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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

A
PROJECT REPORT
ON

WHERE TO INVEST-ULIP OR MUTUAL FUNDS:


AN INVESTORS GUIDE

FORE SCHOOL OF MANAGEMENT


QUTUB INSTITUTIONAL AREA, NEW DELHI

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

CONTENTS
ACKNOWLEDGEMENT
PREFACE
INTRODUCTION
Indian banking System
Profile of the Bank
PRODUCTS OFFERED BY THE BANK
Savings Account
ULIP (Unit Linked Insurance Plan)
Mutual Funds
SAVINGS ACCOUNT OFFERED BY DIFFERENT BANKS
ULIP AND MUTUAL FUNDS : A General Study
COMPARISON BETWEEN ULIP AND MUTUAL FUNDS
WHERE TO INVEST : ULIP OR MUTUAL FUNDS
MARKET SURVEY
Objective
Research Methodology
Findings
Recommendations

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

CONCLUSION
BIBLIOGRAPHY
ANNEXURE

ACKNOWLEDGEMENT
We wish to express our gratitude to Standard Chartered Banks management for giving us an
opportunity to be a part of their esteem organization and enhance our knowledge by granting
permission to do our summer training project under their guidance.
We are grateful to Mr. NITISH DIPANKAR (Team Leader), our guide, for his invaluable guidance
and cooperation during the course of the project. He provided us with his assistance and support
whenever needed that has been instrumental in completion of this project.
The learning during the project was immense & invaluable. Our work basically included the study of
various financial products of the bank and understanding the customer investing patterns. The
present report is an amalgamation of our thoughts and our efforts to study the present banking and
investment scenario and market potential for the sale of products like ULIP and Mutual Funds.
Further a detailed study has been done in order to suggest the customers where to invest according to
their identified needs.
We are also thankful to DR. GAURAV AGGARWAL (Faculty, FSM), our internal faculty guide
who helped us as and when required with his big reservoir of experience and knowledge. If the ideas
do make the difference, than this project has gained maximum from his experience. He has in fact
given the project is form.
Last but not the least we are grateful to all the staff members of Standard Chartered Bank for their
kind cooperation and help during the course of our project.
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

SHANTA KUMARI
VARUN LALL

PREFACE
Someone has rightly said that practical knowledge is far better than classroom
teaching. During the course of this project we actually realized how true it is when
we analyzed the Banking Industry and the real world of Financial Product
marketing. This project enabled us to know about the consumers needs and
competitors activities in the real world of Banking.
The subject of our study is Where to invest-ULIP or Mutual Funds : An
Investors Guide, for which we did a detailed study of features of ULIP and
Mutual Funds offered by different banks followed by a market research in order to
know the investing patterns and concerns of the investors thereby identifying the
potential customers for these products.
The report contains at first, the brief introduction about the company, the products
and services being offered by the bank, comparative analysis of different products
offered by different banks and then the findings and analysis of the research on the
basis of which final suggestions and conclusion has been drawn.
We have also put forward recommendations that will help Standard Chartered
Bank to move a step ahead to be banking giant in India.
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

INTRODUCTION
INDIAN BANKING SYSTEM:
India has a well developed banking system. Most of the banks in India were founded by Indian
entrepreneurs and visionaries in the pre-independence era to provide financial assistance to traders,
agriculturists and budding Indian industrialists. Indian banks have played a significant role in the
development of Indian economy by inculcating the habit of saving in Indians and by lending finance
to Indian industry.
The commercial banking structure in India consists of: Scheduled Commercial Banks and
Unscheduled Banks. Scheduled commercial Banks constitute those banks, which have been included
in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in
this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the Act.
Indian banks can be broadly classified into nationalized banks/public sector banks, private banks and
foreign banks.
Foreign banks have brought latest technology and latest banking practices in India. They have
helped made Indian Banking system more competitive and efficient. Government has come up with
a road map for expansion of foreign banks in India.
The road map has two phases. During the first phase between March 2005 and March 2009, foreign
banks may establish a presence by way of setting up a wholly owned subsidiary (WOS) or
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


conversion of existing branches into a WOS. The second phase will commence in April 2009 after a
review of the experience gained after due consultation with all the stake holders in the banking
sector. The review would examine issues concerning extension of national treatment to WOS,
dilution of stake and permitting mergers/acquisitions of any private sector banks in India by a
foreign bank.
Major foreign banks in India are:

ABN-AMRO Bank

Abu Dhabi Commercial Bank Ltd.

American Express Bank Ltd

BNP Paribas

Citibank

DBS Bank Ltd

Deutsche Bank

HSBC Ltd

Standard Chartered Bank

STANDARD CHARTERED BANK: BACKGROUND


Standard Chartered Bank is one of the largest MNC bank which employs 38,000 people at over 950
locations in more than 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa,
the United Kingdom and the Americas.
Standard Chartered is listed on both the London Stock Exchange and the Stock Exchange of Hong
Kong and is in the top 25 FTSE-100 companies, by market capitalization. The Bank is wellestablished in growth markets and aims to be the right partner for its customers by combining deep
local knowledge with global capability. It is trusted across its network for its standard of governance
and its commitment to making a difference in the communities in which it operates.
Standard Chartered Bank offers a full range of traditional as well as structured banking products to
corporate clients, covering short and long term funding in local and foreign currencies and
transaction banking including comprehensive trade finance, supply and dealer chain financing, and
cash management services.
The Bank has expanded client coverage further to include the middle market segment of corporate
customers in selected industry sectors and has also commenced initiatives covering commercial real

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


estate and commodity finance. The Bank works in close partnership with other businesses - Global
Markets and Consumer Banking, to offer a seamless and comprehensive banking solution to clients.

STANDARD CHARTERED AT A GLANCE

The worlds leading emerging markets bank

Assets in excess of USD 100 billion

500 offices in over 60 countries with 30,000 employees

Currently having H.O at London

Acquired ANZ Grindlays in Aug 2000 at $1.34 Billion

Acquired Chase Hong Kong Consumer Banking for $1.32 Billion

Acquired Korea First Bank in Jan 2005 for $3.3 Billion

STANDARD CHARTERED IN INDIA


Standard Chartered is a London based international bank with significant operations in Asia, Africa,
the Middle East and Latin America. The Standard Chartered Group was formed in 1969 through a
merger of two banks: The Standard Bank of British South Africa founded in 1863, and the Chartered
Bank of India, Australia and China, founded in 1853.
Both companies were keen to capitalize on the huge expansion of trade and to earn the handsome
profits to be made from financing the movement of goods from Europe to the East and to Africa.
Chartered Bank opened its first overseas branch in India, at Kolkata, on 12 April 1858. During that
time Kolkata was the most important commercial city and was the hub of jute and indigo trades.
With the opening of the Suez Canal in 1869 and the growth of cotton trade, Bombay replaced
Kolkata as the main commercial center. Hence Standard Chartered shifted its main operations to
Bombay. Today the Bank's branches and sub-branches in India are directed and administered from
Bombay with Kolkata remaining an important trading and banking centre.
The merger with the Standard Bank of British South Africa in 1969 and the acquisition of Grindlays
Bank in 2000 were two key events that have played an important role in making the Bank the largest
international bank in India. To cater to diverse financial needs, Standard Chartered offers a wide
range of state-of-the-art banking products and services through its network of 80 branches in 31
cities across the country.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Standard Chartered Today


The Groups Share of the Indian Banking Industry
Citibank
18%

HSBC
16%

Foreign 8%

Nationalised - 80%
Pr
iva
te

27%

1
2%

HSBC
9
%
Others
30%

Advantage of level playing field

MORE THAN BANKING:


Corporate Social Responsibility (CSR) is at the core of the values of Standard Chartered Bank. The
Bank is committed to the communities and environments in which it operates. The Bank strongly
supports the trend towards delivering shareholder value in a socially, ethically and environmentally
responsible manner. Living with HIV is a global community initiative of Standard Chartered that is
aimed at raising awareness of HIV/AIDS amongst employees through workshops and amongst
stakeholders by providing thought leadership. Under Seeing is believing, a programme that aims to
restore sight to one million people globally by 2006, the Bank has raised funds to help 8000 people
to see.
In partnership with Sight Savers International and VISION2020 the Bank is now involved in two
flagship projects at Vishakhapatnam and Muzaffarpur, both aimed at the elimination avoidable
blindness. Furthermore, in support of the communities ravaged by the Asian Tsunami Crisis in 2004
the Standard Chartered Group committed US$ 1 million to India. The Bank is utilizing these funds
for the rehabilitation of two villages adopted near Chennai.
In 2004, Standard Chartered initiated the phenomenally successful Standard Chartered Mumbai
Marathon - an event dedicated to charity fund raising. The two marathons held so far have forged

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


partnerships with customers and charities and deepened the Banks ties with the community, with
over US$ 1 million being raised in 2005.

FUTURE PLANS:
After 150 years of service to India, Standard Chartered Bank continues to be committed to the
country and optimistic of positively contributing to the Indian Financial Sector. The Standard
Chartered Group considers India to be one of the greatest economic opportunities of the 21st century
and is proud to be so strongly positioned here. The Bank has ambitious plans to transform its
business in the country and to further expand operations across the country.

MARKET POTENTIAL:
With a burgeoning national economy, financial-sector reforms and a growing middle class, the
Indian market offers huge potential for SCB to grow. The large and growing middle class population
and increase in disposable incomes have created booming markets in housing, motor, televisions,
computers, mobile phones and other products, most of which require financing. SCB has been
effective in leveraging this opportunity with its product and service offerings.

PRODUCTS OFFERED:
Standard Chartered bank provides different products and services in order to cater the needs of the
customers which can be broadly classified into the following categories:
1. PERSONAL BANKING: To cater the diverse financial needs, Standard Chartered offers a
wide range of premium banking products and services through its network of 81 branches in
31 cities across the country.As a privileged customer of this bank, the customers can always
be assured of a banking service that is flexible enough to tailor-make a product suite to take
care of his specific banking needs.
2. SME BANKING: SME Banking provides integrated financial solutions to small and medium
businesses, through a relationship management approach. Its customer focused product
offerings include working capital finance, trade services, foreign exchange, and cash
management.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


3. COMMERCIAL BANKING: Standard Chartered has maintained a long local presence, since
1858, with particular emphasis on relationship banking. Significant networks have been
established with vendors and financial-related organisations to enable it to offer the
customers a comprehensive range of flexible financial services, with special focus on
transactional banking products. Supported by state-of-the-art operations, Standard Chartered
is pro-active in improving every part of services. Electronic Delivery system has been put in
place to ensure that transactions are handled speedily. It has its Cash Product Specialists and
dedicated Customer Service Centres to provide its customers with effective solutions.
To fully understand the workings and functions of Standard Chartered Bank, the scope of this
project has been limited to the detailed study of only three products offered by this bank under the
above mentioned categories:
1. Savings Account : Personal banking
2. Unit Linked Insurance Plan (ULIP): Personal banking
3. Mutual Funds: Commercial banking

SAVINGS ACCOUNT
An account primarily opened for and operated by individuals, wherein the numbers of transactions
are few and which give the customer liquidity, with the facility to earn some interest on the residual
balances.
Standard Chartered bank offers 4 types of Savings account matching different needs of customers
namely:
1.

Axcess

Plus

:The

Standard

Chartered

Bank

have

launched

the

Axcess

Plus

saving account as a premium product placed in the market with maintenance of minimum
quarterly balance of 10,000/- The product in supposed to be targeted to a specific group elite of
customers. This will help to increase the volume and as such the profitability of the company.
The name axcess plus means that the account is accessible anywhere anytime, as well as it will
be an innovative and convenient services for the customers needs.
2. Super Value
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


3. Parivaar account
4. Saral Account
ELIGIBILITY (IN GENERAL)

Indian Residents

NRIs

Clubs, Associations, Trusts and Registered Societies

HUF (Hindu Undivided Family)

Foreign Nationals (QA-22)

PRODUCT FEATURES (IN GENERAL)

Account can be in sole name or in joint names

Minimum balance: Minimum Quarterly balance of a specific amount is to be maintained failing


to which a specific fees per quarter has to be paid.

