaxSaver

Zurich India Top 200 Fund HDFC Top 200 Fund

62
*HDFC Sovereign Gilt Fund has been wound up in March 2006.

The AMC is also providing portfolio management / advisory services

and such activities are not in conflict with the activities of the Mutual

Fund. The AMC has renewed its registration from SEBI vide

Registration No. - PM / INP000000506 dated December 8, 2006 to

act as a Portfolio Manager under the SEBI (Portfolio Managers)

Regulations, 1993. The Certificate of Registration is valid from

January 1, 2007 to December 31, 2009.

The Board of Directors of the HDFC Asset Management

Company Limited (AMC) consists of the following eminent

persons.

• Mr. Deepak S. Parekh

• Mr. N. Keith Skeoch

• Mr. Keki M. Mistry

• Mr. James Aird

• Mr. P. M. Thampi

• Mr. Humayun Dhanrajgir

• Dr. Deepak B. Phatak

63
 • Mr. Hoshang S. Billimoria

• Mr. Rajeshwar Raj Bajaaj

• Mr. Vijay Merchant

• Ms. Renu S. Karnad

• Mr. Milind Barve

Mr. Deepak S. Parekh

Mr. Deepak Parekh, the Chairman of the Board, is associated with

HDFC Ltd. in his capacity as its Executive Chairman.

Mr. Parekh joined HDFC Ltd. in a senior management position in

1978. He was inducted as Wholetime Director of HDFC Ltd. in 1985

and was appointed as the Executive Chairman in 1993.

His other Directorships as on March 31, 2009 are as follows:

Company

Airport Authority of India Director

Bharat Bijlee Limited Alternate Director

Borax Morarji Limited Alternate Director

Castrol India Limited Director

Exide Industries Limited Alternate Director

GlaxoSmithKline Pharmaceuticals Limited Chairman

64
 HDFC ERGO General Insurance Company Limited Chairman

HDFC Standard Life Insurance Company Limited Chairman

Hindustan Oil Exploration Corporation Limited Director

Hindustan Unilever Limited Director

Infrastructure Development Finance Company Limited Chairman

Lafarge India Pvt. Limited Chairman

Mahindra & Mahindra Limited Director

Satyam Computer Services Limited Director

Siemens Limited Chairman

The Indian Hotels Company Limited Director

Zodiac Clothing Company Limited Alternate Director

Mr. Parekh is a Fellow of the Institute of Chartered Accountants

(England & Wales).

Mr. N. Keith Skeoch

Mr. N. Keith Skeoch is associated with Standard Life Investments

Limited as its Chief Executive and is responsible for all company

business and investment operations within Standard Life Investments

Limited.

Mr. Skeoch joined Standard Life Investments Limited as Chief

Executive Officer from James Capel & Co (now HSBC Securities),

65
where he was employed from 1980 to 1999. From his first role at

James Capel as an International Economist, he went on to become

the Senior UK Economist in 1982 and Chief Economist two years

later. In 1993, he was appointed Director of Economics and Strategy

and was given the responsibilities of Managing Director, International

Equities in 1998.

His other Directorships as on March 31, 2009 are as follows:

66
 ICICI PRU. MUTUL FUND

ICICI Prudential mutual fund is a joint venture between ICICI Bank, a

premier financial powerhouse, and Prudential plc, a leading

international financial services group headquartered in the United

Kingdom. ICICI Prudential was amongst the first private sector

insurance companies to begin operations in December 2000 after

receiving approval from Insurance Regulatory Development

Authority (IRDA).

ICICI Prudential's capital base stands at Rs. 20.26 billion with ICICI

Bank and Prudential plc holding 74% and 26% stake respectively.

For the past five years, ICICI Prudential has retained its position

as the No. 1 private life insurance in the country, with the wide

range of flexible products that meet the needs of the Indian

customer at every step in life. In the first quarter of financial year

2006-07 we have cross the new milestone of insuring the lives of

more than 2.5 million police holders. Today our nation-wide team

comprises of over 580 offices, over 234000 advisors; and 22 bank

assurance partners.

