SUMMER TRANING REPORT

ON

TOPIC: THE COMPREHENSIVE STUDY OF RELIANCE MUTUAL

FUNDS

A dissertation submitted to India Bulls

in partial fulfillment of the requirement of summer training for the award of degree of
BACHELOR OF BUSINESS ADMINISTRATION (HONS.)

Submitted by: Supervisor:

VIRENDRA OM MISS.SWATI SAKLANI
Regd. No.7020070044

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

1
 TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project entitled, “ COMPREHENSIVE STUDY OF

MUTUAL FUND”, project done for “RELIANCE MUTUAL FUND”,
submitted by Mr virendra om for the partial fulfillment of the
requirements for the award of degree of BBA(HONS)All the work is
done by him under my guidance and that this has not been submitted
by him for any other Degree.

MISS SWATI SAKLANI

LECTURER IN L.H.S.B

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 Acknowledgement

Before I get into the details of my project, I would like to show my

sincere gratitude by adding few heart full words for the people who
were part of this project report in numerous ways. People who gave
unending support right from the stage the project were conceived.

I would also like to express my heartfelt thanks to Miss Swati Saklani

for providing me the opportunity to do my project at international
business i.e on foreign trade. I would like to thank for the cooperation
and intellectual counsel he gave me throughout the work on this
project. I would also like to thanks My Dad an ideal teacher and a true
guide, for his rendered invaluable help and guidance to me during my
project. He remained a continuous source of information and
motivation for me.
Last but not the least; I owe my overwhelming gratitude to all the
people who have directly or indirectly have contributed to the
completion of the project.

Sincerely,

VIRENDRA OM

PREFACE

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This project title is “A COMPREHENSIVE STUDY OF MUTUAL
FUND IN INDIA” is done in RELIANCE MUTUAL FUND (Reliance
Capital Asset Management Ltd.), Pune. In this project, apart from
introduction, the concept of mutual fund, its history, a comprehensive
study has been done to understand the overall impact of portfolios of
mutual fund scheme.

The focus of the project is to find out whether mutual fund investors
are interested to invest in the present scenario or not. Another
important area is to find out which products of mutual funds are they
interested in investing.

INDEX

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CHAPTER PAG
CONTENTS
NO. E
NO.
1 Introduction
1.1 What is Mutual Fund? 9
1.2 Net Asset Value 10
1.3 Classification of Mutual Fund. 11
1.4 Types of Mutual Fund. 12
1.5 Advantage Of Mutual Fund 15
1.6 Disadvantage Of Mutual Fund 15
1.7 Mutual Fund In India 16
1.8 Growth of Mutual fund Industry in India 17
How Long to Keep Investment to get
1.9 18
maximum return
1.10 Returns 18
1.11 The Risk Return Graph. 19
1.12 Association of mutual fund in India 19
1.13 Objectives of AMFIA in India 20
1.14 Regulatory Aspect 21
1.15 Structure of mutual fund in India 22
1.16 Some AMC’S Operating currently 26
2 Company profile 29
3 Problem Statements and Objectives of Study.
3.1 Problem Statements. 37
3.2 Objectives of Study. 38

4 Research Methodology.
4.1 Methodology of Study. 39
4.2 Research Methodology. 39
4.3 Assumptions. 39
4.4 Literature Survey. 39
4.5 Probability Sampling. 40
4.6 Sampling Size. 40
4.7 Execution of Project. 41

5 Limitations.
5.1 Limitations. 41

6 Analysis of Mutual Fund.

6.1 Analysis on the basis of Schemes. 42
6.2 Comparison between Bank and MF 43

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 Industry.
7 Data collection 44
7.1 Questionnaire 45
7.2 Personal Visits. 46
7.3 Telephonic Information. 46`

8 Interpretation of Data.
8.1 Percentage of People who Invest. 47
Investment in Financial Product in
8.2 48
Percentage.
8.3 Awareness of Mutual Fund. 51
8.4 Perception of Mutual Fund. 52
Comparison between Risk Investment and
8.5 53
Returns.
8.6 Identification of Mutual Fund Industry. 54
8.7 Risk taken ability by different Age Groups. 55
Percentage of total Income Invested in
8.8 56
Mutual Fund.

Awareness of Reliance Capital Company

8.9 57
out of 100 people

9 9.1 Project Findings. 58

9.2 Recommendations. 58

10. Annexure 61

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 EXECUTIVE SUMMARY

The project titled “COMPREHENSIVE STUDY OF MUTUAL FUND IN

LUCKNOW” being carried out for RELIANCE MUTUAL FUND (A
RELIANCE CAPITAL ASSET MANAGEMENT LTD.)

RELIANCE CAPITAL operates in various financial products and services

like, Mutual Fund, Insurance, etc.
The evaluation of financial planning has been increased through
decades, which is best seen in customer rise. Now a day’s investment
of saving has assumed great importance.

According to the study of the markets, it is being observed that

markets are doing well in Mutual fund. In near future a proper financial
planning is required to invest money in all type of financial product
because there is good potential in market to invest.

In this project the great emphasis is given to the investor’s mind in

respect to investment in Mutual Fund .The needs and wants of the
client is taken into consideration.

I hope RELIANCE CAPITAL COMAPNY, Pune will recognize this as well as

take more references from this project report.

The main objective of this project is to know the Awareness of Mutual

Fund among investors and also to know the investing pattern of people
in different Financial Project.

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IT sector has been given more emphasis for the study of the project
because it is the only sector where all type of Age group, Income class
and different level of people are represented.
After analyzing the feedback the conclusion has been made that the
Indian financial market is having lots of potential customer the only
thing is to give a proper guidance to the prospective customers.

1. INTRODUCTION

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1.1 Mutual Fund

Mutual fund is a mechanism for pooling the investment, made by

the investors, in stock market, securities, shares and debentures as
disclosed in offer document and issuing units to the investors. Units
are issued to the investors in accordance with quantum of money
invested by them. Investors of Mutual funds are known as Unit Holders.

As investments are spread across a wide cross-section of

industries
and sectors, the risk are reduced. Diversification reduces the risk
because all stocks may not move in the same direction in the same
proportion at the same time.

The profits or losses are shared by investors in proportion to their

investments. The Mutual funds normally come out with a number of
schemes with different investment objectives which are launched from
time to time. A mutual fund is required to be registered with Securities
and Exchanges Board of India (SEBI) which regulates securities
markets before it can collect funds from the public.

ONE CAN MAKE MONEY FROM MUTUAL FUND IN THREE WAYS:-

9
  Income is earned from dividends and interest on bonds. A fund
pays out nearly all income it receives over the year to fund
owners in the form of a distribution.
 If the fund sell securities that have increased in price, the fund
have a capital gain most fund also pass on this gain to investor in
a distribution.

 If fund holding increases in price but are not sold by the fund
manager, the fund shares increase in price. One can sell then
this mutual fund shares the profit.

1.2 Net Asset Value

Following are the regulatory requirements and accounting definitions
laid down by
SEBI:
NAV = Net Asset of the Scheme / Number of Units
Outstanding
= MVL+ REC+ AI+ Asset – AE – Pay – Lia
No .of Units Outstanding as at the NAV date

MVL: Market value of Investment

REC: Receivables
AI: Other Accrued Income
Asset: Other Assets (Dividend yet to be received)
AE: Accrued Expenses

Pay: Other Payables

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Lia: Other Liabilities (Custodian and Management Fees)

Fund’s NAV is affected by:

• Purchase or Sale of Investors Securities.
• Valuation of all Investment Securities.
• Other Assets and Liabilities.
• Units Sold or Redeemed.