Account can be operated at any branch across the country.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

PARAMETERS
SAVINGS ACCOUNT NAME
ACCOUNTS
CHARGES FOR OPENING THE
ACCOUNT
AVERAGE QUARTERLY
(DAILY)BALANCE REQD.

aXcessPlus Savings Account

SuperValue Savings
Account

NIL

NIL

Rs.10000

PENALTY FOR UNSUFFICIENT AQB


DORMANT A/C CHARGES

Rs. 1500/qtr (Bal<Rs.5000)


Rs.750/qtr(Rs.10000>Bal>Rs.500
0)
Rs.1000 per yr.

ACCOUNT CLOSURE

Rs.500 (within 6 months)

Rs 50,000
Rs. 1250/qtr
(Rs.5000<=Bal<10k)
Rs.1250/qtr(Rs.10000
>Bal>Rs.5000)
Rs.1000 per yr.
Rs.500 (within 6
months)

0.25%
Rs 250

FREE
Rs.250

0.30%
Rs.75

0.25%
FREE

FREE/qtr

FREE/qtr

Rs.100
Rs.100
Free for 1st Yr yr,250/yr

Rs.100
FREE
Free for 1st Yr
yr,250/yr

Rs.200 per year


Rs.200

FREE
Rs.200

DEMAND DRAFT
DRAWN AT OWN BANK(min fee
Rs.50 & max Rs.1500)
CANCELLATION
DRAWN AT OTHER BANK( Min Fee
Rs.250)
PAY ORDER
STATEMENTS
STATEMENT OF ACCOUNT,(ESTMT)
CHARGES FOR DUPLICATE
STATEMENT
MONTHLY STATEMENT CHARGES
ISSUE BALANCE CONFIRMATION
CERTIFICATE
CARDS
DEBIT CARD ANNUAL FEE
DEBIT CARD REPLACEMENT FEE
ATM INTERCHANGE(NON
PARTNER)
SERVICES
NETBANKING
INTERBRANCH/ INTERCITY
BANKING
BILLPAY
PHONE BANKING
MOBILE BANKING(SMS)

Free for first 4 transactions per


month/ Rs.50 for beyond 4 trans.
FREE
Rs.50
FREE
FREE
NOT AVAILABLE

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

PARAMETERS
STANDING INSTRUCTIONS
SETTING UP
DOOR STEP BANKING
CASH PICK UP
CASH DELIVERY/TRANSACTION
CHEQUE BOOKS
CHEQUE BOOK CHARGES(AT PAR)
CHARGES FOR STOP PAYMENT OF
INSTRUMENT

aXcessPlus Savings
Account

SuperValue Savings
Account

Rs.100(for setting)
Rs.25(on execution)
FREE
FREE
FREE
FREE

FREE
FREE

CHEQUE RETURN CHARGES(Issued)


CHEQUE RETURN
CHARGES(Deposited)

Rs.100
Rs.250 + other banks
charges
Rs.100 + other banks
charges

MISCELLANEOUS
BALANCE CERTIFICATE(Upto 1
Yr)/more Than 1 Yr old
BANKER'S REPORT
SIGNATURE VERIFICATION

FREE/Rs.250
Rs.50
Rs.25

FREE/Rs.250
FREE
FREE

INSURANCE PARTNER

BAJAJ ALLIANZ

BAJAJ ALLIANZ

FORE SCHOOL OF MANAGEMENT

Rs.250
FREE

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

PARAMETERS
SAVINGS ACCOUNT NAME
ACCOUNTS
CHARGES FOR OPENING THE
ACCOUNT
AVERAGE QUARTERLY
(DAILY)BALANCE REQD.
PENALTY FOR UNSUFFICIENT AQB
DORMANT A/C CHARGES
ACCOUNT CLOSURE
DEMAND DRAFT
DRAWN AT OWN BANK(min fee Rs.50
& max Rs.1500)
CANCELLATION
DRAWN AT OTHER BANK( Min Fee
Rs.250)
PAY ORDER
STATEMENTS
STATEMENT OF ACCOUNT,(E-STMT)
CHARGES FOR DUPLICATE
STATEMENT
MONTHLY STATEMENT CHARGES
ISSUE BALANCE CONFIRMATION
CERTIFICATE
CARDS
DEBIT CARD ANNUAL FEE
DEBIT CARD REPLACEMENT FEE

ATM INTERCHANGE(NON PARTNER)


SERVICES
NETBANKING
INTERBRANCH/ INTERCITY
BANKING
BILLPAY
PHONE BANKING
MOBILE BANKING(SMS)

Parivaar Account
NIL
Rs.25000 across all linked Savings a/c
Rs. 1000/qtr (Bal<Rs.10000)
Rs.750/qtr(Rs.25000>Bal>=Rs.10000)
Rs.1000 per yr.
Rs.500 (within 6 months)

0.25%
Rs 250
0.30%
Rs.75
FREE/qtr
Rs.100
Rs.100
Free for 1st Yr yr,250/yr
Rs.200 per year
Rs.200
Free for first 4 transactions per month/
Rs.50 for beyond 4 trans.
FREE
Rs.50
FREE
FREE
NOT AVAILABLE

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

PARAMETERS
STANDING INSTRUCTIONS
SETTING UP
DOOR STEP BANKING
CASH PICK UP
CASH DELIVERY/TRANSACTION
CHEQUE BOOKS
CHEQUE BOOK CHARGES(AT PAR)
CHARGES FOR STOP PAYMENT OF
INSTRUMENT
CHEQUE RETURN CHARGES(Issued)
CHEQUE RETURN
CHARGES(Deposited)

Parivaar Account
Rs.100(for setting),Rs.25(on
execution)

FREE
Rs.100
Rs.250 + other banks charges
Rs.100 + other banks charges

MISCELLANEOUS
BALANCE CERTIFICATE(Upto 1
Yr)/more Than 1 Yr old
BANKER'S REPORT
SIGNATURE VERIFICATION

FREE/Rs.250
Rs.50
Rs.25

INSURANCE PARTNER

BAJAJ ALLIANZ

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

COMPARITIVE ANALYSIS OF VARIOUS SAVINGS ACCOUNT OFFERED


BY DIFFERENT BANKS
The services provided by Standard Chartered Bank are almost the same as any other private or
multinational banks like statement charges, phone banking, automatic cheque book reorder, any
branch banking, investment advisory services, net banking, demat, overdraft, corporate salary
accounts, priority banking, doorstep banking. Thus, it becomes essential to do a comparative
analysis among the different chosen banks.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

BANKS
PARAMETERS
SAVINGS ACCOUNT NAME
ACCOUNTS
CHARGES FOR OPENING THE A/C
AVERAGE QUART. (DAILY)BAL
REQD.

PENALTY FOR UNSUFFICIENT


AQB

ABN-AMRO
FLEX PLUS

KOTAK
MAHINDRA
EDGE

NIL
NIL
(Rs. 10000/mth),Rs 15000 with
add on A/C
Rs.10000
Rs.
300/mth(Rs7500<=Bal<10000),Rs
400(Rs
5000<=Bal<Rs7500,Rs500(Bal<Rs
5000)
Rs 661/Qtr

DORMANT A/C CHARGES


ACCOUNT CLOSURE
DEMAND DRAFT

Rs. 300/qtr (2 yrs.)


Rs.500(Within 1 yr)

DRAWN AT OWN BANK


CANCELLATION
DRAWN AT OTHER BANK
STATEMENTS
STATEMENT OF ACCOUNT,(ESTMT)
CHARGES FOR DUPLICATE
STATEMENT
MONTHLY STATEMENT CHARGES
ISSUE BALANCE CONFIRMATION
CERT.

Rs 50
Rs 50
0.25%

Min 50,Rs2.5/1000

FREE/Hlf yr,(FREE/mth)

FREE/qtr

Rs 661

Rs. 50/stmt.
Rs.25
Rs.50

CARDS
DEBIT CARD ANNUAL FEE
DAILY ATM WITHDRAWL LIMIT
DEBIT CARD SPENDING LIMIT
DEBIT CARD REPLACEMENT FEE
ATM
INTERCHANGE(PARTNER)/TRANSN
ATM INTERCHANGE(NON
PARTNER)
SERVICES
NETBANKING
INTERBRANCH/ INTERCITY
BANKING
BILLPAY
PHONE BANKING

Rs.180
Rs.50000(NON GOLD)
Rs.50000(NON GOLD)
Rs 200

FREE FOR 1ST


YR,110/yr
Rs 25,000
Rs 25,000

FREE,Bal=Rs5

FREE

Rs 50,Bal=Rs 20

FREE

FREE

FREE

FREE
Rs.100

FREE
FREE

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

BANKS
PARAMETERS
SAVINGS ACCOUNT NAME
SERVICES
MOBILE BANKING(SMS)
STANDING INSTRUCTIONS
SETTING UP
AMMENDMENT
DOOR STEP BANKING
CASH PICK UP
CASH
DELIVERY/TRANSACTION
CHEQUE BOOKS
CHEQUE BOOK CHARGES(AT
PAR)
CHARGES FOR STOP PAYMENT
OF INSTRU
CHEQUE RETURN
CHARGES(Issued)
CHEQUE RETURN
CHARGES(Deposited)
ISSUE OF CHEQUE LEAF
CHARGE
MISCELLANEOUS
BALANCE CERTIFICATE
PHOTO ATTESTATION
SIGNATURE VERIFICATION

KOTAK
MAHINDRA

ABN-AMRO
FLEX PLUS

EDGE

(FREE)
Rs 50
Rs 50
FREE
1/DAY FREE,Rs 50

FREE

Rs.50
Rs.100

110.2

Rs.350

110

Rs 100

Rs 50
Rs 50
Rs 50

INSURANCE PARTNER

FORE SCHOOL OF MANAGEMENT

RELIANCE,Kotak

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

BANKS
PARAMETERS
SAVINGS ACCOUNT NAME
ACCOUNTS
CHARGES FOR OPENING THE ACCOUNT
AVERAGE QUARTERLY
(DAILY)BALANCE REQD.
PENALTY FOR UNSUFFICIENT AQB

STANDARD CHARTERED
aXcessPlus Savings Account

Savings Account

NIL

NIL

Rs.10000

Rs.25000

Rs. 1500/qtr (Bal<Rs.5000)


Rs.827/qtr(Rs.10000>Bal>Rs.5000) Rs. 750/qtr

DORMANT A/C CHARGES


ACCOUNT CLOSURE
DEMAND DRAFT

Rs.1000 per yr.


Rs.500 (within 6 months)

DRAWN AT OWN BANK


CANCELLATION
DRAWN AT OTHER BANK
STATEMENTS
STATEMENT OF ACCOUNT,(E-STMT)
CHARGES FOR DUPLICATE STATEMENT
MONTHLY STATEMENT CHARGES
ISSUE BALANCE CONFIRMATION
CERTIFICATE

0.25%
Rs 250
0.30%

CARDS
DEBIT CARD ANNUAL FEE
DAILY ATM WITHDRAWL LIMIT
DEBIT CARD SPENDING LIMIT
DEBIT CARD REPLACEMENT FEE
ATM
INTERCHANGE(PARTNER)/TRANSACTIO
N
ATM INTERCHANGE(NON PARTNER)
SERVICES
NETBANKING
INTERBRANCH/ INTERCITY BANKING
BILLPAY
PHONE BANKING

HSBC

FREE/qtr
Rs.100
Rs.100

Rs. 150/qtr (2
yrs.)

