________________ __PREFACE__________________ _

Mutual fund is a trust that pools the savings, which are then invested in capital market instruments such as shares, debentures and other securities. It works in a different manner as compared to other savings organizations such as banks, national savings, post office, nonbanking financial companies etc. As most if, not all capital market instruments have an element of risk , it is very essential that the investors have clear understanding of how a mutual fund operates and what are its advantages as well as limitations . This understanding has to be created in the investors by the distributors engaged in the marketing of mutual fund products. This project report is the result of the survey of Noida population and presents investors which lead to widen the scope of the mutual fund market .So this report provides the awareness level of the investors of Noida about mutual fund market and understanding the working of mutual fund industry.

SUPERVISOR'S CERTIFICATE

This is to certify that Ms. Sarita Singh of PGDM VI Trimester student of APEEJAY INSTITUTE OF TECHNOLOGY -SCHOOL OF MANAGEMENT FOR WOMEN,GREATER NOIDA has carried out a research project titled "STUDY OF PERFORMANCE EVALUATION OF RELIANCE MUTUAL FUNDS IN NOIDA" under my guidance is for partial fulfillment of the requirement for the award of POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM) by APEEJAY INSTITUTE OF TECHNOLOGY -SCHOOL OF MANAGEMENT, GREATER NOIDA.

Signature
Dated: Ms.Poonam Kain (Finance Faculty) (AIT- School of management for women)

D E

I hereby solemnly declare that the project title "STUDY OF PERFORMANCE EVALUATION OF MUTUAL FUNDS IN NOIDA" submitted by me is a genuine and bonfide work based on my own understanding and has not been copied from any published sources or website nor has been submitted to any other university or organization .This project is done in partial fulfillment for the award of PGDM from APEEJAY INSTITUTE OF TECHNOLOGY, GREATER NOIDA.

Date: MW200913

\T

xarita Singh

Apeejay Institute of Technology School of Management for women

DIRECTOR'S CERTIFICATE

This is to certify that the research project title "STUDY OF PERFORMANCE EVALUATION OF MUTUAL FUNDS IN NOIDA" has been carried by Sarita Singh, student of PGDM-VI Trimester, AIT-School of Management, and Greater Noida under supervision of Ms. Poonam Kain. This is an original work carried out by the said student to the best of my knowledge and I recommend for the submission of this project.

Dated:

Prof. Deepak Gupta (Director)

ACKNOWLEDGEMENT

The project "STUDY OF PERFORMANCE EVALUATION OF RELIANCE MUTUAL FUNDS IN NOIDA" is an outcome of my research. For the completion of this project I get an opportunity to express my deep gratitude to all those who helped me in making this report. First of all I would like to thank The Almighty for his blessing for completing this project successfully. I would like to express my sincere thanks to Prof.C.K Roy for providing his valuable guidance regarding to my research report. I would like to express my sincere thanks to Mrs. Poonam Kain who is my college guide and providing me his valuable guidance regarding to my research report. Last but not the least, I also express my grateful thanks to respondents for giving their valuable time to make this project to success.

(SARITA SINGH)

CONTENTS

Preface Supervisor's certificate Declaration Director's certificate Acknowledgement Executive Summary

CHAPTER 1 -INTRODUCTION

2 3 4 5 6 9

Mutual fund - Inception Mutual fund - Concept Organisation of Mutual fund Characteristics of M utual fund Historical events of M utual fund Different phases of Mutual fund
CHAPTER 2 - INDUSTRY PROFILE

12 12 14 17 19 19

Mutual fund companies in India Major players in Mutual fund industry 5 Easy steps to invest in Mutual fund Reliance Mutual fund Details of Reliance Mutual fund Different types of mutual fund offered by the Reliance Mutual Fund Future of Mutual fund in India Conception and performance in India
CHAPTER 3 - LITERATURE REVIEW

25 25 31 33 33 33 38 38

Working of Mutual fund Various Mutual fund schemes and their implications Risk measurement in Mutual fund Regulatory aspect of Mutual Fund Comparison of Investment products Restrictions on Investment Advantage of Mutual fund Disadvatage of Mutual fund Economic environment Technological environment Legal and Poltial environment Implications of Mutual fund industry

41 41 47 48 51 53 55 56 57 60 61 63

C H A PTER 4 - R ESEA R C H M ETH O D O LO G Y

Objective of the study Scope 68 Limitations 69 Steps of Research design 71 CHAPTER 5 Data analysis and interpretation CHAPTER6 Findings Recommendations CHAPTER 7 Conclusion Bibliogrphy Annexures

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74 91 93 95 97 99

EXECUTIVE SUMMARY

A mutual fund is a trust that pools the savings of a number of investors who shares a common financial goal. The money thus collected is invested by the fund manager in different type of securities depending upon the objective of the schemes.

Mutual fund plays a vital role in the growth and development of the investment industry. Mutual fund is the right product in which investors invest their money securely and get more benefits as compare to other investments.

Basic aim of the project "Study of Performance Evaluation of Reliance Mutual Fund in Noida" is to study investor's awareness towards Mutual Funds investment .i.e. whether they have knowledge about Mutual Funds or which scheme of Mutual Funds they have preferred for investment.

The methodology used was data collection using Questionnaire. The target customers were salaried, professionals and business class people. The area of survey was restricted to people residing in Noida. The finding made during the survey was that more than 50 % of the investors told that they have preferred balance schemes for investment in the Mutual Funds.

In the survey it was found that the investors prefer to invest in the different investment schemes where they meet there objectives and safety and security concerns.

Mutual Funds are preferred to invest in because of its various advantages over the other investment options available in the market such as portfolio diversification, high return, diversified risk, transparency in its operation and management.

In order to conclude the topic, the study reveals that in a very short duration Mutual Funds industry developed tremendously in the finance sector and in the coming future it will occupy the top position in the finance sector.

10

CHAPTER -1 Introduction to mutual fund

11

MUTUAL FUND

INCEPTION The concept of mutual funds was introduced in India with the formation of Unit Trust of India in 1963. The first scheme launched by UTI was the now infamous Unit Scheme 64 in 1964. UTI continued to be the sole mutual fund until 1987, when some public sector banks and Life Insurance Corporation of India and General Insurance Corporation of India set up mutual funds. It was only in 1993 that private players were allowed to open shops in the country. Today, 32 mutual funds collectively manage Rs 6713575.19 cr under hundreds of schemes. A mutual fund is a trust that pools the savings of a number of investors with common financial goals. The collected money is invested in various instruments like debentures, shares, etc. The income generated from these instruments and the capital appreciation is shared by the investors in proportion to the number of units owned by them.

MUTUAL FUNDS - CONCEPT

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.

12

The flow chart below describes broadly the working of a mutual fund;

Investors

fc^^fkpssiecl
b$ick to jlJF

^ffw ^^ ^ilnk.

pwl t?ur

^Ik :ni'iiiiif y with

Returns.^

^Fiiiid

G Mutual Fund Operation Flow Chart

. V

FLOW CHART OF INVESTMENT PROCEDURE IN MUTUAL FUNDS

I n The flow chart of investment procedure in mutual funds shows that how the savings of investors invested in security market and how the investors get return back from there.

ORGANIZATION OF A MUTUAL FUND There are many entities involved and the diagram below illustrates the organisational set up of a mutual fund:

SEBI

The regulation of mutual funds operating in India falls under the preview of authority of the Securities and Exchange Board of India (SEBI). Any person proposing to set up a mutual fund in India is required under the SEBI (Mutual Funds) Regulations, 1996 to be registered with the SEBI.
Sponsor

The sponsor should contribute at least 40% to the net worth of the AMC. However, if any person holds 40% or more of the net worth of an AMC shall be deemed to be a sponsor and will be required to fulfill the eligibility criteria in the Mutual Fund Regulations. The sponsor or any of its directors or the principal officer employed by the mutual fund should not be guilty of fraud or guilty of any economic offence.