1.3 Classification of Mutual Fund

• Open Ended Funds: These funds have units available for sale
and repurchase at
all time. An investor can buy or redeem the units at price
based on NAV per
Unit.

• Close Ended Funds: These funds don’t have units available for
sale and repurchase at all time. It allows only one-time sale of a
fixed number of units. However, to provide liquidity to investors
many close-ended funds get listed on a Stock Exchange(s).

• Load Funds: Fund Manager made charges to the investors to

cover
distribution/ sales/marketing expenses. These charges
are called “ Loads”.If load amount is charged over a period of time,
it is called a “Deferred Load”. Some funds charge different
amount of load to the investors depending on number of years

11
 the investors have stayed with funds. Such charges are called
“Contingent Deferred Sale Charge”.

• No-Load Funds: Funds which make no charges or load for sales

expenses are called as “No Load Funds”.

1.4 TYPES OF MUTUAL FUNDS : -

Mutual Funds have specific investment objectives such as growth of

capital, safety of principal current income or tax exempt income, one
can select one fund or any number of different funds to help one meets
ones specific goals. In general mutual fund fall under 3 general
categories : -

 Equity fund invest in shares of common stocks.

 Fixed income funds invest in government or corporate securities
which offer fixed rate of returns.
 Balanced fund invest in a combination of both stocks and bonds.

AGGRESSIVE GROWTH FUNDS :-

These funds seek to provide maximum growth of capital with
secondary emphasis on dividend or interest income. They invest in
common stocks with a high potential for rapid growth and capital
appreciation.

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Aggressive growth funds are suitable for those investors who can
afford to assume the risk of potential loss in value of their investment
in the hope of achieving substantial and rapid gains. They are not
suitable for investors who must conserve their principal or who must
maximize their current income.

GROWTH FUNDS:-
Like aggressive growth funds, growth fund generally invests in stocks
for growth rather than income. They are considered more conservative
in their approach because they usually invest in established companies
to achieve long-term growth. Growth fund provides low current income
but the investor principal is more stable then it would be in an
aggressive growth fund. While the growth potential may be less over
the short term, many growth funds have superior long-term
performance records.

These funds are suitable for growth oriented investors but not
investors who are unable to assume risk or who are dependent on
maximizing current income from there investments.

GROWTH AND INCOME FUNDS:-

Growth and income funds seek long-term growth of capital as well as
current income. The investments strategies use to reach these goals
vary among funds.

Growth and income funds have low to moderate stability of principal

and moderate potential for current income and growth. They are

13
suitable for investors who can assume some risk to achieve growth of
capital but want to maintain a moderate level of current income.

FIXED INCOME FUNDS:-

The goal of fixed income fund is to provide high current income
consistent with the level of capital. Growth of capital is of secondary
importance.

Fixed income funds offer a higher level of current income than money
market funds, but a lower stability of principal. Fixed income funds are
suitable for investors who want to maximize current income and who
can assume a degree of capital risk in order to do so.

EQUITY FUNDS:-
Funds that invest in stocks represent the largest category of mutual
fund. Generally the investment objective of this class of fund is long-
term capital growth with some income. There are however many type
of equity funds.

BALANCED FUNDS:-

The Balanced funds aims to provide both growth and income. These
funds invest in both shares and fixed income securities in the
proportion indicated in their offer documents. It is an idea for investors
who are looking for the combinations of income and moderate growth.

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MONEY MARKET FUNDS/ LIQUID FUNDS:-
For the cautious investors these funds provide a very high stability of
principal while seeking a moderate to high current income. They invest
in highly liquid; virtually risk free, short-term debt securities of
agencies of the Indian government, banks and corporation and
treasury bills. Because of their short-term investments, money market
mutual funds are able to keep a virtually constant unit price; only the
yield fluctuates.
Money market funds are suitable for those investors who want high
stability of principal and current income with immediate liquidity.

SPECIALITY / SECTOR FUNDS:-

These funds invest in securities of a specific industry or sector of the
economy such as health care, technology, leisure, utilities or precious
metals. The funds enable investor to diversify holding among many
companies within an industry, a more conservative approach than
investing directly in one particular company.
Sector funds offer a opportunity for sharp capital gains in cases where
the fund’s industry is “in favor” but also entail the risk of capital losses
when the industry is out of favor. While sectors funds restrict holdings
to a particular industry, other specialty funds such as index funds gives
investors a broadly diversified portfolio and attempt to mirror the
performance of various market averages.

1.5 Advantages of Mutual funds

• Diversified portfolio of investments: As the investments are

made in various stocks of different companies, Professional
Management: Fund Managers and his/her team of highly

15
 qualified professional looks at all perspectives before
committing to an investment decision. This sort of specialist
knowledge is available to the small retail investor through the MF
route.

• Market Linked Return: Many schemes offered by mutual

funds help investors to gain return better than the market.

• Diversification of Risk: Diversification reduces the risk of

exposure to one or two shares or debentures or other
instruments.

• Reduction in Transaction Cost: A direct investors bears all

costs of investing such as brokerage or custody of securities.
Investing via Mutual Fund help investors to reduce the cost as
larger volumes are involved
.
• Liquidity: An MF investor can invest and disinvest at will,
irrespective of market conditions. In case of shares or bonds it’s
very difficult to sell them unless and until a buyer is there.
Mutual Funds give the option of liquidity. The units of an open
ended scheme can be redeemed at any working day.

• Convenience and Flexibility: Various options of Systematic

Investment Plan, Systematic Withdrawal Plan and Systematic
Transfer Plan are designed for the convenience of the investors.

1.6 Disadvantages of Mutual Fund

No Control over Costs: A Mutual Fund Investor has to pay
management fees, fund distribution cost to the Mutual Fund. This cost

16
is not incurred in direct investing. But this cost is less than the cost
of direct investing by the investor
s.
• No Tailor-made Portfolios: Investors investing in Mutual Fund
gives the rights to Fund Manager to build the portfolio of
shares, bonds and other securities. W h i l e i n v e s t i n g d i r e c t l y ,
investors can build there own portfolio
However, today Mutual Funds are offering families of
schemes. Investors
ca n c hoo se fro m different inv estm e nt pla ns c co ns tru ct a
p ortfo lio o f his choe.
ic
• Managing a Portfolio of Funds: Due to presence of large
number of funds availability in the market, investor needs some
advice to select a fund to achieve his objective.

1.7 MUTUAL FUND INDUSTRY IN INDIA

17
 Mutual Funds in India

UTI Private sector

Public

Foreign Houses Indian Houses

JV’s with foreign
Partners

Birla Sun Capital Templeton

Prudential ICICI Alliance TATA
Alliance Capital Morgan Stanley JM Reliance
Kothari Pioneer

Banks
SBI Institutions
CANARA GIC
PNB LIC etc.
BOI etc.

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1.8 Growth of the Mutual Fund Industry in
India

• 1963: Unit Trust of India was established by an Act of Parliament.