FREE/qtr
Rs. 150/stmt.

Free for 1st Yr yr,250/yr


Rs.200 per year
Rs. 25000/day

Free for first 4 transactions per


month,
Rs.50
for beyond 4 trans.
FREE

FREE

Rs.50
FREE
FREE

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

BANKS
PARAMETERS
SAVINGS ACCOUNT NAME
SERVICES
MOBILE BANKING(SMS)
STANDING INSTRUCTIONS
SETTING UP
AMMENDMENT
DOOR STEP BANKING
CASH PICK UP
CASH DELIVERY/TRANSACTION
CHEQUE BOOKS
CHEQUE BOOK CHARGES(AT PAR)
CHARGES FOR STOP PAYMENT OF
INSTRUMENT
CHEQUE RETURN CHARGES(Issued)
CHEQUE RETURN
CHARGES(Deposited)
ISSUE OF CHEQUE LEAF CHARGE
MISCELLANEOUS
BALANCE CERTIFICATE
PHOTO ATTESTATION
SIGNATURE VERIFICATION
INSURANCE PARTNER

STANDARD
CHARTERED
aXcessPlus Savings
Account

HSBC
Savings
Account

NOT AVAILABLE
Rs.100(for setting),
Rs.25(on execution)

Rs.100
Rs.250 + other banks
charges
Rs.100 + other banks
charges

BAJAJ ALLIANZ,Royal
Sundaram

FORE SCHOOL OF MANAGEMENT

TATA AIG

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

BANKS
PARAMETERS
SAVINGS ACCOUNT NAME
ACCOUNTS
CHARGES FOR OPENING THE A/C
AVERAGE QUART. (DAILY)BAL
REQD.
PENALTY FOR UNSUFFICIENT
AQB

ICICI

HDFC

SAVINGS ACCOUNT

Savings Account

NIL

NIL

Rs. 5000

Rs. 5000

Rs 750/qtr

Rs 750/qtr

Rs. 250 (within 1 yr) Rs.


100(>1 yr)

Rs.100 (< 6 months),NIL (>6


months)

Min 50,Rs 2/1000


Rs 50
Min 50,Rs 2.5/1000

Rs 75(Amt<= Rs 50K),Rs
2.5/1000 Min
100(50K<Amt<=1 L),Rs2/1000
(Amt>1L)
Rs 50
Rs 50+Other charges

FREE(Qtr)

FREE/qtr

Rs. 25 per page


Rs. 200/ yr

Rs.100
Rs.800/yr

Rs. 50/ cert

Free for 1st Yr yr,250/yr

DORMANT A/C CHARGES


ACCOUNT CLOSURE
DEMAND DRAFT

DRAWN AT OWN BANK


CANCELLATION
DRAWN AT OTHER BANK
STATEMENTS
STATEMENT OF ACCOUNT,(ESTMT)
CHARGES FOR DUPLICATE
STATEMENT
MONTHLY STATEMENT CHARGES
ISSUE BALANCE CONFIRMATION
CERT.
CARDS
DEBIT CARD ANNUAL FEE
DAILY ATM WITHDRAWL LIMIT
DEBIT CARD SPENDING LIMIT
DEBIT CARD REPLACEMENT FEE
ATM
INTERCHANGE(PARTNER)/TRANSN
ATM INTERCHANGE(NON
PARTNER)
SERVICES
NETBANKING
INTERBRANCH/ INTERCITY
BANKING

Rs.99,FREE FOR Sr
CTZN
Rs 50000(Ncash)
Rs 50000(Ncash)
Rs.200
Rs 20,Bal= Rs 10

Rs.100/yr
Rs. 15000

Rs.55,Bal=Rs 10

Rs 60, Bal= Rs 25
FREE
FREE

FORE SCHOOL OF MANAGEMENT

FREE
FREE (UPTO
Rs.50000/day),Rs.2.90 /
21

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

BILLPAY
PHONE BANKING

Rs.1000 (> Rs.50000/day)


Rs.25/qtr
FREE

FREE

BANKS
PARAMETERS
SAVINGS ACCOUNT NAME
SERVICES
MOBILE BANKING(SMS)
STANDING INSTRUCTIONS

ICICI

HDFC

SAVINGS ACCOUNT

Savings Account

FREE

FREE (SMS CHARGES


APPLY)
Rs.100(for setting), Rs.25(on
execution)

SETTING UP
AMMENDMENT
DOOR STEP BANKING
CASH PICK UP
CASH
DELIVERY/TRANSACTION
CHEQUE BOOKS
CHEQUE BOOK CHARGES(AT
PAR)
CHARGES FOR STOP PAYMENT
OF INSTRU
CHEQUE RETURN
CHARGES(Issued)
CHEQUE RETURN
CHARGES(Deposited)
ISSUE OF CHEQUE LEAF
CHARGE
MISCELLANEOUS
BALANCE CERTIFICATE
PHOTO ATTESTATION
SIGNATURE VERIFICATION

Rs 100/instn
Rs 25/amdmt

INSURANCE PARTNER

PRUDENTIAL,LOMBARD STANDARD LIFE

Rs 10
Rs 10
FREE
Rs.50
Rs. 200

Rs.350

Rs 50(local),Rs100(outstn)

Rs.50(local),Rs.100(outstation)

Rs.25
Rs 50
Rs 100
Rs 50

FORE SCHOOL OF MANAGEMENT

Rs 50
Rs 50
Rs 50

22

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

ULIP (Unit Linked Insurance Plan)


INTRODUCTION:
A Unit Link Insurance Policy (ULIP) is one in which the customer is provided with a life insurance
cover and the premium paid is invested in either debt or equity products or a combination of the two.
In other words, it enables the buyer to secure some protection for his family in the event of his
untimely death and at the same time provides him an opportunity to earn a return on his premium
paid. In the event of the insured person's untimely death, his nominees would normally receive an
amount that is the higher of the sum assured or the value of the units (investments). To put it simply,
ULIP attempts to fulfill investment needs of an investor with protection/insurance needs of an
insurance seeker. It saves the investor/insurance-seeker the hassles of managing and tracking a
portfolio or products.
A ULIP, as the name suggests, is a market-linked insurance plan. The main difference between a
ULIP and other insurance plans is the way in which the premium money is invested. Premium from,
say, an endowment plan, is invested primarily in risk-free instruments like government securities
(gsecs) and AAA rated corporate paper, while ULIP premiums can be invested in stock markets in
addition to corporate bonds and gsecs.
ULIPs offer a variety of options to the individual depending on his risk profile. For instance, an
individual with an above-average risk appetite can choose a ULIP option that invests upto 60% of
premium in equities. Likewise, an individual with a lower risk appetite can select a ULIP that invests
upto 20% of premium in equities.

ULIP VS TRADITIONAL INSURANCE PLAN


It wasn't too long back, when the good old endowment plan was the preferred way to insure oneself
against an eventuality and to set aside some savings to meet one's financial objectives. Then
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


insurance was thrown open to the private sector. The result was the launch of a wide variety of
insurance plans, including the ULIPs.

Two factors were responsible for the advent of ULIPs on the domestic insurance horizon. First was
the arrival of private insurance companies on the domestic scene. ULIPs were one of the most
significant innovations introduced by private insurers. The other factor that saw investors take to
ULIPs was the decline of assured return endowment plans. Of course, the regulator -- IRDA
(Insurance and Regulatory Development Authority) was instrumental in signaling the end of assured
return plans.
Today, there is just one insurance plan from LIC (Life Insurance Corporation) -- Komal Jeevan -that assures return to the policyholder.
These were the two factors most instrumental in marking the arrival of ULIPs, but another factor that
has helped their cause is a booming stock market. While this now appears as one of the primary
reasons for their popularity, we believe ULIPs have some fundamental positives like enhanced
flexibility and merging of investment and insurance in a single entity that have really endeared them
to individuals.
SUM ASSURED
Perhaps the most fundamental difference between ULIPs and traditional endowment plans is in the
concept of premium and sum assured.
When you want to take a traditional endowment plan, the question your agent will ask you are -how much insurance cover do you need? Or in other words, what is the sum assured you are looking
for? The premium is calculated based on the number you give your agent.
With a ULIP it works in reverse. When you opt for a ULIP, you will have to answer the question -how much premium can you pay?
Depending on the premium amount you state, you are offered a sum assured as a multiple of the
premium. For instance, if you are comfortable paying Rs 10,000 annual premium on your ULIP, the
insurance company will offer you a sum assured of say 5 to 20 times the premium amount.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

In the case of LIC's ULIP, the sum assured--premium relationship works the traditional way. So you
need to state how much sum assured you are looking for and your premium is calculated as 1/10th
the sum assured. If you have opted for a sum assured of Rs 100,000, your annual premium will be
Rs 10,000.

INVESTMENTS
Traditionally, endowment plans have invested in government securities, corporate bonds and the
money market. They have shirked from investing in the stock markets, although there is a provision
for the same.
However, for some time now, endowment plans have discarded their traditional outlook on investing
and allocate about 10%-15% of monies to stocks. This percentage varies across life insurance
companies.
ULIPs have no such constraints on their choice of investments. They invest across the board in
stocks, government securities, corporate bonds and money market instruments. Of course, within a
ULIP there are options wherein equity investments are capped.
EXPENSES
ULIPs are considered to be very expensive when compared to traditional endowment plans. This
notion is rooted more in perception than reality.
Sale of a traditional endowment plan fetches a commission of about 30% (of premium) in the first
year and 60% (of premium) over the first five years. Then there is ongoing commission in the region
of 5%.
Sale of a ULIP fetches a relatively lower commission ranging from as low as 5% to 30% of premium
(depending on the insurance company) in the first 1-3 years. After the initial years, it stabilises at 13%. Unlike endowment plans, there are no IRDA regulations on ULIP commissions.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Mortality expenses for ULIPs and traditional endowment plans remain the same as also the
administration charges.
One area where ULIPs prove to be more expensive than traditional endowment is in fund
management. Since ULIPs have an equity component that needs to be managed actively, they incur
fund management charges. These charges fluctuate in the 0.80%-1.50% (of premium) range.

FLEXIBILITY
As we mentioned, one aspect that gives ULIPs an edge over traditional endowment is flexibility.
ULIPs offer a host of options to the individual based on his risk profile.
There are insurance companies that offer as many as five options within a ULIP with the equity
component varying from zero to a maximum of 100%. You can select an option that best fits your
objectives and risk-taking capacity.
Having selected an option, you still have the flexibility to switch to another option. Most insurance
companies allow a number of free 'switches' in a year.
Another innovative feature with ULIPs is the 'top-up' facility. A top-up is a one-time additional
investment in the ULIP over and above the annual premium. This feature works well when you have
a surplus that you are looking to invest in a market-linked avenue, rather than stash away in a
savings account or a fixed deposit.
ULIPs also have a facility that allows you to skip premiums after regular payment in the initial
years. For instance, if you have paid your premiums religiously over the first three years, you can
skip the fourth year's premium. The insurance company will make the necessary adjustments from
your investment surplus to ensure the policy does not lapse.
With traditional endowment, there are no investment options. You select the only option you have
and must remain with it till maturity. There is also no concept of a top-up facility.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Your premium amount cannot be enhanced on a one-time basis and skipped premiums will result in
your policy lapsing.
TRANSPARENCY
ULIPs are also more transparent than traditional endowment plans. Since they are market-linked,
there is a price per unit. This is the net asset value (NAV) that is declared on a daily basis. A simple
calculation can tell you the value of your ULIP investments. Over time you know exactly how your
ULIP has performed.
ULIPs also disclose their portfolios regularly. This gives you an idea of how your money is being
managed. It also tells you whether or not your mutual fund and/or stock investments coincide with
your ULIP investments. If they are, then you have the opportunity to do a rethink on your investment
strategy across the board so as to ensure you are well diversified across investment avenues at all
times.
With traditional endowment, there is no concept of a NAV. However, insurers do send you an
annual statement of bonus declared during the year, which gives you an idea of how your insurance
plan is performing.
Traditional endowment also does not have the practice of disclosing portfolios. But given that there
are provisions that ensure a large chunk of the endowment portfolio is in high quality
(AAA/sovereign rating) debt paper, disclosure of portfolios is likely to evoke little investor interest.
LIQUIDITY
Another flexibility that ULIPs offer the individual is liquidity. Since ULIP investments are NAVbased it is possible to withdraw a portion of your investments before maturity. Of course, there is an
initial lock-in period (3 years) after which the withdrawal is possible.
Traditional endowment has no provision for pre-mature withdrawal. You can surrender your policy,
but you won't get everything you have earned on your policy in terms of premiums paid and bonuses
earned. If you are clear that you will need money at regular intervals then it is recommended that
you opt for money-back endowment.
TAX BENEFITS

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Taxation is one area where there is common ground between ULIPs and traditional endowment.
Premiums in ULIPs as well as traditional endowment plans are eligible for tax benefits under
Section 80C subject to a maximum limit of Rs 100,000. On the same lines, monies received on
maturity on ULIPs and traditional endowment are tax-free under Section 10.

