CONTENT

Sl.No.

DESCRIPTION INTRODUCTION COMPANY PROFILE

PAGE NO.

CHAPTER I CHPATER II

2-24 25-47

CHPATER III

CASE STUDY

48-52

CHAPTER IV CHAPTER V

ANALYSIS FINDINGS SUGGESTIONS

53-72 73-75

CHAPTER VI CHAPTER-VII

!UESTIONNAIRE "I"ILOGRAPHY

7#-7$ 8%-8&

CHAPTER-&

INTODUCTION TO MUTUAL FUNDS

I'()o*+,(-o'. Mutual funds are for everyone. Around the world, millions of investor invests in mutual funds because of their safety, ease of investing and the many advantages they offer. It is very necessary before investing that you know some basics of investing which are given below. It is best option for those investors who dont have time to manage their fund.

I'/01(20'(1 3'* 4o+. Investment is never an easy process. owever, a sound understanding of some basic concepts make the process of investment decision!making much easier and the e"perience much more en#oyable. $he following step can help you get started on your path to becoming a successful investor%

&. I*0'(-54 4o+) 5-'3',-3l '00*1 3'* 6o3l1% $he first step is to get a clear understanding of your own financial needs and goals. Ask yourself the &uestion '(hen do I need money and for what purpose) *ist down your financial goals and when they will materialise +daughters higher education after , years, purchase of a house after 1- years., and how much money you will need for the same. $he answer will help you arrive at the time frame for your investment ' short term, medium term or long term.

F-'3',-3l Go3l1

A2o+'( )07+-)0*

Y03)81 (o 3,9-0/0

I'/01(20'( 9o)-:o' /

3( (o*3481 ;)-,0 R0(-)020'( D3+69(0)81 9-690) E*+,3(-o' "+4-'6 3 ,3) So'81 ,o2;+(0) ,o+)10 R1. 4 L3<91 R1. %.5 L3<91 R1. 25 L3<91 R1. 2 L3<91

4o+) 6o3l 2% 403)1 # 403)1 Lo'6 (0)2 Lo'6 (0)2

2 403)1 # 2o'(91

M0*-+2 (0)2 S9o)( (0)2

2. U'*0)1(3'* 4o+) (ol0)3',0 (o )-1<. 0efore making an investment decision, it is very necessary for an investor to know his risk tolerance limits. (ill he be comfortable with fluctuations in the value of his investments) 1r would he prefer to settle down for a lower return without many ups and downs. 0y knowing risk tolerance limit of himself an investor can decide his portfolio and also choose from a variety of financial investment tools , one which suit his portfolio the most.

3. E1(-23(0 4o+) )07+-)0* )3(0 o5 )0(+)'. 2our re&uired rat 3

e of return depends on your financial goals and the time you have to achieve them. $ake an e"ample that your retirement goal at 45 years is 6s. 2- *akhs and your monthly savings is 6s. 4---, your re&uired rate of return depending on your current age would be%

P)010'( A60 43 403)1 48 403)1

R0(+)'1 $.5 = 2&.2=

As you can see, the later you start, the higher will be your re&uired rate of return7 hence as your investment hori8on reduces, for the same level of saving you may need to take higher risk. Alternatively, if you were not willing to take a higher risk, you would have to save a higher amount every month! 6s 95--, almost twice the original savings re&uired to achieve your target accumulation. $hese three steps give a very basic idea about how to invest, when an investor is seeking investment in different financial tools. $hough there are different steps of investment in each financial tool, these acts as blue print for them too.

$he following diagram e"plains the working of Mutual :und 4

MUTUAL FUND OPERATION CHART

M+(+3l F+'*1 3'* Yo+. >93( -1 3 2+(+3l 5+'*? A mutual fund is a type of financial intermediary that pools the funds of investors who seek the same general investment ob#ective and invests them in a number of different types of financial claims +e.g. e&uity shares, bonds, money market instrument.. $hese pooled funds provide thousands of investors with proportional ownership of diversified managed by professional investment managers. >90)0 *o 2+(+3l 5+'*1 -'/01(? 0roadly, mutual funds invest basically in three types of asset classes% S(o,<1. ;tocks represent ownership or e&uity in a company. $hese are also called as shares. "o'*1. $hese represent debt from companies, financial institutions or government agencies. Mo'04 M3)<0( I'1()+20'(1. $hese include short term debt instrument such as treasury bills, certificates of deposits and inter bank money.

H-1(o)4 o5 M+(+3l F+'*1 -' I'*-3. In India the setting up of <nit $rust of India +<$I. in 19,/ marked the advent of mutual fund industry. <nit $rust of India was set up by an Act of =arliament. $he purpose of establishing of <nit $rust of India was to give a fillip to the e&uity market. In the wake of Indo!>hina war of 19,2, there was shortage of savings going into industrial investment for economic development. $here was a need to mobili8e ade&uate amount of risk capital for industrial enterprise. $he household savings were sought to be channeli8ed into primary and secondary market through units. owever, in the initial years, the emphasis in <$I was on income product. Master ;hare launched in 195, ushered in the e&uity!oriented schemes in India. <nit $rust of India launched a variety of innovative products suited to meet diverse needs of investors, virtually the complete life cycle of investors.

E/ol+(-o' o5 M+(+3l F+'* -' I'*-3% $he mutual fund industry in India started in 19,/ with the formation of <nit $rust of India, at the initiative of the ?overnment of India and 6eserve 0ank the. $he history of mutual funds in India can be broadly divided into four distinct phases. F-)1( P9310. &$#4-&$87 <nit $rust of India +<$I. was established on 19,/ by an Act of =arliament. It was set up by the 6eserve 0ank of India and functioned under the 6egulatory and administrative control of the 6eserve 0ank of India. In 19@5 <$I was de!linked from the 60I and the Industrial Aevelopment 0ank of India +IA0I. took over the regulatory and administrative control in place of 60I. $he first scheme launched by <$I was <nit ;cheme 19,3. At the end of 1955 <$I had 6s.,, @-- crores of assets under management. S0,o'* P9310. &$87-&$$3 @E'()4 o5 P+Al-, S0,(o) F+'*1B 195@ marked the entry of non! <$I, public sector mutual funds set up by public sector banks and *ife Insurance >orporation of India +*I>. and ?eneral Insurance >orporation of India +?I>.. ;0I Mutual :und was the first non! <$I Mutual :und established in Bune 195@ followed by >anbank Mutual :und +Aec 5@., =un#ab Cational 0ank Mutual :und +Aug 59., Indian 0ank Mutual :und +Cov 59., 0ank of India +Bun 9-., 0ank of 0aroda Mutual :und +1ct 92.. *I> established its mutual fund in Bune 1959 while ?I> had set up its mutual fund in Aecember 199-. At the end of 199/, the mutual fund industry had assets under management of 6s.3@, --3 crores. T9-)* P9310. &$$3-2%%3 @E'()4 o5 P)-/3(0 S0,(o) F+'*1B (ith the entry of private sector funds in 199/, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 199/ was the year in which the first Mutual :und 6egulations came into being, under which all mutual funds, e"cept <$I were to be registered and governed. $he erstwhile Dothari =ioneer +now merged with :ranklin $empleton. was the first private sector mutual fund registered in Buly 5

199/. $he 199/ ;E0I +Mutual :und. 6egulations were substituted by a more comprehensive and revised Mutual :und 6egulations in 199,. $he industry now functions under the ;E0I +Mutual :und. 6egulations 199, $he 199/ ;E0I +Mutual :und. 6egulations were substituted by a more comprehensive and revised Mutual :und 6egulations in 199,. $he industry now functions under the ;E0I +Mutual :und. 6egulations 199, Fo+)(9 P9310. S-',0 2%%3 In :ebruary 2--/, following the repeal of the <nit $rust of India Act 19,/ <$I was bifurcated into two separate entities. 1ne is the ;pecified <ndertaking of the <nit $rust of India with assets under management of 6s.29, 5/4 crores as at the end of Banuary 2--/, representing broadly, the assets of <; ,3 scheme, assured return and certain other schemes. $he ;pecified <ndertaking of <nit $rust of India, functioning under an administrator and under the rules framed by ?overnment of India and does not come under the purview of the Mutual :und 6egulations. $he second is the <$I Mutual :und *td, sponsored by ;0I, =C0, 010 and *I>. It is registered with ;E0I and functions under the Mutual :und 6egulations. (ith the bifurcation of the erstwhile <$I which had in March 2--- more than 6s.@,, --- crores of assets under management and with the setting up of a <$I Mutual :und, conforming to the ;E0I Mutual :und 6egulations, 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 ;eptember, 2--3, there were 29 funds, which manage assets of 6s.14/1-5 crores under 321 schemes. F+'*1 5o) All R031o'1 3'* All S031o'1. TYPES OF MUTUAL FUNDS. Mutual :unds have specific investment ob#ectives such as growth of capital, safety of principal current income or ta" e"empt income, one can select one fund or any number of different funds to help one meets ones specific goals. In general mutual fund fall under / general categories% ! 9

 E&uity fund invest in shares of common stocks. :i"ed income funds invest in government or corporate securities which offer fi"ed rate of returns. 0alanced fund invest in a combination of both stocks and bonds. AGGRESSIVE GRO>TH FUNDS.$hese funds seek to provide ma"imum growth of capital with secondary emphasis on dividend or interest income. $hey invest in common stocks with a high potential for rapid growth and capital appreciation. Aggressive growth funds are suitable for those investors who can afford to assume the risk of potential loss in value of their investment in the hope of achieving substantial and rapid gains. $hey are not suitable for investors who must conserve their principal or who must ma"imi8e their current income. GRO>TH FUNDS.*ike aggressive growth funds, growth fund generally invests in stocks for growth rather than income. $hey are considered more conservative in their approach because they usually invest in established companies to achieve long!term growth. ?rowth fund provides low current income but the investor principal is more stable then it would be in an aggressive growth fund. (hile the growth potential may be less over the short term, many growth funds have superior long!term performance records. $hese funds are suitable for growth oriented investors but not investors who are unable to assume risk or who are dependent on ma"imi8ing current income from there investments. GRO>TH AND INCOME FUNDS.?rowth and income funds seek long!term growth of capital as well as current income. $he investments strategies use to reach these goals vary among funds.