• 1964: First scheme launched by UTI - Unit Scheme 1964(US 64).
• 1978: UTI de-linked from the RBI and IDBI took over.
• 1987: SBI Mutual Fund was the first Public Sector Fund
(November)
Canbank Mutual Fund (December)
UTI had Rs.6, 700 crores of AUM
• 1989: Punjab National Bank Mutual Fund ( Augest )
Indian Bank Mutual Fund (November)
LIC Mutual Fund
• 1990: Bank of India (June)
GIC Mutual Fund
• 1992: Bank of Baroda Mutual Fund (October).
• 1993: Total Rs.47, 004 as AUM.
Kothari Pioneer- First Private Sector Mutual Fund (July)
SEBI (Mutual Fund) Regulations
• 1996: Revised SEBI (Mutual Fund) Regulations
• 2003: Mutual Funds
Total assets: Rs.1, 21, 805 crores.
The Unit Trust of India: Rs.44, 541 crores of AUM
UTI bifurcated into two separate entities
The Specified Undertaking of UTI: Rs.29, 835 crores of
AUM
The UTI Mutual Fund Ltd

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 • 2004: Mutual Funds
Total Asset: Rs.153108 crores
Schemes: 421.
• 2005: Indian mutual fund industry has Rs. 199200 crores

1.9 HOW LONG TO KEEP INVESTMENT TO GET

MAXIMUM
RETURNS:-

Technically open-ended funds you can withdraw your investments

even within a week, but to get desired returns positive time frame is
required are:

Funds Time Period

Equity Funds 3 Years (plus)
Balanced Funds 18 months to 3 Years
MIP’s 1 Year (plus)
Income Funds 6 months to 1 Year
Liquid Funds few days to 6 months

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1.10 WHAT RETURNS CAN I EXPECT IF I KEEP
MY MONEY FOR SUGGESTED TIME FRAMES:-
Funds Returns

Sector funds 22% to 25% p.a

Balance funds 15% to 18% p.a
MIP’s Pension Plans 12% to 15% p.a
Income Funds 10% to 12% p.a
Liquid Funds 7% to 9% p.a

The above-mentioned returns in the table are indicative and not

assured. All investments in MUTUAL FUNDS are securities and are
subject to market risk and the NAVs of the schemes may go up and
down depending upon the factors and forces affecting the security
market including the fluctuations in the internal rates .The past
performance of the MUTUAL FUNDS is not indicative of future
performance.

1.11 THE RISK RETURN GRAPHS FOR VARIOUS

FUNDS:-

21
 Sector Funds

R
E Equity Funds
T
U Balanced Funds
R
N Income Funds
S
Liquid Funds

RISKS

The above Graph shows the Risk and Returns generated by different
Funds. Liquid Funds are less Risky and also generate less Returns
where as Sector Funds are more Risky but generate more Returns by
the example of above two Funds it is clear that Risk and Returns are
directly proportional to each other. Other Funds like Equity Funds,
Balanced Funds and Income Funds are also gives the same percentage
of Returns as the Risk involved.

1.12 ASSOCIATION OF MUTUAL FUNDS IN

INDIA:-

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With the increase in mutual fund players in India, a need for mutual
fund association in India was generated to function as a non-profit
organization. Association of Mutual Funds in India (AMFI) was
incorporated on 22nd August 1995.
AMFI is an apex body of all Asset Management Companies (AMC),
which has been registered with SEBI. Till date all the AMCs are that
have launched mutual fund schemes are its members. It functions
under the supervision and guidelines of its Board of Directors.
Association of Mutual Funds India has brought down the Indian Mutual
Fund Industry to a professional and healthy market with ethical lines
enhancing and maintaining standards. It follows the principle of both
protecting and promoting the interests of mutual funds as well as their
unit holder.

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1.13 The objectives of Association of Mutual Funds in
India:-
The Association of Mutual Funds of India works with 30 registered
AMCs of the country. It has certain defined objectives, which
juxtaposes the guidelines of its Board of Directors. The objectives are
as follows:

 This mutual fund association of India maintains high professional

and ethical standards in all areas of operation of the industry.

 It also recommends and promotes the top class business

practices and code of conduct which is followed by members and
related people engaged in the activities of mutual Fund and
asset management. The agencies that are by any means
connected or involved In the field of capital markets and financial
services also involved in this code of conduct Of the association.

 AMFI interacts with SEBI and works according to SEBIs guidelines

in the mutual fund Industry.

 Association of Mutual Fund in India do represent the Government

of India, the Reserve Bank of India and other related bodies on
matters relating to the Mutual Fund Industry.

 It develops a team of well qualified and trained Agent

distributors. It implements a programme of training and
certification for all intermediaries and other engaged in the
mutual fund industry.

 AMFI undertakes all India awareness programmed for investor’s

in order to promote Proper understanding of the concepts and
working of mutual funds.

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

1.14 FUTURE OF MUTUAL FUND 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.
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 the asset will
be double.

Some facts for the growth of mutual funds in

India:-

 100% growth in the last 6 years.

 Number of foreign AMC's are in the queue to enter the Indian

markets like Fidelity Investments, US based, with over
US$1trillion assets under management worldwide.

 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.

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  '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 rural 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.

1.15 REGULATORY ASPECT :-

Schemes of mutual funds:-

 The Asset management company shall launch no schemes unless

the trustees approve such scheme and a copy of the offer has
been filed with the Board.

 Every mutual fund shall along with the offer documents of each
scheme pay filing fees.

 The offer document shall contain disclosures which are adequate

in order to enable the investors to make informed investment
decision including the disclosure non maximum investments
proposed to be made by the scheme in the listed securities of

26
 the group companies of the sponsor. A close-ended scheme
shall be fully redeemed at the end of the maturity period.
“Unless a majority of the unit holders otherwise decide for its
rollover by passing a resolution”.

 The mutual fund and asset management company shall be liable

to refund the application money to the applicants:-

 If the mutual fund fails to receive the minimum subscription

amount referred to in clause (i) of sub- regulation.
 If the moneys received from the applicants for units are in excess
of subscription as referred to in clause (ii) of sub-regulation.

o The asset management company shall issue to the

applicant whose
 application has been accepted, unit certificates or a statement of
accounts
 specifying the number of units allotted to the applicant as soon
as possible
 but not later than six weeks from the date of closure of the initial
 subscription list and or from the date of receipt of the request
from the unit
 Holders in any open ended scheme.

Rules Regarding Advertisement:-

 The offer document and advertisement materials shall not be

misleading or contain any statement or opinion, which are
incorrect or false.

Investment objectives and valuation policies:-

27
  The price at which the units may be subscribed or sold the price
at which such unit may at any time be repurchased by the
mutual fund shall be made available to the investors.


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

• The financial year for all the scheme shall end as of March 31 of
each year. Every mutual fund or the asset management
company shall prepare in respect of each financial year an
annual report and annual statement of accounts of the schemes
and the fund as specified in Eleventh Schedule.

• Every mutual fund shall have the annual statement of accounts

audited by an auditor who is not in any way associated with the
auditor of the asset management comp

Procedure for Action In Case Of Default:-

28
 On and from the date of the suspension of the certificate or the
approval, as the case may be, the mutual fund, trustees or asset
management company, during the period of suspension and shall
be subject to the direction of the Board with regard to any
records, documents, or securities that may be in its custody or
control relating to its activities as mutual funds, trustees or the
asset management company.

Restrictions on Investments:
 A mutual fund scheme shall not invest more than 15% of its NAV
in debt instrument issued by a single issuer, which are rated not
below investment grade by a credit rating agency authorize to
carry out such activity under the act. Such investment limit may
be extended to 20% of the NAV of the

 scheme with the prior approval of the Board of Trustees and the
Board of Asset Management Company.

 A mutual fund Scheme shall not invest more than 10% of its NAV
in unrated debt instrument issued by a single issuer and the total
investment in such instruments shall not exceed 25% of the NAV
of the Board of Trustees and the Board of Asset management.