ULIP - KEY FEATURES (IN GENERAL):


1. Premiums paid can be single, regular or variable. The payment period too can be regular or
variable. The risk cover can be increased or decreased.
2. As in all insurance policies, the risk charge (mortality rate) varies with age.
3. The maturity benefit is not typically a fixed amount and the maturity period can be
advanced or extended.
4. Investments can be made in gilt funds, balanced funds, money market funds, growth funds
or bonds.
5. The policyholder can switch between schemes, for instance, balanced to debt or gilt to
equity, etc.
6. The maturity benefit is the net asset value of the units.
7. The costs in ULIP are higher because there is a life insurance component in it as well, in
addition to the investment component.
8. Insurance companies have the discretion to decide on their investment portfolios.
9. They are simple, clear, and easy to understand.
10. Being transparent the policyholder gets the entire episode on the performance of his fund.
11. Lead to an efficient utilization of capital.
12. ULIP products are exempted from tax and they provide life insurance.
13. Provides capital appreciation.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


14. Investor gets an option to choose among debt, balanced and equity funds.

ULIP SALES SINCE 2003


The Story in Numbers
No of policies
Gross premium (Rs cr)
Market share (%)
Pvt life insurance cos
All life insurance cos

2003-04
186,443
221

2004-05
288,189
1,002

Apr-Sep '05
200,213
762

7.3
0.96

15.4
3.39

19.8
4.75

ULIP STANDARD CHARTERED


The flexible Unit linked life insurance plans at Standard Chartered bank provides the opportunity to
participate in market-linked returns while enjoying the valuable benefits of life insurance. Insurance
Plans for Standard Chartered Bank customers is issued by Bajaj Allianz Life Insurance Company
Limited.

BAJAJ ALLIANZ-BACKGROUND:
Bajaj Allianz Life Insurance Co Ltd is a joint venture between two leading conglomeratesAllianz AG, one of the world's largest insurance companies, and Bajaj Auto, one of the biggest two
and three wheeler manufacturers in the world.
Allianz Group is one of the world's leading insurers and financial service providers. Founded in
1890 in Berlin, Allianz is now present in over 70 countries with almost 174,000 employees. Allianz
Group provides its more than 60 million customers worldwide with a comprehensive range of
services in the areas of Property and Casualty Insurance, Life and Health Insurance, & Asset
Management and Banking.
Bajaj Auto Ltd, the flagship company of the Rs80bn Bajaj Group is the largest manufacturer of twowheelers and three-wheelers in India and one of the largest in the world. Bajaj Auto has a strong
brand image & brand loyalty synonymous with quality & customer focus in India

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Allianz AG with over 110 years of experience in over 70 countries and Bajaj Auto, trusted for over
55 years in the Indian market, together are committed to offer Insurance solutions that provide all the
security needed for a family.

UNIT GAIN A UNIT LINKED PLAN:


With Bajaj Allianz Unit Gain, one can invest in life insurance plan that can take care of all changing
requirements throughout ones life. This plan has been designed to provide the maximum flexibility
to the customers, so that they do not have to worry about the changing needs.
Bajaj Allianz Unit Gain offers the unique option of combining the protection of life insurance with
the attractive prospects of investing in securities. One can choose the investment funds he wants to
invest his money in, providing with an opportunity to have a direct stake in the performance of the
financial markets. One can also benefit from attractive tax advantages and can protect his loved ones
against unfortunate events.

FEATURES
The Bajaj Allianz Unit Gain comes with a host of features to allow a customer to have the best of all
worlds Protection and Investment with flexibility like never before.
Some of the key features of this plan are:
Guaranteed death benefit
Choice of 6 investment funds with flexible investment management: you can change funds at any
time.
Attractive investment alternative to fixed-interest securities
Provision for full/partial withdrawals any time after three full years premiums are paid.
Unmatched flexibility to match the changing needs.
In order to understand the ULIP policy, a detailed analysis of how the plan works, what all are the
service charges charged by the company, what is the amount assured and how is it calculated etc. has
been done in the following sheets. Moreover, as at present every next bank is offering this policy it
becomes essential to compare the different ULIP policies offered by different banks and companies
with the policy offered by Bajaj Allianz.

FUTURE PROSPECTS:

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Bajaj Allianz Life Insurance Company has firmed up massive network expansion and it plans to
achieve around 100 per cent growth in its total premium income at Rs 6,000 crore in 2006-07. The
company is planning to double its branch network to more than 1,000 from the current level of 550.
(Currently, Bajaj Allianz Life has branches in 150200 districts headquarters).

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31

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

ULIP
Joint/Single life
Min Annual premium(Rs)
Mode of premium payment
Min Sum Assured

Types of Funds
Benefits
Death Benefit
Accidential Death Benefit
Critical illness Benefit
Accidential Pemanent/Partial
Disability Benefit
Hospital Cash Benefit
MahilaGain Rider Benefit
Cash Withdrawl Option
Min Withdrawl Amt(Rs.)
Min Balance requirement(Rs.)
Redirect Premium
Free Switches
Min Switching Amt(Rs)
Top Up
Choice Of Top Up
Min Top Up Amt.
Percentage of Top up Allocated
Flexibility to Increase Sum
Assured
No of Times
Quantum of Increase
Flexibility to Decrease Sum
Assured

Bajaj Allianz Unit Gain


Single life
10,000
Yearly,quarterly,monthly
5*Annual Premium

ICICI Prudential Life Time2


Single life
18,000
Yearly,quarterly,monthly
7*Annual Premium

6(Equity,Equity Gain,Equity
Midcap,Debt,Balanced,Cash)

4(Maximiser,Balancer,Protector,Reserve
r

Yes
Optional
Optional

Yes

Optional
Optional
Optional(for womem only)
Anytime after payment of 3
full year premiums
1000
10000
Allowed
3/yr
5000

Anytime after payment of 3 full year


premiums
2000
Allowed
4/yr
10000

Yes
-

Yes
5000

100%

100%

Yes
Every 3rd year upto 4 times
25% of the SA/Rs.1Lakh
whichever lower

Yes
Every 3rd year upto 3 times
25% of the SA/Rs.1Lakh whichever
lower

yes

Flexibility to Decrease Premium


Flexibility to Increase Premium
Additional Allocation of Units
Charges

No
Yes
No

Yes
Yes,Max Decrease 20 % of the original
premium
yes
Yes

Allocation
1st year
2nd year
3rd Year

All
30%
98%
99%

(18000-49,999)
80%
92.50%
96%

(50,000 &
above)
82%
92.50%
96%

4 th Year
Bid Offer Spread
Transaction Charges

100 % onwards
5%
0.5%(equity)0.2%(debt)

96% onwards

96% onwards

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

ULIP
HDFC Unit Linked
Endowment Plan
Single life
10000
Yearly,quarterly,monthly
5*Annual Premium
6(liquid,secure
managed,defensive
managed,balanced
managed,equity managed
growth.

Joint/Single life
Min Annual premium(Rs)
Mode of premium payment
Min Sum Assured

Types of Funds
Benefits
Death Benefit
Accidential Death Benefit
Critical illness Benefit

Yes
Optional
Optional

Accidential Permanent/Partial
Disability Benefit
Hospital Cash Benefit
MahilaGain Rider Benefit

No
No
No

Cash Withdrawal Option


Min Withdrawal Amt(Rs.)
Min Balance requirement(Rs.)
Redirect Premium
Free Switches
Min Switching Amt(Rs)
Top Up
Choice Of Top Up
Min Top Up Amt.

10000
15000
Allowed
No Limit

Percentage of Top up Allocated


Flexibility to Increase Sum
Assured
No of Times
Quantum of Increase
Flexibility to Decrease Sum
Assured

Yes
5000
97%(1 & 2 Yr),99%(3 yr
Onwards)
No

Yes

Flexibility to Decrease Premium


Flexibility to Increase Premium
Additional Allocation of Units
Charges

no

Allocation
1st year
2nd year
3rd Year

upto1,99,999
73%
73%
99%

4 th Year
Bid Offer Spread
Transaction Charges

99% Onwards

Fund Administration Charges

Rs15/month

2,00,000
to
4,99,999
80%
80%
99%
99%
Onwards

FORE SCHOOL OF MANAGEMENT

5,00,000
to
9,99,999
85%
85%
99%
99%
Onwards

10,00,000
& Above
90%
90%
99%
99%
Onwards

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


ULIP
Max New York Life Maker
Single life
15000

Joint/Single life
Min Annual premium(Rs)
Mode of premium payment
Min Sum Assured

Aviva Life Bond


Joint life
25000(one time)

1,00,000

4(secure,conservative,balanced,growth
)

Types of Funds
Benefits
Death Benefit
Accidental Death Benefit
Critical illness Benefit

4(with profits,
secure,growth,balanced)

Optional
Optional

Accidental Permanent/Partial
Disability Benefit
Hospital Cash Benefit
MahilaGain Rider Benefit
Anytime after payment of 3 full year
premiums

Cash Withdrawal Option


Min Withdrawal Amt(Rs.)
Min Balance requirement(Rs.)
Redirect Premium
Free Switches
Min Switching Amt(Rs)
Top Up
Choice Of Top Up
Min Top Up Amt.

Allowed
2/yr
yes

Anytime after 5 years


5000
10000
Allowed,2 times
1/yr
5000
Yes
10000

Percentage of Top up Allocated


Flexibility to Increase Sum
Assured
No of Times
Quantum of Increase
Flexibility to Decrease Sum
Assured
Flexibility to Decrease Premium
Flexibility to Increase Premium
Additional Allocation of Units
Charges
Allocation
1st year
2nd year
3rd Year

Yes
As applicable
75%
80%
100%

4 th Year
Bid Offer Spread
Transaction Charges

100%Onwards

Fund Administration Charges

Rs 50/month

5%

FORE SCHOOL OF MANAGEMENT

1.5% Of the initial premium for


1st 5yrs,0.5% subsequently

34

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Bajaj Allianz Unit


Gain

ICICI Prudential Life Time2

Other Charges

Investment Charges(as% of fund


value)
Switching Charges
Mortality Charges
Top Up Charges
Initial Set up Charge(1st year
only)

1%
(Equity,Balanced,Debt
& Cash),1.5%(Equity
Gain,Equity Midcap)
1%of switch Amt/Rs
100 whichever higher
As applicable
-

[including Adm Charges]2.25%


(Maximiser),2.25%(Balancer),1.5%
(Protector),0.75%(Reserver)
Rs. 100
As applicable
1% of Top up

HDFC Unit Linked


Endowment Plan
Other Charges

Investment Charges(as% of fund


value)
Switching Charges
Mortality Charges
Top Up Charges
Initial Set up Charge(1st year only)

0.80%
Free
As applicable

Max New York Life


Maker

Aviva Life Bond

Other Charges

Investment Charges(as% of fund


value)

(0.9% to1.25%)

Switching Charges
Mortality Charges
Top Up Charges
Initial Set up Charge(1st year only)

1%
0.5%of switch Amt/Rs 100 whichever
higher

(0.15% to
0.25%)/month

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

MUTUAL FUNDS
A mutual fund is a pool of money, collected from investors, and is invested according to certain
investment objectives.
A mutual fund is created when investors put their money together. It is therefore a pool of investors
funds. The most important characteristic of a mutual fund is that the contributors and the
beneficiaries of the fund are the same class of people, namely the investors.