1-

?rowth and income funds have low to moderate stability of principal and moderate potential for current income and growth. $hey are suitable for investors who can assume some risk to achieve growth of capital but want to maintain a moderate level of current income.

FICED INCOME FUNDS.$he goal of fi"ed income fund is to provide high current income consistent with the level of capital. ?rowth of capital is of secondary importance. :i"ed income funds offer a higher level of current income than money market funds, but a lower stability of principal. :i"ed income funds are suitable for investors who want to ma"imi8e current income and who can assume a degree of capital risk in order to do so. E!UITY FUNDS.:unds that invest in stocks represent the largest category of mutual fund. ?enerally the investment ob#ective of this class of fund is long!term capital growth with some income. $here are however many type of e&uity funds. "ALANCED FUNDS%! $he 0alanced funds aims to provide both growth and income. $hese funds invest in both shares and fi"ed income securities in the proportion indicated in their offer documents. It is an idea for investors who are looking for the combinations of income and moderate growth. MONEY MARDET FUNDSE LI!UID FUNDS.:or the cautious investors these funds provide a very high stability of principal while seeking a moderate to high current income. $hey invest in highly li&uid7 virtually risk free, short!term debt securities of agencies of the Indian government, banks and corporation and 11

treasury bills. 0ecause of their short!term investments, money market mutual funds are able to keep a virtually constant unit price7 only the yield fluctuates. Money market funds are suitable for those investors who want high stability of principal and current income with immediate li&uidity. SPECIALITY E SECTOR FUNDS.$hese funds invest in securities of a specific industry or sector of the economy such as health care, technology, leisure, utilities or precious metals. $he funds enable investor to diversify holding among many companies within an industry, a more conservative approach than investing directly in one particular company. ;ector funds offer a opportunity for sharp capital gains in cases where the funds industry is Fin favorG but also entail the risk of capital losses when the industry is out of favor. (hile sectors funds restrict holdings to a particular industry, other specialty funds such as inde" funds gives investors a broadly diversified portfolio and attempt to mirror the performance of various market averages.

OPEN ENDED SCHEMES.1pen!ended schemes do not have a fi"ed maturity period. Investors can buy or sell units at CAH! related prices from and to the mutual fund on any business day. $hese schemes have unlimited capitali8ation, open!ended schemes do not have a fi"ed maturity, there is no cap on the amount you can buy from the fund and the unit capital keep growing. $hese funds are not generally listed on any e"change. 1pen!ended schemes are preferred for their li&uidity. ;uch funds can issue and redeem units any time during the life of schemes. ence unit capital of open!ended funds can fluctuate on a daily basis. $he advantages of open ended schemes are% ! 1. Any time e"it option 2. Any time enter option. 12

CLOSE ENDED SCHEMES.>lose!ended schemes have fi"ed maturity periods. Investors can buy into these funds during the period when these funds are open in the initial issue. After that such scheme cannot issue new units e"cept in case of bonus or right issue. owever after the initial issue you can buy or sell units of the schemes on the stock e"change where they are listed. $he market price of the unit could vary from the CAH of the schemes due to demand and supply factor

1/

HO> LONG TO DEEP INVESTMENT TO GET MACIMUM RETURNS $echnically open!ended funds you can withdraw your investments even within a week, but to get desired returns positive time frame is re&uired are%

F+'*1 E7+-(4 F+'*1 "3l3',0* F+'*1 MIP81 I',o20 F+'*1 L-7+-* F+'*1

T-20 P0)-o* 3 Y03)1 @;l+1B &8 2o'(91 (o 3 Y03)1 & Y03) @;l+1B # 2o'(91 (o & Y03) 50F *341 (o # 2o'(91

>HAT RETURNS CAN I ECPECT IF I DEEP MY MONEY FOR SUGGESTED TIME FRAMES

F+'*1 S0,(o) 5+'*1

R0(+)'1 22= (o 25= ;.3 13

"3l3',0 5+'*1 MIP81 P0'1-o' Pl3'1 I',o20 F+'*1 L-7+-* F+'*1

&5= (o &8= ;.3 &2= (o &5= ;.3 &%= (o &2= ;.3 7= (o $= ;.3

$he above!mentioned returns in the table are indicative and not assured. All investments in M<$<A* :<CA; are securities and are sub#ect to market risk and the CAHs of the schemes may go up and down depending upon the factors and forces affecting the security market including the fluctuations in the internal rates .$he past performance of the M<$<A* :<CA; is not indicative of future performance.

THE RISD RETURNS GRAPHS FOR VARIOUS FUNDS.-

;ector :unds R E T U R N S E&uity :unds 0alanced :unds Income :unds

*i&uid :unds
RISDS 14

$he above ?raph shows the 6isk and 6eturns generated by different :unds. *i&uid :unds are less 6isky and also generate less 6eturns where as ;ector :unds are more 6isky but generate more 6eturns by the e"ample of above two :unds it is clear that 6isk and 6eturns are directly proportional to each other. 1ther :unds like E&uity :unds, 0alanced :unds and Income :unds are also gives the same percentage of 6eturns as the 6isk involved.

ADVANTAGE OF MUTUAL FUND.$he advantages of investing in a Mutual :und are%

D-/0)1-5-,3(-o'. $he best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. :or e"ample, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. 1ther securities in the portfolio will respond to the same economic conditions by increasing in value. (hen a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value.

P)o5011-o'3l M3'36020'(. Most mutual funds pay topflight professionals to manage their investments. $hese managers decide what securities the fund will buy and sell. R06+l3(o)4 o/0)1-69(. Mutual funds are sub#ect to many government regulations that protect investors from fraud. L-7+-*-(4. ItIs easy to get your money out of a mutual fund. (rite a check, make a call, and youIve got the cash. Co'/0'-0',0. 2ou can usually buy mutual fund shares by mail, phone, or over the Internet. LoF ,o1(. Mutual fund e"penses are often no more than 1.4 percent of your investment. E"penses for Inde" :unds are less than that, because inde" funds are not 1,

actively managed. Instead, they automatically buy stock in companies that are listed on a specific inde".

T)3'1;3)0',4. Mutual :und schemes are said to be $ransparent because they show the clear allocation of :unds to Investors. Fl0G-A-l-(4. Mutual funds are fle"ible because they change time to time and also if an Investor wants his money back before the maturity of the :und eJshe can easily redeem it.

DRA>"ACDS OF MUTUAL FUNDS.Mutual funds have their drawbacks and may not be for everyone%

No G+3)3'(001.

Co 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. owever, anyone who invests through a mutual fund runs the risk of losing money.

F001 3'* ,o22-11-o'1.

All funds charge administrative fees to cover their day!to!day e"penses. ;ome funds also charge sales commissions or KloadsK to compensate brokers, financial consultants, or financial planners. Even if you donIt use a broker or other financial adviser, you will pay a sales commission if you buy shares in a *oad :und.

T3G01.

1@

Auring a typical year, most actively managed mutual funds sell anywhere from 2- to @percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay ta"es on the income you receive, even if you reinvest the money you made.

M3'36020'( )-1<.

(hen you invest in a mutual fund, you depend on the fundIs manager to make the right decisions regarding the fundIs 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 e"pected. 1f course, if you invest in Inde" :unds, you forego management risk, because these funds do not employ managers.

ASSOCIATION OF MUTUAL FUNDS IN INDIA.-

(ith the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non!profit organi8ation. Association of Mutual :unds in India +AM:I. was incorporated on 22nd August 1994. AM:I is an ape" body of all Asset Management >ompanies +AM>., which has been registered with ;E0I. $ill date all the AM>s are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its 0oard of Airectors. Association of Mutual :unds India has brought down the Indian Mutual :und 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 holder

T90 oAH0,(-/01 o5 A11o,-3(-o' o5 M+(+3l F+'*1 -' I'*-3% ! $he Association of Mutual :unds of India works with /- registered AM>s of the 15

country. It has certain defined ob#ectives, which #u"taposes the guidelines of its 0oard of Airectors. $he ob#ectives are as follows% $his mutual fund association of India maintains high professional and ethical standards 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 of mutual fund and asset management. $he agencies that are by any means connected or involved. In the field of capital markets and financial services also involved in this code of conduct of the association. AM:I interacts with ;E0I and works according to ;E0Is guidelines in the mutual fund Industry. Association of Mutual :und in India do represent the ?overnment of India, the 6eserve 0ank of India and other related bodies on matters relating to the Mutual :und Industry. It develops a team of well &ualified and trained Agent distributors. It implements a program of training and certification for all intermediaries and other engaged in the mutual fund industry. AM:I undertakes all India awareness programmed for investors in order to promote proper understanding of the concepts and working of mutual funds. At last but not the least association of mutual fund of India also disseminate informations on Mutual :und Industry and undertakes studies and research either directly or in association with other bodies.

R06+l3(o)4 A1;0,(1.

S,90201 o5 2+(+3l 5+'*1%!