67
ICICI Prudential is also the only private life insurer in India to receive

a National Insurer Financial Strength rating of AAA (Ind) from

Fitch ratings. The AAA rating is the highest rating, and is a clear

assurance of ICICI Prudential's ability to meet its obligations to

customers at the time of maturity or claims. This rating is

determined after a thorough evolution of company’s financial

processes, risk management framework , product mix , market

share, etc. Over the past five years

We have paid over 2100 claims amounting to more then Rs 26 crore

and taken several step to assure customers of quick and smooth

claims process .For the past five years, ICICI Prudential has

retained its position as the No. 1 private life insurer in the country,

with a wide range of flexible products that meet the needs of the

Indian customer at every step in life. We have once again

maintained our leadership position with a 32% market share

amongst the private life insurance companies ( figure as of

Quarter 1,finantial year 2006-07)

68
 MARKET SHARE OF ICICI PRUDENTIAL

M a rk e t S h a re A m o n g P riv a te C o m p e tito rs

5% 5% 1 1%%
6% 32%
7%

6%
10 % 16%
11%

IC IC I P rude ntialB irla S unlife H D F C S tandradB ajaj A llianz

M A X NY L TA TA A ig O M K o tak A V IV A Life
IN G V y s y a M et L ife A M P S am m ar

DISTRIBUTION

ICICI Prudential has one of the largest distribution networks amongst

private life insurers in India with a network of over 234,000 advisors,

and having commenced operations in 271 cities and towns in India,

stretching from Bhuj in the west to Guwahati in the east, and Jammu

in the north to Trivandrum in the south.

The company has 22 bank assurance partners, having tie-ups with

ICICI Bank, of India, Federal Bank, South Indian Bank, Lord Krishna

69
Bank, all regional rural banks sponsored by Bank of India, as well as

some co-operative banks; as well as over 200 corporate agents and

brokers. It has also tied up with NGOs, MFIs and corporate for the

distribution of rural policies.

Board of Directors

The ICICI Prudential Life Insurance Company Limited Board

comprises reputed people from the finance industry both from India

and abroad.

• Mr. K.V. Kamath, Chairman

• Mr. Barry Stowe

• Mrs. Kalpana Morparia

• Mrs. Chanda Kochhar

• Mr. HT Phong

• Mr. M.P. Modi

• Mr. R Narayanan

• Mr. Keki Dadiseth

• Ms.Shikha Sharma, Managing Director

• Mr. N.S.Kannan, Executive Director

70
 • Mr. Bhargav Dasgupta, Executive Director

Management Team

The ICICI Prudential Life Insurance Company Limited

Management team comprises reputed people from the

finance industry both from

India and abroad.

Ms. Shikha Sharma, Managing Director & CEO

Mr. N. S. Kannan, Executive Director

Mr. Bhargav Dasgupta, Executive Director

Ms. Anita Pai, EVP - Customer Service & Technology

Mr. Azim Mithani, Chief Actuary

Mr. Puneet Nanda , Chief Investments Officer

71
 Vision & Values

Our vision:

To make ICICI Prudential the dominant Life and Pensions player built on trust by

world-class people and service.

This we hope to achieve by:

1-Understanding the needs of customers and offering them superior products

and service .

2- Leveraging technology to service customers quickly, efficiently and

conveniently.

3- Developing and implementing superior risk management and investment

strategies to offer sustainable and stable returns to our policyholders

4-Providing an enabling environment to foster growth and learning for our

employees .

5-And above all, building transparency in all our dealings.

The success of the company will be founded in its unflinching commitment to 5

core values -- Integrity, Customer First, Boundary less, Ownership and Passion.

Each of the values describe what the company stands for, the qualities of our

people and the way we work.

We do believe that we are on the threshold of an exciting new opportunity, where

we can play a significant role in redefining and reshaping the sector. Given the

72
quality of our parentage and the commitment of our team, there are no limits to

our growth.

Our values :

Every member of the ICICI Prudential team is committed to 5 core values:

Integrity, Customer First, Boundary less, Ownership, and Passion. These values

shine forth in all we do, and have become the keystones of our success.

73
 RESEARCH METHODOLOGY

This Research involves the collection of primary data through survey

approach because data is to be collected only by meeting worker of

mutual fund Company executives. Survey helps to know that what is

the strength of company means which worth, publicity and strength.

Approached executive through various means. We did cold calling,

targeted on Mutual fund. A meeting that talks about the career

opportunity being provided and the benefits that a what is the position

of company in India. Also did surveys, at places like Karvy, UTI, Birla,

HDFC, Reliance, ICICI pru with a questionnaire taking their

information.

Also since how many years was established your company in

Lucknow city. All this helps in judging who will be a better in 5 MNC’s

company’s and who fulfills the criteria we looking out for the most. We

mainly approached that company’s executive’s who answered truly.

74
RESEARCH INSTRUMENT

The research instrument used here for collecting primary data

is questionnaire. This has provided flexibility in substantial

Information from diversified people.