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY


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. The history
of mutual funds in India can be broadly divided into four distinct phases.
First Phase 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. 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 Canbank
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.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

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

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


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.

The graph indicates the growth of assets over the years.

Source:
Association of Mutual Funds in India (AMFI)

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

ADVANTAGES OF INVESTING IN MUTUAL FUNDS:


1. Portfolio diversification
2. Professional management
3. Reduction in risk
4. Reduction of transaction costs
5. Liquidity
6. Convenience and flexibility

DISADVANTAGES OF INVESTING IN MUTUAL FUNDS:


1. No control over costs: Since investors do not directly, monitor the funds operations they cannot
control the costs effectively. Regulators therefore usually limit the expenses of mutual funds.
2. No tailor made portfolios: Mutual fund portfolios are created and marketed by AMCs into which
investors invest. They cannot create tailor made portfolios.
3. Managing a portfolio of funds: As the numbers of mutual funds increase, in order to tailor a
portfolio for him, an investor may be holding a portfolio of funds, with the costs of monitoring them
and using them, being incurred by him.

TYPES OF MUTUAL FUNDS

By Structure
o Open - Ended Schemes
o Close - Ended Schemes
o Interval Schemes
By Investment Objective
o Growth Schemes
o Income Schemes
o Balanced Schemes
o Money Market Schemes
Other Schemes
o Tax Saving Schemes
o Special Schemes
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Index Schemes
Sector Specific Scheme

MUTUAL FUNDS ORGANIZATION

Organization of a Mutal Fund

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 mutual fund market.
The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual Fund,
Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India 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 existance with reregistering all mutual funds except UTI. The regulations were further given a revised shape in 1996.

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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 MUTUAL FUND COMPANIES IN INDIA


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 golbal organisation 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.
HDFC Mutual Fund
HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers nemely 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.
Prudential ICICI Mutual Fund
The mutual fund of ICICI is a joint venture with Prudential Plc. 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 Plc. 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.
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
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


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 Mahindra 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.
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.

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Franklin Templeton India Mutual Fund


The group, Frnaklin 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 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 non-profit 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 focussing on a long-term capital appreciation.
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.

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 banks should be Rs 40, 90,000 crore.

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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.

SOME FACTS FOR THE GROWTH OF MUTUAL FUNDS IN INDIA

100% growth in the last 6 years.

Number of foreign AMCs is in the queue to enter the Indian markets.

Our saving rate is over 23%, highest in the world. Only channelizing these savings in mutual
funds sector is required.

We have approximately 29 mutual funds which is much less than US having more than 800.
There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating
on the 'A' class cities. Soon they will find scope in the growing cities.

Mutual fund can penetrate rurals like the Indian insurance industry with simple and limited
products.

SEBI allowing the MF's to launch commodity mutual funds.

Emphasis on better corporate governance.

Trying to curb the late trading practices.

Introduction of Financial Planners who can provide need based advice.

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Category Equity ELSS

HDFC Tax Saver-G


PruICICI Taxplan-G
Tata Tax Saving

Inception
Date
31-Mar-96
9-Aug-99
31-Mar-96

1yr(%
)
77.68
67.39
52.21

3yr(%
)
82.45
86.19
70.47

SI(%)
45.79
37.22
30.25

Top 10
Holdings(%)
56.1
39.85
35.12

Equity Index
HDFC Index Sensex plus G Fund
Prudential ICICI index
Birla Index Fund-G

10-Jul-02
25-Feb-02
17-Sep-02

56.88
55.19
50.16

50.26
44.49
43.07

41.64
28.6
40.24

57.53
67.62
28.63

24-Dec-94 76.35
7-May-98 63.76
31-Aug-96 69.13

72.63
75.04
71.88

25.55
36.42
28.72

66.42
41.85
43.2

10-Apr-00

65.06

73.27

29.34

34.87

7-Oct-05
19-Jul-02
31-Dec-03
1-Oct-02

75.78
77.5
55.56
60.09

90.25
84.07
73.27
69.12

34.01
70.5
15.94
62.44

47.16
30.85
42.95
39.32

51.8
39.29

53.92
46.68

23.24
18.85

32.15
19.68

DSP Merrill Lynch Balanced-Fund


Prudential ICICI Balanced

31-Jan-94
7-Oct-95
14-May99
7-Oct-99

42.76
45.78

45.76
43.91

18.84
18.2

22.15
22.97

Liquid
DSP Merrill Lynch Liquidity Fund

9-Mar-98

5.64

5.18

6.92

Equity Large Cap


HDFC Equity Fund-G
Tata pure Equity Fund
HDFC Top 200-G
DSP Merrill Lynch Oppurtunities
Fund-G
Eqiuty Mid Cap
Reliance Growth
Sundram Select Midcap
HDFC Capital Builder Fund
Birla Mid Cap Fund-G
Balanced
HDFC Prudence Fund
Tata Balanced Fund

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


RP-G
HDFC Cash Management Fund SPG
HSBC Cash Fund-Regular-G
Tempelton India Treasury
Management A/C-G
MIP
Tata Young Citizens Fund
FT India Monthly Income Plan
Prudential ICICI Monthly Income
Plan
Tempelton Monthly Income Plan

19-Nov-99 5.55
3-Dec-02
5.28

5.12
2.02

6.08
5.07

29-Apr-98

5.15

7.25

14-Oct-95
28-Sep-00

30.44
10.81

31.6
12.61

17.26
12.7

14-Oct-00
7-Feb-00

12.23
9.9

10.73
11.16

10.95
10.57

Category Equity ELSS

HDFC Tax Saver-G


PruICICI Taxplan-G
Tata Tax Saving

Expense
Ratio
2.43
2.36
2.49

Standard
Corpus(Crs) RAR Deviation
323.28
3.59 6.66
280.96
3.52 8.07
106.27
2.91 6.86

Equity Index
HDFC Index Sensex plus G Fund
Prudential ICICI index
Birla Index Fund-G

1.5
1.25
1.49

5.82
2.94
4.31

2.4
2.08
2

6.12
6.98
6.72

1.95
2.4
2.18

2657.9
265.48
1003.38

3.18
3.1
3.06

6.46
6.87
6.97

2.2

925.96

3.05

Eqiuty Mid Cap


Reliance Growth
Sundram Select Midcap
HDFC Capital Builder Fund
Birla Mid Cap Fund-G

1.96
2.32
2.06
2.42

2496.41
474.05
952.82
152.27

3.74
3.55
3.18
3.06

7.06
7.89
6.37
6.17

Balanced
HDFC Prudence Fund
Tata Balanced Fund
DSP Merrill Lynch Balanced-Fund
Prudential ICICI Balanced

2.01
2.46
2.04
2.28

1643.57
137.29
312.11
321.11

2.58
2.22
2.19
2.14

4.46
4.95

Liquid
DSP Merrill Lynch Liquidity Fund

0.45

4476.52

0.32

Equity Large Cap


HDFC Equity Fund-G
Tata pure Equity Fund
HDFC Top 200-G
DSP Merrill Lynch Oppurtunities
Fund-G

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


RP-G
HDFC Cash Management Fund SP-G
HSBC Cash Fund-Regular-G
Tempelton India Treasury
Management A/C-G
MIP
Tata Young Citizens Fund
FT India Monthly Income Plan
Prudential ICICI Monthly Income
Plan
Tempelton Monthly Income Plan

0.45
0.7

2369.69
2663.42

0.31
0.31

0.01
0.01

0.75

1780.26

0.3

0.01

2.46
1.83

138.49
702.54

1.63
0.71

3.53
0.48

1.8
1.9

463.07
142.63

0.64
0.63

0.61
0.38

Category Equity ELSS

HDFC Tax Saver-G


PruICICI Taxplan-G
Tata Tax Saving

Alpha
2.31
2.37
1.8

Beta
0.88
0.98
0.86

R-squared
0.79
0.65
0.71

Benchmark Index
S&P 500
S&P Cnx Nifty
Sensex

Equity Index
HDFC Index Sensex plus G Fund
Prudential ICICI index
Birla Index Fund-G

0.58
-0.06
-0.04

0.9
1.03
0.99

0.98
1
0.99

Sensex
S&P Cnx Nifty
S&P Cnx Nifty

1.42
1.7
1.34

0.9
0.95
0.9

0.88
0.86
0.84

S&P 500
Sensex
BSE 200

2.63
2.82
2.19
2.17

0.89
0.86
0.78
0.73

0.72
0.53
0.67
0.63

BSE 100
BSE midcap
S&P 500
CNX Midcap

1.79
1.62

1.03
1.17

0.66
0.69

Crisil Balanced
Crisil Balanced

1.19

1.23

0.8

Crisil Balanced

0.02
0.01

0
0.05

0
0.18

Crisil Liquid
Crisil Liquid

Equity Large Cap


HDFC Equity Fund-G
Tata pure Equity Fund
HDFC Top 200-G
DSP Merrill Lynch Oppurtunities FundG
Eqiuty Mid Cap
Reliance Growth
Sundram Select Midcap
HDFC Capital Builder Fund
Birla Mid Cap Fund-G
Balanced
HDFC Prudence Fund
Tata Balanced Fund
DSP Merrill Lynch Balanced-Fund
Prudential ICICI Balanced
Liquid
DSP Merrill Lynch Liquidity Fund RP-G
HDFC Cash Management Fund SP-G
HSBC Cash Fund-Regular-G

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Tempelton India Treasury Management
A/C-G

0.01

0.08

0.26

Crisil Liquid

MIP
Tata Young Citizens Fund
FT India Monthly Income Plan
Prudential ICICI Monthly Income Plan
Tempelton Monthly Income Plan

2.38
0.15
0.26
0.13

0.72
0.05
0.07
0.04

0.1
0.01
0.01
0.01

Crisil Balanced
Crisil MIP Bl
Crisil MIP Bl
Crisil MIP Bl

ULIP V/S MUTUAL FUNDS


Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds in terms
of their structure and functioning. As is the case with mutual funds, investors in ULIPs is allotted
units by the insurance company and a net asset value (NAV) is declared for the same on a daily
basis.
Similarly ULIP investors have the option of investing across various schemes similar to the ones
found in the mutual funds domain, i.e. diversified equity funds, balanced funds and debt funds to
name a few. Generally speaking, ULIPs can be termed as mutual fund schemes with an insurance
component.
However it should not be construed that barring the insurance element there is nothing
differentiating mutual funds from ULIPs.Despite the seemingly comparable structures there are
various factors wherein the two differ.
1. MODE OF INVESTMENT/ INVESTMENT AMOUNTS
Mutual fund investors have the option of either making lump sum investments or investing using the
systematic investment plan (SIP) route which entails commitments over longer time horizons. The
minimum investment amounts are laid out by the fund house.