 No mutual funds under all its schemes should own more than
10% of any company’s paid up capital carrying voting rights.

 Such transfers are done at the prevailing market price for quoted
instrument on spot basis.

29
  The securities so transferred shall be in conformity with the
investment objectives of the scheme to which such transfer has
been made.

 A scheme may invest in another scheme under the same asset

management company or any other mutual fund without
charging any fees, provided that aggregated intercourse inter
scheme investment made by all schemes under the same
management or in schemes under the management of any other
asset management company shall not exceed 5% of the net
asset value of the mutual fund.
The initial issue expenses in respect of any scheme may not exceed
6% of the funds raised under that scheme.

 Every mutual fund shall buy and sell securities on the basis of
deliveries and shall in all cases of purchases, take delivery of
relative securities and in all cases of sale, deliver the securities
and shall in no case put itself in a position whereby it has to
make short sale or carry forward transaction or engage in Badla
finance.

 Every mutual fund shall get the securities purchased or

transferred in the name of the mutual fund on account of the
concerned scheme, wherever investments are intended to be of
long-term nature.

 Pending deployment of funds of a scheme a mutual fund can

invest the funds of the scheme in short term deposits of
scheduled commercial banks.

30
  No mutual fund scheme shall make any investment in ;
o Any unlisted security of an associate or group company of
the sponsor or

o Any security issued by way of private placement by an

associate or group company of the sponsor.

The listed securities of group companies of the sponsor which is in

excess of 30% of the net assets (of all the schemes of a mutual fund)

 No mutual fund scheme shall invest more than 105 of its NAV in
the equity shares or equity related instrument of any company.
Provided that, the limit of 10 percent shall not be applicable for
investments in index fund or sector or industry specific schemes.

 A Mutual fund scheme shall not invest more than 5% of its NAV
in the equity shares or equity related investments in case of
open-ended schemes and 10 % of its NAV in case of close ended
schemes.

1.16 STRUCTURE OF MUTUAL FUND IN INDIA:-

The Indian mutual fund industry is dominated by the Unit Trust of India
which has a total corpus of Rs.700bn collected from more than 20
million investors. The UTI has many funds schemes in all categories i.e.
equity , balanced , income etc with some being open ended and some
being close ended . The unit schemes 1964 commonly referred to as
US 64 , which is a Balanced fund is a biggest schemes with a corpus of
about Rs. 200 billion UTI was floated by financial institution and is
governed by a special act of parliament . Most of its investors believe

31
that UTI is government owned and controlled which while legally
incorrect, is true for all practical purposes.

The second largest category of mutual funds is the ones floated by

Nationalize Banks. Canbank Asset Management floated by Canera
Bank and SBI Funds Management floated by State Bank of India are the
largest of it. GIC AMC floated by General Insurance Corporation and
Jeevan Bema Sahayog AMC floated by LIC are some of the other
prominent ones. The aggregate corpus of funds managed by this
category of AMCs is about 150bn.

The third largest category of mutual fund is the ones floated by the
private sector and by foreign Asset Management Company . The
largest of these are Prudential ICICI AMC and Birla Sunlife AMC. The
aggregate corpus of asset managed by this category of AMCs is in
excess of Rs. 250bn.

Some of AMCs operating currently are:-

NAME OF AMC OWNERSHIP

Alliance capital asset management (I)Pvt. Ltd
Private foreign

Birla Sunlife Asset Management Company ltd. Private Indian

Bank of Baroda Asset management Company
LTD
Bank
Bank of India Asset Management Company Ltd
Bank
Canbank Investment Management Services Ltd
Bank

32
Cholamandalam Cazenove Asset Management
Company Ltd. Private foreign
Dundee Asset Management Company Ltd
Private foreign
DSP Merrill Lynch ASSET Management
Company Ltd Private foreign
Escorts Asset management ltd
Private Indian
First India Asset Management Ltd
Private Indian
GIC Asset Management Company Ltd.
Institution
IDBI Investment Management Company Ltd
Institution
Indfund Management Ltd
Bank
ING Investment Asset Management Company
Pvt. Ltd Private foreign
J M Capital Management limited
Private Indian
Jardine Fleming Asset Management ltd
Private foreign
Kotak Mahindra Asset Management Company
Private Indian
Kothari Pioneer Asset Management Company
Private Indian
Morgan Stanley Asset Management Company
Pvt Ltd Private foreign
Punjab National Bank Asset Management
Company Ltd Bank
Reliance Mutual FundCompany Private Indian
State Bank of India Funds Management ltd.
Bank
Shriram Asset Management Company Ltd.
Private Indian
Sun F and C Asset Management Company Ltd. Private foreign

33
 Sundaram Newton Asset Management
Company ltd Private foreign
Tara Asset Management Company Ltd.
Private Indian
Credit Capital Asset Management Company Ltd
Private Indian
Templeton Asset Management Company Ltd
Private foreign
Unit Trust Of India
Institution

2. COMPANY PROFILE:-

COMPANY OVERVIEW:
Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds,
with Average Assets Under Management (AAUM) of Rs. 1,08,332
CRORES and an investor base of over 70.87 Lacs. (AAUM and investor
count as on June 30, 2009)

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

Group, is one of the fastest growing mutual funds in the country. RMF
offers investors a well-rounded portfolio of products to meet varying
investor requirements and has presence in 118 cities across the
country. Reliance Mutual Fund constantly endeavors to launch
innovative products and customer service initiatives to increase value
to investors. "Reliance Mutual Fund schemes are managed by Reliance
Mutual FundLimited., a subsidiary of Reliance Capital Limited, which
holds 93.37% of the paid-up capital of RCAM, the balance paid up
capital being held by minority shareholders."

34
Reliance Capital Ltd. is one of India’s leading and fastest growing
private sector financial services companies, and ranks among the top 3
private sector financial services and banking companies, in terms of
net worth. Reliance Capital Ltd. has interests in asset management, life
and general insurance, private equity and proprietary investments, and
other financial services.

VISION OF THE COMPANY:

To be a globally respected wealth creator with an emphasis on
customer care and a culture of good corporate governance.

MISSION OF THE COMPANY

To create and nurture a world-class, high performance environment
aimed at delighting our customers.

HISTORY

Reliance Mutual FundLimited (RCAM), a company registered under the

Companies Act, 1956 was appointed to act as the Investment Manager
of Reliance Mutual Fund.

Reliance Mutual FundLimited (RCAM) was approved as the Asset

Management Company for the Mutual Fund by SEBI vide their letter no
IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into
an Investment Management Agreement (IMA) with RCAM dated May
12, 1995 and was amended on August 12, 1997 in line with SEBI
(Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is

35
authorized to act as Investment Manager of Reliance Mutual Fund.
The networth of the Asset Management Company including preference
shares as on September 30, 2007 is Rs.152.02 crores. Reliance Mutual
Fund has launched thirty-five Schemes till date, namely :

"Reliance Mutual Fund schemes are managed by Reliance Mutual

FundLimited., a subsidiary of Reliance Capital Limited, which holds
93.37% of the paid-up capital of RCAM, the balance paid up capital
being held by minority shareholders."

Reliance Mutual FundLimited (RCAM) was approved as the Asset

Management Company for the Mutual Fund by SEBI vide their letter no
IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into
an Investment Management Agreement (IMA) with RCAM dated May
12, 1995 and was amended on August 12, 1997 in line with SEBI
(Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is
authorised to act as Investment Manager of Reliance Mutual Fund. The
networth of the Asset Management Company as on March 31, 2008 is
Rs 709.39 crores.

