Beruflich Dokumente
Kultur Dokumente
Submitted by:
BBA(B&I) Semester – VI
Gurgaon
Evaluation Certificate
This is to certify that the project titled “The study Campaigning, Promoting &
Selling of Mutual Funds ” submitted by Anu Yadav, a student of BBA (B&I)
program of Ansal Institute of technology, Gurgaon, affiliated to GGSIP University,
Delhi has been examined by the following examiners.
This is to certify that the project titled “The study Campaigning, Promoting & Selling of
Mutual Funds” submitted by Anu Yadav, a student of BBA (B&I) program of Ansal
Institute of technology, Gurgaon, affiliated to GGSIP University, Delhi is original and
authentic ad has been carried out under my supervision and guidance.
I am thankful to all respondents for giving me their valuable time and genuine
information.
In the end I would like to thank to all my colleagues for giving their support and raising
my confidence in carrying out this project.
CONTENTS
CHAPTER 1 INTRODUCTION
1.1 EXECUTIVE SUMMARY…………………………………
1.2 OBJECTIVE OF THE STUDY…………………………………………...
CHAPTER 2 LITERATURE REVIEW
2.1 INTRODUCTION OF MUTUAL FUND…………………….
2.2 HISTORY OF MUTUAL FUND IN INDIA…………………...
2.3ADVANTAGES OF MUTUAL FUND ……………………
2.4 DISADVANTAGES OF MUTUAL FUND ……………
2.5 CHARACTERISTICS OF MUTUAL FUND……………………
2.6 TYPES OF FUNDS………………………...
2.7 DIFFEERENT METHODS ADOPTED BY AMC TO
TO SELL MUTUAL FUND……………………………………
2.8 METHODS ADOPTED FOR PROMOTION AND
CAMPAIGNING OF MUTUAL FUND……………………..
CHAPTER 6 BIBLIOGRAPHY
APPENDIX
CHAPTER ONE
INTRODUCTION
EXECUTIVE SUMMARY
The project covers an over view of the MUTUAL FUND industry. The total corpus
of the AMC industry recently crossed 6 Trillion Rupees. which is around 6% of
current GDP of India. This means that people in India are getting their focus shifted
towards investing in a way which is safe as well as providing returns.
In this report we have discussed about “Sales and Promotion of Mutual Fund in
India” The project also discusses various ways to promote mutual funds and
different ways which are adopted by AMCs to sell mutual fund in India.
OBJECTIVE OF THE STUDY:
LITERATURE REVIEW
INTRODUCTION OF MUTUAL FUND
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.
History of the Indian Mutual Fund Industry
The mutual fund industry in India started in 1963 with the formation of Unit Trust
of India, at the initiative of the Government of India and Reserve Bank. The history
of mutual funds in India can be broadly divided into four distinct phases :
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.
1987 marked the entry of non- UTI, public sector mutual funds set up by public
sector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund
established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab
National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of
India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual
fund in June 1989 while GIC had set up its mutual fund in December 1990.
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 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.
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs.29,835 crores as at the end of
January 2003, representing broadly, the assets of US 64 scheme, assured return and
certain other schemes. The Specified Undertaking of Unit Trust of India,
functioning under an administrator and under the rules framed by Government of
India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It
is registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000
crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth. As at the end of September, 2004, there
were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
ADVANTAGES OF MUTUAL FUNDS
• LIQUIDITY: Mutual funds are typically very liquid investments. Unless they
have a pre-specified lock-in, your money will be available to you anytime you
want. Typically funds take a couple of days for returning your money to you.
Since they are very well integrated with the banking system, most funds can
send money directly to your banking account.
• EASE OF PROCESS: If you have a bank account and a PAN card, you are
ready to invest in a mutual fund: it is as simple as that! You need to fill in the
application form, attach your PAN (typically for transactions of greater than
Rs 50,000) and sign your cheque and you investment in a fund is made.
• HIGH COSTS & RISKS: Mutual funds require a detailed study of the
investment options as the fee charged by the management firm can be quite
high. Mutual funds are subjected to market risks or asset risks. If the
investment is not sufficiently diversified, it may involve huge losses.
• TAX ISSUES: Although, the returns on investments are quite high, a mutual
fund cannot guarantee lower tax bills. The tax amounts are usually high,
especially in case of short-term gains. Moreover, it is the fund manager who
handles these issues and you cannot dictate terms on the amount of tax to be
paid.
1.BY STRUCTURE:
• Open ended funds: A type of mutual fund that does not have restrictions on
the amount of shares the fund will issue. If demand is high enough, the fund
will continue to issue shares no matter how many investors there are. Open-
end funds also buy back shares when investors wish to sell. The majority of
mutual funds are open-end. By continuously selling and buying back fund
shares, these funds provide investors with a very useful and convenient
investing vehicle.
