International school of informatics and management

Comparative study of ULIP and Mutual fund.

By: Rahul Sharma MBA RTU 2nd semester

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Contents

Objective Introduction to ULIP Working of ULIPs USP of ULIP. Introduction to Mutual Fund Process of Mutual fund Points of difference Between Mutual Fund and ULIP. Research Methodology. Data Interpretation & Analysis.
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Objectives

To know the customers awareness about Ulips and Mutual Fund. To compare the investment in ULIPS plan with the Mutual fund. To study the degree of risk involved in both.

To analyze the future prospective of these 4/20/12 investment option.

Introduction to the ULIPs

Unit-linked insurance plans, popularly known as Ulips are life insurance policies which offer a mix of investment and insurance similar to traditional life insurance policies, but with one major difference. Unlike traditional policies, in Ulips investment risk lies with the insured (i.e., policy holder) and not with the insurance company

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Working of ULIPs

ULIPs work on the lines of mutual funds. The premium paid by the client (less any charge) is used to buy units in various funds (aggressive, balanced or conservative) floated by the insurance companies. Units are bought according to the plan chosen by the policyholder. On every additional premium, more units are allotted to his fund.

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USP of ULIPS
Insurance cover plus savings Multiple investment options Flexibility Works like an SIP Fund Switching Option

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Introduction to Mutual Funds

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities.

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Passed back to

Pool their money with

Generates

Invest In

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Points of difference between ULIPs & Mutual fund

Objective Cost Investment Duration Flexibility

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Resear ch Methodolog y

Research Design: -

Descriptive Research Design.

Data Collection: -

Primary Research:- Questionnaires

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Secondary Research: - Journals & Magazines.

Sampling Unit:-

People of Jaipur who are investing in ULIPs or Mutual fund

Sample Size:- 50.

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Percentage of people who have invested in ULIPS, in Mutual fund and both

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Factors consider by investors before investing in ULIPS and Mutual fund

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Information Sources helpful to the investor in making investment decision

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Preference of investor regarding different types of funds

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Preference of ULIPS or mutual fund on the basis of following factors

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Expected annual Return from both ULIPS and Mutual fund

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Preferred tenure of investment for ULIPS and Mutual Fund

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Preferred investment option for investing their money in future

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Investing in ULIP doesnt give high Returns.

GROWTH CHART
12 10 8
NAV IN RS.

REALLY?

6 4 2 0
DATE

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Findings

People are aware regarding ulips &Mutual fund but, the awareness regarding mutual fund is high comparative to ulips. Broker and reference group plays an important role while making an investment decision of an investor. Open ended funds & closed funds are more popular among investors.

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Low risk is taken in case of ulips & moderate risk in case of mutual funds. The expected annual return is high for mutual fund comparative to ulips. The preferred tenure of investment is same for both ulips & mutual fund

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Insurance and tax rebate is the most important reason for investing in ulips & people are investing in mutual fund for the appreciation of the capital invested by them. Among the various advantages liquidity & flexibility plays the most important role for the preference of mutual fund over ulips

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RECOMMENDATIONS

The people do not want to take risk. The AMC should launch more diversified funds so that the risk becomes minimize. This will lure more and more people to invest in mutual funds and ulips. The expectation of the people from the mutual funds is high. So, the portfolio of the fund should be prepared taking into consideration the expectations of the people.

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BIBLIOGRAPHY Internet siteswww.moneycontrol.com www.savingwala.com www.ICICIprulife.com www.NSE.com Books and magazinesThe financial system of India IC33 4/20/12

Questionnaire
Name: Designation: Organization: Annual Income: Q.1Investing in the mutual fund is more risky as compared to ULIP. 1) Strongly agree. 2) Neither agree nor disagree 3) Strongly disagree. Q.2.Do you think that information about mutual fund is more available as compare to ULIP. 1) agree. 2) neither agree nor disagree 3) disagree. Q3. Do you think that charges in mutual fund are more then ULIP? 1) agree. 2) neither agree nor disagree 3) disagree. Q4.Do you think that tax rebates in mutual fund are less then ULIP? 1) agree. 2) neither agree nor disagree 3) disagree. Q5. Do you think that market risk in mutual fund is higher than ULIP? 1) agree. 2) neither agree nor disagree 3) disagree. Q6. What will you prefer at present? 1)ULIP 2) Mutual Fund

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Q7. Which factor you consider before investing in ULIP or Mutual fund? 1)safety of principal 2) high return 3) maturity period 4) terms and conditions Q8. Information source helpful to the investor in making investment decision. 1)Journals 2) reference group 3) television 4) brokers 5) news papers. Q9. Preference of investors regarding different type of funds 1)Equity fund 2) Debt fund 3) Balanced fund 4) open ended fund 5) Close ended fund Q10. Reason for investing in ULIPs {more than one answer is also allowed} 1)tax rebate 2)life insurance 3)capital growth 4) investment of excess money Q11. Reason for investing in Mutual fund. {more than one answer is also allowed} 1)tax rebate 2) capital growth 3) investment of excess money. Q12.Preference of ULIP or mutual fund on the basis of the following factors. 1)Diversification 2) professional management 3) low cost 4) liquidity 5) flexibility
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