YEAR WISE MILESTONES OF RELIANCE MUTUAL FUND

Reliance Growth Fund (September 1995)
Reliance Income Fund (December 1997)
Reliance Medium Term Fund (August 2000)
Reliance Diversified Power Sector Fund (March 2004)
Reliance Index Fund (February 2005)
Reliance Tax Saver (ELSS) Fund (July 2005)
Reliance Equity Linked Saving Fund - Series I (December 2007)
Reliance Infrastructure Fund (May 2009)

RELIANCE MUTUAL FUND COMPETITIVE ADVANTAGES

36
Reliance Mutual Fund – At a Glance

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

Funds, with Assets Under Management (AUM) of Rs. 1,08,332
crore (AUM as on 30th June 2009) and an investor base of over
70.87 Lacs.
• Investor base of over 3.38 million as on March 31, 2007
• Rapid growth in Assets Under Management (AUM), 87.7% growth
in AUM year on year. AUM of over Rs.46,306 crore ($10.62
billion) as on March 30, 2007 from Rs. 24,669 crore ($5.53
billion) as on March 31, 2006.
• Accelerated growth in investor base – 66.89% growth in investor
base year on year. Over 3.38 million investors as on March 31,
2007 from over 2.02 million investors as on March 31, 2006.
• Reliance Mutual Fund has over 10 years of extensive market
experience, over 26 schemes combined with a strong
performance track record.
• Reliance Equity Fund NFO (6th Feb -7th March 2006), the largest
ever collection of Rs.5,759 crore ($1.29 billion) in the history of
the Indian Mutual Fund industry.
• Footprint in over 100 cities in India
• Wide network of 130 collection points
• Wide portfolio of 26 well-rounded products to meet varying
investor requirements.
• Reliance Mutual Fund is amongst the few mutual funds in the
industry to offer Subscription, Redemption and Switch through
Online Transactions.
• Lipper Fund Award India 2007 :
o Reliance Gilt Securities Fund-Long Term Plan-Growth was
declared the best fund over 3 years in the Bond INR
Government category, out of 52 eligible schemes.

37
 o Reliance Growth Fund-Growth Plan was declared the best
fund over 5 years in the Equity India category, out of 81
eligible schemes.
• Lipper Fund Award Gulf 2007 :
o Reliance Banking Fund-Growth Plan-Growth Option was
declared the best fund over 3 years in Equity Sector Banks
and Other Financials
o Reliance Growth Fund-Growth Plan was declared the best
fund over 3 years in the Equity India category
o Reliance Growth Fund-Growth Plan was declared the best
fund over 5 years in the Equity India category
o Reliance Income Fund-Growth Plan-Growth Option was
declared the best fund over 5 years in Bond Indian Rupee –
General category
o Reliance Gilt Securities Fund-Long Term Plan-Growth was
declared the best fund over 3 years in the Bond INR
Government category
o Reliance Short Term Fund-Growth Plan was declared the
best fund over 3 years in Bond Indian Rupee
o
• CNBC TV18 - CRISIL Mutual Fund of the Year Awards 2006 :
o Reliance Gilt Securities Fund - Long Term Plan was
awarded CNBC TV18 - CRISIL Mutual Fund of the Year
Awards 2006, in the Open End Long Term Gilt Category
o Reliance Short Term Fund was awarded CNBC TV18 -
CRISIL Mutual Fund of the Year Awards 2006, in the Open
End Debt Short Term Category

• ICRA Mutual Funds Awards 2007 :

38
 o Reliance Short Term Fund has been ranked ICRA MFR 1 by
ICRA Mutual Funds Awards 2007 in the category Open
Ended Debt – Short Term for its 1 year performance till
December 31, 2006. The rank indicates performance within
the top 10% of the stated category.
o Reliance Gilt Securities Fund - Long Term Retail Plan has
been ranked ICRA MFR 1 by ICRA Mutual Funds Awards
2007 in the category Open Ended Gilt - Long Term for its 3
year performance till December 31, 2006. The rank
indicates performance within the top 10% of the stated
category.
o Reliance Liquidity Fund has been ranked ICRA MFR 1 by
ICRA Mutual Funds Awards 2007 in the category Open
Ended Liquid Scheme for its 1 year performance till
December 31, 2006. The rank indicates performance within
the top 10% of the stated category.
• The first mutual fund in India to offer instant cash withdrawal
facility on investments. Reliance Mutual Fund offers the Reliance
Any Time Money (ATM) Card with select schemes. The card is a
boon for retail investors as it enables them to withdraw their
investment any time, anywhere at over 1 million VISA-enabled
ATMs across the world.
• Reliance Mutual Fund is amongst the few mutual funds with a
24X7 Call Centre facility

OBJECTS OF THE COMPANY

The main objects as contained in our Memorandum of Association are:
1. To engage or undertake software and internet based services, data
processing, IT enabled services, software development services, selling

39
advertisement space on the site, web consulting and related services
including web designing and web maintenance, software product
development and marketing, software supply services, computer
consultancy services, e-commerce of all types including electronic
financial intermediation business and e-broking, market research,
business and management consultancy.
2. To undertake, conduct, study, carry on, help, promote any kind of
research, probe, investigation, survey, developmental work on
economy, industries. corporates, business houses, agricultural and
mineral, financial institutions, foreign financial institutions, capital
market on matters related to investment decisions primary equity
market, secondary equity market, debentures, bond, ventures, capital
funding proposals, competitive analysis, preparation of
corporate/industry profile etc. and trade/invest in researched
securities.

BUSINESS MODEL
Reliance Mutual Fund (RMF) has been established as a trust under the
Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the
Settlor/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as
the Trustee.
RMF has been registered with the Securities & Exchange Board of India
(SEBI) vide registration number MF/022/95/1 dated June 30, 1995. The
name of Reliance Capital Mutual Fund has been changed to Reliance
Mutual Fund effective 11th. March 2004 vide SEBI's letter no.
IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was
formed to launch 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

40
securities.

The main objectives of the Trust are :

• To carry on the activity of a Mutual Fund as may be permitted at

law and formulate and devise various collective Schemes of
savings and investments for people in India and abroad and also
ensure liquidity of investments for the Unit holders;
• To deploy Funds thus raised so as to help the Unit holders earn
reasonable returns on their savings and
• To take such steps as may be necessary from time to time to
realise the effects without any limitation.

COMPETITORS
• ABN AMRO Mutual Fund ,
• Birla Sun Life Mutual Fund
• BOB Mutual Fund
• Chola Mutual Fund
• Deutsche Mutual Fund
• DSP Merrill Lynch Mutual Fund
• Fidelity Mutual Fund
• Franklin Templeton Mutual Fund
• HDFC Mutual Fund
• HSBC Mutual Fund
• ING Vysya Mutual Fund
• J M Financial Mutual Fund

41
 • Kotak Mahindra Mutual Fund
• LIC Mutual Fund
• Morgan Stanley Mutual Fund
• Principal Mutual Fund
• Prudential ICICI Mutual Fund
• Sahara Mutual Fund
• SBI Mutual Fund
• Standard Chartered Mutual Fund
• Sundaram Mutual Fund
• Tata Mutual Fund
• Taurus Mutual Fund
• UTI Mutual Fund

SWOT ANALYSIS
STRENGTHS
• Original research
• Integrated technology platform
• Performance of previously introduced funds
• Pan – India distribution
WEAKNESS
• After Sales Services
• Limited number of outlet
OPPORTUNITIES
• Changing demographic with higher disposable income and
increasing complex financial instruments will drive the demand
for investment advisory services
• Rapid penetration of internet and computer needs that
technology enabled services will gain market share
THREATS

42
 • Economic slowdown
• Stock market fall will have a cascading effect on mutual fund
mobilization
• Increase or decrease in interest rates can effect debt or income
mobilizations
• Future changes in personal taxation rules can impact insurance
sales
• Increasing competition from large and particularly foreign
players

3. PROBLEM STATEMENT AND OBJECTIVE OF

THE
STUDY:-

3.1 PROBLEM STATEMENT:-

Due to the falling Rate of Interest on Bank deposits, it is obvious

that Investment in Mutual Fund will grow in year to come. However
lack of Awareness of Mutual Fund is a hindering factor in expected
growth of Mutual Fund Business. Under noted problems are
envisaged in this area:

• Difficult in convincing people for investment.

