Birla Project, (Mahesh.S)

Service proliferation and customer satisfaction
Mr.MAHESH.S
Masters of Business Administration, Marketing Specialization
at JSSCMS, sjce campus Mysore.
Project on “Service proliferation and customer satisfaction” at

Birla Sunlife Assest Management ,Mysore
Guide:HK Karthik
Branch Head
Birla AMC
Mysore
JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

SUMMARY
The basic objective of any financial services company would be to provide an

absolute tailor made products and services to the customer and to retain them into the
organization, but to retain a particular customer is not easy because customer
expectations change by time and it becomes a tough job for the companies to curb the
needs of their customers.
Now with the case of asset management company which is getting its pace and a lot
of companies are emerging as players, here a study has been undertaken with regards to
BIRLA SUNLIFE AMC where study looks into the expectation of the customers
regarding mutual funds and issues relating to customers expectation. The need for this
research is to emphasis the expectations of customer of mutual funds and how the
company in contrast to the expectations is performing. This research is conducted to
understand the customer’s perception towards mutual fund. Till yesterday people are
having very less knowledge for mutual funds because of brokerage companies in India
have not made efforts to expand the market. They have been doing business with the
same clientele. There is also a lack of investor awareness as far as markets are concerned.
The Harshad Mehta scam and various other scams have created a bad impression in
people's minds and this need to be changed. Just to put things in perspective, India has
330 million bank accounts. The mutual fund industry has 30 million unique folios.

Unfortunately, in the broking industry, the number of people with Demat accounts
has continued to stagnate at 5.85 million in the last 10-12 years, which is worrisome.
Every industry in India has grown over the last 10 years except this one. Whatever retail
participation exists is coming from bigger cities such as Mumbai and Delhi. The services
have not reached bottom-of-the-pyramid towns.
A Mutual Fund is a trust that pools the savings of a number of investors who
share a common financial goal. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. The income earned
through these investments and the capital appreciation realized is shared by its unit
holders in proportion to the number of units owned by them. Thus a Mutual Fund is the
most suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost. The flow
chart below describes broadly the working of a mutual fund.

INTRODUCTION
Customer satisfaction is a measure of how products and services supplied by a

company can meet the customer’s expectations. Customer satisfaction is still one of the
single strongest predictors of customer retention. It’s considerably more expensive to
attract new customers than it is to keep old ones happy.
In a climate of decreasing brand loyalties, understanding customer service and

measuring customer satisfaction are very crucial. There is obviously a strong link
between customer satisfaction and customer retention. Customer's perception of Service
and Quality of product will determine the success of the product or service in the market.
With better understanding of customers' perceptions, companies can determine the

actions required to meet the customers' needs. They can identify their own strengths and
weaknesses, where they stand in comparison to their competitors, chart out path future
progress and improvement. Customer satisfaction measurement helps to promote an
increased focus on customer outcomes and stimulate improvements in the work practices
and processes used within the company.
Customer expectations are the customer-defined attributes of your product or service

you must meet or exceed to achieve customer satisfaction.

There are many reasons why customer expectations are likely to change over time.
Process improvements, advent of new technology, changes in customer's priorities,
improved quality of service provided by competitors are just a few examples.
PURPOSE OF THE STUDY
The main purpose of the study is to know the expectations of those investors who
invested in BIRLA SUNLIFE mutual funds and the satisfaction levels of investors with
the services provided by the BIRLA SUNLIFE Asset Management Company, MYSORE

In the present competitive environment it is very crucial to every business firm to ensure
satisfaction to its customers.
According to one survey it was found that it costs five times more to attract a new
customer than to retain an existing customer. So with all these parameters taking into
consideration one can say that it is very important to provide goods and services that
satisfy customers needs or wants irrespective of the industry or scale of the business in
which a firm is operating. Here the main purpose of the survey is to know the various
factors that are very important in satisfying the customer’s needs and to know how
BIRLA SUNLIFE AMC is ensuring its customers satisfaction.
The expectations of customers are vary from one customer to the other customer.
For example some customers are only concerned about the returns that they are getting in
a fund but at the same time there are some other customers who are very specific about
the location, ambience and front line employees’ interaction and some other parameters.
It is very difficult to any business firm to satisfy all the expectations of all customers
but there are some common factors that are essential to fulfill. The objectives of the
projects are given as below. The details of the survey such as the source of data, the
sample size taken and the methods of analysis are all given briefly in the methodologies.
There are some constraints throughout the project, which are given clearly in the
limitations.
OBJECTIVES
The following are the objectives of the Management Thesis.
• To understand the different investment options provided by BIRLA SUNLIFE

mutual funds through its mutual fund schemes.

• To know the investors’ expectations on mutual funds offered by BIRLA
SUNLIFE mutual funds.
• To know the various services provided by BIRLA SUNLIFE AMC to its
Investors.
• To study the satisfaction levels of customers in BIRLA SUNLIFE mutual funds.
• To identify how the brand building helps in meeting the customers expectation to
meet their investment objectives
METHODOLOGY
• The type of research used in the study is primary analytical research design.
• Survey method of data collection was adopted. The research instrument used for
collection of primary data was a questionnaire.
• The secondary data was obtained from various company journals, annual reports,
books from the library and websites.
SAMPLING TECHNIQUE
Since the size of the investors was large, sampling was adopted. Cluster random
sampling was adopted and further, convenience random sampling was adopted to
conduct the research. Depending on the availability of respondents, the sample
was selected.
SAMPLE SIZE

A sample of 50 was targeted for the study. The sample consists of individual
investors classified as: High Net worth individuals. Medium Net worth
Individuals. Low Net worth Individuals.
SOURCES, TOOLS AND TECHNIQUES OF DATA

COLLECTION
Data was collected from both primary and secondary sources.
Primary Data
• An interview schedule that is a questionnaire was designed, pre-tested and
administrated on the individual potential investors. Visiting the organization·
Using structured questionnaire for the existing customer
• Secondary Data
It is collected from a wide array of research papers, capital market, finance
journals, various websites and company’s database.
• Tool and techniques of data collection

Purpose based questionnaire have been designed seeking relevant information.
Furthermore, past history of investors and market watch is also used. Data has
also been collected through specific search engines over the Internet.
PLAN OF ANALYSIS
All data collected was carefully classified, tabulated and interpreted on the basis
of which, tables, charts and graphs were drawn up. Percentages were drawn and
the data have been analyzed. The analysis helped in drawing inferences and for
better understanding graphs were plotted.

LIMITATIONS
As the data will be collected through questionnaire, there are chances of biased
information provided by the respondent. The study is confined to the existing customers
of BIRLA SUNLIFE mutual funds only.
• The survey will be limited only to MYSORE city.
• The study does not consider the equity investment portfolio of investors.
LITERATURE REVIEW
Literature review is the beginning of the primary data collection. It acts as a gateway to
the familiarity exercise by getting exposed to the study field in details. Literature review
included texts, databases, internet, journals and dailies.
PURPOSE
The purpose of literature review is innumerable in research work. Specific need
for references and citations makes secondary data quite valid. Literature review forms the
integral part of larger research. Secondary data forms the sole basis for research in some
instances. Above all, secondary data has proven to be less costly, readily available, less
time consuming and less effort required compared to primary data.
Literature reviews provides support to validate secondary data. Hence, complementing

the field data conclusion. It has also been observed that secondary data gives insight into
the research details. It is mandatory to examine secondary data as a prerequisite for
accuracy and relevance for primary data and subsequent analysis.
Document Review
This report has been supplemented by observational fieldwork and interviewing
with and gathering and analyzing documentary material. These kinds of documents are a

useful source of information on program activities and processes, and they can generate
ideas for questions that can be pursued through observation and interviewing.
METHODOLOGY FOR LITERATURE REVIEW

Literature review heavily relied on published materials like journals, newspaper
articles; magazines and write-ups of Current issues on the internet concerning inventory
management were constantly reviewed. Dailies and journals were visited from time to
time as articles appeared in the newspapers and magazines. Methodology is the concept
of methods used in conducting the study.
The methodology used for data collection is mainly through primary and secondary data.
The secondary data is collected in the form of Balance sheets, Profit & Loss accounts and
Financial Statements from the annual reports published by the company and other
records, documents, journals, facts and figures of the company
Findings – Customer revenue was found to correlate negatively with customer

profitability for unprofitable customers, and positively for profitable customers.
Research limitations/implications – One of the limitations of this research is that it tests
the propositions within a single industry. Future research should attempt to replicate these
findings in other contexts.
Practical implications – A simplistic focus on improving customer satisfaction for

all customers in order to improve share-of-wallet and customer revenue does not seem to
represent the best management approach to maximize overall firm profitability. In fact, it
could actually result in a negative return on investment. Therefore, customers should first
be segmented by their profitability to the firm before expending resources to improve
customer satisfaction and share-of-wallet.
Originality/value – The results of this paper challenge the conventional belief that
customer satisfaction should lead to customer retention in turn, resulting in customer

revenue and ultimately customer profitability. The findings indicate that this may not
always be true.