Trustees
The mutual fund is required to have an independent Board of Trustees, i.e. two third of the trustees should be independent persons who are not associated with the sponsors in any manner. An AMC or any of its officers or employees are not eligible to act as a trustee of any mutual fund. The trustees are responsible for - inter alia - ensuring that __

the AMC has all its systems in place, all key personnel, auditors, registrar etc. have been appointed prior to the launch of any scheme.

Asset Management Company(AMC) The sponsors or the trustees are required to appoint an AMC to manage the assets of the mutual fund. Under the mutual fund regulations, the applicant must satisfy certain eligibility criteria in order to qualify to register with SEBI as an AMC. The sponsor must have at least 40% stake in the AMC. The chairman of the AMC is not a trustee of any mutual fund. The AMC should have and must at all times maintain a minimum net worth of rs. 100 million The director of the AMC should be a person having adequate professional experience. The board of directors of such AMC has at least 50% directors who are not associate of or associated in any manner with the sponsor or any of its subsidiaries or the trustees.

Mutual Fund The Mutual Fund Regulations lay down several criteria that need to be fulfilled in order to be granted registration as a mutual fund. Every mutual fund must be registered with SEBI and must be constituted in the form of a trust in accordance with the provisions of the Indian Trusts Act, 1882. the instrument of trust must be in the form of a deed between the sponsor and the trustees of the mutual fund duly registered under the provisions of the Indian Registration Act, 1908. The Transfer Agents -_

The transfer agent is contracted by the AMC and is responsible for maintaining the register of investors / unit holders and every day settlements of purchases and redemption of units. The role of a transfer agent is to collect data from distributors relating to daily purchases and redemption of units. Custodian The mutual fund is required, under the Mutual Fund Regulations, to appoint a custodian to carry out the custodial services for the schemes of the fund. Only institutions with substantial organizational strength, service capability in terms of computerization and other infrastructure facilities are approved to act as custodians. The custodian must be totally delinked from the AMC and must be registered with SEBI.

Unit Holders They are the parties to whom the mutual fund is sold. They are ultimate beneficiary of the income earned by the mutual funds.

CHARACTERSTICS OF MUTUAL FUNDS The ownership is in the hands of the investors who have pooled in their funds. It is managed by a team of investment professionals and other service providers.

The pool of funds is invested in a portfolio of marketable investments. The investors share is denominated by 'units' whose value is called as Net Asset Value (NAV) which changes everyday.

17

The investment portfolio is created according to the stated investment objectives of the

fund.

RISK AN D RETURN M ATRIX O F M UTU AL FU ND R is k R e tu rn M a trix

The risk and return matrix of mutual funds with other financial instruments shows that mutual funds have lower risk and higher returns as compared to other financial

18

instruments.

HISTORICAL EVENTS OF MUTUAL FUNDS IN INDIA Short History: The government of India set up Unit Trust of India in 1963 by an act on parliament. UTI functioned under the regulatory and administrative control of the Reserve Bank of India till 1978. The Industrial Development Bank of India took over the regulatory and administrative control that year. The first scheme launched by UTI was Unit Scheme 1964 or the infamous Unit 64. The second phase of the mutual fund industry began with the public sector banks and Life Insurance Corporation of India and General Insurance Corporation of India setting up their own mutual funds in 1987. Finally, in 1993 Kothari Pioneer (now merged with Franklin Templeton) became the first private sector mutual fund to start operations in the country. A host of private sector as well as foreign funds set up shop after that. In 1996, a comprehensive and revised Mutual Fund regulation was put in place. The industry now functions under SEBI (Mutual Fund) regulations, 1996. The industry faced its toughest challenge when the US 64 fiasco shattered the confidence of investors. However, in 2003, the government bifurcated the erstwhile UTI. One entity manages the assets of US 64 and some assured return schemes. The other is a regular mutual fund working under the SEBI regulations. Thanks to the boom in the stock market, UTI managed to clean up its act and continue to enjoy the confidence of several investors. The whole industry also came out of the controversy without any major setbacks.

DIFFERENT PHASES OF MUTUAL FUNDS The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. The history of mutual funds in India can be broadly divided into four distinct phases: -

19

First Phase -1964-87

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

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 Crores.
Third Phase -1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and __

acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 Crores. The Unit Trust of India with Rs. 44,541 Crores of assets under management was way ahead of other mutual funds. Fourth Phase - Since February, 2003 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. Association of Mutual Funds in India (AMF1)

With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. __

Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.

The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the country. has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows: This mutual fund association of India maintains a high professional and ethical standard in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also code of conduct of the association. AMFI interacts with SEBI and works according to SEBI's guidelines in the mutual fund industry. Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. involved in this of It

22

It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.

AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds.

At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

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CHAPTER 2 Industry profile

2 4

MUTUAL FUND COMPANIES IN INDIA

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn assets under management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund companies in India took their position in the mutual funds market. The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Bank of India Mutual Fund Indian Bank Mutual Fund. The succeeding decade showed a new horizon in Indian mutual fund industry. By the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds started penetrating the fund families. In the same year the first Mutual Fund Regulations came into existence with re-registering all mutual funds except UTI. The regulations were further given a revised shape in 1996. Kothari Pioneer was the first private sector mutual fund company in India which has now merged with Franklin Templeton. Just after ten years with private sector players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund companies in India.

MAJOR PLAYERS IN MUTUAL FUNDS INDUSTRY

ABNAMRO Mutual Fund ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN AMRO Mutual Fund.

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Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life Financial is a global organization evolved in 1871 and is being represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores.
Bank ofBaroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30,1992 under the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AC is the custodian.
HDFC Mutual Fund
HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers namely Housing Development Finance Corporation Limited and Standard Life Investments Limited.

HSBC Mutual Fund

HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund.
ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management (India) Pvt. Ltd. was incorporated on April 6,1998.
Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Pic. of America, one of the largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of October, 1993 with two sponsorers, Prudential Pic. and ICICI Ltd. The Trustee
__.

Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of June, 1993. Sahara Mutual Fund Sahara Mutual Fund was set up on July 18,1996 with Sahara India Financial Corporation Ltd. as the sponsor. Sahara Asset Management Company Private Limited incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid-up capital of the AMC stands at Rs 25.8 crore. State Bank of India Mutual Fund State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs spread over 18 schemes. Tata Mutual Fund Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. 7,703 crores (as on April 30, 2005) of AUM. Kotak Mahlndra Mutual Fund Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having more than 1,99,818 investors in its various schemes. KMAMC started its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk - return profiles. It was the first company to launch dedicated gilt scheme investing only in government securities.