• Difficult to change mind of the investor according to age and

Profession.

43
• Difficult to make an approach to investors.

• Difficult to take an appointment with professional people.

• Difficult to get the documents required for formalities from

investors
.
• Difficult to overcome an impassionate person who wants
return in less time.

• Difficult to follow up the people whose names are being stored

in a data.

• Difficult to remove the fear of risk from the minds of investors.

44
3.2 OBJECTIVE OF STUDY:

In view of the problem cited above, the study aims at analyzing the
following major issues:
s
• To know the awareness of MUTUAL FUND among people.

• To know the different Asset management companies involve in

MUTUAL FUND.

• To know the different aspects of MUTUAL FUND according to

different age, profession etc.

• To see the interest of people in investing in MUTUAL FUNDS.

• To know the future of MUTUAL FUNDS in India.

• To know the different attitudes of people regarding risk, rate of

return, period of investment etc.

• To study the diversification of mutual fund.

4. RESERCH METHODOLOGY:

4.1 METHODOLOGY OF STUDY:-

45
Research can be defined as systemized effort to gain new knowledge.
A research is carried out by different methodologies which have their
own pros and cons. Research methodology is a way to solve research
in studying and solving research problem along with logic behind them
are defined through research methodology. Thus while talking about
research methodology we are not only talking of research methods but
also considered the logic behind the methods. We are in context of our
research studies and explain why it is being used a particular method
or technique and why the others are not used. So that research result
is capable of being evaluated either by researcher himself or by others

4.2 Research Methodology:-

Research has its special significance in solving various operational and

planning problem of business and industry. Research methodology is
the way to systematically solve the research problem.

4.3 ASSUMPTIONS:-

1. It has been assumed that sample of 100 respondents represents

the whole population.
2. The information given by the customer is unbiased

4.4 Literature Survey:-

The project is based on pure findings of facts.

Development of Working Hypothesis:-The Hypothesis could be

developed by discussing with the concerning department heads and
guides about this exploratory research and reached to the conclusion

46
that the data is to be collected by personal interaction with the
customers, asking them about the services and the improvement
required. First of all they are aware of mutual funds or not and then
analyzing the findings to reach to the objectives of research.
Collection of Data:-There was secondary data available for the study
and also primary data collected by carrying out by the survey which
has been carried out to through personal interviews of the customers.
The sample size was roughly 100.

Sampling methods: - A sample is the representative of the

population which will predict the behavior of the whole universe.
a. The sampling size put under two categories: Probability
sampling and non probability sampling.

4.5 Probability sampling:-

This is the process of selecting the elements or group of elements from
as well defined population by such procedure which gives every
element in the population an equal chance of being selected for
observation. The sampling method use for this survey is the area
sampling which is a sub type of probability sampling.

4.6 Sampling size:-

Large sample gives reliable result than small sample. However, it is
not feasible to target entire population or even a substantial portion to
achieve a reliable result. So, in this aspect selecting the sample to
study is known as sample size. Hence, for my project my sample size
was 100.

The Sample Size of 100 is not enough to draw a conclusion but as per
the time assigned it was difficult to take a sample size more than 100.

47
The Sample Size consist of both the Professional and Business class
people. IT peoples, Doctors, Jewelers, Timber Merchants & Real estate
Agents are taken as Sample .

4.7 Execution of the project:-

It is the very important step in the research process accuracy findings

depends on how systematically the study has been carried out in time
so that it can make some sense when required. I have executed the
project after prior discussion with the guide and structured in following
steps:

a. Preparation of questionnaire.

b. Collection of list of some of the clients interview of the

customer so that more interaction is impossible and the
variety of responses can be registered to have a good data for
analysis.

c. Visiting the corporate and asking about their feedback on the

mutual funds services they are availing. Try to find out their
satisfaction level with the existing mutual fund.

5. LIMITATIONS:
Every work has its own limitation. Limitations are extent to which the
process should not exceed. Limitations of this project are:-

48
 1. Duration of Project was not enough to make a conclusion on
such a vast subject time Constraint has become a big limitation.

2. The Sample Size being taken for drawing a conclusion was too
small to get an accurate result.

3. Changing the Mentality of people for investing in a particular

Financial Product is a very difficult task.

All the above mentioned statements are the limitations of the

project ,Time, Sample Size & Mentality of investor are the main
limitations of the project. The study is being done by taking and
keeping all the limitations in mind. The project is completed in
prescribed time. To find the Awareness of Mutual Fund the Sample
Size is not at all enough because the population size is much bigger
than the sample size and the last limitation was to change the
mentality of the investor to invest in a particular type of the
Investment Product. As the Indian Market have a large number of
potential customer to draw a conclusion in such a small size may
not be reliable.

6. ANALYSIS OF MUTUAL FUNDS:-

The schemes have been divided into 10 different categories for the
purpose of meaningful comparison. The categories are as follows:

1. Equity diversified Funds.

2. Equity ELSS Funds.

49
3. Equity sectoral Funds.

4. Balanced Funds.

5. Income Funds.

6. Liquid Funds.

7 .Gilt Funds.

8. MIPS (Monthly income plans)

9. Index Funds.

10. Hybrid Funds.

There are many asset management companies being involved in

mutual fund but people invest thing reputated mutual fund like ICICI
PRUDENTIAL, FRANKLIN TEMPLETON, HSBC, KOTAK, HDFC, RELIANCE
etc. All the companies have different mutual fund schemes vary from
different needs of a customer. Like in the month of June the NFO of
Reliance Infrastructure Fund has been issued with different concept
and also being accepted by the investors.

6.2 COMPARISAN BETWEEN BANKS AND MUTUAL FUNDS IN

DIFFERENT ASPECTS:-
MUTUAL
BANKS FUNDS
Returns Low Better
Administrativ
e exp. High Low
Risk Low Moderate

50
 Investment
option Less More
Low but
Network High Penetration improving
Liquidity At a cost Better
Quality of
asset Not Transparent Transparent
Interest Min. Balance between 10th
calculation and 31st of month. Everyday
Guarantee Max. Rs. 1Lakh on Deposit None

In the above table the Comparison is made between Banks and Mutual
Fund with different aspects. Now a day due to low Rate of interest
people prefer to invest in those products which give more Returns in
less time without Risk. Now a days also nearly 40% of people keep
there money in Banks because they are less Risky (reference with
chart 8.2). The Returns expected in Mutual Funds are high where as in
bank it is low but the Guarantee of money back is more than Mutual
fund. Thus both Bank and Mutual Fund are good enough in themselves.
It is depend on the Investor what type of investment they want to do.