.
INTRODUCTION OF MUTUAL FUND INDUSTRY
MUTUAL FUND:
The SEBI regulations, 1993 defines a mutual fund as “a fund in the form of a
trust by a sponsor, to raise money by the trustees trough the sale of units to the public,
under one or more schemes, for investing in securities in accordance with these
regulations”
A mutual fund is a professionally-managed firm of collective investments that
pools money from many investors and invests it in stocks, bonds, short-term money
market instruments, and/or other securities. In a mutual fund, the fund manager, who is
also known as the portfolio manager, trades the fund's underlying securities, realizing
capital gains or losses, and collects the dividend or interest income. The investment
proceeds are then passed along to the individual investors. The value of a share of the
mutual fund, known as the net asset value per share (NAV), is calculated daily based on
the total value of the fund divided by the number of shares currently issued and
outstanding.
HISTORY OF THE MUTUAL FUND:
In the beginning:
Historians are uncertain of the origins of investment funds; some cite the
closed-end investment companies launched in the Netherlands in 1822 by King
William I as the first mutual funds, while others point to a Dutch merchant named
Adriaan van Ketwich whose investment trust created in 1774 may have given the
king the idea. Van Ketwich probably theorized that diversification would increase
the appeal of investments to smaller investors with minimal capital. The name of
van Ketwich's fund, EENDRAGT MAAKT MAGT, translates to "unity creates
strength". The next wave of near-mutual funds included an investment trust
launched in Switzerland in 1849, followed by similar vehicles which are followed
by many kind of companies created in Scotland in the 1880s.The idea of pooling
resources and spreading risk using closed-end investments soon took root in

Great Britain and France, making its way to the United States in the 1890s. The
Boston Personal Property Trust, formed in 1893, was the first closed-end fund in
the U.S. The creation of the Alexander Fund in Philadelphia, Pennsylvania, in
1907 was an important step in the evolution toward what we know as the modern
mutual fund. The Alexander Fund featured semi-annual issues and allowed
investors to make withdrawals on demand.
Origin of mutual fund industry in India
The origin of mutual fund industry in India is with the introduction of the concept of
mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated
from the year 1987 when non-UTI players entered the industry in the past decade, Indian
mutual fund industry had seen a dramatic improvement, both qualities wise as well as
quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets
under Management (AUM) were Rs. 67bn. The private sector entry to the fund family
raised the AUM to Rs.470bn in March 1993 and till April 2004; it reached the height of
1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the
total of it is less than the deposits of SBI alone, constitute less than 11% of the total
deposits held by the Indian banking industry. The main reason of its poor growth is that
the mutual fund industry in India is new in the country. Large sections of Indian investors
are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all
mutual fund companies, to market the product correctly abreast of selling. The mutual
fund industry can be broadly put into four phases according to the development of the
sector. Each phase is briefly described as under.
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)
SBI Mutual Fund was the first 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 in 1989 and GIC in 1990.
The end of 1993 marked Rs.47, 004 as assets under management.
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
This phase had bitter experience for UTI. It was bifurcated into two separate
entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,

835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India,
functioning under an administrator and under the rules framed by Government of India
and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of
AUM 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.
OPERATION OF THE FUND

A mutual fund invites the prospective investors to join the fund by offering
various schemes so as to suit to the requirements of categories of investors. The resources
of individual investors are pooled together and the investors are issued units/shares for
the money invested. The amount so collected is invested in capital market instruments
like treasury bills, commercial papers, etc.
For managing the fund, a mutual fund gets an annual fee of 1.25% of funds
managed at the maximum as fixed by SEBI (MF) regulations, 1993 and if the funds
exceed Rs.100 crores, the fee is only 1%. The fee cannot exceed 1%. Off course, regular
expenses like custodial fee, cost of dividend warrants, fee for registration, the asset
management fee etc are debited to the respective schemes. These expenses cannot exceed
3% of the assets in the respective schemes. These expenses cannot exceed 3% of the
assets in the respective schemes each year. The remaining amount is given back to the
investors in full.

Mutual Fund Operation Flow Chart
ORGANISATION OF A MUTUAL FUND

The formation and operations of Mutual Funds in India is solely guided by SEBI
(Mutual Funds) Regulations, 1993, which came into force on 20th January, 1996, through
a notification on 9th December 1996. These Regulations make it mandatory for Mutual
Funds to have a three-tier structure of:
1. A Sponsor Institution to promote the Fund.
2. A team of Trustees to oversee the operations and to provide checks for the efficient,
profitable and transparent operations of the fund and
3. An Asset Management Company (AMC) to actually deal with the funds.
There are many entities involved and the diagram below illustrates the Organizational set
up of a mutual fund

Sponsoring institution;
The company, which sets up the mutual fund, is called the Sponsor. SEBI has laid
down certain criteria to be met by the sponsor. The criterion mainly deals with adequate
experience, good past track record, net worth etc.
• Sponsor appoints the Trustees, Custodian and the AMC with the prior approval of
SEBI, and in accordance with SEBI Regulations.
• Sponsor must have at least 5-year track record of business interest in the Financial
Markets.
Trustees:
Trustees are the people with long experience and good integrity in the respective
fields carry the crucial responsibility in safeguarding the interests of the investors. For
this purpose, they monitor the operations of the different schemes. They have wide
ranging powers and they can even dismiss AMC with the approval of SEBI.
The Indian Trust Act governs them.
Rules regarding appointment of the Trustees are:
• Appointment of Trustees has to be done with the prior approval of SEBI.

• There must be at least 4 members in the Board of Trustees and at least 2/3 rd of the
members of the Board of Trustees must be independent.
• Trustees of one Mutual Fund cannot be a Trustee of another Mutual Fund, unless
he is an independent trustee in both cases, and has the approval of both the
Boards.
Rights of Trustees:
• Trustees appoint the AMC, in consultation with the sponsor and according SEBI
Regulations.
• All mutual Fund Schemes floated by the AMC have to be approved by the
Trustees.
• Trustees can seek information from the AMC on the operations and compliance of
the Mutual Fund, with the provisions of the trust Deed, investment management
agreement and the SEBI Regulations.
• Trustees can review and ensure that Net worth of the AMC is according to
stipulated norms and regulations.
DISTRIBUTION CHANNELS IN THE MUTUAL FUND INDUSTRY:
In India, AMCs work with five distinct distribution channels those are direct,
banking, retail, corporate and individual financial adviser.
• The Direct Channels:

In the direct channel, customers invest in the schemes directly through AMC. In
most cases, the company does not provide any investment advice, so these
investors have to carry out their own research and select schemes themselves. The
fund companies provide several tools to investors who invest through this
channel. This includes monthly a/c statement, processing of transaction, and

maintenance of records. In this channel most investors can invest through
websites, or receive information through telephonic services provided by the
company. About 10-20% of the total sales of an AMC come through this direct
channel.
• The banking channel:

The large customer bases of banks, in devolped countries, have played an
important role in the selling MFs. In the recent years, this channel has also opened
up in India. Banks operating in India , including public sector, private and foreign
banks have established tie-up with various fund companies for providing
distribution and servicing.
The banking channel is likely to develop as the most vital distribution channel for
fund companies there are several reasons for the same. Customers remain invested
in banks for long periods of time and therefore banks maintain a relationship of
trust with their customers. Customers are rely on advice provided to them by
bankers as they are always on the look out for better investment avenues.
Managers are guiding to customers about various funds.
An additional advantage that banks provide is that the concerned customer

becomes a permanent contact of the banks and therefore can be reached during
launch of (new fund offer) NFO or new schemes any time in the future.
• The retail channel:

A customer can deal with directly with a sub broker belonging to a distribution
company, instead of taking trouble of dealing with several agents. Distribution
companies sell the schemes of several fund houses simultaneously and brokerage
is paid by the AMC whose funds they sell. The retail channels offer the benefits
of specialist knowledge and established client contact and, therefore private fund
houses are generally prefer this channel. Some of the major players in India in this

in this channel are national players like Karvey, Birla sun life and
cholamandalam. The key factor for this channel to sell a company’s fund used to
be the brokerage paid. The banking and retail channel generally contribute to
about 50-70% of the total Asset Under Management (AUM).
• The corporate channel:

The corporate channel includes a variety of institutions that invest in shares on the
company’s name.these are businesses, trust,and even state and local governments.
For institutional investors, fund managers prefer to create special funds and share
classes. Corporate can either invest directly in mutual funds, or through an
intermediary such as a distribution house or a bank.
Corporate exhibit varying degrees ‘of awareness of mutual fund products. Most of
the established corporate, such as the TVS industries in Hyderabad, are well-
versed with the performance and composition of various funds. The smaller
companies and start-up firms, however, need to be educating on several aspects of
mutual funds. In order to provide information to such clients, fund companies
usually organize presentation for these companies or set-up meetings with the
finance managers.
• Individual Financial Advisors(IFA) or Agents:
i. The IFA channel is the oldest channel for distribution and was widely employed
at the time when UTI monopoly in the market. In recent times with the emergence
significantly decreased.
ii. An agent who basically acts as an interface between the customer and the fund
house there is a unique systems in place in India , wherein several sub-brokers are

working under one main broker. The huge network of sub-brokers, thus ensure
larger market penetration and geographic coverage. As per AMFI, over one lakh
agents are registered to sell mutual funds and other financial products such as
insurance across the country.
Asset Management Company:
The AMC actually manages the funds of the various schemes. The AMC employs
a large number of professionals to make investments, carry out research &to do agent and
investor servicing. Infact, the success of any Mutual
Fund depends upon the efficiency of this AMC. The AMC submits a quarterly report on
the functioning of the mutual fund to the trustees who will guide and control the AMC.
The AMC is usually a private limited company, in which the sponsors and their
associations or joint venture partners are shareholders. The AMC has to be registered by
SEBI and should have a minimum Net worth of Rs.10 cores all times. The role of the
AMC is to act as the Investment Manager of the Trust along with the following functions:
• It manages the funds by making investments in accordance with the provision of
the Trust Deed and Regulations
• The AMC shall disclose the basis of calculation of NAV and Repurchase price of
the schemes and disclose the same to the investors.
• Funds shall be invested as per Trust Deed and Regulations.
Restrictions on the AMC.s:

• AMC.s cannot launch a fund scheme without the prior approval of Trustees.
• AMC.s has to provide full details of Employees and Board Members, in all cases
where such investments exceed Rs. 1 lakh.
• AMC.s cannot take up any activity that is in conflict with the activities of the
mutual funds.

Registrars and Transfer Agents:
The Registrars and Transfer Agents are responsible for the investor servicing
functions, as they maintain the records of investors in the mutual funds. They process
investor applications, record details provided by the investors on application forms, send
out periodical information on the performance of the mutual fund; process dividend pay-
out to the investors; incorporate changes in information as communicated by investors;
and keep the investor record up to date, by recording new investors and removing
investors who have withdrawn their funds
Custodian:
Custodians are responsible for the securities held in the mutual funds portfolio.
They discharge an important back-office function, by ensuring that securities that are
bought are delivered and transferred to the books of mutual funds, and that funds are
paid-out when mutual fund buys securities. They keep the investment account of the
mutual fund, and also collect the dividends and interest payments due on the mutual fund
investments. Custodians also track corporate actions like bonus, issues, right offers, offer
for sale, buy back and open offers for acquisition.
GROWTH IN ASSETS UNDER MANAGEMENT

REGULATORY STRUCTURE OF MUTUAL FUNDS IN

INDIA
The regulation of mutual funds in India is governed by the SEBI vide the SEBI (Mutual
Fund) Regulation, Act 1996 (here in after referred to as SEBI Regulations). These
regulations make it mandatory for mutual funds to have a three-tier structure of sponsor –
Trustee – Asset Management Company (AMC). The sponsor is the promoter of the
mutual fund and appoints the trustees. The Trustees are responsible to the investors in the
mutual fund and appoint the AMC for managing the investment portfolio. SEBI
regulations also provide for who can be a sponsor, trustee and AMC, specifying the
format of agreement between these entities. These agreements provide for the rights,

duties and obligations of these three entities. The UTI is also structured as a trust. The
important difference through is that UTI does not have sponsors or a separate AMC.
Financial intuitions and banks that contributed to the initial capital of the UTI have their
representatives on UTI’s Board of Trustees, which oversees the operation of UTI Mutual
Fund. The Association of Mutual Funds in India (AMFI) is a self regulatory body formed
by the various MF Companies to address the practices and policies of various aspects like
new scheme launches, payments to intermediaries’ comparisons and other ethical
systems.
Likewise, different companies have their own Compliance and Audit offices,
which are mandated to control and report adherence to and deviations if any on the
regulations and policies issued by SEBI.
Market Share and Growth of the Mutual Fund Industry
Assets Under Management as at the end of Feb-2009

SL.no Mutual Fund House Growth% % Market Share
1 AIG global investment group Mutual Fund 6.69 0.29
2 Baroda Pioneer Mutual Fund NA NA
3 Benchmark Mutual Fund -22.47 0.29
4 Bharathi AXA Mutual Fund -11.24 0.04
5 Birla Sun Life Mutual Fund 15.18 9.69
6 Canara Robeco Mutual Fund 19.53 0.98
7 DBS Chola Mutual Fund -8.48 0.20
8 Deutsche Mutual Fund 14.77 1.92
9 DSP BlackRock Mutual Fund 2.53 2.82
10 Edelweiss Mutual Fund -3.45 0.01
11 Escorts Mutual Fund -2.19 0.04
12 Fidelity Mutual Fund 3.79 1.25
13 Fortis Mutual Fund 7.86 1.10
14 Franklin Templeton Mutual Fund 0.52 3.87
15 Goldman Sachs Mutual Fund NA NA
16 HDFC Mutual Fund 10.59 11.35
17 HSBC Mutual Fund -2.07 1.91
18 ICICI Prudential Mutual Fund 12.62 10.68
19 IDFC Mutual Fund 19.00 2.71
20 ING Mutual Fund 1.56 0.53
21 JM financial Mutual Fund -1.54 1.08

22 JP Morgan Mutual Fund 16.09 0.48
23 Kotak Mahindra Mutual Fund 9.82 3.45
24 LIC Mutual Fund 29.56 4.84
25 Mirae Asset Mutual Fund -1.38 0.03
26 Morgan Stanley Mutual Fund -7.27 0.28
27 PRINCIPAL Mutual Fund -1.60 1.39
28 Quantum Mutual Fund 3.14 0.01
29 Reliance Mutual Fund 7.17 16.29
30 Religare AEGON Mutual Fund NA NA
31 Religare Mutual Fund 23.99 1.08
32 Sahara Mutual Fund -7.06 0.03
33 SBI Mutual Fund 2.54 5.51
34 Sundaram BNP Paribas Mutual Fund 1.76 1.94
35 Tata Mutual Fund -4.18 3.85
36 Taurus Mutual Fund 3.39 0.04
37 UTI Mutual Fund 6.64 9.83
FUTURE OF MUTUAL FUND:
Indian mutual fund industry reached Rs 1, 50,537 crore by March 2004. 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 there is an annual growth rate of 9%. According to the
current growth rate, by year 2010.
Mutual fund India assets will be double.
• 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.

• '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
The asset base will continue to grow at an annual rate of about 30 to 35 % over the next
few years as investor’s shift their assets from banks and other traditional avenues.
Benefits of Mutual Fund Investment

• Professional Management
Mutual Funds provide the services of experienced and skilled professionals, backed by a
dedicated investment research team that analyses the performance and prospects of
companies and selects suitable investments to achieve the objectives of the scheme.
• Diversification
Mutual Funds invest in a number of companies across a broad cross-section of industries
and sectors. This diversification reduces the risk because seldom do all stocks decline at
the same time and in the same proportion. You achieve this diversification through a
Mutual Fund with far less money than you can do on your own.
• Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such
as bad deliveries, delayed payments and follow up with brokers and companies. Mutual
Funds save your time and make investing easy and convenient.

• Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher return
as they invest in a diversified basket of selected securities.
• Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing
in the capital markets because the benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.
• Liquidity
In open-end schemes, the investor gets the money back promptly at net asset value
related prices from the Mutual Fund. In closed-end schemes, the units can be sold on a
stock exchange at the prevailing market price or the investor can avail of the facility of
direct repurchase at NAV related prices by the Mutual Fund.
• Transparency
You get regular information on the value of your investment in addition to disclosure
on the specific investments made by your scheme, the proportion invested in each class
of assets and the fund manager’s investment strategy and outlook.
• Flexibility
Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, you can systematically invest or withdraw funds according to your
needs and convenience.
• Affordability

Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual
fund because of its large corpus allows even a small investor to take the benefit of its
investment strategy.
• Well Regulated
All Mutual Funds are registered with SEBI and they function within the provisions of
strict regulations designed to protect the interests of investors. The operations of Mutual
Funds are regularly monitored by SEBI.
Advantages of mutual funds include:
• _Diversification of risk,
• _ Professional management
• _ Different investment options and ability to purchase a large selection of
investments at a modest cost.
• _ Their large size permits them to buy larger volumes of stocks at a discount
• _ The investor can be a part owner of many different companies even with a modest
investment
Disadvantages of mutual funds include:

• Inability to make one’s own decisions
• No guarantee that the professional managers will provide anticipated results
• Investment company managers can switch styles of investing, even while
adhering to the objectives and policy agreed upon by the mutual fund. This makes
it difficult for the investor to keep track of the investments owned by the fund
and the activity of fund managers.

• Past performance, a highly reported indicator is just that, one of many indicators;
it is no guarantee for future performance. Careful scrutiny is warranted when
reading a fund’s advertisement about past stellar performance.
Risk Involved in Mutual Funds

All investments involve some form of risk, which should be evaluated them potential
rewards when an investment is selected.
• Managing risk
At times the prices or yields of all the securities in a particular market rise or fall due
to broad outside influences. When this happens, the stock prices of both an outstanding,
highly profitable company and a fledgling corporation may be affected. This change in
price is due to “market risk”.
• Interest rate risk

Sometimes referred to as “loss of purchasing power”. Whenever inflation sprints
forward faster than the earnings on your investment, you run the risk that you will
actually be able to buy less, not more. Inflation risk also occurs when prices rise faster
than your returns.
• Credit risk
In short, how stable is the company or entity to which you lend your money when you
invest? How certain are you that it will be able to pay the interest you are promised, or
repay your principal when the investment matures?
• Inflation risk

Changing interest rates affect both equities and bonds in many ways. Investors are
reminded that “predicting” which way rates will go is rarely successful. A diversified
portfolio can help in offsetting these changes.
Effect of loss of key professional and inability to adopt
An industries’ key asset is often the personnel who run the business i.e. intellectual
properties of the key employees of the respective companies. Given the ever changing
complexion of few industries and the high obsolescence levels, availability of qualified,
trained and motivated personnel is very critical for the success of industries in few
sectors. It is, therefore, necessary to attract key personnel and also to retain them to meet
the changing environment and challenges the sector offers. Failure or inability to
attract/retain such qualified key personnel may impact the prospects of the companies in
the particular sector in which the fund invests.
• Exchange risks
A number of companies generate revenues in foreign currencies and may have
investments or expenses also denominated in foreign currencies. Changes in exchange
rates may, therefore, have a positive or negative impact on companies which in turn
would have an effect on the investment of the fund.
• Investment risks
The Sectorial fund schemes, investments will be predominantly in equities of select
companies in the particular sectors. Accordingly, the NAV of the schemes are linked to
the equity performance of such companies and may be more volatile than a more
diversified portfolio of equities.

• Changes in government policy

Changes in Government policy especially in regard to the tax benefits may impact the
business prospects of the companies leading to an impact on the investments made by the
fund.
Types of Mutual Funds

Mutual fund schemes may be classified on the basis of its structure and its investment
objectives.
1. By Structure:
_
• Open-ended Funds
An open-end fund is one that is available for subscription all through the year. These do
not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset
Value (NAV) related prices.
The key feature of open-end schemes is liquidity.
• Closed-ended Funds
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15
years. The fund is open for subscription only during a specified period. Investors can
invest in the scheme at the time of the initial public issue and thereafter they can buy or
sell the units of the scheme on the stock exchanges where they are listed. In order to
provide an exit route to the investors, some close-ended funds give an option of selling
back the units to the Mutual Fund through periodic repurchase at NAV related prices.
SEBI regulations stipulate that at least one of the two exit routes is provided to the
investor.

• Interval Funds
Interval funds combine the features of open-ended and close-ended schemes. They are
open for sale or redemption during pre-determined intervals at NAV related prices.

1. By Investment Objective:
• Growth Funds
The aim of growth funds is to provide capital appreciation over the medium to long-term.
Such schemes normally invest a majority of their corpus in equities. It has been proven
that returns from stocks, have outperformed most other kind of investments held over the
long term. Growth schemes are ideal for investors having a long-term outlook seeking
growth over a period of time.
• Income Funds
The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate debentures
and Government securities. Income Funds are ideal for capital stability and regular
income.
• Balanced Funds
The aim of balanced funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income
securities in the proportion indicated in their offer documents. In a rising stock market,
the NAV of these schemes may not normally keep pace, or fall equally when the market
falls. These are ideal for investors looking for a combination of income and moderate
growth
• Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer short-term instruments such as
treasury bills, certificates of deposit, commercial paper and inter-bank call money.
Returns on these schemes may fluctuate depending upon the interest rates prevailing in
the market. These are ideal for Corporate and individual investors as a means to part their
surplus funds for short periods.

• Load Funds
A Load Fund is one that charges a commission for entry or exit. That is, each time you
buy or sell units in the fund, a commission will be payable. Typically entry and exit loads
range from 1% to 2%. It could be worth paying the load, if the fund has a good
performance history.
• No-Load Funds
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no
commission is payable on purchase or sale of units in the fund. The advantage of a no
load fund is that the entire corpus is put to work.
2. Other Schemes:
• Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Indian
Income Tax laws as the Government offers tax incentives for investment in specified
avenues. Investments made in Equity Linked Savings Schemes and Pension Schemes are
allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides
opportunities to investors to save capital gains u/s 54EA and 54EB by investing in
Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the
amount is invested before September 30, 2000.
3. Special Schemes
• Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the offer document.
The investment of these funds is limited to specific industries like InfoTech, Fast moving
consumer goods Pharmaceuticals etc.
• Index Schemes

Index Funds attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50.
• Sectorial Schemes
Sectorial Funds are those, which invest exclusively in a specified industry or a group of
industries or various segments such as ‘A’ Group shares or initial public offerings.
TABLE SHOWING THE COMPARISION BETWEEN BANKS V/S

MUTUAL FUNDS
BASES BANKS MUTUAL FUNDS

Returns Low Better
Administrative expenses High Low
Risk Low Moderate
Investment Option Less More
Network High Penetration Low but improving
Liquidity At a cost Better
Quality of Assets Not Transparent Transparent
Interest calculation Minimum Balance Everyday

between 10th & 30th
Of every month
Guarantee Maximum Rs.1 lac on None
deposit

RISKS AND RETURN
Investors’ interest in investments is largely pecuniary – to earn a return on their money.
However, selecting stocks exclusively on the basis of maximization of returns is not
enough. The fact that most investors do not place available funds into the one, two or
even three stocks promising the greatest returns suggests that other factors must be
considered besides returns in the selection process. Investors not only like returns but
they also dislike risk. Their holding of an assortment of securities attests to that fact.
To say that investors like returns and dislike risk is however, simplistic. Before we can
analyze securities and portfolios within a risk – return context, we must begin with a clear
understanding of the meaning of both, risk and return, what creates them and how they
should be measured?
The ultimate decisions to be made in investments are:
What mutual funds should be held?
How much to allocate to each.
Security analysis and portfolio management is built around the idea that investors are
concerned with two principal properties inherent in securities: the return that can be
expected from holding a security, and the risk that the return that is achieved will be less
than the return that was expected. Investors want to maximize expected returns subject to
their tolerance for risk.
The level of risk you are willing to take typically determines the funds you decide to
invest in. Mutual funds offer 3 levels of risk - low, medium and high. In general, the
higher the risk, the greater the potential gain or loss. As a result, unit prices for high risk
mutual funds fluctuate far more widely than for lower risk funds. People who are more
cautious would tend to purchase lower risk funds, while more aggressive investors tend to
purchase higher risk units. One method of investment that many people like to use is
diversification - that is, buying a variety of funds across the various risk levels. As a
result, they will never totally miss out on major market gains, and their losses will be less
than if they invested only in high risk funds. Depending on how quickly you want to
build your capital, you can choose from a number of investment styles, ranging from
conservative to aggressive.