SAMPLING PLAN:

• Sampling unit: Lucknow

• Sample size : 120

• Sampling Procedure

(a) Random sampling

(b) Stratified sampling: Existing executive in other

AMC’s companies Lucknow Region

• Big sample size helps in getting more reliable result &

information about the respondents preferences.

• CONTACT METHOD:

Following contact methods through which information was

gathered:

75
 • In depth interview

IN-DEPTH INTERVIEW:

After collecting the data I made an appointment with

respondents for their detailed interview to check whether the

candidate have zeal to earn money by making relationship with

customers. Their qualification and work experience was also

checked.

DATA COLLECTION:

• Primary Data: Data collected through market survey

and cold calling.

• Secondary Data: Data collected from magazines,

yellow pages and from other indirect sources.

Primary Data: For collecting data I directly approached to

persons of different profile with questionnaire. I took the relevant

information out of them.

Primary data is the kind of data, which is collected by the investigator

himself for the purpose of the specific study. The data such collected

is original in character. The advantage of this method of collections

76
authentic.

For Primary data we did MNC’s Companies surveys where we

approached people through questionnaire, used posters & banners

(many people came enquiring & we got questionnaires filled on which

calls were made later, we also did cold calling on random numbers

telling people about the career opportunity & those that seemed

interested were called to the office for formal meeting. The method of

sampling was the random convenient sampling method.

MARKET SURVEY

We carried out various surveys where we approached executives of

ICICI Prudential, Birla, HDFC, Reliance. We approached executives

who appeared in interview and they showed interest in my

programme they are Alpna Dubey Branch Manager HDFC Mutual

fund, Niraj Kumar cluster head ICICI Pru and executive of UTI, Birla

and Reliance mutual fund. Their name & contact numbers were

taken.

SECONDARY DATA:

The data that has been already collected by others is called

secondary data. The secondary data could be collected from journals,

77
Reports, internet and various publications. The advantages of the

secondary data can be it is economical, both in terms of money and

time spent.

For secondary data we used various sources like Directories, CA’s

directory, Yellow pages, references & also data from various internet

sites like google.com, ask.com where there are few free resumes

available.

These data was taken from the following sources:

 Mutual Fund companies executives

78
 OBJECTIVE OF THE STUDY

The Present study has been undertaken with the objective of

examining, analyzing and interpreting under the title

“Comparison between performance in mutual fund in”

The specific objective can be enumerated as following-

(1)To study the demographic pattern of investment.

(2)To know the saving habits of investors.

(3)To know the interest of customers regarding Investment in

Mutual Fund.

(4)To identify the criteria for choosing the schemes amongst the

following-

a. Tax benefit

b. Capital growth

c. Liquidity

(5)To identify need of customers/investors according to the

various schemes available in Mutual Fund, Such as sectoral

fund, debt fund and equity fund.

(6)To study the satisfaction level of Investors.

(7)To identify the investors reaction for the introduction of

Mandatory Permanent Account Number (PAN) Card.

79
(8)To develop the understanding of various funds available in the

market.

80
 DATA ANALYSIS

INVESTOR’S PROFILE
AGE:
Age (Years) No %
20-30 23 19.17
30-40 48 40.00
40-50 34 28.33
>50 15 12.50
Total 120 100.00

12.50% 19.17%
20-30
30-40
28.33% 40-50

40.00% >50

Description:
 Most of the respondents (40%) are in the age group of 30-40 years.
 Least no. of respondents are in the age group of more than 50 years.

81
Sex:
Male No %
MALE 94 78.3
FEMALE 26 21.7
Total 120 100.00

21.70%
Male
Female
78.30%

Description:
 Majority of the respondents are male (about 78%).
 About 22% are female No. of female investors are quite less than that of male.

82
Profession:
Profession No %
Govt. Service 23 19.17
Private Service 45 37.50
Self Employed 52 43.33
Total 120 100.00

19.17%
Govt. Service
43.33%
Private Service

37.50% Self Employed

Description:
 Majority of the respondents are self employed i.e. 43% of the sample size.
 Govt. servant constitute only about 19% lesser than private service holder (about
37%).
 More of the person are from self employed which determine from the concern
report.

83
Q.1 Which Income bracket best describe your annual income?
Income (Rs. in lakh) No %
Up to One 08 7
1 to 2.5 36 30
2.5 to 5 54 45
>5 22 18
Total 120 100.00

18.00% 7.00% Up to One lakh

30.00% One lakh to 2.5
2.5 to 5 lakh
45.00% >5 lakh

Description:
 Majority of the investors comes under the income 2.5 to 5 lakh.
 About 18% respondents come under the income more than 5 lakh.
 Least %age (7%) respondents come under the income up to 1 lakh.