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Unit Trust of India Mutual Fund

UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual Fund with the support of UTI Trustee Company Privete Limited. UTI Asset Management Company presently manages a corpus of over Rs.20000 Crore. The sponsorers of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, Equity Funds and Balance Funds.
Reliance Mutual Fund

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the Trustee. It was registered on June 30,1995 as Reliance Capital Mutual Fund which was changed on March 11, 2004. Reliance Mutual Fund was formed for launching of various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities.
Standard Chartered Mutual Fund

Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard Chartered Asset Management Company Pvt. Ltd. is the AMC which was incorporated with SEBI on December 20,1999.
Franklin Templeton India Mutual Fund

The group, Franklin Templeton Investments is a California (USA) based company with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial services groups in the world. Investors can buy or sell the Mutual Fund through their financial advisor or through mail or through their website. They have Open end Diversified Equity schemes, Open end Sector Equity schemes, Open end Hybrid schemes, Open end Tax

28

Saving schemes, Open end Income and Liquid schemes, Closed end Income schemes and Open end Fund of Funds schemes to offer. Morgan Stanley Mutual Fund India Morgan Stanley is a worldwide financial services company and its leading in the market in securities, investment management and credit services. Morgan Stanley Investment Management (MISM) was established in the year 1975. It provides customized asset management services and products to governments, corporations, pension funds and nonprofit organizations. Its services are also extended to high net worth individuals and retail investors. In India it is known as Morgan Stanley Investment Management Private Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the first close end diversified equity scheme serving the needs of Indian retail investors focusing on a longterm capital appreciation. Escorts Mutual Fund Escorts Mutual Fund was setup on April 15, 1996 with Escorts Finance Limited as its sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was incorporated on December 1,1995 with the name Escorts Asset Management Limited. Alliance Capital Mutual Fund Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital Management Corp. of Delaware (USA) as sponsorer. The Trustee is ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the corporate office in Mumbai. Benchmark Mutual Fund Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as the sponsorer and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company. Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Asset Management Company Pvt. Ltd. is the AMC.

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Canbank Mutual Fund Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai. Chola Mutual Fund Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is the Trustee Company and AMC is Cholamandalam AMC Limited. LIC Mutual Fund Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. . The Company started its business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund. GIC Mutual Fund GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a Government of India undertaking and the four Public Sector General Insurance Companies, viz. National Insurance Co. Ltd (NIC), The New India Assurance Co. Ltd. (NIA), The Oriental Insurance Co. Ltd (OIC) and United India Insurance Co. Ltd. (UII) and is constituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882

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5 EASY STEPS TO INVEST IN MUTUAL FUNDS

1. Search: "Where to look for if we want to invest in MF" a) Contacting an Investment advisor in a bank or a brokerage house or an Independent Financial Advisor is the first step to gathering information. b) Mutual funds units can also be bought over the Internet. c) Mutual funds are much like any other product, in that there are manufacturers who provide the product and there are dealers who sell them. 2. Evaluation: "Evaluation: choosing the right mutual fund for you As an investor one may a) for the short term or long term want to invest b) want regular income or growth c) want to target lower risk or higher returns d) be convinced of a particular sector and want to invest in it 3. Purchase: a) Systematic Investment Plan (SIP): Allows you to save a part of your income regularly. Also used to reduce risk when investing in schemes targeting aggressive growth. b) Systematic Withdrawal Plan (SWP): Allows you to withdraw a part of your investment regularly. Used when you want to withdraw your investment for a specific regular payment, like insurance premium payments of monthly/quarterly frequency. c) Automatic debit: Saves the hassle of writing a cheque when making an investment. Your account is debited automatically for the amount invested. d) Dividend Plan: i. Dividend Payout: Under this plan investor can redeem his/her dividend at specific times.

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ii.

Dividend Reinvestment: Under this plan investor's dividend is reinvested back to it's principal amount which therefore increase the number of units investor is holding.

e) Growth; Under this plan income generated from investment will put back to it's invested amount which therefore increases the value of each unit customer is holding.
4. Post Purchase Monitoring: Once you have invested in an ongoing fund, expect a period of two to three days before

you receive an account statement on the address mentioned by you in your application form. a) The Account Statement Your account statement indicates your current holding in the scheme that you have invested. b) The transaction slip The transaction slip at the end of the account statement can be used for additional purchases, redemptions or to intimate the mutual fund on any change in bank mandates/address. c)NAV The NAVs of all the open-ended schemes are published at the fund's website, financial newspapers and AMFI (Association of Mutual Funds) web-site www.amfiindia.com
5. EXIT

Every AMC advice that every investor should monitor the his/her units NAV periodically but AMC also recommend their unit holders to not get swayed by short term considerations in deciding their exit. Redemption: In case of open ended funds investor can redeem his/her invested amount. Most funds take 1-3 days to credit your account with your redemption proceeds.

RELIANCE MUTUAL FUND

The Reliance Mutual Fund is one of the most popular and leading mutual fund in the mutual fund sector of India. The Reliance Mutual Fund is owned by Anil Dhirubhai Ambani Group and with respect to net worth it ranks among the top three of all the private financial service providers in India. It is an ISO 9001:2000 certified company, which offers innovative mutual fund products to a wide pool of customers. The Reliance mutual fund products are available in hundred and fifteen cities across India. It is one of the fastest growing mutual fund in India and the main reason of its popularity is that it has a wide portfolio of products that meets the requirements of each and every type of investors. The Reliance Mutual Fund is headed by Mr. Vikrant Gugnani - the CEO of the company.

Details of Reliance Mutual Fund: The schemes of Reliance Mutual Fund are being managed by Reliance Capital Asset Management Ltd, which is a subsidiary of Reliance Capital Limited. Reliance Capital Ltd holds 93.37% of the paid-up capital of the Reliance Capital Asset Management Ltd.

The value of the cumulative assets that are being managed (also called Assets Under Management (AUM)) amounted to ' 80,779 crores, as on Dec 31st 2007.
The investor base of Reliance Mutual Fund is over 43.67 lakh.

Different types of mutual fund offered by the Reliance Mutual Fund: Equity / Growth based products- The main objective of investing in such scheme is to provide capital appreciation over the medium to long- term range. Generally, in such __

schemes a major portion of the accumulated sum is invested in equities.

Debt /Income based products- the main objective of investing in such scheme is to provide regular and steady income to the investors of such funds. Generally, in such schemes a major portion of the accumulated sum is invested in fixed income securities. Sector Specific products - The main objective of investing in such funds is to gain leverage out of the fast growing sectors. Generally, in such schemes all the sum accumulated is invested in securities of a particular type of sector.

Some of the popular Reliance Mutual Fund Schemes have been listed below. Reliance Fixed Tenor Fund Reliance Liquidity Fund Reliance Liquid Treasury Plan Reliance Liquid Cash Plan Fund Reliance Floating Rate Fund Reliance Tax Saver Fund

RELIANCE FIXED FORIZON FUND Type of Scheme: Closed Ended Debt Scheme Investment Objective; The main objective is to generate regular returns and capital appreciation by investing in a diversified portfolio of government securities, fixed income securities, debt securities etc. These securities mature either in line with the scheme or before the scheme. AMC: Reliance Capital Asset Management Limited

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Fund Type: Fixed Maturity Plan Type of Plan: Growth Entry Load; NIL

SIP IN RELIANCE GOLD SAVING FUND

Investment Objective: The scheme aims to generate returns which closely relates to Reliance Gold Exchange Traded Fund. Minimum Application Amount: Rs 5000 and in multiples of Re 1 after SIP - Minimum Application Amount: There are various types of SIP options available starting from a minimum amount per month of Rs 100, 500 or Rs 1000 per month. You can also invest on a quarterly basis with a minimum amount per quarter is Rs 500 or Rs 1500 per quarter. Entry Load: NIL Exit Load; 2% if the units are redeemed or switched out before 1 year from the date of investment. NIL if the units are redeemed or switched out after 1 year from the date of investment. Benchmark: The price of Physical Gold Benefits of Investing in Systematic Investment Plan: You can reduce the risk of investing, as the average cost of purchasing the units would be low.

35

You can start investing very small amounts i.e. Rs 500 per month and this helps you to accumulate wealth over a long time. Such accumulation of wealth helps you to save more money for your marriage, education etc.