19

$he Asset management company shall launch no schemes unless the trustees approve such scheme and a copy of the offer has been filed with the 0oard. Every mutual fund shall along with the offer documents of each scheme pay filing fees. $he offer document shall contain disclosures which are ade&uate in order to enable the investors to make informed investment decision including the disclosure non ma"imum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor. A close!ended scheme shall be fully redeemed at the end of the maturity period. F<nless a ma#ority of the unit holders otherwise decide for its rollover by passing a resolutionG.

$he mutual fund and asset management company shall be liable to refund the application money to the applicants%!

If the mutual fund fails to receive the minimum subscription amount referred to in clause +i. of sub! regulation.

If the moneys received from the applicants for units are in e"cess of subscription as referred to in clause +ii. of sub!regulation.

T90 3110( 23'36020'( ,o2;3'4 193ll -11+0 (o (90 3;;l-,3'( F9o10. Application has been accepted, unit certificates or a statement of accounts ;pecifying the number of units allotted to the applicant as soon as possible 0ut not later than si" weeks from the date of closure of the initial ;ubscription list and or from the date of receipt of the re&uest from the unit olders in any open ended scheme.

R+l01 R063)*-'6 A*/0)(-1020'(%! $he offer document and advertisement materials shall not be misleading or contain any statement or opinion, which are incorrect or false. 2-

I'/01(20'( oAH0,(-/01 3'* /3l+3(-o' ;ol-,-01.$he price at which the units may be subscribed or sold the price at which such unit may at any time be repurchased by the mutual fund shall be made available to the investors.

G0'0)3l OAl-63(-o'. Every asset management company for each scheme shall keep and maintain proper book of accounts, records and document, for each scheme so as to e"plain its transaction 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. $he financial year for all the scheme shall end as of March /1 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 ;chedule. 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 comp

P)o,0*+)0 5o) A,(-o' I' C310 O5 D053+l(.1n 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, during the period of suspension 21

and shall be sub#ect to the direction of the 0oard with regard to any records, documents, or securities that may be in its custody or control relating to its activities as mutual funds, trustees or the asset management company. R01()-,(-o'1 o' I'/01(20'(1. A mutual fund scheme shall not invest more than 14L of its CAH in debt instrument issued by a single issuer, which are rated not below investment grade by a credit rating agency authori8e to carry out such activity under the act. ;uch investment limit may be e"tended to 2-L of the CAH of the scheme with the prior approval of the 0oard of $rustees and the 0oard of Asset Management >ompany. A mutual fund ;cheme shall not invest more than 1-L of its CAH in unrated debt instrument issued by a single issuer and the total investment in such instruments shall not e"ceed 24L of the CAH of the 0oard of $rustees and the 0oard of Asset management. Co mutual funds under all its schemes should own more than 1-L of any companys paid up capital carrying voting rights. ;uch transfers are done at the prevailing market price for &uoted instrument on spot basis. $he securities so transferred shall be in conformity with the investment ob#ectives of the scheme to which such transfer has been made.

A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees, provided that aggregated intercourse inter scheme investment made by all schemes under the same management or in

22

schemes under the management of any other asset management company shall not e"ceed 4L of the net asset value of the mutual fund. $he initial issue e"penses in respect of any scheme may not e"ceed ,L of the funds raised under that scheme. 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 0adla finance. 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. =ending deployment of funds of a scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. Co mutual fund scheme shall make any investment in7

Any unlisted security of an associate or group company of the sponsor or Any security issued by way of private placement by an associate or group company of the sponsor. $he listed securities of group companies of the sponsor which is in e"cess of /-L of the net assets +of all the schemes of a mutual fund. Co mutual fund scheme shall invest more than 1-4 of its CAH in the e&uity shares or e&uity related instrument of any company. =rovided that, the limit of 2/

1- percent shall not be applicable for investments in inde" fund or sector or industry specific schemes. A Mutual fund scheme shall not invest more than 4L of its CAH in the e&uity shares or e&uity related investments in case of open!ended schemes and 1- L of its CAH in case of close ended schemes.

So20 53,(1 5o) (90 6)oF(9 o5 2+(+3l 5+'*1 -' I'*-3%!

1--L growth in the last , years. Cumber of foreign AM>s is in the &ueue to enter the Indian markets like :idelity Investments, <; based, with over <;M1trillion assets under management worldwide. 1ur saving rate is over 2/L, highest in the world. 1nly channeli8ing these savings in mutual funds sector is re&uired. (e have appro"imately 29 mutual funds which is much less than <; having more than 5--. $here is a big scope for e"pansion. I0I and I>I class cities are growing rapidly. $oday most of the mutual funds are concentrating on the IAI class cities. ;oon they will find scope in the growing cities. Mutual fund can penetrate rural like the Indian insurance industry with simple and limited products. ;E0I allowing the M:Is to launch commodity mutual funds.

23

CHAPTER-2 COMPANY PROFILE

H-1(o)4 o5 (90 I'*-3' M+(+3l F+'* I'*+1()4.

$he mutual fund industry in India started in 19,/ with the formation of <nit $rust of India, at the initiative of the ?overnment of India and 6eserve 0ank .$he ob#ective then is to 24

attract the small investors and introduce them to market investments. ;ince then, the history of mutual funds in India can be broadly divided into four distinct phases.

F-)1( P9310 &$#4-87.

<nit $rust of India +<$I. was established on 19,/ by an Act of =arliament. It was set up by the 6eserve 0ank of India and functioned under the 6egulatory and administrative control of the 6eserve 0ank of India. In 19@5 <$I was de!linked from the 60I and the Industrial Aevelopment 0ank of India +IA0I. took over the regulatory and administrative control in place of 60I. $he first scheme launched by <$I was <nit ;cheme 19,3. At the end of 1955 <$I had 6s.,,@-- crores of assets under management. $he mutual :unds Industry in India not only started with <$I, but still count <$I as its largest =layer with the largest corpus of investible funds among all Mutual :unds currently opening in India. Fo) (90 ;0)-o* o5 &$87-88
T3Al0 No. & So+),0. S0,o'*3)4 D3(3

A2o+'( MoA-l-:0* @R1.C)o)01B 2,1@4 2I&75

A110(1 U'*0) M3'36020'( @ R1.C)o)01B ,,@-#I7%%

<$I To(3l

S0,o'* P9310 &$87-&$$3 @E'()4 o5 P+Al-, S0,(o) F+'*1B.

195@ marked the entry of non! <$I, public sector mutual funds set up by public sector banks and *ife Insurance >orporation of India +*I>. and ?eneral Insurance >orporation of India +?I>.. ;0I Mutual :und was the first non! <$I Mutual :und established in Bune 195@ followed by Mutual :und +Aec 5@., =un#ab Cational 0ank Mutual :und +Aug 59., Indian 0ank 2,

Mutual :und +Cov 59., 0ank of India +Bun 9-., 0ank of 0aroda Mutual :und +1ct 92.. *I> established its mutual fund in Bune 1959 while ?I> had set up its mutual fund in Aecember 199-. At the end of 199/, the mutual fund industry had assets under management of 6s.3@,--3 crores. :rom 195@to 1992!9/, the fund industry e"panded nearly seven times in terms of Assets under Management, as seen in the following figures% Fo) (90 ;0)-o* o5 &$$2-$3
T3Al0 No. 2 S0,o'*3)4 D3(3

UTI P+Al-, S0,(o) To(3l

A2o+'( MoA-l-:0* @R1.C)o)01B 11,-4@ 1,9,3 &3I%2&

A110(1 U'*0) M3'36020'( @ R1.C)o)01B /5,23@ 5,@4@ 47I%%4

T9-)* P9310 &$$3-2%%3 @E'()4 o5 P)-/3(0 S0,(o) F+'*1B% (ith the entry of private sector funds in 199/, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 199/ was the year in which the first Mutual :und 6egulations came into being, under which all mutual funds, e"cept <$I were to be registered and governed. $he erstwhile Dothari =ioneer +now merged with :ranklin $empleton. was the first private sector mutual fund registered in Buly 199/.$he 199/ ;E0I +Mutual :und. 6egulations were substituted by a more comprehensive and revised Mutual :und 6egulations in 199,. $he industry now functions under the ;E0I +Mutual :und. 6egulations 199,.

$he 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 ac&uisitions. As at the end of Banuary 2--/, there were // mutual funds with total assets of 6s. 1,21,5-4 crores. $he <nit $rust of India with 6s.33,431 crores of assets under management was way ahead of other mutual funds.

2@

Fo+)(9 P9310 1-',0 F0A)+3)4 2%%3. In :ebruary 2--/, following the repeal of the <nit $rust of India Act 19,/ <$I was bifurcated into two separate entities. 1ne is the ;pecified <ndertaking of the <nit $rust of India with assets under management of 6s.29,5/4 crores as at the end of Banuary 2--/, representing broadly, the assets of <; ,3 scheme, assured return and certain other schemes. $he ;pecified <ndertaking of <nit $rust of India, functioning under an administrator and under the rules framed by ?overnment of India and does not come under the purview of the Mutual :und 6egulations. $he second is the <$I Mutual :und *td, sponsored by ;0I, =C0, 010 and *I>. It is registered with ;E0I and functions under the Mutual :und 6egulations. (ith the bifurcation of the erstwhile <$I which had in March 2--- more than 6s.@,,--- crores of assets under management and with the setting up of a <$I Mutual :und, conforming to the ;E0I Mutual :und 6egulations, 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 1ctober /1, 2--/, there were /1 funds, which manage assets of 6s.12,@2, crores under /5, schemes. $he graph indicates the growth of assets over the years

F-6. &.GRO>TH IN ASSETS UNDER MANAGEMENT

25

U'-( 9ol*-'6 ;3((0)' o5 2+(+3l 5+'*1 -'*+1()4 31 o' M3),9 3&I 2%%3

;E0I has done an analysis of the unit holding pattern of mutual funds industry as on March /1, 2--/. $he details are given below% !