Mutual fund India assets will be double.

• 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.
• '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
The asset base will continue to grow at an annual rate of about 30 to 35 % over the next
few years as investor’s shift their assets from banks and other traditional avenues. Some
of the older public and private sector players will either close shop or be taken over.

COMPANY PROFILE
Company Profile - Birla SunLife

Birla sunlife Asset Management Company Ltd.(BSLAMC). The investment
managers of Birla Mutual Fund, is a joint venture between the Aditya Birla Groups and
the Sun Life Financial Services Inc. of Canada. The joint venture brings together the
Aditya Birla Groups” experience in the Indian market and Sun Life’s global experience.
Since its inception in 1994, Birla Mutual Funds has emerged as one of India’s
leading mutual Fund with over Rs.16500 crores* of assets under management and an
investor base in excess of 8 lakhs. The fund offers a variety range of investment options,
which includes diversified and sector specific equity schemes, fund of fund schemes,
hybrid and monthly income funds, a wide range of debt and treasury products and
offshore funds.
BSLMAC is the first asset management company in India to be awarded the
coveted ISO 9001:2000 certification by DNV, Netherlands .BSLAMC also provides
private Wealth Management services. BSLMAC follows a long -term, fundamental
research based approach is to identify companies, which have excellent growth prospects
and strong fundamentals. The fundamentals include the quality of company’s
management, sustainability of its business model and its competitive position amongst
other factors. Birla sun life Asset Management Company has the largest team of research
analysts in the industry, dedicated to tracking down the best companies to invest in.
Birla sun life AMC strives to provide transparent, ethical and research, based
investment and wealth management services.
Vision:

To be the most trusted name investment and wealth management, to be the
preferred employer in the industry and to be a catalyst for growth and excellence of the
asset management business in India.
Mission:
To consistently pursue investor’s Wealth optimization by: Achieving superior and
consistent investment results.
Creating conducive environment to hone and retain talent. Providing customer
delight. Institutionalizing system-approach in all aspects of functioning. Upholding
highest standards of ethical values at all times.
Values:
Integrity
Commitment
Passion
Seamlessness
Speed.
Birla mutual funds were set up in the year 1994. It provides a range of investment
products on equity and fixed asset classes. It is one of the leading Mutual funds in India
and has recipient of various awards for its investment performance.
Heritage:
Birla Mutual funds is a joint venture between the Aditya Birla Group and Sun life
Financial Inc. of Canada. Birla Mutual fund offers a wide Range of top quality financial
services solutions for resident and non-resident Indians.
The Aditya Birla Group:

The Aditya Birla Group is one of the India’s largest business houses. Global in
vision, rooted in Indian values the Group is driven by a performance Ethics pegged on
value creation for its multiple stake holders.
The Group’s operations span 66 state of the art, straddling India. Thailand
Malaysia, Indonesia, Egypt. Philippines, Canada. Australia and China. Its revenues are in
excess of US$ 8.3 billion and it has a market capitalization of US$ 14 billion. The group
has 72,000 committed employees and over 7, 00.000 shareholders. The Aditya Birla
Group is a dominant player in all its areas of operations viz; Aluminium, Copper,
Cement, Viscose staple fiber, carbon black, Viscose filament yarn, Fertilizers, Insulators,
Sponge iron, Chemicals, Brand apparels, Insurance, Telecom, Mutual funds and Soft
ware.
The group has strategic joint venture with global majors such as Sunlife (Canada).
AT&T (USA), the TATA group and NGK Insulators (Japan), and has Ventured into BPO
sector with the acquisition of Transworks, a leading ITES/BPO company.
Sun life Financial:

Sun life Financial is a leading international financial services organization
providing a diverse range of wealth accumulation and protection products and services to
individuals and corporate customers. Charted in 1865, Sunlife financial and its partners
today have operations in key markets world wide, including Canada, the United States
the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China.
Bermuda. As of 30 June 2005, the sunlife financial group of companies has total assets
under Management of CDN $ 400 billion.
Track Record:
With a proven record of 11 years, Birla Mutual funds has bee a catalyst towards
the growth of the private sector asset management business.
Innovations:

Birla Mutual funds was first to launch Birla Cash Plus, a liquid fund. Birla
Dividend Yield Plus which is a Dividend yield fund. Birla Bond Index Fund (a debt index
fund) which replicates the Crisil Composite Bond Fund Index, has been assigned AAAF
rating by Crisil.
BSLAMC is the first asset management company in India to be awarded the
covered ISO 9001: 2000 certification by DNV. Netherlands.
Investment Philosophy:
Birla mutual funds follow a long term fundamental research based approach to
investments. The approach is to identify companies, which have excellence credit-
Worthiness and strong fundamentals. The fundamentals include the quality of the
Companies management sustainability of its business model and its competitive position.
Amongst other factors. Birla sunlife Asset Management Company amongst others
factors. Birla Sunlife Life Asset Management Company (BSLAMC). Has one of the
largest team of tracking down the best companies to invest in. BSLAMC will always
strive to provide transparent, ethical and research - based Investments and wealth
management services.
Geographical Reach:
Today, BSLAMC is present in 71 locations, including 22 branches.
Product offering:
Birla mutual fund offers a range of investment options , which include diversified
And sector specific equity schemes, fund - of- fund schemes, hybrid schemes, and
monthly income schemes , a wide range of debt and treasury products and offshore funds.
BSLAMC also provides Private wealth Management services.
Effective Marketing Plan

The tale of peddling services is as old as the hills. But never has a period in
business history seen such an aggressive marketing of services. No business
prognosticator could have forecast such a brutal fight for customer money, such a
struggle for existence and such revolutionary changes in the service industries to satiate
the escalating expectations of consumers. This is now true of the Mutual Fund industry.
The fact that the Mutual Fund industry can be viewed as a ‘Service industry’
makes it imperative to analyze the seven ‘Ps’ of marketing which form the pillars of
modern day marketing strategies. These seven ‘Ps’ must be carefully examined and
analyzed and the “effective” marketing plan must be made only by giving adequate
weightage to them. This analysis is done as under and has been supplemented by real life
examples.
In a Mutual Fund managerial efficiency and investment skills and know-how determine
returns to the investors. Successful Mutual Funds are those wherein marketing creates
confidence among potential investors and strengthens their desire to invest in the Fund.
Since Mutual Funds have greater characteristics of being a service rather than a Product,
there are 7 Ps associated with it. These are, therefore, the following elements of the
Marketing Mix:
(1) Product
(2) Price
(3) Promotion
(4) Place
(5) People
(6) Processes
(7) Physical Evidence
Mutual Funds as a Service

Mutual Funds primarily sell a service to the investors – The service of organizing
the pooling of resources, and managing assets and investments of the investors. They
mobilize funds from the investing public to manage funds efficiently, i.e., they create an

expectation of good returns in the mind of the investors and generate a desire in them to
invest their money in Mutual Fund units / shares.
Mutual Funds are portrayed as products different from various other investment
options. While bank deposits offer assured returns, insurance companies sell contracts.
Equity shares of companies give returns based on their operations. Mutual Funds on the
other hand sell on the proposition that returns are hedged against various risks and
depend on the investment skills and efficiency of the MF managers.
Successful mutual fund marketing, therefore, must create confidence among
potential investors and strengthen their desire to put their money with a particular fund. It
is not only publicity talking skills and public relations that will strengthen confidence, but
also evidence of good performance. Additionally, Organizational image, visibility of
operational policies and quality of management form an indirect part of Mutual fund
marketing.
In case of Mutual funds, unit certificates, which are proofs of the ownership,
nothing but the service provided by the professional portfolio managers who manage the
investments signifying the mutual fund units.
While intangibility means that services cannot be displayed, physically
demonstrated or illustrated, heterogeneity means that consumers cannot be certain about
performance on any given day.
These inherent properties of services lead them to possess very few search
qualities (the attributes that a customer can determine before purchasing a product like
color, style, feel, smell etc) and more of experience qualities (for their attributes cannot
be known or assessed until they have been purchased and consumed) and credence
qualities (the characteristics that the consumer may find impossible to evaluate even after
purchase and consumption). The services of an Asset management company of a MF are
not tangible, displayable or easily communicable to the investors. Thus, assessing the
quality of the services is difficult. Moreover, customer satisfaction is dependent on a
factor called inseparability of production and consumption that is important in the case of
Mutual funds where the units are first produced and then sold and invested in and hence
consumed simultaneously, thereby affecting the perception of the quality of service.