RELIANCE BANKING FUNDS

Type of Scheme: Open Ended Banking Sector Scheme Investment Objective:The main objective of the scheme is to generate income by primarily investing in equities / equity related fixed income securities of the banks. The fund will invest in banking equities only when the stocks are expected to perform well. If the stocks are not expected to perform well, the scheme will invest in debt and money market instruments. Asset Allocation: Equity / Equity related instruments - 0 to 100% Debt and Money Market Instruments - 0 to 100% Types of Plans Available; Retail Institutional Both the plans have the following Options: Dividend Option - Dividend Payout or Dividend Reinvestment Growth Option - Growth Option or Bonus Option Minimum Investment Amount - Rs 5000 and in multiples of Re 1 thereafter Minimum Additional purchase Amount - Rs 1000 and in multiples of Re 1 thereafter Entry Load: NA Exit Load: 1 % if the scheme is redeemed within 1 year from the date of investment. There no exit load if the scheme is redeemed after 1 year. __ is

Systematic Investment Plan: Yes Systematic Withdrawal Plan: Yes Systematic Transfer Plan; Yes Online Investment: Yes

RELIANCE SMALL CAP FUND

Investment Objective; This is an open ended equity scheme which is aimed to generate more capital appreciation by investing in small cap equities. This fund plans to invest in small cap companies which have high growth potential with very less valuations. The small caps have very high potential and they could be the future large cap companies. They do proper research to find an undervalued company which could turn into a multi bagger in future. This fund is a high risk / high return scheme. The investment phenomenon of this fund is as below: Small Cap Companies - 65% to 100% Equities of other companies - 0% to 35% Debt and Money Market instruments - 0% to 35% The fund manager for this scheme is Mr. Sunil Singhania. The various options available for investing in this scheme are growth option, Dividend Payout and Dividend Reinvestment. The Minimum Investment Amount is Rs 5000. Entry Load for this Scheme - NIL Exit Load: 2% (if the investment is withdrawn before 12 months) 1 % (12 months to 24 months) NIL - more than 24 months

FUTURE OF MUTUAL FUNDS IN INDIA

By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore. It is estimated that by 2010 March-end, the total assets of all scheduled commercial bank should be Rs.40,90,000 crore. The annual composite rate of growth is expected 13.4% during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%. According to the current growth rate, by year 2010, mutual fund assets will be double. Let us discuss with the following table:

Mutual Fund AUM's Growth

M o

Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Sep-04 4-Dec

M F

68984 93717 83131 94017 75306 137626 151141 149300

C h
2 6 1 3

2 5

(Source - AMFI)

CONCEPTION AND PERFORMANCE IN INDIA

The industry has steadily grown over the decade. For example, before the public sector mutual fund's entry, UTI was managing around Rs 6,700 Crore on its own. Public sector mutual funds also helped accelerate the growth of assets under management. UTI and its __

public sector counterparts were managing around Rs 47,000 Crore when Kothari Pioneer, the first private sector mutual fund, set up shop in 1993. Before the US 64 fiasco, there were 33 mutual funds with total assets of Rs 1, 21,805 Crore as on January 2003. The UTI was way ahead of other mutual funds with Rs 44,541 Crore assets under management. The industry overall has performed well over the years. Of course, there were a few funds houses, which disappointed investors. However, overall performance has been good. However, lack of awareness still impedes the growth of the mutual fund industry. Unlike developed countries, most of the household savings still go to bank deposits in India.

39

CHAPTER 3

4 0

WORKING OF MUTUAL FUNDS A mutual fund is set up by a sponsor. However, the sponsor cannot run the fund directly. He has to set up two arms: a trust and Asset Management Company. The trust is expected to assure fair business practice, while the AMC manages the money. All mutual funds except UTI functions under SEBI (Mutual Fund) regulations, 1996. The mutual fund collects money directly or through brokers from investors. The money is invested in various instruments depending on the objective of the scheme. The income generated by selling securities or capital appreciation of these securities is passed on to the investors in proportion to their investment in the scheme. The investments are divided into units and the value of the units will be reflected in Net Asset Value or NAV of the unit. NAV is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the valuation date. Mutual fund companies provide daily net asset value of their schemes to their investors. NAV is important, as it will determine the price at which you buy or redeem the units of a scheme. Depending on the load structure of the scheme, you have to pay entry or exit load.

VARIOUS MUTUAL FUND SCHEMES AND THEIR IMPLICATIONS Mutual fund schemes are classified on the basis of its structure and investment objective. By Structure Open-ended funds: Investors can buy and sell units of open-ended funds at NAV-related price every day. Open-end funds do not have a fixed maturity and it is available for subscription every day of the year. Open-end funds also offer liquidity to investments, as one can sell units whenever there is a need for money. Close-ended funds: These funds have a stipulated maturity period, which may vary from 3 to 15 years. They are open for subscription only during a specified period. Investors have the option of investing in the scheme during initial public offer period or buy or sell units of

41

the scheme on the stock exchanges. Some close-ended funds repurchase the units at NAVrelated prices periodically to provide an exit route to the investors. Interval Funds: These funds combine the features of both open and close-ended funds. They are open for sale and repurchase at a predetermined period. By Investment objective Growth funds: They normally invest most of their corpus in equities, as their objective is to provide capital appreciation over the medium-to-long term. Growth schemes are ideal for investors with risk appetite. Income funds: As the name suggests, the aim of these funds is to provide regular and steady income to investors. They generally invest their corpus in fixed income securities like bonds, corporate debentures, and government securities. Income funds are ideal for those looking for capital stability and regular income. Balanced funds: The objective of balanced funds is to provide growth along with regular income. They invest their corpus in both equities and fixed income securities as indicated in the offer documents. Balanced funds are ideal for those looking for income and moderate growth. Money Market Mutual Funds A money market fund is a mutual fund that invests solely in money market instruments. Money market instruments are forms of debt that mature in less than one year and are very liquid and invest the corpus in safer short-term instruments for less than one year like treasury bills, certificates of deposit, commercial paper and inter-bank call money. Treasury bills make up the bulk of the money market instruments. Securities in the money market are relatively risk-free. Money market funds are generally the safest and most secure of mutual fund investments. The goal of a money-market fund is to preserve principal while yielding a modest return. Money-market mutual fund is akin to a high-yield bank account but is not entirely risk free. When investing in a money-market fund, attention should be paid to the interest rate that is being offered.

Other Schemes

Tax saving schemes (ELSS): Tax saving schemes offer tax rebates to investors under section 88 of the Income Tax Act. They generally have a lock-in period of three years. They are ideal for investors looking to exploit tax rebates as well as growth in investments. These schemes are also known as Equity Linked Savings Scheme or ELSS. Special schemes: These schemes invest only in the industries specified in the offer document. Examples are InfoTech funds, FMCG funds, Pharma funds, etc. These schemes are meant for aggressive and well-informed investors. Index funds: Index Funds invest their corpus on the specified index such as BSE Sensex, NSE index, etc. as mentioned in the offer document. They try to mimic the composition of the index in their portfolio. Not only are the shares, even their weightage replicated. Index funds are a passive investment strategy and the fund manager has a limited role to play here. The NAVs of these funds move along with the index they are trying to mimic save for a few points here and there. This difference is called tracking error. Sector specific schemes: These funds invest only specified sectors like an industry or a group of industries or various segments like 'A' Group shares or initial public offerings.

Fund of Funds

A fund of funds is a type of mutual fund that invests in other mutual funds. Just as a mutual fund invests in a number of different securities, a fund of funds holds shares of many different mutual funds.Fund of funds are designed to achieve greater diversification than traditional mutual funds. But on the flipside, expense fees on fund of funds are typically higher than those on regular funds because they include part of the expense fees charged by the underlying funds. Also, since a fund of funds buys many different funds which themselves invest in many different stocks, it is possible for the fund of funds to own the same stock through several different funds and it can be difficult to keep track of the overall holdings.