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ULIP investors also have the choice of investing in a lump sum (single premium) or using the
conventional route, i.e. making premium payments on an annual, half-yearly, quarterly or monthly
basis. In ULIPs, determining the premium paid is often the starting point for the investment activity.
This is in stark contrast to conventional insurance plans where the sum assured is the starting point
and premiums to be paid are determined thereafter.
ULIP investors also have the flexibility to alter the premium amounts during the policy's tenure. For
example an individual with access to surplus funds can enhance the contribution thereby ensuring
that his surplus funds are gainfully invested; conversely an individual faced with a liquidity crunch
has the option of paying a lower amount (the difference being adjusted in the accumulated value of
his ULIP). The freedom to modify premium payments at one's convenience clearly gives ULIP
investors an edge over their mutual fund counterparts.
2. EXPENSES
In mutual fund investments, expenses charged for various activities like fund management, sales and
marketing, administration among others are subject to pre-determined upper limits as prescribed by
the Securities and Exchange Board of India.
For example equity-oriented funds can charge their investors a maximum of 2.5% per annum on a
recurring basis for all their expenses; any expense above the prescribed limit is borne by the fund
house and not the investors.
Similarly funds also charge their investors entry and exit loads (in most cases, either is applicable).
Entry loads are charged at the timing of making an investment while the exit load is charged at the
time of sale.
Insurance companies have a free hand in levying expenses on their ULIP products with no upper
limits being prescribed by the regulator, i.e. the Insurance Regulatory and Development Authority.
This explains the complex and at times 'unwieldy' expense structures on ULIP offerings. The only
restraint placed is that insurers are required to notify the regulator of all the expenses that will be
charged on their ULIP offerings.

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Expenses can have far-reaching consequences on investors since higher expenses translate into lower
amounts being invested and a smaller corpus being accumulated.
3. PORTFOLIO DISCLOSURE
Mutual fund houses are required to statutorily declare their portfolios on a quarterly basis, albeit
most fund houses do so on a monthly basis. Investors get the opportunity to see where their monies
are being invested and how they have been managed by studying the portfolio.
There is lack of consensus on whether ULIPs are required to disclose their portfolios. During our
interactions with leading insurers we came across divergent views on this issue.
While one school of thought believes that disclosing portfolios on a quarterly basis is mandatory, the
other believes that there is no legal obligation to do so and that insurers are required to disclose their
portfolios only on demand.
Some insurance companies do declare their portfolios on a monthly/quarterly basis. However the
lack of transparency in ULIP investments could be a cause for concern considering that the amount
invested in insurance policies is essentially meant to provide for contingencies and for long-term
needs like retirement; regular portfolio disclosures on the other hand can enable investors to make
timely investment decisions.
4. FLEXIBILITY IN ALTERING THE ASSET ALLOCATION
As was stated earlier, offerings in both the mutual funds segment and ULIPs segment are largely
comparable. For example plans that invest their entire corpus in equities (diversified equity funds), a
60:40 allotment in equity and debt instruments (balanced funds) and those investing only in debt
instruments (debt funds) can be found in both ULIPs and mutual funds.
If a mutual fund investor in a diversified equity fund wishes to shift his corpus into a debt from the
same fund house, he could have to bear an exit load and/or entry load.
On the other hand most insurance companies permit their ULIP inventors to shift investments across
various plans/asset classes either at a nominal or no cost (usually, a couple of switches are allowed
free of charge every year and a cost has to be borne for additional switches).

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Effectively the ULIP investor is given the option to invest across asset classes as per his convenience
in a cost-effective manner. This can prove to be very useful for investors, for example in a bull
market when the ULIP investor's equity component has appreciated, he can book profits by simply
transferring the requisite amount to a debt-oriented plan.
5. TAX BENEFITS
ULIP investments qualify for deductions under Section 80C of the Income Tax Act. This holds
good, irrespective of the nature of the plan chosen by the investor. On the other hand in the mutual
funds domain, only investments in tax-saving funds (also referred to as equity-linked savings
schemes) are eligible for Section 80C benefits.
Maturity proceeds from ULIPs are tax free. In case of equity-oriented funds (for example diversified
equity funds, balanced funds), if the investments are held for a period over 12 months, the gains are
tax free; conversely investments sold within a 12-month period attract short-term capital gains tax @
10%.
Similarly, debt-oriented funds attract a long-term capital gains tax @ 10%, while a short-term capital
gain is taxed at the investor's marginal tax rate.Despite the seemingly similar structures evidently
both mutual funds and ULIPs have their unique set of advantages to offer. As always, it is vital for
investors to be aware of the nuances in both offerings and make informed decisions.
IN A NUTSHELL:

Investment
amounts

ULIPs

Mutual Funds

Determined by the investor


and can be modified as well
No upper limits, expenses
determined by the insurance
company

Minimum investment amounts are


determined by the fund house
Upper limits for expenses chargeable
to investors have been set by the
regulator

Section 80C benefits are


available on all ULIP
investments

Section 80C benefits are available


only on investments in tax-saving
funds

Expenses
Portfolio
disclosure
Not mandatory*
Quarterly disclosures are mandatory
Modifying asset Generally permitted for free Entry/exit loads have to be borne by
allocation
or at a nominal cost
the investor

Tax benefits

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

WHERE TO INVEST
Whether to invest in ULIP or to invest in MUTUAL FUND depends upon customers future
financial goals & present investments.
1. If an investor is looking for an insurance policy and is ready to take moderate risks, he must
opt for the ULIP plan. A term of 10 years or less is advisable only when one needs an
insurance cover, otherwise if a customer wants to enter a horizon of 11-30 years, then ULIP
scores handsomely over Mutual funds.
2. ULIP is not meant for an irregular investor, as under a ULIP policy an investor has to make
compulsory savings. An investor has to save regularly and invest through the highs and lows
in the market. So, for the investors who generally do not save regularly and invest only when
market is high and disinvest when the market is low, mutual funds are the best option.
3. The investors who want to invest only to enjoy short term gains and want to switch and
withdraw their amounts frequently are not advised to invest in ULIP as there is usually a lock
in period of 3 or 4 years involved in ULIP.Such investors should go in for Mutual funds
where they can switch anytime they want to.
4. For low risk taking investors mutual funds can be the best option as the risk can be
diversified as there exists huge variety of specialized schemes under mutual funds which can
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be tailored according to all the possible requirements and the needs of the investor. Such
options are not available under the ULIP scheme.
5. The service charges such as fund management charges etc. are usually low in the case of
ULIP as compared to mutual funds. Though the initial charges under ULIP are high but still
the cumulative effect comes out to be less than that of Mutual funds, thus an investor who
doesnt want to shell out more on the expenses and wants safe investment should opt for
ULIP as compared to Mutual funds.

SURVEY
As a part of our project, in order to know the perceptions of the investors about the investment
schemes basically ULIP and MUTUAL FUNDS, a survey was being conducted by us in Delhi NCR
region.

OBJECTIVE OF THE SURVEY:

To know the existing investment pattern among different age groups and different
occupations.

To know the present portfolio of the investors, their perceptions about different investment
schemes, their investment concerns, their present returns, and their future expectations from
different investment schemes.

To know the popularity and acceptability of the two products i.e. ULIP and MUTUAL
FUNDS (of Standard Chartered bank specially) among the above mentioned categories.

To know the potential customers for the investment schemes: ULIP and Mutual Funds of
Standard Chartered bank.

To analyze which set of customers should invest in ULIP and Mutual Funds as per their
needs identified.
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DATA COLLECTION METHOD


The basic objective of the project was to compare the products offered by Standard Chartered
namely ULIP and Mutual Funds. Both primary and secondary data has been used in order to analyze
these products.
The primary data was obtained through observation, direct communication with the people and
filling up of questionnaires.
The secondary data was collected through the

Internet

Journals and newspapers

DATA COLLECTION INSTRUMENT


A semi structured kind of questionnaire was designed which contained both open- ended and
multiple choice questions.
The questionnaire designed was to provide dual information sharing type, it is seriously undertaken
that anyone who is undergoing the process, should find his interest or else he might show disinterest
towards the programme. The questionnaire was equally important both to the customers as well as to
the bank to draw out its prospects.
The questionnaire was designed to meet all the objectives of the survey fully and helped us in
knowing the needs of the customers and the market value and image of the bank from those who
already had an experience with the Standard Chartered bank. Moreover, it helped us to give
suggestions to the bank so as to cater customers needs in a much better way and hence broaden its
customer base.

RESEARCH METHODOLOGY
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The survey process involved two phases: First phase included identification and selection of the
target audience to be studied and to determine the parameters on which respondents will justify their
preferences. The audience were targeted and analyzed basically on the basis of two important
parameters: Age and Occupations. Demographical information was also taken in order to know the
investment patterns according to the location, age, gender etc. A questionnaire was designed to
collect the needed information from the respondents. (See the annexure)
In the second phase data was collected through questionnaire from more than 100 respondents within
DELHI- NCR region. Results were viewed cautiously as sample was from a specific population.
The responses that were generated during this exercise were converted in the form of percentages to
have a comparative outlook, as the numbers itself cannot explain the true picture. These percentages
were then represented through the simple tools like bar graphs, pie charts.

ANALYSIS
FINDINGS:
OCCUPATION
To begin with the nature of occupation was divided broadly into 2 categories:
1. Business
2. Services
The study shows:

Almost 80% of people were into service and 20% were into business, either proprietorship or
partnership.

BUSINESS

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The sample consisted of 50 % having income between Rs. 2 lakh to Rs. 5 lakh. 33% had income
greater than Rs. 5 lakh. It can be seen that a large amount of people in business are investing (72%)
and are insured (83%). But the investments are basically in fixed deposits and share markets.
There is some lack of awareness of the products like ULIP and Mutual funds as can be seen that only
16% of people are holding ULIP policy and 19 % are having Mutual Funds. The prime concern of
this segment for investing is to build cash reserves and purchase assets.
This class (79%) considers High Returns as very important investment factor while only 20 %
Liquidity with the same importance.
In the ULIPs we find LIC to be dominating with 50 % of the market share, ICICI is second most
preferred company with 17 % share. 83% of the people investing in ULIP invest in Equity Type
Fund, indicating their preference for high returns as well as well as Risk Tolerance.
In Mutual Funds we find that of the 19 % people investing in Mutual Funds, 34 % have invested
with Reliance with ICICI as second preference.

SERVICE
The sample consisted of 61 % having income between Rs. 2 lakh to Rs. 5 lakh. 28% had income
greater than Rs. 5 lakh.
It can be seen that 68 % people in services are investing and only 64% people are having their life
insured. In this segment the main concern of investing is to build cash reserves. The
majority of their portfolio consists of Mutual Funds (23%) & Fixed Deposits (23%).
This segment is comparatively better aware of ULIPs.This Risk Tolerance is also low
as only 18% invest in share markets.
This class (60%) considers High Returns as very important investment factor while only 20 % Tax
free proceeds with the same importance.
In the ULIPs we find LIC & ICICI to be dominating the market with 36% share each. Bajaj Allianz
has 14 % presence. We find the preference for Equity Type Fund declines to 54 % & for balanced
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


increase to 34 % when compared with Business class. 14 % people also invest in cash fund,
indicating their preference for low Risk Tolerance.
In Mutual Funds we find that of the 23 % people investing in Mutual Funds, 23 % have invested
with Franklin. ICICI & Reliance with 16 % each come as second preference.

AGE
The analysis was also done on the basis of age which was being broadly classified into 4 categories:
1. 18-25 years
2. 25-35 years
3. 35-45 years
4. 45 and above
The study shows:

AGE 18-25
The sample consisted of 58 % people having income between Rs. 2 lakh to Rs. 5 lakh. 25% had
income greater than Rs. 5 lakh. Majority (74%) belonged to salaried class. It can be seen that only
54% people are investing. We find that majority of people of this age group (58%) do not have Life
Insurance cover. The investments are basically in Mutual funds (35%) & share markets (24%).
This indicates high Risk Tolerance for this age group. The prime concern of this segment for
investing is to purchase assets.
This class considers High Returns (79%) & Flexibility (60%) as very important investment factors
while only 21 % consider Tax Free proceeds with the same importance.