The service aspect also has implications for Perishibility. The services provided
by the Mutual fund cannot be saved, stored, resold or returned. The implication of this is
that the Mutual fund managers find it difficult to forecast demand and plan creatively for
capacity utilization in terms of services. All such factors make selling of mutual funds as
services more complicated than ever. And to meet the challenging task of penetrating the
markets deeper and winning over the customers, in the face of heavy competition, it has
become imperative for the market players to sensibly tangibilise their services by correct
positioning and effective communication of the core benefit.
Some of the aspects that need to be kept studied are enumerated as under. These apply to
all services in general and hence are of relevance to the Mutual Fund industry as well.
Positioning
Service positioning is useful in establishing a new service image as well as for
maintaining and repositioning existing services. Some of the instances are as follows:
Service is considered to be successfully positioned if it establishes and strives hard to
maintain a distinctive and desirable place for itself in the consumers’ mind in relation to
the other competing organizations and offerings. Organizations may choose to focus on
one or more of the four dimensions of service quality in developing effective position viz.
reliability, responsiveness, assurance, empathy.
Reliability: Reliability can work well as an effective dimension of positioning
service as long as it can be maintained as a distinguishing characteristic feature among
their competitors.
Responsiveness: Mutual funds are increasingly realizing the need for focusing on
responsiveness by responding to the desires of the customers by prompt, “willing-to
help” value –added services.

Assurance: This factor is used effectively in the industries where trust and
confidence in the service provider are particularly critical. As in the case of MFs, which
frequently use assurance-based advertising tag lines to build customer confidence.
Empathy: Firms can position themselves on empathy, which caters to customer’s
desire for individualized attention. In a Mutual Fund managerial efficiency and
investment skills and know-how determine returns to the investors. Successful Mutual
Funds are those wherein marketing creates confidence among potential investors and
strengthens their desire to invest in the fund.
Since Mutual Funds have greater characteristics of being a service rather than a
product, there are 7 Ps associated with it.
OPTIONS AND VALUE-ADDED SERVICES:
Thanks to the heightened competition in the mutual fund industry, mutual funds now
offer various options and value-added services to attract and retain customers.
Options:
With respect to a number of schemes, mutual funds offer the following: dividend and
growth options, systematic investment plan, and systematic withdrawal plan.
i. Dividend and growth options when you join a scheme, you can choose the dividend
option or the growth option. Under the dividend option, the gains of the scheme are
paid out at regular intervals in the form of dividends. Funds may offer daily,
weekly, monthly, and quarterly, half-yearly, and annual dividend options.
ii. Under the growth option, investment gains are ploughed back into the scheme and
no dividends are declared. Though the returns from both the dividend and growth
options will be the same, the tax implications may be different.
iii. Systematic investment plan under the systematic investment plan (SIP), the investor
can invest regular sums of money every month to buy units of a mutual fund
scheme. As the investment is made regularly, the investor buys more units when the
price is low and fewer units when the price is high.

iv. A systematic withdrawal plan (SWP) works like a systematic investment plan in the
opposite direction. The SWP allows the investor to withdraw a fixed amount every
month.
Value-added services:
Mutual funds offer value-added services like redemption over phone, triggers and alerts,
cheque book facility, and new points of purchase.
i. Redemption over phone for example offers investors the facility of making a
redemption request or switch between schemes over the phone.
ii. Cheque book facility Fund houses take few days to process a redemption request
and then further time is lost when the redemption cheque is in transit. To cut
down this delay, some fund houses give investors in certain schemes (typically
debt schemes), the some limit, at the time of investment itself. Encashment of the
cheque is deemed as withdrawal, at the scheme’s NAV on the day the cheque is
deposited.
iii. Sending messages through mobile phone regarding changes that happened in the
schemes.
BIRLA SUNLIFE CUSTOMER SERVICE

Online Services
Transact Online. It’s really simple.
It's time you experienced the ease and convenience of transacting online. You can
now purchase, redeem or switch your units Birla sunlife mutual fund schemes at
Www.Birlasunlifemutualfund.com. You can also check your account statement, fill in
and submit the application form as well as view and download Offer Documents. You
can do all this from the comfort of your home or office. Here is a simple step-by-step
online transaction guide that will help you get started.

Online Transaction
Customers can purchase, switch or redeem their Birla sunlife mutual fund units
through online.
Online Payment:
When customers can choose Online Payment, they will be directed to the
Payment Gateway Page, where they have to choose one of the banks to make the
payment. Once they select their bank, they will be directed to the Net Banking page of
the respective bank. Log in to their bank account and make the payment. When the
transaction is complete, a confirmatory mail will be sent to their registered email address.
Cheque Payment:
If they choose to make the payment by Cheque, they will need to download and
print the application form by clicking on the link provided. They need to simply sign this
form and submit it at the nearest Investor Service Centre (ISC), along with their cheque.
The transaction reference number should be written on the reverse of the cheque before
submission. The ISC will acknowledge receipt of the same and send their application for
further processing.
Till now in the part of research understood the products and features of mutual
funds and gathers complete information on Mutual Fund Industry. Studied completely
about products of Birla sunlife mutual funds and their performance levels and also
studied value added services offered by Birla sunlife mutual fund AMC to the customers.
Met company executive to know about the performances of the products in our region
and also customer perception on Birla sunlife mutual fund.
Prepared a questionnaire to measure customer satisfaction on Birla sunlife mutual

fund. Gather some customer’s information list from Birla sunlife mutual fund office,
Mysore. The customers of Birla sunlife mutual funds are mainly business people,

employees and Institutional Investors .The Mutual fund customers are risk averse .They
expect high returns from less risk .Customers have different views regarding Mutual fund
investments . They are in dilemma whether to invest in Bear market or Bull market. The
investment objective is varies from customers to customers. There are different objectives
like Growth Fund, Income Fund, and Balance Fund. Met some customers and got
feedback about Birla sunlife mutual fund from them.

DATA ANALYSIS
Age profile:
The age group of a person is a very important factor of determining the risk taking
ability of an investor. Every investor has a different method of investment based on their
requirement, necessity and desire and sometimes their age could be a basis in determining
this. An investor, who is around the age of 20 to 30 years, can possibly take more risk
than an investor who is above 50. Considering that an investor around the age of 30
would have a fixed or stable income and an investor above 50 is usually retired.
Moreover an investor around the age of 30 might have young youth so he can still take
more risk than a person around 50 might have young children of manageable age. Of
course, this is just a general understanding of people of different ages out not necessarily
have to be the same.
This question was designed to get a feedback of the investment preferences and
the patterns and the ways an investor would invest based on his/her age.
DIFFERENT AGE GROUP OF THE RESPONDENTS
TABLE-1
AGE NO OF RESPONDENTS (%)

20-30 18%
30-40 46%
40-50 24%
50 & above 12%
CHART-1

Number of respondents
20-30
30-40
40-50
50 above
Inference: As from the chart, it can be analyzed that 18% of the respondents are in the
age group of 20-30 years, 46% of them are between 30-40 years, 24% of the respondents
are in the range of 40-50 years and 12% of the respondents are above 50 years.
Annual income:
The annual income of a person is very important factor to determining the
investment profile and risk taking of an investor. Every investor has different method of
investment based on their requirement, necessity and desire and sometimes for this the
annual income would be a basis in determining this. An investor, who’s annual income is
around Rs. 3,00,000 and above, they can be possibly take more risk and different
investment profile than an investor who’s income is around 1,00,000 or below
considering that an investor would have a fixed or stable income the fund manager may
suggest him a good fund. A person around the category of Rs.1,00,000 to 2,00,000 and
2,00,000 to 3,00,000 their main intention is to save his money for a future deficits. So
naturally their investment habits and investment ideas vary with the annual income
category. Of course, this is just a general understanding of people of different annual
income group but not necessarily have to be the same.