84
Q.2 What % of your income do you invest?
Investment (in %) Number %
<15 32 27
15-30 41 34
30-50 29 24
>50 18 15
Total 120 100.00

15.00% 27.00% <15

15 to 30
24.00% 30 to 50
>50
34.00%

Description:
 34% of the respondents invest 15 to 30% of their income where as 27%
respondent invest less than 15% of their income.
 24% invest 30-50% income of their income.
 Only 15% respondents invest greater than half of their total income.

85
Q.3 How much of total investment do you invest in mutual fund?
Investment (in %) Number %
<10 43 36
10-20 37 31
20-40 28 23
>40 12 10
Total 120 100.00

10.00%
<10
36.00%
23.00% 10 to 20
20 to 40
>40
31.00%

Description:
 36% of the respondents invest less than 10% in mutual fund out of their total
investment compare to 31% who invest their 10-20% of their total investment.
 23% respondents invest 20-40% of their total investment where as respondent
greater than 40% invest of their total investment in mutual fund.

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Q.4 What is the Primary objective of your investment?

Objectives Number %
Tax benefits 38 32
Capital appreciation 42 34
Dividend 09 08
Liquidity 31 26
Total 120 100.00

Tax Benefit

26.00% 32.00% Capital

Appreciation
Divident
8.00%
34.00%
Liquidity

Description:
 About 34% of the respondent’s primary objective is capital appreciation. Tax
benefit is the second objective of the respondent (31%).
 Liquidity as a primary objective constitute only 26%. 8% invest for the objective
of dividend.

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Q.5 Which of the following types of Mutual Fund do you invest in?
Types of Mutual Fund Number %
Open Ended 47 39
Close Ended 12 10
Both 61 51
Total 120 100.00

39.00% Open Ended

Close Ended
51.00%
Both
10.00%

Description:
 Open ended schemes constitute 39% of the total respondents. Where as only 10%
constitute close ended schemes.
 Both open ended and close ended constitute about half of the respondent (51%).

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Q.6 What is your preference of investment among the following schemes?
Schemes Number %
Equity 49 41
Debt 23 19
Sectoral 35 29
Others 13 11
Total 120 100.00

11.00% Equity
41.00%
Debt
29.00% Sectoral
Others
19.00%

Description:
 Equity schemes are the most preferred (41%), then sectoral schemes (29%).
 Debt schemes constitute 19% and others constitute only 11%.

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Q.7 Which of the following AMC’S (Mutual Fund) did you make maximum
investment in?
AMC’S (Mutual Fund) Number %
Reliance 29 24
ICICI Prudential 07 06
LIC 43 36
Karvy 25 21
Others 16 13
Total 120 100.00

Reliance
13.00% 24.00%
ICICI
21.00%
6.00%
LIC
KArvy
36.00%
Others

Description:
 Reliance mutual fund is widely expected (second position0 just sfter LIC which
constitute 36% of the respondents. Karvy on 3rd (21%).
 ICICI Prudential is least popular (only6%).
 Others mutual funds constitute 13% of the respondents.

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Q.8 Do you think that the performance of AMC effect the criteria of Investment?
Opinion Number %
Yes 97 80
No 14 12
Can’t Say 09 08
Total 120 100.00

8.00%
12.00% Yes
No
Can's Say
80.00%

Description:
 Maximum of the respondents (80%) think that the performance of AMC effect the
criteria of investment whereas 12% don’t believe so.
 8% are unable to say anything.

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Q.9 Are you satisfy with the return or your present investment?
Opinion Number %
Highly Satisfied 11 09
Satisfied 57 47
Unsatisfied 38 32
Highly Unsatisfied 14 12
Total 120 100.00

Highly Satisfied

12.00% 9.00% Satisfied

32.00% Un Satisfied
47.00%

Highly Un
Satisfied

Description:
 About half of the respondents (47%) are satisfied with return of their present
investment. On the other hand 32% are unsatisfied also.
 9% of the respondents are highly satisfied compare to 12% who are highly
unsatisfied.

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Q.10 Do you think that mandatory of permanent account number (PAN) effect the
investment?
Opinion Number %
Yes 93 77
No 21 18
Can’t Say 06 05
Total 120 100.00

5.00%
18.00%
Yes
No
Can't Say
77.00%

Description:

 77% of the respondents think that mandatory PAN effect the investment. On the other

hand, 18% don’t believe so.