43

Regional Mutual Fund

Regional mutual fund is a mutual fund that confines itself to investments in securities from a specified geographical area, usually, the fund's local region. A regional mutual fund generally looks to own a diversified portfolio of companies based in and operating out of its specified geographical area. The objective is to take advantage of regional growth potential before the national investment community does. Regional funds select securities that pass geographical criteria. For the investor, the primary benefit of a regional fund is that he/she increases his/her diversification by being exposed to a specific foreign geographical area.
International Mutual Funds

International mutual funds are those funds that invest in non-domestic securities markets throughout the world. Investing in international markets provides greater portfolio diversification and let you capitalize on some of the world's best opportunities. If investments are chosen carefully, international mutual fund may be profitable when some markets are rising and others are declining. However, fund managers need to keep close watch on foreign currencies and world markets as profitable investments in a rising market can lose money if the foreign currency rises against the dollar.
Value Funds

Value funds are those mutual funds that tend to focus on safety rather than growth, and often choose investments providing dividends as well as capital appreciation. They invest in companies that the market has overlooked, and stocks that have fallen out of favour with mainstream investors, either due to changing investor preferences, a poor quarterly earnings report, or hard times in a particular industry. Value stocks are often mature companies that have stopped growing and that use their earnings to pay dividends. Thus value funds produce current income (from the dividends) as well as long-term growth (from capital appreciation once the stocks become popular again). They tend to have more conservative and less volatile returns than growth funds.

44

Exchange Traded Funds

Exchange Traded Funds (ETFs) represent a basket of securities that are traded on an exchange. An exchange traded fund is similar to an index fund in that it will primarily invest in the securities of companies that are included in a selected market index. An ETF will invest in either all of the securities or a representative sample of the securities included in the index. The investment objective of an ETF is to achieve the same return as a particular market index. Exchange traded funds rely on an arbitrage mechanism to keep the prices at which they trade roughly in line with the net asset values of their underlying portfolios.
No-Load Mutual Funds

Mutual funds can be classified into two types - Load mutual funds and No-Load mutual funds. Load funds are those funds that charge commission at the time of purchase or redemption. They can be further subdivided into (1) Front-end load funds and (2) Backend load funds. Front-end load funds charge commission at the time of purchase and back-end load funds charge commission at the time of redemption. On the other hand, no-load funds are those funds that can be purchased without commission. No load funds have several advantages over load funds. Firstly, funds with loads, on average, consistently under perform no-load funds when the load is taken into consideration in performance calculations. Secondly, loads understate the real commission charged because they reduce the total amount being invested. Finally, when a load fund is held over a long time period, the effect of the load, if paid up front, is not diminished because if the money paid for the load had invested, as in a no-load fund, it would have been compounding over the whole time period.
Mid cap funds

Mid cap funds are those mutual funds, which invest in small / medium sized companies. As there is no standard definition classifying companies as small or medium, each mutual fund has its own classification for small and medium sized companies. Generally, companies with a market capitalization of up to Rs 500 crore are classified as small. Those companies that have a market capitalization between Rs 500 crore and Rs 1,000 crore are classified as ___

medium sized. Big investors like mutual funds and Foreign Institutional Investors are increasingly investing in mid caps nowadays because the price of large caps has increased substantially. Small / mid sized companies tend to be under researched thus they present an opportunity to invest in a company that is yet to be identified by the market. Such companies offer higher growth potential going forward and therefore an opportunity to benefit from higher than average valuations. But mid cap funds are very volatile and tend to fall like a pack of cards in bad times. So, caution should be exercised while investing in mid cap mutual funds.
Systematic Investment Plan (SIP)

For as little as Rs. 250* each month for 12 months or Rs. 500 every month for 6 months, you can purchase mutual fund units and avoid larger minimum investment amounts of over Rs. 1,000. Fixed amounts can be invested in Mutual Funds each month using funds drawn automatically from your savings account regularly. Investing in SBIMF's Systematic Investment Plan (SIP) offer the benefit of "Rupee-cost averaging", i.e., by purchasing Mutual Fund units over a period of time, you automatically buy more units when prices are low and fewer units when prices are high, resulting in lower "per unit acquiring cost" as a result of averaging. [*: For Magnum Gilt Fund, you can avail of SIP with Rs. 10,000 per month for 12 months.]

Systematic Withdrawal Plan (SWP)

Systematic Withdrawal Plan (SWP) lets you automatically redeem a prearranged amount of your mutual fund holdings each month. SWPs are an ideal way to supplement your monthly cash flow, meet minimum withdrawal requirements, or move assets between the funds. SWP is a no-charge service. When you set up your SWP, cash proceeds from each redemption (minimum balance maintained @ 25% of the holding at any given point of time) are given to you in the form of post-dated cheques (six monthly cheques at par, which enables you to get the funds lodged).

46

RISK MEASUREMENTS IN MUTUAL FUNDS

D E
I D

M E

Should be near to it's mean return.

Standard Deviation allows to evaluate the volatility STA NDA RD of the fund. The standard deviation of a fund D EV IA TIO N measures this risk by measuring the degree to which the fund fluctuates in relation to its mean return.

Beta > 1 * high risky

B E Beta is a fairly commonly used measure of risk. It basically indicates the level of volatility associated with Beta<l= the fund as compared to the benchmark.

'

'

R -

R-squared values range between 0 and R- square measures the correlation of a fund's1, where 0 represents no correlation and movement to that of an index. R-squared describes1 represents full correlation. the level of association between the fund's volatility and market risk. Alpha is the difference between the returns one would expect from a fund, given its beta, and the return it actually produces. It also measures the unsystematic risk.

A L

Alpha is positive = returns of stock are better then market returns. Alpha is neg^tfyeF returns of stock are worst then njarket. ''-.'; *: '*. I Alpha is zero = returns "are same as market.

SH A RPE RA TIO

Sharpe Ratio= Fund return in excess of risk free return/ Standard deviation of Fund. Sharpe ratios are ideal for comparing funds that have a mixed asset classes.

The higher the Sharpe ratio, the better a funds returns relative to the amount of risk taken.

4 7

REGULATORY ASPECTS OF MUTUAL FUND

RULES REGARDING SCHEMES OF MUTUAL FUND:

The asset management company shall launch no scheme unless the trustees approve such scheme and a copy of the offer document has been filed with the Board.

Every mutual fund shall along with the offer document of each scheme pay filing fees. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor. No one shall issue any form of application for units of a mutual fund unless the form is accompanied by the memorandum containing such information as may be specified by the Board. Every close ended scheme shall be listed in a recognized stock exchange within six months from the closure of the subscription
The asset management company may at its option repurchase or reissue the repurchased units of a close ended scheme.

A close-ended scheme shall be fully redeemed at the end of the maturity period. "Unless a majority of the unit holders otherwise decide for its rollover by passing a resolution". The mutual fund and asset management company shall be liable to refund the application money to the applicants,(i) If the mutual fund fails to receive the minimum subscription amount referred to
in clause (a) of sub-regulation (1); __

(ii) If the moneys received from the applicants for units are in excess of subscription as referred to in clause (b) of sub-regulation (1). The asset management company shall issue to the applicant whose application has been accepted, unit certificates or a statement of accounts specifying the number of units allotted to the applicant as soon as possible but not later than six weeks from the date of closure of the initial subscription list and or from the date of receipt of the request from the unit holders in any open ended scheme.

RULES REGARDING ADVERTISEMENT

The advertisement for each scheme shall disclose investment objective for each scheme.