This question was designed to get a feedback of the investment preferences and
the patterns and ways an investor would invest based on his/her annual income
ANNUAL INCOME OF INVESTORS
TABLE-2
Annual income No. of respondents (%)

Below 1,00,000 6%
1,00,000-2,00,000 28%
2,00,000-3,00,000 38%
Above 3,00,000 28%
ANNUAL INCOME OF INVESTORS
above 3lac 28
2lac-3lac 38
1lac-2lac 28
below 1lac 6
0 10 20 30 40
below 1lac 1lac-2lac 2lac-3lac above 3lac

Inference: As from the graph and table number, it can be analyzed that 6% of the
investors annual income is below 1lakh, 28% of the investors annual income ranges from
1-2lakhs, 38% of them have 2-3lakhs annual income, and 28% of them are having above
3lakhs annual income. It can be inferred that most of the respondents, i.e., 38% draw an
annual income that ranges from 2-3lakhs.
Occupation profile:
Investors come from all walks of life with different occupations and different
professions. So they should be classified under different categories and different classes
depending on their job, occupation, income levels, status etc. Investors cannot be
generalized and put under one class and category.
Hence this question would give us the feedback as to what occupation does the
investor belong to. By this we could also know a little background of the investor and
assume how much income would probably be earning.
The options given under this question were:

a) Government
b) Professional
c) Retired
d) Businessman
e) Others
INVESTORS OCCUPATION
TABLE-3
Occupation No of investors (%)

Government 14%
Professional 26%
Retired 4%
Businessmen 28%
Others 28%

30
20
26 28 28
10
14
4
0
gover profes retired busine others
investors 14 26 4 28 28
government professional retired
businessmen
Inference: As from the graph and table, itothers
can be analyzed that 28% of businessmen
invested, because of tax benefit.26% of them are professionals, 14% of them are
government persons, 28% of them are different fields and 4% of respondents are retired
persons.
DURATION OF INVESTMENT:
One of the important questions that arise in the investor’s mind before investing is
regarding the duration of the investment. The duration of investments usually depends on
the age factor. It also depends on the performance of the fund.
The purpose of this question was to get an idea of how long the people would invest in a
security.
The options given under this question were:
1) Less than one year
2) 1-3 years
3) 3-5 years
4) More than 5 years

TABLE-4
Duration No. of respondents Percentage level

Less than 1year 9 15%
1-3 years 15 25%
3-5 years 16 27%
More than 5 years 20 33%
Total number of 60 100%
respondents
Duration of investment
33%
35%
Percentage level
30% 27%
25%
25%
20% 15%
15%
10%
5%
0%
Less than 1-3 years 3-5 years More than 5
1year years
Duration

PREFERRED FUND STRUCTURE
TABLE-5
Structure of the fund No of investors preferred (%)

Open-ended fund 64%
Close-ended fund 24%
Interval fund 12%
NUMBER OF INVESTORS PREFERRED FUND
80
60
40
20
0
open close interval
respondents 64 24 12
respondents
Inference: It is observed that 32 out of 50 that are 64% of investors are interested to
invest their money in open ended funds the reason can be attributed to its convenience to

enter and exit at any time. 24% investors preferred to invest in close ended funds because
they are long term investors as well as they want some tax benefits. And the remaining
12% investors replied that they don’t mind to invest in any funds including interval fund.
INVESTORS SCHEME PREFERENCE
TABLE-6
Fund scheme No of investors (%)
Growth scheme 52%

Income scheme 16%
Balanced Scheme 32%
INVESTORS PREFERRED SCHEME
inve s tors , 32%
inve s tors , 52%
inve s tors , 16%
growth income balance

Inference: In the above given graph it is showed that26 out of 50 that are 52% of
customers are interested to invest in growth schemes. 32% of customers are interested to
invest in balanced schemes and the remaining 16% customers are preferred to invest in
Income schemes.
INVESTORS FUND PREFERENCE
FUND NO OF INVESTORS (%)

Tax saver fund 50
Index fund 20
Sectorial fund 30
TABLE-7
tax
50
saver
40
30 sectorial
20 index tax saver

index
10
sectorial
0
tax secto
index
saver rial
respondent 50 20 30
Inference:sOut of 50 investors 25 that is 50% of customers are preferred to invest in Tax
saver funds. 10 that is 20% of investors are preferred to invest in index funds which give
returns based upon respective indexes..15 that is 30% of investors are interested to invest
in Sectorial funds that means they are ready to take high risk but want high returns.

Repeating of Investment made by the respondents
TABLE-8
Repeating of investment Investor’s response (%)

Yes 78%
No 22%
REPEATION OF INVESTMENT
22%
78%
ye s no
Inference: As from the chart and table number, it can be analyzed that most of the
respondents, i.e., 78% of them invest on regular basis, because those who invest
repeatedly, know about the market cycle and 22% of them do not invest. Because of
market risk, they are able to tolerate market up and downs.
GETTING MONTHLY / QUARTERLY STATEMENTS FROM TIME

TO TIME
TABLE-9
GETTING MMONTHLY/QUARTERLY NO OF INVESTORS

STATEMENTS FROM TIME TO TIME
YES 76
NO 24
80
60
40 YES
20
NO
0
YES NO
INVESTORS 76 24
investors
INFERENCE: 70% of the investors getting monthly/quarterly statements and 30% of
the investors not getting monthly/quarterly statements from time to time.

TEMPORARY DECLINE OF INVESTMENT TOLERATED BY
INVESTORS
TABLE-10
DECLINE INVESTORS (%)

NO DECLINE 22%
5%-10% 34%
10%-15% 30%
15% ABOVE 14%
50%
0%
investor
nodecline 5%-10% 10%-15% 15%
s
investors 22% 34% 30% 14%
nodecline 5% -10% 10% -15% 15% above
Inference: as per the study and graph 22% of the investors cannot tolerate decline.
Because they always look for increase, 34% of the investors can tolerate 5-10% decline,
30% investors can tolerate 10%-15% decline and 14% of investors tolerate decline of
more than 15%.

RESPONSE REGARDIND AREAS FOR IMPROVEMENT BY BIRLA SUN LIFE

MUTUAL FUND
TABLE-11
AREAS NO OF RESPONDENTS (%)

CUSTOMER SERVICE 34%
MONITORING FUND 32%
AGENTS TRAINING 28%
OTHERS 6%
AREAS IMPROVEMENT
6%
34%
28%
32%
CUSTOMER SEVICE MONITOR
TRAINING OTHERS
Inference: as per the survey 34% of the investors prefer good service, 32% of them are
prefer monitoring of fund, 28% of them are looked at agents training. 6% of them are
recommended other services such as ATM and others.
REDEMPTION FACILITY SATISFACTION OF THE CUSTOMERS

TABLE-12
SATISFACTION ABOUT REDEMPTION NO OF INVESTORS
FACILITY
YES 84%
NO 16%
16%
YES NO
84%
Inference: As per the survey 84% of the investors have satisfied with redemption
facility provided by Birla sun Life Mutual fund.16% of them are not satisfied with
redemptions facility, because it takes longer time and delay of the process.

RESPONSE REGARDING USAGE OF VALUE ADDED SERVICE

PROVIDED BY MUTUAL FUND
Table-13
VALUE ADDED SERVICE NO OF RESPONDENTS (%)

ATM 0
Ecs 42
Online transaction 20
Direct investment 38
no of respondents
50
Ecs, 42
40 Direct, 38
30
online, 20
20
10
ATM, 0
0
ATM Ecs online Direct
ATM Ecs online Direct

Inference: Most of the investors are making use of value added services of Ecs and
direct investment, few of the customers make use online transaction.
OPINION ON BIRLA SUN LIFE MUTUAL FUND
PERFORMANCE
TABLE-14

PERFORMANCE OF THE COMPANY OPINION OF INVESTORS

EXCELLENT 18%
GOOD 50%
BETTER 22%
BAD 10%
OPINION OF INVESTORS
60
GOOD
40
EXCELLEN
20 T BETTER
BAD
0
EXCEL GOOD BETTE BAD
INVESTORS 18 50 22 10
OPINION
EXCELLENT
Inference: As per the graph and survey GOOD BETTER
50% of the majority BAD
investor’s opinion is
GOOD, 22% of investors opinions are BETTER performance by the company,
18% of the investors opinion EXCELLENT and of them gave BAD opinion.
FINDINGS

The findings for the above research are as follows:-

• It was found that majority of the investors i.e.46% are from the age group of 30-
40. This is the group of middle age people who deserve to invest for their future
financial needs.
• It was found that Out of 50 respondents 50 customers have already reinvested in

the company. They were already earned the profits, but this time, value of their
investment is decreased because of recession. Some of the persons are waiting for
correct time to invest.
• It was observed that Out of 50 respondents 39 investors have reinvested due to

better returns and performance of funds. While the rest of the investors have voted
for performance of funds and services provided by the company.
• It was observed that Out of 50 investors 25 that is 50% of customers are preferred
to invest in Tax saver funds. 10 that is 20% of investors are preferred to invest in
index funds which give returns based upon respective indexes.15 that is30% of
investors are interested to invest in Sectorial funds that means they are ready to
take high risk but want high returns
• It was found that Out of 50 respondents 50% ranked “Good” BIRLA SUN LIFE
AMC, because of performance at the Market.22% of respondents ranked
EXCELLENT,18% ranked BETTER, and 10% ranked their opinion as BAD.
• It was found that Out 50 respondent’s 34% respondents want BIRLA SUN LIFE
to improve at their customer service.32% respondents suggested that improve
monitoring fund. Some of them prefer agents training, because agents are not
communicating the offers and changes happened at the fund structure.