A] Mutual Funds Industry Unit holding Pattern :rom the data collected from the mutual funds, the following has been observed%! i. As on March /1, 2--/ there are a total number of 1., crore investors accounts +it is likely that there may be more than one folio of an investor which might have been counted more than once and actual number of investors would be less. holding units of 6s. @9,,-1 crore. 1ut of this total number of investors accounts, 1.4, crore are individual investors accounts, accounting for 9@.32L of the total number of investors accounts and contribute 6s./2,,91 crore which is 31.-@L of the total net assets.

29

ii.

>orporate and institutions who form only 2.-3L of the total number of investors accounts in the mutual funds industry, contribute a si8eable amount of 6s.34,3@- crore which is 4@.12L of the total net assets in the mutual funds industry.

iii.

$he C6IsJ1>0s and :IIs constitute a very small percentage of investors accounts +-.43L. and contribute 6s.133-.15crore +1.51L. of net assets.

T90 *0(3-l1 o5 +'-( 9ol*-'6 ;3((0)' 3)0 6-/0' -' (90 5olloF-'6 (3Al0.

T3Al0 No. 3

S0,o'*3)4 D3(3

UNIT HOLDING PATTERN OF MUTUAL FUNDS INDUSTRY Category I'*-/-*+3l1 NRI1EOC"1 FII1 Co);o)3(0E I'1(-(+(-o'1EO(90 )1 TOTAL /23,9@9 &5I$#8I854 2.-3 &%%.%% 34,3,9.4/ 7$I#%%.83 4@.12 &%%.%% No. O5 I'/01(o)1 AEC 14,44@,4-, 53,/11 2,-45 = To To(3l I'/01(o)1 AEC 9@.32 -.4/ -.-1 /2,,91.12 5@5.41 4,1.,@ NAV@R1.C)o)0B =To To(3l NAV 31.-@ 1.1-.@1

"J U'-( 9ol*-'6 P3((0)' P)-/3(0EP+Al-, S0,(o) M+(+3l F+'*1% :rom the analysis of data on unit holding pattern of =rivate ;ector Mutual :unds and =ublic ;ector Mutual :unds, the following observations are made%!

/-

&.

1ut of a total of 1., crore investors accounts in the mutual funds industry, +it is likely that there may be more than one folio of an investor which might have been counted more than once and therefore actual number of investors may be less. 32.9/ lakh investors accounts i.e. 2@L of the total investors accounts are in private sector mutual funds whereas the 1.1@ crore investors accounts ie.@/L are with the public sector mutual funds which includes <$I Mutual :und. owever, the private sector mutual funds manage @1.2L of the net assets whereas the public sector mutual funds own only 25.5L of the assets.

2.

<$I Mutual :und has 9@. 12 lakh investors accounts which is ,-.52L of the total investors accounts in the mutual funds industry.

D0(3-l1 o5 +'-( 9ol*-'6 ;3((0)' o5 ;)-/3(0 10,(o) 3'* ;+Al-, 10,(o) 2+(+3l 5+'*1 3)0.
T3Al0 No. 4 S0,o'*3)4 D3(3

UNIT HOLDING PATTERN OF PRIVATE SECTOR MFS

Category I'*-/-*+3l1 NRI1EOC"1 FII1 Co);o)3(0E I'1(-(+(-o'1E O(90)1 TOTAL

No. O5 I'/01(o)1 AEC 3--1531 /531, 1/1@

= To To(3l I'/01(o)1 AEC 9/.2/ -.59 -.-/

NAV@R1.C) o)0B 1@94,.35 @2/.-2 425.41

=To To(3l NAV /1.,5 1.25 -.9/

24-9@2 42$254#

4.54 &%%.%%

/@3,4.91 5##73.$2

,,.11 &%%.%%

/1

T3Al0 No. 5

S0,o'*3)4 D3(3

UNIT HOLDING PATTERN OF PU"LIC SECTOR MFS @INCLUDING UTI MF B Category NO. O5 I'/01(o)1 AEC = To To(3l I'/01(o)1 AEC NAV@R1.C) o)0B =To NAV To(3l

I'*-/-*+3l1 NRI1EOC"1 FII1 Co);o)3(0E I'1(-(+(-o'1E O(90)1 TOTAL

11,444,,,4 34594 @31

95.9@ -./9 -.-1

13@/3.,3 144.39 //.1,

,3.2@ -.,5 -.13

@3--@ &&#7#3%8

-.,/ &%%.%%

5--/.,2 22$2#.$&

/3.91 &%%.%%

RECENT TRENDS IN MUTUAL FUND INDUSTRY.

$he most important trend in the mutual fund industry is the aggressive e"pansion of the foreign owned mutual fund companies and the decline of the companies floated by nationali8ed banks and smaller private sector players. Many nationali8ed banks got into the mutual fund business in the early nineties and got off to a good start due to the stock market boom prevailing then. $hese banks did not really understand the mutual fund business and they #ust viewed it as another kind of banking activity. :ew hired speciali8ed staff and generally chose to transfer staff from the parent organi8ations. $he performance of most of the schemes floated by these funds was not good. ;ome schemes had offered guaranteed returns and their parent organi8ations had to bail out these AM>s by paying large amounts of money as the difference between the guaranteed and actual returns. /2

$he service levels were also very bad. Most of these AM>s have not been able to retain staff, float new schemes etc. and it is doubtful whether, barring a few e"ceptions, they have serious plans of continuing the activity in a ma#or way. $he e"perience of some of the AM>s floated by private sector Indian companies was also very similar. $hey &uickly reali8ed that the AM> business is a business, which makes money in the long term and re&uires deep!pocketed support in the intermediate years. ;ome have sold out to foreign owned companies, some have merged with others and there is general restructuring going on.

$he foreign owned companies have deep pockets and have come in here with the e"pectation of a long haul. $hey can be credited with introducing many new practices such as new product innovation, sharp improvement in service standards and disclosure, usage of technology, broker education and support etc. In fact, they have forced the industry to upgrade itself and service levels of organi8ations like <$I have improved dramatically in the last few years in response to the competition provided by these.

//

COMPANY PROFILE
HDFC A110( M3'36020'( Co2;3'4 L-2-(0* @AMCB
A:> Asset Management >ompany *td +AM>. was incorporated under the >ompanies Act, 194,, on Aecember 1-, 1999, and was approved to act as an Asset Management >ompany for the A:> Mutual :und by ;E0I vide its letter dated Buly /, 2---. $he registered office of the AM> is situated at 6amon ouse, /rd :loor, .$. =arekh Marg, 1,9, 0ackbay 6eclamation, >hurchgate, Mumbai ! 3-- -2-. In terms of the Investment Management Agreement, the $rustee has appointed the A:> Asset Management >ompany *imited to manage the Mutual :und. $he paid up capital of the AM> is 6s. 24.1,9 crore. $he present e&uity shareholding pattern of the AM> is as follows % =articulars L of the paid up e&uity capital ousing Aevelopment :inance >orporation *imited 49.95 ;tandard *ife Investments *imited /9.99 1ther ;hareholders +shares issued on e"ercise of ;tock 1ptions. -.-/

Nurich Insurance >ompany +NI>., the ;ponsor of Nurich India Mutual :und, following a review of its overall strategy, had decided to divest its Asset Management business in India. $he AM> had entered into an agreement with NI> to ac&uire the said business, sub#ect to necessary regulatory approvals. 1n obtaining the regulatory approvals, the following ;chemes of Nurich India Mutual :und have migrated to A:> Mutual :und on Bune 19, 2--/. $hese ;chemes have been renamed as follows% :ormer Came Cew Came /3

Nurich India E&uity :und Nurich India =rudence :und Nurich India >apital 0uilder :und Nurich India $a";aver :und Nurich India $op 2-- :und Nurich India igh Interest :und Nurich India *i&uidity :und Nurich India ;overeign ?ilt :und O A:> ;overeign ?ilt :und has

A:> E&uity :und A:> =rudence :und A:> >apital 0uilder :und A:> $a";aver A:> $op 2-- :und A:> igh Interest :und A:> >ash Management :und A:> ;overeign ?ilt :undO been wound up in March 2--,

$he AM> is also providing portfolio management J advisory services and such activities are not in conflict with the activities of the Mutual :und. $he AM> has renewed its registration from ;E0I vide 6egistration Co. ! =M J IC=------4-, dated Aecember 21, 2--9 to act as a =ortfolio Manager under the ;E0I +=ortfolio Managers. 6egulations, 199/. $he >ertificate of 6egistration is valid from Banuary 1, 2-1- to Aecember /1, 2-12. A:> Asset Management >ompany *imited +AM>. A:> Asset Management >ompany *td +AM>. was incorporated under the >ompanies Act, 194,, on Aecember 1-, 1999, and was approved to act as an Asset Management >ompany for the A:> Mutual :und by ;E0I vide its letter dated Buly /, 2---. $he registered office of the AM> is situated at 6amon ouse, /rd :loor, .$. =arekh Marg, 1,9, 0ackbay 6eclamation, >hurchgate, Mumbai ! 3-- -2-. In terms of the Investment Management Agreement, the $rustee has appointed the A:> Asset Management >ompany *imited to manage the Mutual :und. $he paid up capital of the AM> is 6s. 24.1,9 crore.

T90 "o3)* o5 D-)0,(o)1 o5 (90 HDFC A110( M3'36020'( Co2;3'4 L-2-(0* @AMCB ,o'1-1(1 o5 (90 5olloF-'6 02-'0'( ;0)1o'1.