An advertisement shall be truthful, fair and clear and shall not contain a statement, promise or forecast which is untrue or misleading. Advertisements shall not be so framed as to exploit the lack of experience or knowledge of the investors. All advertisements issued by a mutual fund or its sponsor or asset management company, shall state "all investments in mutual funds and securities are subject to market risks and the NAV of the schemes may go up or down depending upon the factors and forces affecting the securities market". The advertisement shall not compare one fund with another, implicitly or explicitly, unless the comparison is fair and all information relevant to the comparison is included in the advertisement. The offer document and advertisement materials shall not be misleading or contain any statement or opinion, which are incorrect or false.

49

INVESTMENT OBJECTIVES AND VALUA TIONPOLICIES The moneys collected under any scheme of a mutual fund shall be invested only in transferable securities in the money market or in the capital market or in privately placed debentures or securitized debts. Provided that moneys collected under any money market scheme of a mutual fund shall be invested only in money market instruments in accordance with directions issued by the Reserve Bank of India; The mutual fund shall not borrow except to meet temporary liquidity needs of the mutual funds for the purpose of repurchase, redemption of units or payment of interest or dividend to the unit holders. The mutual fund shall not advance any loans for any purpose. Every mutual fund shall compute and carry out valuation of its investments in its portfolio and publish the same in accordance with the valuation norms specified in Eighth Schedule Every mutual fund shall compute the Net Asset Value of each scheme by dividing the net assets of the scheme by the number of units outstanding on the valuation date. The Net Asset Value of the scheme shall be calculated and published at least in two daily newspapers at intervals of not exceeding one week. The price at which the units may be subscribed or sold and the price at which such units may at any time be repurchased by the mutual fund shall be made available to the investors.

50

GENERAL OBLIGATIONS

Every asset management company for each scheme shall keep and maintain proper books of accounts, records and documents, for each scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the fund and intimate to the Board the place where such books of accounts, records and documents are maintained.

The financial year for all the schemes shall end as of March 31 of each year. Every mutual fund or the asset management company shall prepare in respect of each financial year an annual report and annual statement of accounts of the schemes and the fund as specified in Eleventh Schedule. Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management company.
PROCEDURE FOR ACTION IN CASE OF DEFAULT

On and from the date of the suspension of the certificate or the approval, as the case may be, the mutual fund, trustees or asset management company, shall cease to carry on any activity as a mutual fund, trustee or asset management company, during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents, or securities that may be in its custody or control, relating to its activities as mutual fund, trustees or asset management company.

COMPARISON OF INVESTMENT PRODUCTS Investor tends to constantly compare one form of investment with another Investors certainly look for the best returns for different option. However, to determine which option __

is better, the comparison should be made in terms of other benefits that the investor ought to look for in any investment.

Investment Objective Equity FI Bonds Corporate Debentures Capital appreciation Income Income

Returns High
Moderate Moderate

Risk Tolerance High Low High

Investment Horizon Long term Med-long Med

Liquidity High Moderate Low

Corporate FD s Income Bank Deposits Income

Moderate

High

Med

Low

Low

Generallylow Flexible High Moderate

PPF

Income

Moderate

Low

Long term

Life Insurance Risk cover

Low

Low

Long term

Low

Gold

Inflation hedge

Moderate

Low

Long term

Moderate

Real Estate

Inflation hedge

High

Low

Long term

Low

Mutual Funds

Capital growth & Income

High

High

Flexible

High

52

RESTRICTIONS ON INVESTMENTS

A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer, which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the Act. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of asset management company

A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. All such investments shall be made with the prior approval of the Board of Trustees and the Board of asset management company.

No mutual fund under all its schemes should own more than ten per cent of any company's paid up capital carrying voting rights.

Transfers of investments from one scheme to another scheme in the same mutual fund shall be allowed only if, -

1. Such transfers are done at the prevailing market price for quoted instruments on spot basis. 2. The securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made. 3. A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees, provided that aggregate inter scheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund. 4. The initial issue expenses in respect of any scheme may not exceed six per cent of the __

funds raised under that scheme. 5. Every mutual fund shall 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 badly finance. 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 investments 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. No mutual fund scheme shall make any investment in; i. Any unlisted security of an associate or group company of the sponsor; or ii. company of the sponsor; or iii. The listed securities of group companies of the sponsor which is in excess of 30% of the net assets [of all the schemes of a mutual fund] 9. No mutual fund scheme shall invest more than 10 per cent of its NAV in the equity shares or equity related instruments of any company. Provided that, the limit of 10 per cent shall not be applicable for investments in index fund or sector or industry specific scheme. 10. A mutual fund scheme shall not invest more than 5% of its NAV in the equity shares or equity related investments in case of open-ended scheme and 10% of its NAV in case of close-ended scheme. Any security issued by way of private placement by an associate or group

54

ADVANTAGES OF MUTUAL FUNDS The advantages of mutual funds are given below: -Portfolio Diversification Mutual funds invest in a number of companies. This diversification reduces the risk because it happens very rarely that all the stocks decline at the same time and in the same proportion. So this is the main advantage of mutual funds. Professional Management Mutual funds provide the services of experienced and skilled professionals, assisted by investment research team that analysis the performance and prospects of companies and select the suitable investments to achieve the objectives of the scheme. Low Costs Mutual funds are a relatively less expensive way to invest as compare to directly investing in a capital markets because of less amount of brokerage and other fees. Liquidity This is the main advantage of mutual fund, that is whenever an investor needs money he can easily get redemption, which is not possible in most of other options of investment. In open-ended schemes of mutual fund, the investor gets the money back at net asset value and on the other hand in close-ended schemes the units can be sold in a stock exchange at a prevailing market price. Transparency In mutual fund, investors get full information of the value of their investment, the proportion of money invested in each class of assets and the fund manager's investment strategy.

55

Flexibility

Flexibility is also the main advantage of mutual fund. Through this investors can systematically invest or withdraw funds according to their needs and convenience like regular investment plans, regular withdrawal plans, dividend reinvestment plans etc.
Convenient Administration

Investing in a mutual fund reduces paperwork and helps investors to avoid many problems like bad deliveries, delayed payments and follow up with brokers and companies. Mutual funds save time and make investing easy.
Affordability

Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy. Well Regulated All mutual funds are registered with SEBI and they function with in the provisions of strict regulations designed to protect the interest of investors. The operations of mutual funds are regularly monitored by SEBI.

DISADVANTAGES OF MUTUAL FUNDS Mutual funds have their following drawbacks:

No Guarantees

No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through mutual fund runs the risk of losing the money. __

Fees and Commissions

All funds charge administrative fees to cover their day to day expenses. Some funds also charge sales commissions or loads to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial advisor, you will pay a sales commission if you buy shares in a Load Fund.
Taxes

During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive; even you reinvest the money you made.
Management Risk

When you invest in mutual fund, you depend on fund manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in index funds, you forego management risk because these funds do not employ managers.

ECONOMIC ENVIRONMENT

The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. People rarely understood, and of course investing was out of question. But yes, some 24 million shareholders was accustomed with guaranteed high returns by the begining of liberalization of the industry in 1992. This good record of UTI became marketing tool for new entrants. The expectations of investors touched the sky in profitability factor. However, people were miles away from the praparedness of risks factor after the liberalization. The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as high as Rs. l,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There was rather no choice apart from holding the cash or to further continue investing in shares. One more thing to be noted, since only closed-end funds were floated in the market, the investors disinvested by selling at a loss in the secondary market. The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the losses by disinvestments and of course the lack of transparent rules in the whereabout rocked confidence among the investors. Partly owing to a relatively weak stock market performance, mutual funds have not yet recovered, with funds trading at an average discount of 10~120 percent of their net asset value. The supervisory authority adopted a set of measures to create a transparent and competitve environment in mutual funds. Some of them were like relaxing investment restrictions into the market, introduction of open-ended funds, and paving the gateway for mutual funds to launch pension schemes. The measure was taken to make mutual funds the key instrument for long-term saving. The more the variety offered, the quantitative will be investors. At last to mention, as long as mutual fund companies are performing with lower risks and higher profitability within a short span of time, more and more people will be inclined to invest until and unless they are fully educated with the dos and don'ts of mutual funds.