7. DATA COLLECTION:
Proceeding further after determines the Methodology and limitation of
the study the next step is to analyze the Data being collected for the
study. Data is being collected from various sources like:-
 Questionnaire

51
  Personal visit
 Telephonic Information etc.

7.1 QUESTIONAIRE:-
Questionnaire is a written form being given to the prospective
investor to give feedback about the services provided to them
and also to find the satisfaction level of the investor for a
particular investment product .Questionnaire is an easy and
simple way of collecting a data .After filling up of form the next
step is to evaluate the form in different dimensions and draw a
conclusion.
It is difficult to get a Questionnaire filled by corporate because of
time they don’t have time to fill the Questionnaire so at the time
of meeting them personally or after that the Questionnaire is
filled by us.
The Sample size taken for this study is 100 which is not enough
to draw a conclusion but due to time limitation only this much
size has been taken into consideration. After analyzing the
Questionnaire the following evaluation has been done:-

CATEGORY OF TOTAL RISK RETUR

INVESTORS INCOME N

IT PEOPLE HIGH LOW HIGH

DOCTORS HIGH LOW HIGH
TIMBER MERCHANTS HIGH HIGH HIGH
JEWELLERS HIGH HIGH HIGH
REAL ESTATE AGENTS HIGH HIGH HIGH

52
After analyzing the above table the conclusion was made that the
business people are more Risk taker while professional people are
less Risk taker where the return expected in both the case are high.

7.2 PERSONAL VISIT:-

The second way of collecting data is Personal Visits to the corporate
personally by fixing an appointment. Personal Visit gives a clear
picture of the conclusion drawn in Questionnaire It gives a clear
view of the client Awareness about the product .Some of the
difficulties in making Personal Visits are:-
 To take a time or appointment from the corporate.
 To convenes investor to invest in a particular product.


Personal Visit gives a clear picture about the Investment areas of

both the categories they are:-
PROFESSIONAL PEOPLE BUSINESS PEOPLE
PPF LAND
KISAN VIKAS PATR GOLD
BANK ACCOUNT STOCKS
INSURANCE INSURANCE
FURTHER STUDIES etc. VEHICLES etc.

From the above table it is clear that the Professional people invest
in the Value Added items where as Business people they invest in
Future Prospect assets like land, gold etc.

53
 7.3 TELEPHONIC INFORMATION:-
The further source of collecting data is telephonic information with
the existing coustomer and the prospective investors. It is very
difficult to reveal the data of investors from the company itself
because it has been kept as a secret document. After getting a data
some problems too come in the way. Some are:-
 People are not ready to listen.
 People ask question like from where did you get the number?
 From this source not much of the Information is drawn.

 Few respondents where not happy with the level of customer

services rendered by RELIANCE MUTUAL FUND LTD.
Particularly about the delays in replying or not replying the
queries raised by them.

8. INTERPRETATION AND ANALYSIS OF

DATA:-

CHART:- 8.1

54
From the data collected through the questioner, observation made
during the personal visits the data revealed following information :-

PERCENTAGE OF PEOPLE WHO INVEST

 100% people invest in various instruments

PERCENTAGE OF INVESTMENT TO TOTAL INCOME

The following table and pie chart throw the light on the percentage of
saving out of income.

NO. of
INCOME PEOPLE PERCENTAGE
Over 50% 1 1%
30%-50% 5 5%
10%-30% 56 56%
10% &
below 38 38%

55
 Percentage in Income People Invest

1% 5%

38%

56%

Over 50% 30-50% 10-30% Below 10%

In the above chat it has been observed that people invest mostly
between 10% to 30% of their income as the moderate level of income
is in the range of rupees 30,000 to 40,000. There are very few people
who invest above 50% of their Income as their income level is too
high say above Rs. 10,000,00. Investors are having different
responsibilities toward the society and family due to which they are
not able to invest more money in Financial product .There are many
people who invest only 10% of there income according to total
Sample Size.

CHART:-8.2

INVESTMENT IN FINANCIAL PRODUCTS

FINANCIAL INSTRUMENTS % OF INVESTMENT

BANK 40%
INSURANCE 10%
STOCK MARKET 15%
BONDS & DEBENTURE 3%

56
 PPF 7%
NSC 5%
POST OFFICE SAVING SCHEMES 8%
REALESTATE 2%
GOLD 5%
CHIT FUND 5%

These are many Financial Instrument in Indian Market. People in early

days kept their money in Bank. They think Bank is the only place
where the money is safe till today also 40% of people feel the same
but many of them have started investing in other Financial Products
like Insurance, Stock Markets etc. The Post Office savings are less
preferred by the Investors due to the less Returns in more Time.
Businessmen mostly invest in tangible assets like land, building, gold
etc.

57
 BANK

INSURANCE

5%
STOCK
5% MARKET
2%
BONDS &
8% DEBENTURE
40%
5%
PPF
7%
3%
NSC
15% 10%

POST OFFICE
SAVING
SCHEMES
REALESTATE

GOLD

CHIT FUND

In this chart it is clear that people mainly invest and keep their
money in banks .Stock market came into existence only from
early 90s that’s why the percentage investment in stocks is low
as compared to banks. People generally invest in risk free
financial product like PPF, NSC etc. as they get tax exemption.
Investment in Insurance is also preferred by people because it is
not a risky instrument.

58
CHART:-8.3
AWARENESS OF MUTUAL FUND OUT OF 100
PEOPLE:-

Awareness of Mutual Funds

7%

Yes
No

93%

In chart 7.3 the awareness of mutual fund is determined in the

percentage terms only 7% of the total population are not aware of
MUTUAL FUNDS. As Mutual Funds of India are growing rapidly the
awareness of Mutual Funds is increasing among the Investors
although & every Investor knows about Mutual Funds by its
nomenclature. They are not really aware of the concept.

59
CHART :- 8.4
PERCEPTION ABOUT MUTUAL FUND

Safe 10%
Risky 28%
Other 62%

Perception of Investors

10%

Safe
28% Risky
Others
62%

From the above pie chart it is clear that people perceive mutual fund
as an risky product whereas 62% of investors believe that mutual fund
gives high returns.
Only 10 % of people feel that it is safe. Out of 100 sample size it is very
difficult to determine the exact perception of investors. Due to
continuous increase in mutual fund industries the perception of people
are changing slowly.

CHART :-8.5

60
COMPARITIVE STUDY OF RISK , INVESTMENT
AND RETURN.

INVESTMEN
AGE GROUP RISK RETURN T
25-35 60% 35% 45%
35-45 25% 15% 15%
45-60 10% 20% 10%
60& ABOVE 5% 30% 30%

Risk Return and Investment Chart

according to different age group

60%
50%
40%
30% RISK
RETURN
20%
INVESTMENT
10%
0%
25-35 45-60

In chart 7.5 above it is determined that people of the age group 25-
30 yrs are more risk takers as compared to other age groups.
However they are able to invest less because they do not have any
responsibility toward the society

and family. They also invest less because they don’t get proper
guidance. As the age increases the saving percentage decrease but

61
 the people above 55 are keener to invest because they become
free from all the responsibilities of the family and society. At this
stage they need continuous flow of income.
Middle age people of the age group of 35-45 yrs. are not investing
much because they are bound to many responsibilities towards
family and society.