M). D00;3< S. P3)0<9 /4

M). N. D0-(9 S<0o,9 M). D0<- M. M-1()4 M). K3201 A-)* M). P. M. T932;M). H+234+' D93')3H6-) D). D00;3< ". P93(3< M). Ho193'6 S. "-ll-2o)-3 M). R3H019F3) R3H "3H33H M). V-H34 M0),93'( M1. R0'+ S. D3)'3* M). M-l-'* "3)/0

Mr. Aeepak ;. =arekh Mr. Aeepak ;. =arekh is associated with Mr. =arekh #oined A:> *td. in his capacity as its >hairman. e was inducted as a

A:> *td. in a senior management position in 19@5.

whole!time director of A:> *td. in 1954, appointed as the Managing Airector of A:> *td. +designated as I>hairmanI. in 199/ and continued to be appointed as such from time to time. e retired as the Managing Airector +designated as I>hairmanI. with effect from the close of business hours on Aecember /1, 2--9. Mr. =arekh was appointed as an Additional Airector of A:> *td. with effect from Banuary 1, 2-1-. $he shareholders of as a Airector liable to retire A:> *td. at the //rd by rotation. Annual ?eneral Meeting held on (ednesday, Buly 13, 2-1-, appointed Mr. Aeepak ;. =arekh

is other Airectorships as on March /1, 2-12 are as follows% >ompany E"ide Industries *imited ?la"o;mithDline =harmaceuticals *imited A:> E6?1 ?eneral Insurance >ompany *imited

Alternate Airector >hairman >hairman /,

A:> ;tandard *ife Insurance >ompany *imited Infrastructure Aevelopment :inance >ompany *imited Mahindra P Mahindra *imited ;iemens *imited $he Indian otels >ompany *imited Nodiac >lothing >ompany *imited (C; ?lobal ;ervices =vt. *td. A= (orld *imited ?I> ;pecial Investments =te *td.

>hairman >hairman Airector >hairman Airector Alternate Airector Airector Airector Airector

Mr. =arekh is a :ellow of the Institute of >hartered Accountants +England P (ales..

Mr. C. Deith ;keoch Mr. C. Deith ;keoch is an associate director on the 0oard. Mr. C. Deith ;keoch is associated with ;tandard *ife Investments *imited as its >hief E"ecutive and is responsible for all company business and investment operations within ;tandard *ife Investments *imited. Mr. ;keoch #oined ;tandard *ife Investments *imited as >hief Investment 1fficer from Bames >apel P >o +now ;0> ;ecurities., where he was employed from 195- to 1999. :rom his first role at Bames >apel as an International Economist, he went on to become the ;enior <D Economist in 1952 and >hief Economist two years later. In 199/, he was appointed Airector of Economics and ;trategy and was given the responsibilities of Managing Airector, International E&uities in 1995. Mr. ;keoch has held a number key industry appointments and responsibilities. In March 2-12 he was appointed as a non!e"ecutive director to the 0oard of the :inancial 6eporting >ouncil, the <D independent regulatory body. In Bune 2-11, he was appointed as a member of the Advisory >ouncil for the Institutional Investor >ommittee, a body which represents Institutional investors. Mr ;keoch is also a board member of the Investment Management Association. In Aug 2-1- he stepped down as >hairman of A0I Investment >ommittee having completed three years in office. Immediately prior to this Mr. ;keoch contributed to the industry through a number of channels including M $reasury (holesale Markets :orum in the year 2--9, Airector Association of 0ritish Insurers, Airector Investment Management Association, >hairman IMA Asset Management >ommittee and the >hancellorIs (orking ?roup on 6ights Issues in the year 2--@, and :;A ;enior =ractitioner /@

=anel

in

the

year

2--,.

Mr. ;keoch graduated in Economics +0A

ons. from <niversity of ;usse" in 19@5 and

completed MA +Economics. at <niversity of (arwick in 19@9.

Mr. Deki M. Mistry Mr. Deki M. Mistry is an associate director on the 0oard. Mr. Deki M. Mistry, Hice >hairman and >hief E"ecutive 1fficer of since 1951. A:> *td. Mr. Mistry has been employed with A:> *td. e was appointed as the e"ecutive director of A:> *td. in 199/, as the deputy e was re!designated as the e was re!designated e has

managing director in 1999 and as the managing director in 2---. Hice >hairman and Managing Airector of

A:> *td. in 1ctober 2--@.

as the Hice >hairman P >hief E"ecutive 1fficer with effect from Banuary 1, 2-1-. 1fficerI. of

been re!appointed as the Managing Airector +designated as IHice >hairman P >hief E"ecutive A:> *td. for a period of 4 years, with effect from Covember 1/, 2-1-.

is other Airectorships as on March /1, 2-12 are as follows% >ompany 0ombay ;tock E"change *td ?reatship +India. *imited ?6< :inance *imited ?6I A Investments, Mauritius A:> E6?1 ?eneral Insurance >ompany *imited A:> ;tandard *ife Insurance >ompany *imited India Halue :und Advisors =vt. *td. Infrastructure *easing P :inancial ;ervices *imited Ce"t ?en =ublishing *imited ;hrenu# P >ompany *imited ;un =harmaceutical Industries *imited $he ?reat Eastern ;hipping >ompany *imited $orrent =ower *imited =(> India Advisory 0oard A:> 0ank *td

Airector Airector >hairman Airector Airector Airector Airector Airector Airector Airector Airector Airector Airector Member Airector /5

e is a :ellow of the Institute of >hartered Accountants of India. Mr. Bames Aird Mr. Bames Aird is an associate director on the 0oard. Mr. Bames Aird is associated with ;tandard *ife Investments *imited as development of its ead of ;trategic Aevelopment and is responsible for new international business.

Mr. Aird #oined ;tandard *ife in 199@ as an Investment Manager for the >orporate =ooled and ;egregated :und businesses. e was appointed Investment Airector, ead of ;egregated :unds in April 1995 and took up the current position in Covember 1999. =reviously Mr. Aird worked for ;cottish E&uitable, #oining as an Investment Analyst in 1951 before moving on to :und Manager in 1953. Mr. Aird also managed both <D and international e&uity portfolios, before taking on the responsibility for developing new investment business in the <; institutional market. is other Airectorships as on March /1, 2-12 are as follows% >ompany ;tandard *ife Investments ! India 1pportunities :und ;tandard *ife! India Advantage :und ;*A> +Mauritius oldings. *imited ;tandard *ife +Mauritius oldings. 2--, *imited ;elect =roperty oldings + Mauritius. *imited ;tandard *ife Investments +?eneral =artner ?A6;. *imited

Airector Airector Airector Airector Airector Airector

Mr. Aird graduated in Economics from Edinburgh <niversity in 1951 and is currently an Associate of the ;ociety of Investment =rofessionals.

Mr. =. M. $hampi Mr. $hampi is an independent Airector on the 0oard. Mr. $hampi was the >hairman and Managing Airector of 0A;: India *imited from Banuary 195, to March 2---. =rior to this, he was with I>I India *imited from 194@ to 1954. is last position held at I>I India *imited was /9

as >hief E"ecutive, :ertili8er Aivision. is other Airectorships as on March /1, 2-12 are as follows% >ompany 0rigade Enterprises *imited =ioneer 0alloon India =rivate *imited ;trides Acrolab *td.

Airector Airector Airector

Mr. $hampi is a ?raduate in ;cience, =ost ?raduate Aiploma in >hem. Engineering, :.I. >hem. E. +<D. and >. Eng. +<D..

Mr. umayun Ahanra#gir Mr. umayun Ahanra#gir

is

an

independent

Airector

on

the

0oard.

Mr. Ahanra#gir was associated with Dodak India *imited as its Managing Airector from 1ctober 1994 to 1ctober 2---. =rior to this he was the Managing Airector of *upin *aboratories *imited from Aecember 1993. Mr. Ahanra#gir has held various senior management positions in ?la"o India from 19,9 to 1993 from where he retired as E"ecutive Hice!>hairman. :rom 19,3 to 19,9 Mr. Ahanra#gir was associated with 0urmah ;hell India in ;enior positions. Earlier, Mr. Ahanra#gir was a =rocess Aesign Engineer with 0ritish 1"ygen >ompany, *ondon from 19,-!19,/.

is other Airectorships as on March /1, 2-12 are as follows% >ompany >adila ealthcare *imited Emcure =harmaceuticals *imited . Ahanra#gir Estates =rivate *imited Ce"t ?en =ublishing *imited Ceuland *aboratories *imited ;ami *abs *imited $hemis Medicare *imited Nydus (ellness *td.

Airector Airector Airector Airector Airector Airector Airector Airector 3-

Mr. Ahanra#gir was the =resident of the 1rganisation of =harmaceutical =roducers of India +1==I. for 2 years till ;eptember 1993. =rior to that, he was the Hice =resident of 1==I for 2 years. e was also a Member of the ?eneral >ommittee of the 0ombay >hamber of >ommerce P Industry +0>>I. and was Hice!>hairman of Indo!0ritish 0usiness >ommittee, 0>>I. Mr. Ahanra#gir is a 0.$ech in >hemical Engineering, *oughborough <niversity, <.D. and M.I.>hem.E +*ondon., >.Eng.+*ondon., A.M.=. + arvard..