RECOMMENDATIONS
The following suggestions are the outcome of the research and applications of these
suggestions are not necessary:
• The company should come up with innovative ways of service at their door steps
this may be a costly affair but will surely give positive results in the long run.
• The company should take the initiative of training the advisors about the new
funds from time to time which also makes the advisors connected to the company.
This also improves the liaison between company customers and advisors.
• The company should also emphasis on the monitoring of funds which directly
relates to the returns of a specific fund.
• The company should use brand ambassadors for example the CEO’s of major
companies where the company allocate the funds. This will probably ensure
proper results.
• The company should focus on the advertising strategy and also the marketing of
the product.
• The company should emphasis on creating an awareness about the SIP options
which is always preferable when the market is volatile.
• The company doesn’t have enough tax saving plans or appropriate plans for tax so
which they should come up with.

CONCLUSION
Mutual fund is booming sector now a days and it has lot of scope to generate income and
providing return to the investor, the mutual fund is one of the way to development of
country and helps to mobilizing dead money in the economy which helps to develop the
economic conditions of the country and people
Mutual fund helps the people for studying the market conditions, it providing lot of
opportunities to the people, getting more returns on investment and it leads to investor’s
better standard of living and future needs. It satisfies the customer by market performance
and its returns and helps the people to know the new things going on around the world. It
gave the more knowledge to the person, because it diversifies the risk by investing in
different securities.
QUESTIONNAIRE

Dear Respondents,
I am MAHESH.S pursuing Masters of Business Administration, Marketing

Specialization at JSSCMS, sjce campus Mysore. Has part of my curriculum, I have
undertaken a project work on “A THESIS ON SERVICE PROLIFERATION
AND CUSTOMER SATISFACTION at BIRLA SUNLIFE MUTUAL FUND”.I will
be grateful to you if you could kindly spare a few minutes of your valuable time to fill up
the following questionnaire. I assure you that absolute confidentiality would be
maintained.
NAME: __________________________________
AGE: ____________________________________
ADDRESS: _______________________________
__________________________________________
__________________________________________
Ph: _______________________________________
1. Occupation:
Government [ ]
Professional [ ]
Retired [ ]
Businessman [ ]
Others specify_______________ [ ]
2. In which income do you fall under?

Below 1lac [ ]
1lac-2lac [ ]
2lac-3lac [ ]

Above 3lac [ ]
3. Have you ever invested in BIRLA SUNLIFE Mutual Funds?
Yes [ ] No [ ]
4. If yes why did you choose BIRLA SUNLIFE Mutual Funds?
5. What are your financial goals that you intend to achieve in your lifetime?
Good education for your children [ ]

Retirement needs [ ]
Better standard of living [ ]
Purchase of assets [ ]
Marriage [ ]
6. By structure in which type of schemes did you invested?
Open - Ended Schemes [ ]
Close - Ended Schemes [ ]
Interval Schemes [ ]
7. By investment objective in which type of schemes have you invested?
Growth Scheme [ ]
Income Schemes [ ]
Balanced Schemes [ ]
8. In which type of fund you want to invest?
Tax saver funds [ ]
Index funds [ ]
Sectorial funds [ ]

9. Did you repeat your investment after your initial investments?
Yes [ ] No [ ]
If NO, why _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
10. How important are the following factors for your investments
Saving [ ]
Income [ ]
Future contingencies [ ]
Retirement [ ]
Tax-benefits [ ]
11. Are you getting Monthly / Quarterly statements from time to time?
Yes [ ] No [ ]
12. Are you satisfied with the redemption facilities provided by BIRLA SUNLIFE
AMC?
Yes [ ] No [ ]
If NO, why_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
13. Are you satisfied with portfolio management managed by BIRLA SUNLIFE
AMC?
Yes [ ] No [ ]
14. How much of a temporary decline would you tolerate?

No decline [ ]
5% - 10% decline [ ]
10% - 15% decline [ ]
More than 15% decline [ ]
15. Which value added service you are using?

ATM [ ]
Online transaction [ ]
Ecs [ ]
Direct investment [ ]
16. Are you satisfied with value added services offered by BIRLA SUNLIFE
AMC?
Yes [ ] No [ ]
17. Grade the customer service of BIRLA SUNLIFE with regards to Mutual Funds on a
scale of 1-10 (Where 1 will represent the best monitoring of fund, while 10 would reflect
the poor monitoring of fund)
1 2 3 4 5 6 7 8 9 10
18. What is your opinion on BIRLA SUNLIFE Mutual Funds overall performance?
Excellent [ ] Good [ ]
Better [ ] Bad [ ]
19. In what areas do you want BIRLA SUNLIFE mutual funds to improve?
Customer service [ ]
Monitoring of fund [ ]
Agents training [ ]
Others_________ [ ] Thank You
BIBLIOGRAPHY
BOOKS

MUTUAL FUNDS IN INDIA - PERSPECTIVES AND STRATEGIES
Edition 2007 Published by ICFAI BUSINESS SCHOOL: - Arindam

Banerjee
REFERENCES
Websites:
• www.reliancemutualfunds.com
· www.amfiindia.com
· www.mutualfundsindia.com
· www.mutualfundsindia.com
· www.ask.com
· www.faq.com
· www.bseindia.com
· www.amfiindia.com/mutual funds/nav/about funds/open ended schemes.com

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Service proliferation and customer satisfaction

Project on “Service proliferation and customer satisfaction” at

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

The basic objective of any financial services company would be to provide an

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 2

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 3

Customer satisfaction is a measure of how products and services supplied by a

In a climate of decreasing brand loyalties, understanding customer service and

With better understanding of customers' perceptions, companies can determine the

Customer expectations are the customer-defined attributes of your product or service

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 4

PURPOSE OF THE STUDY

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 5

• To understand the different investment options provided by BIRLA SUNLIFE

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 6

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 7

SOURCES, TOOLS AND TECHNIQUES OF DATA

• Tool and techniques of data collection

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 8

Literature reviews provides support to validate secondary data. Hence, complementing

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 9

METHODOLOGY FOR LITERATURE REVIEW

Findings – Customer revenue was found to correlate negatively with customer

Practical implications – A simplistic focus on improving customer satisfaction for

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

INTRODUCTION OF MUTUAL FUND INDUSTRY

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

Origin of mutual fund industry in India

First Phase - 1964-87

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

Second Phase - 1987-1993 (Entry of Public Sector Funds)

Third Phase - 1993-2003 (Entry of Private Sector Funds)

Fourth Phase - since February 2003

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

OPERATION OF THE FUND

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

Mutual Fund Operation Flow Chart

ORGANISATION OF A MUTUAL FUND

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

DISTRIBUTION CHANNELS IN THE MUTUAL FUND INDUSTRY:

• The Direct Channels:

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

• The banking channel:

An additional advantage that banks provide is that the concerned customer

• The retail channel:

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1

• The corporate channel:

• Individual Financial Advisors(IFA) or Agents:

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 2

Asset Management Company:

Restrictions on the AMC.s:

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 2

GROWTH IN ASSETS UNDER MANAGEMENT

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 2

REGULATORY STRUCTURE OF MUTUAL FUNDS IN

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 2

Market Share and Growth of the Mutual Fund Industry

Assets Under Management as at the end of Feb-2009

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 2

FUTURE OF MUTUAL FUND:

Mutual fund India assets will be double.