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In the ULIPs we find ICICI to be dominating with 50 % of the market share, LIC is second most
preferred company. Almost all investing in ULIP invest in Equity Type Fund, indicating their
preference for high returns as well as well as Risk Tolerance.
In Mutual Funds we find that of the 35% people investing in Mutual Funds, Reliance & Franklin are
their common choice.[No. of observations:24]

AGE 25-35
The sample consisted of 55 % people having income between Rs. 2 lakh to Rs. 5 lakh. 31% had
income greater than Rs. 5 lakh. Majority (70%) belonged to salaried class. It can be seen that
majority (70%) people are investing with Building Cash reserves & Funding for children being their
main concerns. We find that majority of people of this age group (71%) have Life Insurance cover.
The investments are basically in ULIP (27%) & Fixed Deposits (23%).
This class considers High Returns, Safety & Liquidity as important investment factors with less
importance given to Tax Free proceeds & Flexibility.
In the ULIPs we find LIC (33 %) & ICICI (29%) to be dominating with Bajaj Allianz having 19%
market share. Majority (60%) of people investing in ULIP invest in Equity Type Fund, indicating
their preference for high returns as well as well as Risk Tolerance.
In Mutual Funds we find that of the 21% people investing in Mutual Funds, Reliance & Fidelity are
their common choice.[No. of observations:35]

AGE 35-45
The sample consisted of 60 % people having income between Rs. 2 lakh to Rs. 5 lakh. 30% had
income greater than Rs. 5 lakh. Majority (60%) belonged to salaried class. It can be seen that 87%
people are investing. We find that majority of people of this age group (90%) have Life Insurance
cover. The investments are basically in Mutual funds (22%) & ULIP (31%). This indicates their
high awareness regarding these two. The prime concern of this segment for investing is to build
Cash reserves & Funding for their children.
This class considers safety (70%) & High Returns (50%) as very important investment factors while
only 10 % consider Flexibility with the same importance.
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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


In the ULIPs we find ICICI, UTI & LIC to be dominating the market. We find that there is a shift to
Balanced fund from Equity fund indicating more preference for less risk as the age increases.
In Mutual Funds we find, Reliance & ICICI to be the common choice.[No. of observations:10]
AGE 45 AND ABOVE
The sample consisted of 67 % people having income between Rs. 2 lakh to Rs. 5 lakh. 29% had
income greater than Rs. 5 lakh. 33% worked in Government jobs & 29% belonged to salaried class.
It can be seen that this is an investing segment and is mostly insurance covered.
The investments are basically in Government securities & Fixed Deposits. The product ULIP also
seems to be quite popular in this segment as quite a large number of people are holding the ULIP
policy. The prime concern of this segment for investing is to build Cash reserves.
This class considers predominantly safety (82%) as very important investment factor while only 25
% consider Liquidity with the same importance. In the ULIPs we find, UTI & LIC to be dominating
the market. We find that majority are investing in Balanced fund In Mutual Funds we find, presence
of many companies.
[No. of observations: 24]

RECOMMENDATIONS:
OCCUPATION

The business segment can be targeted for ULIP (as an investment product) and Mutual funds as
these products are offering high returns and safety which is the major concern of this segment.
The need is to promote ULIP as a better product than the F.Ds and mutual fund can be promoted
in lieu of the share markets.

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The service class can be a potential customer both for the ULIP and Mutual Funds. ULIP needs
to be promoted as an insurance product and can be sold emphasizing the importance and need of
insurance. This segment is already investing into Mutual funds, thus the bank needs to promote
its mutual funds by promising the customers higher returns and safety than the others.

AGE

The segment (18-25) can be a potential customer segment for the bank as most of the people
are falling in the income group of Rs. 2-5 lakhs.The company can target this segment by
offering its ULIP product both as an insurance and investment product, which can provide
high returns as the investments and provide the insurance cover too, as a large segment
doesnt have an insurance cover. The return on investments (ULIP and Mutual funds) is
mostly between the 10% -20% brackets so products offering returns higher than this band
can be offered to this category as 24% of people under this category are looking for building
cash reserves and earning higher returns. The need is to make this segment aware of the
products like ULIP (which is promising return of 20-25% p.a.) and tap as many customers as
possible.

In order to tap the 25-35 years segment ULIP can be promoted as an investment option rather
than an insurance product. Mutual funds need to be promoted as only a small segment is
investing in mutual funds. Mutual funds and ULIP both can be the best investment option for
this segment as the basic reason for investment as can be seen from above is building Cash
reserves and funding for children and both these products are offering high returns.

As the segment 35-45 years is an investing and risk taking segment, Mutual funds promising
higher returns can be promoted in this segment. The product ULIP is also highly acceptable
by this segment, so both of these products can be promoted as a best investment options
promising high returns and low risks.

Thus this segment can mainly be targeted for the Mutual funds as can be seen that very few
people are investing M.Fs. this is because this segment consists of risk averters as this
segment prefers Fixed Deposits and government securities than any other investment product
as safety is the most important factor which is being considered while investing by this
segment, thus product like ULIP and Mutual Funds need to be promoted as safe investments
and better than F.Ds only then this segment can be tapped.

CONCLUSION
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The Standard Chartered Bank has a global presence and it has acquired good recognition in India
also. This can be attributed to the fact that the products and services being offered by the bank have
been carefully developed, over the years, after studying the nitty gritties of the Indian market.
The bank offers a wide range of products and services to meet the requirements of varied customers,
as customer satisfaction is their prime concern. They aim at making banking convenient for their
customers by offering services like Internet banking, mobile banking, doorstep banking, ATM
Service and so on. Each service / product, offered by the blank is designed for a particular market
segment. Moreover, getting along with Standard Chartered is a status symbol for people and really
feels proud to be with Standard Chartered.
The main focus of the bank in the present scenario is to target only the elite group of customers and
thats why the bank is charging high slightly high service charges and maintenance of Rs. 10000 as
AQB in savings account. But the need of the hour is to shift the focus to the middle class in order to
meet the competition existing in this industry and expand the customer base.
The other financial products offered by the bank i.e. ULIP and Mutual Funds, for such products the
bank needs to target the right segment as per their needs and try to offer the best of their services in
order to achieve loyal and satisfied customers.

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BIBLIOGRAPHY
BOOKS:
1. Indian Mutual Funds Handbook by Sankaran S.
2. Investment policy and performance of Mutual Funds by Barua 2003.
3. Mutual funds in India by Sadhak, 2005.
4. Money Simplified, Sept 2005.
5. Business Research Methods by Schindler & cooper, 2003.
WEBSITES:
1. http://www.iloveindia.com/finance/bank/index.html
2. www.valueresearchonline.com
3. http://www.rediff.com/money/2005/oct/18perfin.htm
4. www.standardchartered.com
5. www.icicibank.com
6. www.abnamro.com
7. www.hsbc.com
8. www.kotak.com

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ANNEXURE
AGE 18-25

Income
above5
b/w 2-5
below 2

No.
6
14
4
24

As a % of
total
0.25
0.58
0.17
1

IN COME

17%

25%

above5
b/ w 2-5
below 2

58%

Life Insurance
Cover
Yes
No

No.
10
14
24

As a % of
total
0.42
0.58
1

LIFE IN SURAN CE COVER

42%
58%

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Yes
No

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Invest or Not
Yes
No

No.
13
11
24

As a % of
total
0.54
0.46
1

IN VEST OR N OT

46%

Yes
54%

Reasons for
Investment
Asset Purchase
Building Cash
Reserves
Retirement
Others

No.
8

As a % of
total
0.470588235

4
3
2
17

0.235294118
0.176470588
0.117647059
1

No

REASON S FOR IN VESTMEN TS


Asset Purchase
12%
18%
24%

46%

Building Cash
Reserves
Retirement
Others

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PORTFOLIO
Mutual
Funds
Fixed
Deposits
ULIP
Share
markets
Others

No.

As a % of
total

10

0.344827586

5
4

0.172413793
0.137931034

7
3
29

0.24137931
0.103448276
1

PORTFOLIO

10%

Mutual Funds
Fixed Deposits
ULIP
Share markets
Others

35%

24%
14%

17%

ULIP
Scheme
ICICI
LIC
AVIVA

No.

As a % of
total

2
1
1
4

0.5
0.25
0.25
1

ULIP SCHEME

AVIVA
25%

LIC
25%

ICICI
50%

FORE SCHOOL OF MANAGEMENT

ICICI
LIC
AVIVA

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

M.F Co.
Franklin
ICICI
Fidelity
Reliance
Others

No.
4
2
2
4
4
16

As a %
of total
0.25
0.125
0.125
0.25
0.25
1

MUTUAL FUN DS
Others
25%

Reliance
25%

Franklin
24%

Fidelity
13%

RETURNS ON M.F.
10%-20%
20%-30%
above 30%

Franklin
ICICI
Fidelity
Reliance
Others

ICICI
13%

No.
5
3
2
10

As %
of total
0.5
0.3
0.2
1

RETURN S ON M.F.

20%
50%
30%

10%-20%
20%-30%
above 30%

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AGE 25-35
Income
above5
b/w 2-5
below 2

No.
11
19
5
35

As a % of total
0.314285714
0.542857143
0.142857143
1

Income

14%

31%

above5
b/ w 2-5
below 2

55%

Invest or Not
Yes
No

As a % of
No.
total
26 0.74285714
9 0.25714286
0
35
1
IN VEST OR N OT

26%
Yes
No
74%

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Life Insurance
Cover
Yes
No

No.

As a % of
total
25 0.71428571
10 0.28571429
0
35
1

LIFE IN SURAN CE COVER

29%
Yes
No
71%

Reasons for Investment


Income replacement
Asset Purchase
Building Cash Reserves
Retirement
Funding for Children
Others

No.
4
6
16
7
9
2
44

As a % of total
0.090909091
0.136363636
0.363636364
0.159090909
0.204545455
0.045454545
1

REASONS FOR INVESTMENT

20%
16%

5% 14%

14%

36%

Income
replacement
Asset Purchase
Building Cash
Reserves
Retirement
Funding for
Children
Others

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PORTFOLIO
Mutual Funds
Fixed Deposits
ULIP
Share markets
Others

No.
13
14
16
10
8
61

As a % of total
0.213114754
0.229508197
0.262295082
0.163934426
0.131147541
1

PORTFOLIO

13%

Mutual Funds
Fixed Deposits
ULIP
Share markets
Others

21%

16%
23%

27%

ULIP
Scheme
ICICI
LIC
Bajaj
Allianz
Others

As a % of
total
6 0.285714286
7 0.333333333

No.

4
4
21

0.19047619
0.19047619
1

ULIP Scheme

19%

29%

19%
33%

Type of
Fund
Equity
Balanced

No.

ICICI
LIC
Bajaj Allianz
Others

As a % of
Total
13 0.619047619
3 0.142857143
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Cash

5
21

0.238095238
1

Type of Fund

24%

14%

Returns
Below 10%
10%-20%
20%-30%
Above 30%

62%

No.
2
7
3
4
16

Equity
Balanced
Cash

As a % of
Total
0.125
0.4375
0.1875
0.25
1

Returns

13%

25%

19%

M.F Co.
Franklin
ICICI
Fidelity
Reliance
HDFC
Others

43%

No.
3
3
5
5
3
7

Below 10%
10%-20%
20%-30%
Above 30%

As a % of
total
0.115384615
0.115384615
0.192307692
0.192307692
0.115384615
0.269230769

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M.F Co.