Ar. Aeepak 0. =hatak Ar. Aeepak 0. =hatak is an independent Airector on the 0oard. Ar. =hatak is associated with Indian Institute of $echnology +II$. 0ombay from Aecember 19@1 till date. e is presently the >hair =rofessor, Aeptt. 1f >omputer ;cience P Engg., II$ 0ombay. As on March /1, 2-12, he is not holding directorship in any other company Ar. =hatak is a 0.E, M.$ech and has done his =h.A. Mr. oshang ;. 0illimoria Mr. oshang ;. 0illimoria is an independent Airector on the 0oard. Mr. 0illimoria is presently the >hief E"ecutive 1fficer of Ce"t ?en =ublishing *imited. =rior to this, Mr. 0illimoria was associated with $ata Infomedia India *imited since 199- to 2--3. At the time of his resignation, he was its Hice >hairman and Managing Airector. e was the Aeputy >E1 with $ata ;ons *imited from 1955 '199-. e was a =artner with ;.0. 0illimoria and >o. from 19@9 '1955. is other Airectorships as on March /1, 2-12 are as follows% >ompany :enner >onveyor 0elting =rivate *imited Hice >hairman $homas >ook +India. *imited Airector $ravel >orporation +India. *td. >hairman >ouncil for :air 0usiness =ractices Airector Mr. 0illimoria is a ?raduate in >ommerce, :ellow of the Institute of >hartered Accountants +England P (ales. and :ellow of the Institute of >hartered Accountants of India. 31

Mr. 6a#eshwar 6a# 0a#aa# Mr. 6a#eshwar 6a# 0a#aa# is a ?raduate in ;cience and is an independent director on the 0oard. e is the >hairman of *erch 0ates =rivate *imited, a ;pecialised >onsulting >ompany e also held the position of Hice =resident, ;outh for Hertical $ransportation. Mr. 0a#aa# was the >hairman of the 0oard of Airectors and Managing Airector of 1tis Elevators India. and ;outheast Asia based in ;ingapore wherein the 1tis country heads from India, ;ingapore, $hailand, Malaysia, Indonesia, =hilippines and Hietnam reported to him. In May 2--1, Mr. 0a#aa# #oined ;pecial 1lympics Inc. as Managing Airector, Asia =acific, a non!profit organi8ation created by the Boseph = Dennedy Br. :oundation, (ashington for the benefit of people with mental retardation. is other Airectorships as on March /1, 2-12 are as follows% >ompany ?la"o;mithDline =harmaceuticals *imited *erch 0ates =rivate *imited 0ombay ?ymkhana *td Mr. 0a#aa# is a ?raduate in ;cience and *aw. Mr. Hi#ay Merchant Mr. Hi#ay Merchant is an independent Airector on the 0oard. Mr. Merchant is a partner of Aynam =lastics since 195@. for past 2- years. e is responsible for overall management and control of the firm e was the :ormer =resident of $he All India =lastic Manufacturing e has

Airector Airector =resident

Association for / terms, :ounder of Indian >entre for =lastics in Environment +non!profit body. also Envis Code of Ministry of Environment P :orests ?overnment of India. also served on national bodies of Indian Institute of =ackaging +Ministry of >ommerce., Indian Merchants >hamber, Enviroplast =lastindia :oundation, =le"concil, Indian =lastics Institute, etc. and was the onorary Editor of Industry Bournal =lastics Cews for 1- years.

is other Airectorships as on March /1, 2-12 are as follows% >ompany ;uraiya 0rothers =rivate *imited

Airector

Mr. Merchant is a graduate in >ommerce and has also done =ost ?raduate =rogramme from 32

IIM Ahmedabad.

Ms. 6enu ;. Darnad Ms. 6enu ;. Darnad is an associate director on the 0oard. Ms. 6enu ;ud Darnad is associated with A:> *td. in her capacity as its Managing Airector. ;he has been employed with A:> *td. since 19@5 and was appointed as the e"ecutive director of A:> *td. in 2--- and was re! designated as the Boint Managing Airector of appointed as the Managing Airector of Banuary 1, A:> *td. in 1ctober 2--@. ;he has been 2-1-. A:> *td. for a period of 4 years, with effect from

er other Airectorships as on March /1, 2-12 are as follows% >ompany 0osch *imited >redit Information 0ureau +India. *imited ?6< :inance *imited A:> 0ank *imited A:> ;tandard *ife Insurance >ompany *imited A:> E6?1 ?eneral Insurance >ompany *imited A:> =roperty Hentures *imited A:> ;ales =rivate *imited Indraprastha Medical >orporation *imited ADN1 Cobel India *imited ?3; >orporate ;ervices +India. =vt. *imited :eedback Infrastructure ;ervices =rivate *imited $6AC;<CI1C **> ' >hicago Halue P 0udget ousing >orporation +India. =vt *td A:> =*> Maldives >redila :inancial ;ervices =rivate *td A:> Education and Aevelopment ;ervices =vt. *td EI *td *afarge India =vt *td

Airector Airector Airector >hairperson Airector Airector >hairperson >hairperson Airector >hairperson Airector Airector Airector Airector Airector >hairperson >hairperson Airector Airector

Ms. Darnad is the >hairperson of Audit >ommittee of >redit Information 0ureau +India. *imited and I>I India *imited, a member of Audit >ommittee of 0osch *imited and A:> E6?1 ?eneral Insurance >ompany *imited and a member of InvestorsI ?rievance >ommittee of 0osch *imited. 3/

;he is a graduate in law from the <niversity of Mumbai and holds a MasterIs degree in economics from the <niversity of Aelhi. ;he is a =arvin :ellow ' (oodrow (ilson ;chool of International Affairs, =rinceton <niversity, <.;.A.

Mr. Milind 0arve Mr. Milind 0arve, Managing Airector of the AM>, had been associated with A:> *td. in his capacity as ?eneral Manager ' $reasury. Mr. 0arve headed the treasury operations at A:> *td. for 13 years. Mr. 0arve was responsible for the management of A:>Is $reasury portfolio and for raising funds from :inancial Institutions and >apital Markets. e was also head of marketing for retail deposit products and responsible for investment advisory relationships for >ommonwealth E&uity :und Mutual :und and Invesco India ?rowth :und. is other Airectorships as on March /1, 2-12 are as follows% >ompany Association of Mutual :unds in India +AM:I. A:> Asset Management >ompany +;ingapore. =te. *imited

>hairman Airector

Mr. 0arve is a ?raduate in >ommerce and an Associate Member of the Institute of >hartered Accountants of India. A:> Mutual :und is one of the largest mutual funds and well!established fund house in the country with consistent fund performance across categories since its incorporation on Aecember 1-, 1999. (hile our past e"perience does make us a veteran, but when it comes to investments, we have never believed that the e"perience is enough. O+) I'/01(20'( P9-lo1o;94

$he single most important factor that drives

A:> Mutual :und is its belief to give the A:> Mutual :und has set up the

investor the chance to profitably invest in the financial market, without constantly worrying about the market swings. $o reali8e this belief, infrastructure re&uired to conduct all the fundamental research and back it up with effective analysis. 1ur strong emphasis on managing and controlling portfolio risk avoids chasing the latest KfadsK and trends. 33

(e believe, that, by giving the investor long!term benefits, we have to constantly review the markets for new trends, to identify new growth sectors and share this knowledge with our investors in the form of product offerings. (e have come up with various products across asset and risk categories to enable investors to invest in line with their investment ob#ectives and risk taking capacity. 0esides, we also offer =ortfolio Management ;ervices. ;E0I has directed Mutual :unds JAM> vide ;E0I >ircular no. >I6JIMAJA:J21J2-12 dated ;eptember 1/, 2-12 to provide a separate plan for direct investments, i.e. investments not routed through a distributor, in e"isting as well as new schemes. KAirect =lanK with effect from Banuary 1, 2-1/. $he KAirect =lansK were launched with effect from Banuary 1, 2-1/. Investments under the Airect =lan are open to all categories of investors who choose to invest without routing the transaction via a distributor. All =lans J 1ptions J ;ub!1ptions offered currently under KE"isting =lansK of the ;chemes are also available for subscription under the KAirect =lanK. $hus, there shall be 2 plans available for subscription under the schemes vi8. E"isting =lan and Airect =lan. ence A:> Mutual :und has launched separate plans under e"isting open!ended schemes for direct investments called

34

CHAPTER-3 CASE STUDY

3,

PRO"LEM STATEMENT.Aue to the falling 6ate of Interest on 0ank deposits, it is obvious that Investment in Mutual :und will grow in year to come. owever lack of Awareness of Mutual :und is a hindering factor in e"pected growth of Mutual :und 0usiness. <nder noted problems are envisaged in this area% Aifficult in convincing people for investment. Aifficult to change mind of the investor according to age and =rofession. Aifficult to make an approach to investors. Aifficult to take an appointment with professional people. Aifficult to get the documents re&uired for formalities from investors Aifficult to overcome an impassionate person who wants return in less time. Aifficult to follow up the people whose names are being stored in a data. 3@

Aifficult to remove the fear of risk from the minds of investors.

O"KECTIVE OF STUDY.In view of the problem cited above, the study aims at analy8ing the following ma#or issues% $o know the awareness of M<$<A* :<CA among people. $o know the different Asset management companies involve in M<$<A* :<CA. $o know the different aspects of M<$<A* :<CA according to different age, profession etc. $o see the interest of people in investing in M<$<A* :<CA;. $o know the future of M<$<A* :<CA; in India. $o know the different attitudes of people regarding risk, rate of return, period of investment etc. $o study the diversification of mutual fund.

METHODOLOGY OF STUDY. 6esearch can be defined as a systemi8ed effort to gain new knowledge. A research is carried out by different methodologies which have their own pros and cons. 6esearch methodology is a way to solve research in study and solving research problems along with logic behind them are defined through research methodology. $hus while talking about research methodologies we are not only talking of research methods but also consider the logic behind the methods. (e are in conte"t of our research studies and e"plain why it is being used a particular method or techni&ue and why the others are not used. ;o that research result is capable of being evaluated either by researcher himself or by others. 35

RESEARCH METHODOLOGY. 6esearch has its special significance in solving various operational and planning problem of business and industry. 6esearch methodology is a way to systematically analy8e the research problem.