CHART:- 8.6
IDENTIFICATION OF MUTUAL FUND COMPANIES
ASPECTS PERCENTAGE
Brand Name 39
Good Services 24
High Yield 15
Advertisement 10
Any other reason 12

40
35
30
25
Percentage 20
Series1
15
Series2
10
5
0
Brand Name Good High Yeild Advertisement Any other
Services reason
Aspects

From the above chart it is clear that Brand Name plays an important
role for attracting investors. Secondly, good services are also expected
by an investor from the companies. In other reasons investors
generally pointed out the identification of the companies known by
their friends or relatives.

62
Advertisements and high yield are the secondary aspects of
identifying the mutual fund industries.

CHART :- 8.7
RISK TAKEN BY DIFFERENT AGE GROUP :-

AGE
GROU RISK TAKEN IN
P PERCENTAGE
25-35 60
35-45 20
45-60 17
60 &
above 3

RISK TAKEN IN PERCENTAGE

3%
17%

25-35
35-45
45-60
20% 60% 60 & above

In chart 8.8 the risk taking ability are being depicted. The person
of younger age are willing to take more risk as compared to the
elder age group people. The middle age people do not take much

63
 risk because of much responsibility toward family and society
With reference to this chart only 17% of income of middle age
people is being invested in risk prone securities.

CHART :- 8.8
PERCENTAGE OF TOTAL INCOME INVESTED IN
MUTUAL FUND:-

INVESTORS % OF TOTAL INCOME INVEST IN

CATEGORY MUTUAL FUNDS
IT SECTOR
PEOPLE 50%
DOCTORS 30%
TIMBER
MERCHANTS 7%
JEWELLERS 3%
REALESTATE
AGENTS 10%

64
 PERCENTAGE OF TOTAL INCOME INVEST IN
MUTUAL FUND

10% IT SECTOR
3% PEOPLE
7% DOCTORS

TIMBER
50%
MERCHANTS
JEWELLERS
30%
REALESTATE
AGENTS

In the Pie chart above it is clear that professional people are more
indented to invest in comparison with business people who are high
risk takers. Business people are more in dined to invest in real estate,
land etc. This is because business people want money in less time as
and when required while Professional people believe in continuous flow
of money.

CHART 8.9
AWARENESS OF RELIANCE MUTUAL FUND LTD
OUT OF 100 PEOPLE

 55% says that they are aware of Reliance Mutual Fund Ltd
 45% says that they are not aware of Reliance Mutual Fund Ltd

65
 yes
no

9. PROJECT FINDINGS AND

RECOMMENDATIONS:-
9.1 PROJECT FINDINGS:-

 There is a great potential for investment in Mutual Fund as

people wants to save for various future obligation.
 Since Rate of Interest on Bank deposit is falling people will be
attracted towards investments in Mutual Funds because of high
rate of returns
 Comparatively people of small towns are less aware of other
investment avenues viz Mutual Fund.

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  People of young age group are ready to take risk and they can
be targeted for investment in Mutual Fund.
 Some of the people who were personally contacted showed
reservation about dealing with RELIANCE MUTUAL FUND LTD.

9.2 RECOMMENDATION:-

 Looking to the level of Awareness it is recommended that Mutual

Fund promotion companies may be undertaken in the following
forms:-
( i ) Advertisement in Newspaper and Magazines.
(ii ) Hoardings etc.
 The prospective clients may be imparted training and education
through :-
( i ) Seminar.
( ii ) Short Duration training programmes.
 Small towns may be targeted for business development as this
area is untapped relatively and there exist huge potential for
business development

ANNEXURE

LIST OF BANKS VISITED FOR SELLING INFRASTRUCTURE FUND

NAME OF PERSON PERSONS PHONE

BANK NAME DESIGNATIO NO
N
JANTA PRASHANT BANK 020

67
 SEHKARI PATHANKAR OFFICER 2565240
9
DENA BANK OM PRAKASH MARKETING 9890531
CHOUDHARY OFFICER 992
S.R VITTHAL PRADEEP MARKETING 020
CO KURNALE OFFICER 2553246
OPERATIVE 0
BANK
CORPORATIO MR RAHUL BANK STAFF 020
N BANK 2543837
UNITED BANK P.VISHVANA CASHIER 9011687
OF INDIA 970
DENA BANK S.Y DESHPANDE BANK STAFF 020
2433166
0
VAIBHAV MARKETING 9860377
CENTRAL SONASWAMI MANAGER 322
BANK OF
INDIA
JANTA Mr.DESHPANDE BANK 020
SEHKARI Y MANAGER 2447116
BANK 5
SARASWAT Mrs.JOSHI ASSISTANCE --
BANK MANAGER
BANK OF Mr.P MURALI MANAGER 9890603
BARODA 113
BANK OF K.SUNDARA MANAGER 020
BARODA RAJAN 2355662

10. REFERENCES:-

1.www.njindiainvest.com

68
2.http://mutualfunds.about.com

3.www.shcil.com

4.MutualFunds-ICMR book of readings

5.Fact Sheet of various Mutual Funds.

6.ICMR Text Book

7.Dalal Street Journal’s Stock Market Book

ANNEXURE

11. QUESTIONAIRE:-

1. DO YOU INVEST?

YES
NO

2. WHAT PERCENTAGE OF INCOME DO YOU INVEST?

69
 OVER 50%
30% TO 50%
10% TO 30%
Below 10%

3. WHAT ARE THE VARIOUS INVESTMENT SCHEMES IN WHICH

YOU INVEST?
Bank
Insurance
Stock Market
Bonds and Debenture
PPF (Public provident Funds)
NSC (National saving certificate)
Post office saving schemes
Real Estate
Gold
Chit Funds

4. WHAT ARE THE BREAK UP IN PERCENTAGE TERMS TO YOUR

INVESTMENT?

PERCENTAG
TYPE OF INVESTMENT E
BANK
INSURANCE
STOCK MARKET
BONDS & DEBENTURE
PPF
NSC
POST OFFICE SAVING
SCHEMES

70
REAL ESTATE
GOLD
CHIT FUNDS

5. ARE YOU AWARE OF MUTUAL FUNDS?

Yes
No

6. WHAT IS YOUR PERCEPTION ABOUT MUTUAL FUNDS?

Safe
Risky
Others

7. WHAT ARE DIFFERENT TYPES OF MUTUAL FUNDS ARE YOU

AWARE OF?

Growth schemes.(provide appreciation of capital over

medium to long term)
Income schemes.(provide regular and continuous income
to investor)
Balance schemes.(provide both growth and income)
Money market and Liquid Schemes.(provide easy liquidy
preservation of capital and moderate income).
Tax saving schemes.(offer tax rebates under tax laws)

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 Guilt funds(generating returns by investing in securities
created and issued by a central gov. or state gov.)

8. WHICH OF THEM DO YOU PREFER?

Growth schemes
Income schemes
Balance schemes
Money Market and Liquid schemes
Tax saving schemes
Guilt Funds

9. DO YOU THINK THE MUTUAL FUNDS ARE NOT AS POPULAR

IN INDIA AS IN OTHER COUNTRIES?
Risk involved as returns are not assured.
Any other reason please
specify………………………………………………

10. HOW DO YOU LOOK MUTUAL FUND COMPANYS?

Brand Name
Good Service
High Yield
Advertisement
Any Other
Reason……………………………...........................................

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 11. ARE YOU AWARE OF RELIANCE MUTUAL FUND LTD?

YES
NO

12. WOULD YOU CONSIDER AVAILING THE FINANCIAL

CONSULTANCY OFFERED BY RELIANCE MUTUAL FUND LTD?

YES
NO

NAME:………………………………………. PLACE:
………………………….

AGE:……………………………………………
SIGNATURE

GENDER:…………………………………….. (
)

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