12%

26%

12%

RETURNS
ON M.F.
10%-20%
20%-30%
above 30%

12%
19%

19%

No.
3
4
6
13

Franklin
ICICI
Fidelity
Reliance
HDFC
Others

As % of total
0.230769231
0.307692308
0.461538462
1

RETURNS ON M.F.

23%
46%
31%

10%-20%
20%-30%
above 30%

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AGE 35- 45
Invest
No
Yes

1
7
Invest
13%
No
Yes
87%

Life Insurance
No
Yes

1
9
Life Insurance

10%
No
Yes
90%

Investment reasons
Asset Purchase
Building Cash reserves
Funding for children
Income replacement
Retirement

2
6
4
2
2

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Investment Reasons

13%

Building Cash
reserves
Funding for
children
Income
replacement
Retirement

13%

13%
37%
24%

Most Important
High returns
Safety
Liquidity
Tax free
proceeds
Flexibility

Asset Purchase

5
7
4
3
1

Most Important

Portfolio
Government
securities
Mutual funds
ULIP

Flexibility

Tax free proceeds

Liquidity

Safety

Series1

High returns

8
7
6
5
4
3
2
1
0

4
5
7
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Share Markets
Fixed Deposits
Bonds

3
1
3
Government
securities
Mutual funds

Portfolio

13%

17%

ULIP

4%

Share Markets

13%

22%
Fixed Deposits
31%

Bonds

ULIP SCHEME
ICICI
LIC
UTI
Others

2
3
2
0
ULIP SCHEME

29%

0%

ICICI
LIC
UTI
Others

29%

42%

Returns
Below 10%
10%-20%
20%-30%
Above 30 %

1
4
1
1

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Return in ULIP
14%

14%

Below 10%
10%-20%
20%-30%
Above 30 %

14%
58%

MUTUAL FUND CO.


Reliance
ICICI
HDFC
SBI
GLSS

2
2
1
1
1

Mutual Fund Co.


14%

Reliance
ICICI
HDFC
SBI
GLSS

29%

14%
14%

29%

45 AND ABOVE
Life Insurance
No
Yes

4
20
Life Insurance
17%
No
Yes
83%

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Invest
No
Yes

7
17
Invest

29%
No
Yes
71%

Portfolio
Government
securities
Mutual funds
ULIP
Share Markets
Fixed Deposits
Bonds

8
5
9
6
13
5

Portfolio

11%

17%
11%

28%

13%

20%

Government
securities
Mutual funds
ULIP
Share Markets
Fixed Deposits
Bonds

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Investment reasons
Asset Purchase
Building Cash reserves
Funding for children
Income replacement
Retirement

3
11
6
1
5

Investment Reasons

Building Cash
reserves
Funding for
children
Income
replacement

12%

19%
4%

42%

23%

Asset Purchase

Retirement

Most Important
High returns
Safety
Liquidity
Tax free proceeds
Flexibility

12
16
6
10
6
Most Important

20
15
10
5
0
Flexibility

Tax free
proceeds

Liquidity

Safety

High
returns

Series1

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

ULIP
SCHEME
ICICI
LIC
UTI
Aviva

1
4
4
2
ULIP SCHEME

18%

9%

ICICI
LIC
UTI
Aviva

37%
36%

FUNDS
Equity
Balanced
Debt
Cash

2
7
0
0
0%

FUNDS

0%
Equity
Balanced
Debt
Cash

22%

78%

Returns
Below 10%
10%-20%
Above 30 %

2
6
1

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Returns in ULIP
11%

22%

Below 10%
10%-20%
Above 30 %

67%

MUTUAL FUND CO.


Reliance
ICICI
HDFC
Franklin
Fidelity
UTI
IDBI

1
2
1
1
1
1
1

Mutual Fund Co.


13%
13%
13%
13%

12%
24%
12%

Reliance
ICICI
HDFC
Franklin
Fidelity
UTI
IDBI

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BUSINESS
INCOME
Below 2
b/w 2-5
Above 5

No.
3
9
6
18

As a %
of Total
0.16667
0.5
0.33333
1

INCOME

17%

33%

Below 2
b/ w 2-5
Above 5

50%

Invest or Not
Yes
No

As a %
No.
of Total
13 0.72222
5 0.27778
0
18
1

Invest or Not

28%
Yes
No
72%

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Life Insurance
Cover
Yes
No

As a %
of Total
0.83333
0.16667
0
1

No.
15
3
18

Life Insurance Cover

17%
Yes
No
83%

Reasons for
Investment
Asset Purchase
Building Cash
Reserves
Retirement
Others

No.

As a %
of total
7 0.26923
8 0.30769
3 0.11538
8 0.30769
26
1

Reasons for Investment


Asset Purchase
31%

12%

27%

30%

Building Cash
Reserves
Retirement
Others

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Investment
Factors
High returns
Safety
Liquidity
Tax free proceeds
Flexibility

Very
Important
10
8
3
6
5

Somewhat
Important Important
1
4
6
3
3

Less Important
1
1
3
2
3

1
0
1
2
2

Investment Factors Rating


Less Important

100%
80%
60%
40%
20%
0%

PORTFOLIO
Mutual Funds

Flexibility

Tax free
proceeds

Liquidity

Safety

High
returns

Somewhat
Important
Important
Very Imporant

No.
6

Fixed Deposits

ULIP

Share markets
Government
Securities
Others

7
5
2
32

FORE SCHOOL OF MANAGEMENT

As a %
of total
0.1875
0.2187
5
0.1562
5
0.2187
5
0.1562
5
0.0625
0.8437
5

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

PORTFOLIO

6%

16%

Mutual Funds

19%

Fixed Deposits
ULIP

21%

22%

16%

ULIP
Scheme
ICICI
LIC
Others

Share markets
Government Securities
Others

No.
1
3
2
6

As a %
of total
0.16667
0.5
0.33333
1

ULIP Scheme

33%

17%
ICICI
LIC
50%

Others

Type of Fund

17%
Equity
Balanced
83%

FORE SCHOOL OF MANAGEMENT

83

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

M.F Co.
Franklin
ICICI
Reliance
Others

As a %
of total
0.08333
0.25
0.33333
0.33333
1

No.
1
3
4
4
12
M.F Co.

8%

33%

Franklin
ICICI
Reliance
Others

25%

34%

SERVICE
Income
above5
b/w 2-5
below 2

No.
15
32
6
53

As a % of total
0.283018868
0.603773585
0.113207547
1

Income

11%

61%

28%

above5
b/ w 2-5
below 2

FORE SCHOOL OF MANAGEMENT

84

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Invest or Not
Yes
No

No.

As a % of total
36
0.679245283
17
0.320754717
0
53
1

Invest or Not

32%
Yes
No

68%

Life Insurance Cover


Yes
No

No. As a % of total
34
0.641509434
19
0.358490566
0
53
1

Life Insurance Cover

36%

Yes
No

64%

Reasons for
Investment
Income replacement
Asset Purchase
Building Cash
Reserves
Retirement
Funding for Children
Others

No.

As a % of total
2
0.036363636
9
0.163636364
22
9
9
4

0.4
0.163636364
0.163636364
0.072727273

FORE SCHOOL OF MANAGEMENT

85

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


55

1
Income
replacement
Asset Purchase

Reasons for Investment

7%

16%
16%

4%

Building Cash
Reserves
Retirement

16%

Funding for
Children
Others

41%

PORTFOLIO
Mutual Funds
Fixed Deposits
ULIP
Share markets
Government
Securities
Others

No.
19
19
18
15

As a % of total
0.226190476
0.226190476
0.214285714
0.178571429

6
7
84

0.071428571
0.083333333
0.928571429

PORTFOLIO

Mutual Funds
Fixed Deposits

7% 8%

ULIP

23%

18%
21%

Investment
Concerns
High returns
Safety

Very
Imporant

23%

Share markets
Government
Securities
Others

Somewhat
Important Important
23
9
20
13

FORE SCHOOL OF MANAGEMENT

Less
Important
4
4

2
1
86

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


Liquidity
Tax free proceeds
Flexibility

12
7
14

18
19
15

6
8
5

Investment Factor Rating

2
4
4

Less Important
Somewhat
Important

100%
80%
60%
40%
20%
0%

ULIP Scheme

Flexibility

Tax free
proceeds

Liquidity

Safety

High
returns

Important

No.

ICICI

LIC

Bajaj Allianz

Others

3
22

Very Imporant

As a %
of total
0.3636
4
0.3636
4
0.1363
6
0.1363
6
1

ULIP Scheme

14%
14%
36%

36%

ICICI
LIC
Bajaj Allianz
Others

FORE SCHOOL OF MANAGEMENT

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

Type of Fund

14%

Equity
Balanced
Cash

54%

32%

Returns on ULIP

No.

Below 10%
10%-20%

4
11

20%-30%

Above 30%

3
22

As a %
of
Total
0.1818
2
0.5
0.1818
2
0.1363
6
1

Returns on ULIP

14%
18%

Below 10%
10%-20%
20%-30%
Above 30%

18%

50%

M.F
Co.
Frankli
n

No.
7

ICICI

Fidelity
Relianc
e
Others

5
5
10

As a %
of total
0.2258
1
0.1290
3
0.1612
9
0.1612
9
0.3225

FORE SCHOOL OF MANAGEMENT

88

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


8
1

31
M.F Co.

32%

23%
13%

16%

16%

Franklin
ICICI
Fidelity
Reliance
Others

FORE SCHOOL OF MANAGEMENT

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WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

MARKET SURVEY FOR STANDARD CHARTERED BANK


SHANTA
BANSAL
WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE

VARUN LALL
FORE School of Mgmt

Name: ______________ Contact No. ___________ Age: ______


1. Occupation: Government

Salaried

Business

Others (specify) ____

2. What is Your Familys Annual Income (Rs. Lakhs): Below 2


3. How many dependents you have? None
4. Do you have a Life Insurance Cover?

1
Yes

2 -5

above 5

More than 2

No

5. Do you invest? Yes


No if yes, what is your investment concerns?
Income replacement at death/disability
Building Cash reserves
Retirement
Asset Purchase
Funding for children
Others_____________________
(If No - proceed to Q.13)
6. Rate the following investment factors in your order of importance.
Very Important 1 Important 2 Somewhat Important 3 Less Important 4
S.NO
1.
2.
3.
4.
5.

PARAMETERS
High Returns
Safety
Liquidity
Tax Free Proceeds
Flexibility

RATING
1
1
1
1
1

7. Your current portfolio consists of?


Share Markets
Fixed Deposits Government Securities
ULIP Others (Please specify) ____________

2
2
2
2
2

3
3
3
3
3

4
4
4
4
4

Mutual Funds

Bonds

Attempt (Q.8 Q. 10) if you invest in ULIP schemes


8. With which company do you have the ULIP scheme? LIC
PRUDENTIAL BAJAJ ALLIANZ
OTHERS _________

FORE SCHOOL OF MANAGEMENT

AVIVA

ICICI

90

WHERE TO INVEST -ULIP OR MUTUAL FUNDS: AN INVESTORS GUIDE


9. Which type of fund you invest in? Equity

Debt

Balanced

Cash

10. How much returns are you getting on your ULIP investments annually (approximately)?
Below 10% 10% - 20 %
20%-30%
above 30%
Attempt (Q.11 Q. 12) if you invest in Mutual Funds
11. Which mutual funds are you investing in presently? _______________________
12. How much returns are you getting on your investments annually (approximately)?
Below 10% 10% - 20 %
20%-30%
above 30%
13. Standard Chartered Bank is offering an opportunity to participate in investment
schemes generating high returns, would you like to avail it? Yes No
THANK YOU!!!!!

FORE SCHOOL OF MANAGEMENT

91