 5% are unable to say anything.

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 FINDINGS:
1) Majority of the respondent we met were Male in the age group of 30-40 yrs.

2) More than 65% of the investor invest only about 20% of their total investment in

Mutual fund.

3) Majority of investors have invested in LIC, as perhaps it’s oldest and reliable

trust.

4) Amongst the private player, Karvy Mutual fund is rapidly becoming popular

among investors.

5) People invest in Mutual Fund Primarily for capital growth and secondarily for tax

benefits % liquidity.

6) Majority of the investors opt for equity schemes.

7) Open ended schemes have more preference to close ended schemes.

8) Performance of AMC largely effect the investment.

9) Introduction of Permanent Account No. (PAN) for investing in Mutual Fund will

effect the AMC in accumulating funds.

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 RECOMMENDATIONS AND SUGGESTIONS

1) There is a large scope of Mutual Funds to invest in especially in suburban area.

2) There is need to have more promotional activities from the very grass root level

such as installing canopy, advertising through print & electronic medic.

3) People invest their savings in a trust not in a company. So investors trust should be

maintained and developed by delivering best services and after safe services, value

added services and after sale services.

4) The objective of the investment for mutual fund should be capital growth and fund

should be invested in equities.

5) Equity schemes of Mutual Fund are the most preferred amongst investors as they

give high returns over the other schemes.

6) Open ended scheme is highly preferred amongst customers as there may be reasons

for redemption of unit at any period of time.

7) Performance of mutual should be focused on by providing necessary facts figures,

award & other achievement of the trust.

8) Investors got their expected returns from the investment they have make already

and thus it widen the scope of investment further.

9) Almost 75% of investor do not want to give their permanent Account No. (PAN)

while investing in Mutual fund and trust, it should be mandatory for a specified

amount of investment.

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 LIMITATIONS
• Lead provided me was not sufficient.

• Due to paucity of time, sample size limited up to 120 respondents only.

• Most of the investors did not respond well & might have replied incorrectly.

• it was difficult to fix appointment with clients due to their tight schedule.

• The reliability of data collected and analyzed depends upon the sources of data.

• Some investors did not want to reveals fact figures of their earnings and

investment.

• The lead provided me was limited to Lucknow only. It was not enough to my

summer training Topic.

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 QUESTIONNAIRE
INVESTOR’S PROFILE
AGE:
Age (Years)
20-30
30-40
40-50
>50

Sex:
Male
MALE
FEMALE

Profession:
Profession
Govt. Service
Private Service
Self Employed
Q.1 Which Income bracket best describe your annual income?
Income (Rs. in lakh)
Up to One
1 to 2.5
2.5 to 5
>5
Q.2 What % of your income do you invest?
Investment (in %)
<15
15-30
30-50
>50
Q.3 How much of total investment do you invest in mutual fund?
Investment (in %)
<10
10-20
20-40
>40

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Q.4 What is the Primary objective of your investment?
Objectives
Tax benefits
Capital appreciation
Dividend
Liquidity
Q.5 Which of the following types of Mutual Fund do you invest in?
Types of Mutual Fund
Open Ended
Close Ended
Both
Q.6 What is your preference of investment among the following schemes?
Schemes
Equity
Debt
Sectoral
Others
Q.7 Which of the following AMC’S (Mutual Fund) did you make maximum
investment in?
AMC’S (Mutual Fund)
Reliance
ICICI Prudential
LIC
Karvy
Others
Q.8 Do you think that the performance of AMC effect the criteria of Investment?
Opinion
Yes
No
Can’t Say
Q.9 Are you satisfy with the return or your present investment?
Highly Satisfied
Satisfied
Unsatisfied
Highly Unsatisfied
Q.10 Do you think that mandatory of permanent account number (PAN) effect the
investment?
Yes
No
Can’t Say

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11. If S.I.P then how would you like to invest?
a. Daily
b. Monthly
c. Quaterly
d. Six monthly

12. When would you like to invest in future?

a. 1 To 6 months
b. 6 to 12 months
c. After one year

13. how do you expect your current income to change?

a. Decrease dramatically
b. Decrease slightly
c. Remain about the same
d. Increase dramatically

14. Do you know about karvy stock brokring LTD?

a. Yes
b. No

15. If yes how you came to know about karvy stock brokring LTD?

16. Have you ever invested through karvy stock brokring LTD?

17. If yes please name the product.

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