ASSUMPTIONS. 1. It has been assumed that sample of hundred represents the whole population 2. $he information given by the customer is unbiased

LITERATURE SURVEY. $he pro#ect is based on pure findings of facts D0/0lo;20'( o5 >o)<-'6 H4;o(901-1. $he hypothesis could be developed by discussing with the consulting department heads and guides about this e"ploratory research and reach to the conclusion that the data is to be collected by personal interaction with the clients, asking them about their investment planning and their need for financial advisory service from A:> ;tock 0roking *td. :irst of all are they aware of ta" and investment planning or not and then analy8ing the findings to reach to the ob#ectives of research.

39

COLLECTION OF DATA. $his research is solely based on primary research done by means of &uestionnaires targeted to respondents who primarily belong to the business and service sector. $he sample si8e is 1--. a. ;ampling Methods% A sample is the representative of the populations which will predict the behaviors of the whole universe b. $he sampling si8e put under 2 categories% =robability ;ampling and Con =robability ;ampling.

ECECUTION OF PROKECT It is very essential in the research process to know the accuracy of the findings which depends on how systematically the study has been carried out so that it can make sense. (e have e"ecuted the pro#ect after prior discussion with our guide and structured in the following steps% a. =reparation of a &uestionnaire b. $he focal point of the designing the &uestionnaire was to comprehend the current investment scenario c. $his &uestionnaire was primarily aimed to respondents who belong to the service and business class people d. $he &uestionnaires were discussed through personal interface with the respondents

LIMITATIONS OF STREAMLINING RESULTS. Every work has its own limitations. *imitations are e"tent to which the process should not e"ceed. $he following limitations for the pro#ect are% 1. Auration of pro#ect was not enough to make our conclusion on such a vast sub#ect. $ime constraints has also become a ma#or limitation 2. $he sample si8e taken for drawing the conclusion was not si8eable /. Investor ignorance was faced during discussions with respondents 4-

41

CHAPTER-4 ANALYSIS

42

=ortfolio of Mr. ; ED A6 > ACA. EG;0'101 A''+3l T-(l0 A2(. Mo'(9l4 A''+3l I',. ouse *oan O(90) EG;0'101. Beewan mitra+Aouble cover. Beewan mitra+$riple cover. Money back Misllenious E"penses To(3l EG;0'101 ;urpus money (ant a regular income after 15 years of 6s. 1,4-- p.m Age of Mr. Mano# is 32yrs. D0;0'*0'(1 1(ife P 1 ;on P 1 Aaughter Sol+(-o' N0( >o)(9@To(3l I',o20- To(3l EG;0'101B S+);l+1 Mo'04 To(3l 2o'04 (o I'/01(@A''+3l To(3l 2o'04 (o I'/01(@Mo'(9l4B 1293-&2$4%% &%783 = (o A110(1 Allo,3(-o' Mutual :unds ;tock Market Insurance >ontingency :und To(3l I'/01( /4L 24L 24L 14L &%%= Mo'(9l4 @S3/-'6B 1-@5/ 1-@5/ 1-@5/ 1-@5/ Monthly /@@3 2,9, 2,9, 1,1@ &%783 Annual+saving. 1293-1293-1293-1293-Annual 3429/2/4/2/41931&2$4%% ,---,---1---24--194,-35%#%% 4--4--5// 2-5/ 1,/-2$2&7 35---3---A''+3l A2(. Mo'(9l4 I',o20

To(3l I',.

48%%%%

4%%%%

!&. Do 4o+ -'/01( )06+l3)l4? YES NO TOTAL 8$ && &%% 4/

Percentage of people making any investment

11% YES NO 89%

I( 931 A00' oA10)/0* (93( 3;;)oG-23(0l4 $%= o5 (90 ,o))01;o'*0'(1 -'/01( -' 1o20 o) (90 o(90) 5-'3',-3l -'1()+20'(. T9o+69 (90 ;0),0'(360 o5 ,9o-,0 o5 -'/01(20'( 234 /3)4 *+0 (o *-550)0'( 53,(o)1 1+,9 31 360I 0*+,3(-o'I )-1< 0(,.

!2. Do 4o+ -'/01( +1-'63. S,-0'(-5-, Tool1 A. "4 I'(+-(-o'

43

S,-0'(-5-, Tool1 "4 I'(+-(-o' To(3l

47 53 &%%

Methods of investment

47% 53%

scientific tools by intution

I( 931 A00' oA10)/0* (93( (90)0 -1 'o 23Ho) *-550)0',0 A0(F00' (90 ;0),0'(360 o5 ;0o;l0 F9o -'/01( +1-'6 1,-0'(-5-, (ool1 3'* (9o10 F9o10 F9o A0l-0/0 -' (90-) -'(+-(-o' A+( -( -1 100' (93( (90 4o+'60) 60'0)3(-o' -1 2o)0 l03'-'6 (oF3)*1 +1360 o5 1,-0'(-5-, (ool1 (93' (90-) ;00)1.

!3. >93( 3)0 4o+ ;)050))0* -'/01(20'( ;)-o)-(-01? 3. I'1+)3',0

44

YES NO TOTAL

77 23 &%%

LIC

23%

YES NO

77%

A 23Ho) ,9+'< F9o 93/0 A00' -'(0)/-0F0* -( 931 A00' oA10)/0* (93( 3l2o1( 8%= 93/0 1o20 <-'* o5 -'1+)3',0 ;ol-,4. I( 931 3l1o A00' oA10)/0* (93( (9o+69 LIC -1 3 ;+Al-,

4,

10,(o) +'*0)(3<-'6I ;0o;l0 o5 3ll 3601 93/0 2o)0 53-(9 -' -( 31 ,o2;3)0* (o o(90) ;)-/3(0 10,(o) ,o2;3'-01.

A. "3'< @F-G0* *0;o1-(B YES NO TOTAL 4$ 4& &%%

Banks(Fixed Deposit)

YES NO

T90)0 -1 'o 23Ho) *-550)0',0 A0(F00' (90 '+2A0) o5 ;0o;l0 F9o ;)050) <00;-'6 (90-) 2o'04 -' 5-G0* *0;o1-( 3'* F9o *o'8( o;( 5o) -(. T90)0 -1 9oF0/0) 3 6)oF-'6 ,o',0)' 3Ao+( (90 53ll-'6 -'(0)01( )3(0 -' A3'<1 o' 5-G0* *0;o1-(.

4@

,. "o'*1

D0A0'(+)01 YES NO TOTAL 34 ## &%%

B !D" # De$ent%res

YES NO

I( 931 A00' oA10)/0* (93( o'l4 34= (904 93/0 -'/01(0* -' "o'*1 3'* D0A0'(+)01 AS ,o2;3)0* (o (9o10 F9o 93/0 'o(. T9-1 234 A0 *+0 (o l011 <'oFl0*60 3Ao+( -( o) (90 (-20 o5 )0-*02;(-o'.

45

*. E7+-(-01

S93)0 M3)<0( 45 55 &%%

YES NO TOTAL

&'%ity # "hare Market

YES YES NO NO

"4 (90 ,93)( F0 oA10)/0 (93( (90 ;0),0'(360 o5 ;0o;l0 -'/01(-'6 -' 07+-(4 3'* 193)0 23)<0( -1 'o( 2+,9 A+( (90)0 -1 3 6o-'6 -'(0)01( 32o'6 ;0o;l0 01;0,-3ll4 (90 4o+'60) 60'0)3(-o' (o -'/01( 1o 31 (o 23<0 7+-,< A+,<1 F-(9 (90 23)<0( Aoo2.

49

0. PPF YES NO TOTAL 43 57 &%%

O+( o5 (90 (o(3l ;0o;l0 31<0* 57= 13-* (904 -'/01( -' PPF 3'* 43= 13-* (904 *o'8(I A+( -( 931 A00' oA10)/0* (93( 5)o2 (90 ;0o;l0 F9o 13-* (904 -'/01( (90 23Ho) ,9+'< 3)0 ;0o;l0 5)o2 10)/-,0 10,(o).

,-

5. NSC YES NO TOTAL 45 55 &%%

!"C

45% YES NO 55%

O+( o5 3ll (90 ;0o;l0 7+01(-o'0* 45= 13-* YES 3'* 55= 13-* NO. P0o;l0 F9o 93/0 13-* (93( YES 3 23Ho) ;0),0'(360 3)0 0-(90) A+1-'011 23' o) Fo)<-'6 ;0o;l0 F9o F3'( 3 5-G )3(0 o5 )0(+)' 3'* 10,+)-(4.

,1

6. Po1( O55-,0 S3/-'61 YES NO TOTAL 3& #$ &%%

Post

ffice "avings

31% YES NO 69%

O+( o5 (90 (o(3l ,o))01;o'*0'( o'l4 3&= (904 -'/01( -' ;o1( o55-,0 13/-'61. T9-1 ,o+l* A0 *+0 (o 53ll-'6 -'(0)01( )3(0 3'* A0((0) )0(+)' A4 o(90) (ool1. ,2

9. R03l E1(3(0 YES NO TOTAL 42 58 &%%

(eal &state

42% YES NO 58%

T90 ,o))01;o'*0'( F9o 13-* YES 3)0 42= 3'* F9o 13-* NO -1 58= A+( (9-1 F-ll ,93'60 31 ;0o;l0 3)0 2o)0 ,o25o)(3Al0 -' )03l 01(3(0 3'* F-(9 53ll-'6 -'(0)01( )3(0 ;0o;l0 ()4 (o 5-'* '0F 3/0'+0 o5 -'/01(20'(1.