58

GROWTH IN ASSETS UNDER MANAGEMENT

180000

160000 140000 120000 100000

w e o o
M

80000

tf

40000 20000

1 5

1 5

M M

1 2

g 8

I i 1i
x .c * f *

P h
Y E

Though India is a minor player in the global mutual fund industry, its AUM as a proportion of the global AUM has steadily increased and has doubled over its levels in 1999.

RECENT TRENDS IN MUTUAL FUND INDUSTRY

The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by the nationalized banks and smaller private sector players.

Many nationalized banks got into the mutual fund business in the early nineties and got off to a start due to the stock market boom was prevailing. These banks did not really understand the mutual fund business and they just viewed it as another kind of banking activity. Few hired specialized staff and generally chose to transfer staff from the parent organizations. The performance of most of the schemes floated by these funds was not good. Some schemes had offered guaranteed returns and their parent organizations had to bail out these AMCs by paying large amounts of money as a difference between the

59

guaranteed and actual returns. The service levels were also very bad. Most of these AMCs have not been able to retain staff, float new schemes etc. The foreign owned companies have deep pockets and have come in here with the expectation of a long haul. They can be credited with introducing many new practices such as new product innovation, sharp improvement in service standards and disclosure, usage of technology, broker education and support etc. in fact, they have forced the industry to upgrade itself and service levels of organizations like UTI have improved dramatically in the last few years in response to the competition provided by these.

TECHNOLOGICAL ENVIRONMENT

IMPACT OF TECHNOLOGY Mutual fund, during the last one decade brought out several innovations in their products and is offering value added services to their investors. Some of the value added services that are being offered are: 1. 2. 3. 4. Electronic fund transfer facility. Investment and re-purchase facility through internet. Added features like accident insurance cover, mediclaim etc. Holding the investment in electronic form, doing away with the traditional form of unit certificates. 5. Cheque writing facilities. 6. Systematic withdrawal and deposit facility.

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ONLINE MUTUAL FUND TRADING

More easily accessible to an ever increasing number of investors across the country. For the first time in India the mutual fund start using the automated trading, clearing and settlement system of stock exchanges for sale and repurchase of open-ended dematerialized mutual fund units. Systematic Investment Plan (SIP) and Systematic Withdrawal Plan (SWP) were options introduced which have come in very handy for the investor to maximize their returns from their investments. SIP ensures that there is a regular investment that the investor makes on specified dates making his purchases to spread out reducing the effect of the short term volatility of markets. SWP was designed to ensure that investors who wanted a regular income or cash flow from their investments were able to do so with a pre-defined automated form. Today the SW facility has come in handy for the investors to reduce their taxes. Instead of going through the hassles of filling up a repurchase request form, sending it to the investor service centre and then waiting for cheque to be delivered to them, all they need to do is to simply bank the cheques with them and save time and effort.

LEGAL AND POLITICAL ENVIRONMENT

ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August 1995. AMFI is an apex body of all Asset Management Companies (AMC), which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of board of directors. AMFI has brought down the Indian Mutual Fund Industry to a professional and healthy

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market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interest of mutual funds as well as their unit holders.

REGULA TORY MEASURES BY SEBI Like Banking & Insurance up to the nineties of the last century, Mutual Fund industry in India was set up and functioned exclusively in the state monopoly represented by the Unit Trust of India. This monopoly was diluted in the eighties by allowing nationalized banks and insurance companies (LIC & GIC) to set up their institutions under the Indian Trusts Act to transact mutual fund business, allowing the Indian investor the option to choose between different service providers. Unit Trust was a statutory corporation governed by its own incorporating act. There was no separate regulatory authority up to the time SEBI was made a statutory authority in 1992. but it was only in the year 1993, when a government took a policy decision to deregulate Indian Economy from government control and to transform it market oriented, that the industry was opened to competition from private and foreign players. By the year 2000 there came to be established in the market 34 mutual funds offerings a variety of about 200 schemes, mobilizing a gross investment of Rs. 81000 crores.

SECURITIES AND EXCHANGE BOARD OF INDIA (MUTUAL FUNDS) REGULATIONS, 1996 The fast growing industry is regulated by Securities and Exchange Board of India (SEBI) since inception of SEBI as a statutory body. SEBI initially formulated "SECURITIES AND EXCHANGE BOARD OF INDIA (MUTUAL FUNDS) REGULATIONS, 1993" providing detailed procedure for establishment, registration, constitution, management of trustees, asset management company, about schemes/products to be designed, about investment of funds collected, general obligation of MFs, about inspection, audit etc. based on experience gained and feedback received from the market SEBI revised the guidelines of 1993 and issued fresh guidelines in 1996 titled "SECURITIES AND EXCHANGE BOARD OF

INDIA (MUTUAL FUNDS) REGULATIONS, 1996". The said regulations as amended from time to time are in force even today. The SEBI mutual fund regulations contain ten chapters and twelve schedules. Chapters containing material subjects relating to regulation and conduct of business by Mutual Funds.

IMPLICATIONS FOR MUTUAL FUND INDUSTRY

The Union Budget 06 moved on predictable and there were some sops for the mutual fund industry as well. The dividends from MF units' continue to be tax-free for its investors. Debtoriented Mutual Funds schemes continue to pay distribution tax amounting to 12.5 percent on the dividends declared, while equity-oriented mutual funds schemes will not be required to pay distribution tax. Long-term capital gains tax on equity funds remains nil while for debt funds it would be taxed at the prevailing rates- 10% without indexation or 20% with indexation. The limit on FII investment in corporate debt would be raised from $0.5bn to $1.5bn, which is expected to encourage the investments in debt market. Open-ended equityoriented schemes and close-ended equity oriented schemes would now be treated on par for exemption from dividend distribution tax. The ceiling on aggregate investment by mutual funds in overseas instruments would be raised from $1 billion to $2billion and the requirement of 10% reciprocal share holding would be removed and a limited number of qualified Indian mutual funds to invest, cumulatively up to $1 billion, in overseas exchange traded funds would be allowed. Mutual Fund investment abroad is currently restricted in companies that have a holding of at least 10% in a listed Indian company. This will enable Indian investors to invest in global equity markets with a wider choice of stocks to permit greater diversification and the convenience of dealing with an Indian mutual fund. However, now, investors would have to bear the brunt of increased rate of securities transaction tax. The Investments in fixed deposits in scheduled banks for a term of not less
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than five years has been included in section 80C of the Income tax Act, thereby making them more attractive to the general public, which may affect debt-oriented mutual fund schemes.

CHARACTERISTICS AND PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA Sharad Panwar and Dr. R. Madhumathi Indian Institute of Technology, Madras LITERATURE REVIEW Literature on mutual fund performance evaluation is enormous. A few research studies that have influenced the preparation of this paper substantially are discussed in this section.