• Close ended fund: A closed-end fund is a publicly traded investment
company that raises a fixed amount of capital through an initial public
offering (IPO). The fund is then structured, listed and traded like a stock on
a stock exchange.
Also known as a "closed-end investment".The former raises a
prescribed amount of capital only once through an IPO by issuing a fixed
amount of shares, which are purchased by investors in the closed-end fund as
stock. The stock prices of a closed-end fund fluctuate according to market
forces (supply and demand) as well as the changing values of the securities in
the fund's holdings.
• Interval funds: A fund that combines the features of open-ended and closed-
ended schemes, making the fund open for sale or redemption during pre-
determined intervals.
Mutual Fund companies that have launched Interval Funds in India are:
• Growth funds: Most growth funds offer higher potential capital appreciation
but usually at above-average risk. Growth funds are more volatile than funds
in the value and blend categories. The companies in a growth fund portfolio
are in an expansion phase and they are not expected to pay dividends.
Investing in growth funds requires a tolerance for risk and a holding period
with a time horizon of five to 10 years.
• Income funds: A type of mutual fund that emphasizes current income, either
on a monthly or quarterly basis, as opposed to capital appreciation. Such
funds hold a variety of government, municipal and corporate debt
obligations, preferred stock, money market instruments, and dividend-
paying stocks.
• Balance funds: A balanced fund is geared toward investors who are looking
for a mixture of safety, income and modest capital appreciation. The
amounts that such a mutual fund invests into each asset class usually must
remain within a set minimum and maximum.
• Load funds: A mutual fund that comes with a sales charge or commission.
The fund investor pays the load, which goes to compensate a sales
intermediary (broker, financial planner, investment advisor, etc.) for his or
her time and expertise in selecting an appropriate fund for the investor.
3.OTHER SCHEMES:
Tax-saving schemes.
DIFFERENT METHODS OF SALES & PROMOTION
OF MUTUAL FUNDS
2. ONLINE INVESTMENT
Some mutual fund Web sites allow customers to invest online. However, the
customer must have an account with the banks AMC have partnered with. For
example, Prudential ICICI Mutual Fund allows customers to buy funds online if he
have a banking account with any of the following banks: Centurion Bank, HDFC
Bank , ICICI Bank, IDBI Bank and UTI Bank.
3.THROUGH DISTRIBUTORS
Each AMCs sell its products through various distribution channels. The distributor
in turn gets a variable commission from the AMC.The distributor have a client base
of their own in which they promote the mutual fund. Some of the major distributors
are listed below:
• Indiainfoline Limited
• Sherkhan
• Religare
• Blue Chip India Limited
4 .THROUGH BANKS
Some of the AMCs are sister concern of the bank example Prudential ICICI Mutual
Fund is a sister concern of ICICI BANK. These AMCs aggressively promote their
mutual fund to their client and develop a interest in them to invest in mutual fund in
order to get higher returns.
1. Through Advertisement
Each AMCs spends a lot of money in order to advertise for its Mutual Fund. The
amount spend is high in case New Fund Offers i.e NFOs. Various mediums of
advertisement use are given below:
• Television
• Radio
• Print Media
• Hoardings
2. Online Blogs:
Various AMC’s promote their product through online blogs. They advertise their
product on various online sites.
3. Telephonic Calls:
Almost all the distributors promote the Mutual Fund with the help of telephone.
They have the phone numbers of existing clients and potential clients. A trained
person makes a call to the clients and promotes the Mutual Fund.
RESEARCH METHODOLOGY
RESEARCH DESIGN & METHODOLOGY
A. RESEARCH PROBLEM: -
B. RESEARCH DESIGN: -
DESCRIPTIVE RESEARCH
Blend of Descriptive method has been used in this research for the collection of data.
As the research is related to the study of consumer satisfaction, which can more
effectively be studied through direct questions, personal interview and informal
talks- experimental research will not much effective. Also, considering the time
constraints, descriptive research leading to conclusive result is the most suitable
design for this research as it is related to why anything happening. It checks the
behavior features of a customer.
The data has been collected through questionnaire method. The questionnaire was
designed in such a way to cover as many aspects of consumer behavior as possible.
Many questions have been asked in it for feedback from customers. In it both
opened ended questions and close ended questions have been asked for study.
• SECONDARY DATA
Under this data is taken from the internet. All the data related to its profile, mission
and capital structure is taken. Even data related to this study is also taken from the
book which is sent to bank’s manager annually and also quarterly related to its
management, mission and many other things.
SAMPLE SIZE: - 10
CHAPTER FIVE
BIBLIOGRAPHY
BIBLIOGRAPHY
www.google.com
www.buzzle.com
www.mutualfundsresource.com
www.financialsolutions.com
www.investopedia.com
www.indiastudychannel.com
http://www.scribd.com/doc/17093549/FACTORS-AFFECTING-INVESTORS-
PREFERENCE-FOR-MUTUAL-FUNDS-IN-INDIA