,/

-. Gol* YES NO TOTAL 4& 5$ &%%

O+( o5 (90 (o(3l ,o))01;o'*0'( 7+01(-o'0* 4&= 134 (904 ;)050) (o -'/01( -' 6ol* F9-l0 5$= 134 (904 *o'8(.

,3

H. O(90)1 YES NO TOTAL 3$ #& &%%

)*&("

39% YES NO 61%

O5 3ll (90 ,o))01;o'*0'(1 31<0* o'l4 3$= 13-* (904 93/0 o(90) o;(-o'1 (o -'/01( o(90) (93' (90 ,o'/0'(-o'3l o;(-o'1.

,4

!4. >93( ;0),0'(360 o5 4o+) -',o20 *o 4o+ -'/01(? "0loF &%= &%=-3%= 3%=-5%= AAo/0 5%= 3% 57 &% 3

AAo+( #%= o5 ;0o;l0 13-* (93( (904 -'/01( A0(F00' &%=-#%= o5 (90-) (o(3l -',o20 -' 1o20 o) o(90) (4;01 o5 5-'3',-3l (ool1. A 23Ho) ,9+'< o5 ;0o;l0 A0lo'6-'6 (o (9-1 10620'( 3)0 5)o2 IT 10,(o) F9o 3)0 4o+'6I l3)60 *-1;o13Al0 -',o20 3'* 93/0 3 l-((l0 <'oFl0*60 3Ao+( -'/01(20'( 3'* 3)0 F-ll-'6 (o (3<0 )-1<. ,,

!5. A)0 4o+ 3F3)0 3Ao+( 2+(+3l 5+'*1? YES NO TOTAL 88 &2 &%%

+, areness a$o%t m %t%al f%nds

12% YES NO 88%

O'l4 &2= o5 ,o))01;o'*0'( 13-* (904 *o'8( <'oF 3'4 (9-'6 3Ao+( 2+(+3l 5+'* 3'* 88= 13-* (904 <'oF 3Ao+( 2+(+3l 5+'*1 A+( F93( F0 5o+'* (93( (904 93/0 H+1( 3 ;)-23)4 o) /0)4 '06l-6-Al0 <'oFl0*60 3Ao+( 2+(+3l 5+'*1 3'* 'o( )03ll4 3F3)0 o5 (90 ,o',0;( ,3ll0* MUTUAL FUND.

,@

!#. >93( -1 4o+) ;0),0;(-o' 3Ao+( 2+(+3l 5+'*1? SAFE RISDY OTHERS TOTAL &5= 25= #%= &%%=

Perception a$o%t m%t%al f%nds

60% 50% 40% 30% 20% 10% 0% Safe Risky Others 15% 25% 60% Series1

T90 ;0),0'(360 o5 ;0)1o' F9o 134 (93( 2+(+3l 5+'* -1 1350 -1 5=I 3 (9o10 F9o 134 -( -1 )-1<4 -1 25= A+( 3 23Ho) ;0),0'(360 o5 ,o))01;o'*1 o;( 31 o(90) F9-,9 -1 3Ao+( #%=. T9010 3)0 ;0o;l0 F9o 134 (93( 2+(+3l 5+'*1 3)0 9-69 )-1< 3'* 9-69 63-' o) 0/0' ;0o;l0 F9o 93/0 'o o;-'-o'.

!7. H3/0 4o+ 0/0) -'/01(0* -' 2+(+3l 5+'*? ,5

YES NO TOTAL

4& 5$ &%%

investment in m%t%al f%nds

60 50 40 30 20 10 0 Yes No

O+( o5 (90 (o(3l ,o))01;o'*0'(1 31<0* 3Ao+( 4&= 93/0 13-* (93( (904 93* -'/01(0* -' 2+(+3l 5+'*1 A05o)0 F9-l0 5$= 13-* NO. O+( o5 (90 (o(3l ;0o;l0 F9o 93/0 13-* 401 3 23Ho)-(4 o5 (902 3)0 4o+'6I 93/-'6 *-1;o13Al0 -',o20 3'* F-ll-'6'011 (o (3<0 )-1<.

!8. Do 4o+ <'oF *-550)0'( (4;0 o5 2+(+3l 1,9020 ;)010'( -' (90 23)<0(? ,9

YES NO TOTAL

3# #4 &%%

)ypes of m%t%al f%nds

100% 80% 60% 40% 20% 0% Yes No

O+( o5 (o(3l ,o))01;o'*1 o'l4 3#= 13-* (93( (904 <'oF 3Ao+( /3)-o+1 2+(+3l 1,90201 31 (9-1 '+2A0) -1 /0)4 123ll -( 0G;l3-'1 (93( ;0o;l0 1(-ll *o'8( <'oF 3Ao+( /3)-o+1 1,90201 -' (90 23)<0(. I( 3l1o 19oF1 (93( 0/0' (9o10 F9o 93/0 Ao+69( 2+(+3l 5+'*1 3)0 1(-ll -6'o)3'( 3Ao+( (90 *-550)0'( 1,90201.

@-

!$. HoF 4o+ ,9oo10 3 2+(+3l 5+'*?

"RAND NAME HIGH NAV HIGH RETURNS ADVERTISING OTHERS TOTAL

35 2# &5 &2 &2 &%%

Choosing of m%t%al f%nd

40 35 30 25 20 15 10 5 0 Bran Na!e "i#h N$% "i#h Ret&rns $ 'ertisin# Others

I( 931 A00' oA10)/0* (93( A)3'* '320 *o01 23((0) F90' ;0o;l0 3)0 ,9oo1-'6 3 2+(+3l 5+'* 31 35= 13-* A)3'* '320. T90 '0G( -1 NAV 3( 3Ao+( 2#=. T9010 (Fo 53,(o)1 ;l34 3 23Ho) )ol0 *+)-'6 10l0,(-o' o5 2+(+3l 5+'*1.

@1

CHAPTER-5 PROKECT FINDINGS AND RECOMMENDATIONS

PROKECT FINDINGS. @2

$here is great opportunity for Mutual :und companies as there is a is a rise in number of people who want to invest in share market but dont have time and knowledge to do so, also these people want to take less risk .

(ith booming market and falling interest rate of bank deposits, people see mutual funds as an attractive financial tool which provide a high return rate at lower risk as compared to e&uity market.

2oung people these days are particularly more interested in mutual funds because they see mutual fund as safe bet. Also these people have large disposable incomes and risk taking capability too.

$he bad part is people are still ignorant about mutual funds and different schemes about mutual funds, hence it is very necessary to educate them about mutual funds

Advertising can also play a ma#or part as it has been seen that people buy mutual fund looking at the brand name.

SUGGESTIONS.

@/

India is passing through a tremendous growth phase with an average growth rate of @! 5L per annum. (ith this growth phase there is growth in each and every sector, hence there is rush to by shares and e&uities. It is also a very good time for mutual fund companies but it is advisable for them and their brokers that they dont #ust sell mutual funds but sell the right kind of scheme which is comfortable to a person nature of taking risk and need,

$here is a general ignorance and &uestions about, what are mutual funds) (hat are different schemes of mutual funds) ow to invest in a mutual) And many more. $his thing should be handled by mutual fund companies and their brokers to provide knowledge to their clients.

It has been seen that there is a ma#or increase in the percentage of young investors who have large amount of disposable income with them and want to invest, these type of prospective clients should be tapped at an early stage.

;mall towns, villages are still untapped and can also acts as a business area of very huge potential.

Cow even co!operative society can invest up to 1-L of their capital in mutual funds which open the door to new and very important client base.

@3

CHAPTER-# !UESTIONNAIRE

!+01(-o''3-)0

@4

&. A)0 4o+ 3 )06+l3) -'/01(o)? a. 2es b. Co

2. Do 4o+ -'/01( +1-'6 a. ;cientific $ools b. 0y Intuition

3. >93( 3)0 4o+) ;)050))0* -'/01(20'( ;)-o)-(-01?

N320 o5 I'/01(20'( I'1+)3',0 "3'< "o'*1 D0A0'(+)01 E7+-(-01 S93)0 M3)<0( PPF @P+Al-, P)o/-*0'( F+'*B NSC @N3(-o'3l S3/-'6 S,90201B Po1( O55-,0 S3/-'6 S,90201 R03l E1(3(0 Gol* O(90)1

4. >93( ;0),0'(360 o5 4o+) -',o20 *o 4o+ -'/01(? a. 0elow 1-L b. 1-L ! /-L c. d. /-L ! 4-L Above 4-L

5. A)0 4o+ 3F3)0 3Ao+( M+(+3l F+'*1? a. 2es b. Co

@,

#. >93( -1 4o+) ;0),0;(-o' 3Ao+( M+(+3l F+'*1? a. ;afe b. 6isky c. 1thers

7. H3/0 4o+ -'/01(0* -' 1o20 M+(+3l F+'*1? a. 2es b. Co

8. Do 4o+ <'oF *-550)0'( (4;0 o5 M+(+3l F+'* 1,9020 ;)010'( -' (90 23)<0(? a. 2es b. Co

$. HoF *o 4o+ 10l0,( 3'* ,9oo10 M+(+3l F+'*1? a. 0rand Came c. igh Aividends e. 1thers b. igh CAH d. Advertisement

D02o6)3;9-,1

&. NAME. LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL 2. AGE. 3. MARTIAL STATUS.

SEC. M E F

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4. PROFESSION. 5. ANNUAL INCOME.

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@5

"I"ILOGRAPHY

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MUTUAL FUND PRODUCT AND SERVICES---- TACMAN AMFI COURSE "OOD INDIAN MUTUAL FUNDS HAND"OOD-SUNDER SANDARAN

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