Sharpe, William F. (1966) suggested a measure for the evaluation of portfolio performance. Drawing on results obtained in the field of portfolio analysis, economist Jack L. Treynor suggested a new predictor of mutual fund performance, one that differs from virtually those used previously by incorporating the volatility of a fund's return in a simple yet meaningful manner. Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio performance alpha) that estimates how much a manager's forecasting ability contributes to returns. As indicated by Statman (2000), the e SDAR of a fund portfolio is the excess return of the portfolio over the return of the benchmark index, where the portfolio is leveraged to have the benchmark index's standard deviation. S.Narayan Rao , et. al., evaluated performance Indian mutual funds in a bear market through relative performance index, risk-return analysis, Treynor's ratio, Sharpe's ratio, Sharpe's measure, Jensen's measure, and Fama's measure. The study used 269 open-ended schemes (out of total schemes of 433) for computing relative performance index. Then after excluding funds whose returns are less than risk-free returns, 58 schemes are finally used for further analysis. The results of __ of (Jensen's fund's has all

performance measures suggest that most of mutual fund schemes in the sample of 58 were able to satisfy investor's expectations by giving excess returns over expected returns based on both premium for systematic risk and total risk. Bijan Roy, et. al., conducted an empirical study on conditional performance of Indian mutual funds. This paper uses a technique called conditional performance evaluation on a sample of eighty-nine Indian mutual fund schemes .This paper measures the performance of various mutual funds with both unconditional and conditional form of CAPM, Treynor-Mazuy model and Henriksson-Merton model. The effect of incorporating lagged information variables into the evaluation of mutual fund managers' performance is examined in the Indian context. The results suggest that the use of conditioning lagged information variables improves the performance of mutual fund schemes, causing alphas to shift towards right and reducing the number of negative timing coefficients. Mishra, et al., (2002) measured mutual fund performance using lower partial moment. In this paper, measures of evaluating portfolio performance based on lower partial moment are developed. Risk from the lower partial moment is measured by taking into account only those states in which return is below a pre-specified "target rate" like risk-free rate. Kshama Fernandes(2003) evaluated index fund implementation in India. In this paper, tracking error of index funds in India is measured .The consistency and level of tracking errors obtained by some well-run index fund suggests that it is possible to attain low levels of tracking error under Indian conditions. At the same time, there do seem to be periods where certain index funds appear to depart from the discipline of indexation. K. Pendaraki et al. studied construction of mutual fund portfolios, developed a multi-criteria methodology and applied it to the Greek market of equity mutual funds. The methodology is based on the combination of discrete and continuous multi-criteria decision aid methods for mutual fund selection and composition. UTADIS multi-criteria decision aid method is employed in order to develop mutual fund's performance models.

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Goal programming model is employed to determine proportion of selected mutual funds in the final portfolios. Zakri Y.Bello (2005) matched a sample of socially responsible stock mutual funds matched to randomly selected conventional funds of similar net assets to investigate differences in characteristics of assets held, degree of portfolio diversification and variable effects of diversification on investment performance. The study found that socially responsible funds do not differ significantly from conventional funds in terms of any of these attributes. Moreover, the effect of diversification on investment performance is not different between the two groups. Both groups underperformed the Domini 400 Social Index and S & P 500 during the study period.

METHODOLOGY USED

These three traditional measures of investment performance are used to compare the publicsector sponsored & private-sector sponsored mutual funds. These are Jensen's alpha, p a ; Sharpe information ratio, Sp; and excess standard deviation adjusted return, e SOAR. Jensen's alpha relies on beta as a measure of the risk of a mutual fund portfolio whereas the two other performance measures rely on total variability of returns. Jensen's estimated as: p t p p m t r r a p = + .............(1) Where is the excess return (i.e., the observed return minus the risk-free rate) on mutual fund portfolio p in month t, is the excess return on the benchmark index in month t(i.e., the observed return on the benchmark index minus the risk-free rate), ptr mtr p p is mutual fund portfolio's beta . The riskfree rate is represented by the monthly return on three-month(91-day) Treasury bills. alpha is

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CHAPTER 4

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OBJECTIVES OF THE STUDY

To study about the mutual funds industry. To Compare Investment Options available in Noida city. To find out the preference for Reliance with Different mutual fund plans available in Noida.
To study the approach of investors towards mutual funds.

To find out the USP of Reliance mutual fund in Noida market. To suggest a strategy to Reliance mutual fund for creating awareness about mutual fund and getting an competitive advantage over other investment options in Noida.

SCOPE OF THE STUDY.

In order to keep up with the ever changing requirements of the market new concepts and ideas should be brought into consideration by the organizations through research & development. A big boom has been witnessed in the mutul fund industry in recent time .A large number of new player have entered the market and trying to gain market share in this rapidly improving market. This study enables the user with answers to formulate an effective marketing mix strategy with a broader prospective to tap areas where it did not feel the need earlier, hence, the decision of whether to penetrate this section or not can be found out at the end of data analysis.

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The study will help to know the prefernce of the customer ,which company ,portfolio ,modes of investment ,option for getting return. It also gives an idea of the potential of our business in the future and preventive measures which would be taken by mutual fund industry for increasing investor's interest towards the investment in mutual funds.

LIMITATIONS The limitations of this study can be: 1. Sample size taken is small and may not be sufficient to predict the results with 100% accuracy. 2. The result is based on primary and secondary data that has its own limitations. 3. Purity of report depends on the respondents how willingly they have given the answers. 4. The middle class people do not know basic concept of mutual fund so creating awareness is a big challenge for me. 5. The findings of sample survey cannot be generalized to the entire population, as the sample is not representative. As there is no set criterion for selecting the sample, there is a scope for the research being influenced by the bias of the researcher. 6. Many customers are thinking that investment in share market is very risky. As ULIP and Mutual fund both are related to share market. 7. A general preference to LIC and UTI over private players.

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8. Hesitations on the part of respondents to disclose financial information.

RESEARCH METHODOLOGY Research design can be defined as the plan and structure of enquiry formulated in order to obtain answers to research questions on business on business aspects. Research design can be understood as that which gives the blueprint for collection, measurement and analysis of business data.The research plan constitutes the overall program of the business research process. The planning process includes the framework of the entire research process, starting from developing hypothesis to the final evaluation of collected data. Research design is essential because it facilitates the smooth flow of various research results can be obtained with minimum utilization of time, money and effort. Therefore it can be said that design is highly essential for planning research activities. If research design is not properly prepared, it will jeopardize the whole research process and will not meet its purpose.

EXPLORATORY STUDIES

Exploratory research is carried out to make problem suited to more precise investigation or to frame aworking hypothesis from an operational perspective. Exploratory studies help in understanding and assessing the critical issues of problems. It is not used in case where a definite result is desired. However, the study results are used for subsequent research to attain conclusive results for a particular problem situation. Exploratory studies are

conducted for three main reasons, to analyze a problem situation, to evaluate alternatives and to discover new ideas.

STEPS OF RESEARCH DESIGN;

1. Define the information needed: This first step states that what is the information that is actually required. Information in this case we require is that what is the approach of investors while investing their money in mutual funds e.g. what do they consider before investing in mutual fund, how often do they monitor their investment etc. So, the information sought and information generated is only possible after defining the information needed. 2. Design the research: A research design is a framework or blueprint for conducting the research project. It details the procedures necessary for obtaining the information needed to solve research problem. In this project Descriptive Research is designed. 3. Sources of data : Both primary and secondary data have been used for the purpose of the data collection. Primary data was collected by administering an unbiased structured questionnaire to the respondents. And the secondary data was collected from secondary sources of information that included websites, books and business magazines. 4. Specify the scaling procedures: Scaling involves creating a continuum on which measured objects are located. Both nominal and interval scales have been used for this purpose. 5. Construct and pretest a questionnaire: A questionnaire is a formalized set of questions for obtaining information from respondents. Where as pretesting refers to __

the testing of the questionnaire on a small sample of respondents in order to identify and eliminate potential problems.

6. Specify the sampling process and sample size:1) Population All the investors of NCR region. 2) Sample Unit Any investor in NCR region. 3) Sample size This study involves 60 respondents. 4) Sample design The study uses convenient sampling technique to make contacts with the respondents.

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