Mutual Funds For Individual Investors in India

A
PROJECT REPORT ON
MUTUAL FUNDS FOR INDIVIDUAL INVESTORS IN

INDIA
CONDUCTED FOR
METLIFE INDIA INSURANCE CO. LTD
SUBMITTED
IN
PARTIAL FULLFILLMENT OF
MASTER IN MARKETING MANAGEMENT
SUBMITTED BY
RAJESH B. SURASE
MMM-1
NEVILLE WADIA INSTITUTE OF MANAGEMENT

STUDIES AND RESEARCH
PUNE-411 001
(2010-11)
Neville Wadia Institute of Management Studies and Research , Pune - 411001

ACKNOWLEDGEMENT
I take immense pleasure in completing this project and submitting the summer project
report. The last 90 days with Metlife India Insurance Co.Ltd. has been full of learning
and sense of contribution toward the organization. I would like to thank Metlife India
Insurance Co.Ltd. for giving me an opportunity of learning and contributing through
this project. I also take this opportunity to thank all those people that made this
experience a memorable one.
A successful project can never be prepared by the single effort of the person to whom
project is assigned, but it also demand the help and guardianship of some conversant
person who helped the undersigned actively or passively in the completion of
successful project.
In this context as a student of Neville Wadia Institute of Management Studies and
Research. I would first of all like to express my gratitude to Mr.Santosh Dastane
(Director) Prof. Vikas Dole, Pro. Radha Dogra (Co-ordinator). Who provide me good
opportunity to work with Metlife India Insurance Co.Ltd.
During the actual project work, Mr. Sohan Singh (Sales Manager) has been a source of
inspiration through his constant guidance; personal interest; encouragement and help. I
convey my sincere thanks to him. In spite of his busy schedule he always finds time to
guide me through the project. I am also grateful to Mr. Nitin Baviskar (AM) for
reposing confidence in my abilities and giving me the freedom to work on my project.
Last but not least, I would like to thanks all of my friends and well wishers for giving
me their support during this project knowingly or unknowingly.
RAJESH SURASE
Dr. D. Y. PATIL CENTER FOR MANAGEMENT & RESEARCH. CHIKHALI. PUNE- 411017 2
INDEX
PAGE
CHAPTER NO. CONTENTS
NO.
I Introduction
I.I What is Mutual Fund? 12
I.II Growth of Mutual Fund. 13
I.III Phases of growth. 13
I.IV Types of Mutual Fund. 15
I.V Mutual Fund In India. 19
I.VI How long to keep Investment. 20
I.VII Return Expected. 21
I.VIII Advantage of Mutual Fund. 22
I.IX Drawbacks of Mutual Funds. 24
I.X Association of Mutual Fund. 25
I.XI Future of Mutual Fund. 27
I.XII Regulatory aspects 29
I.XIII How to judge Mutual Fund. 33
I.VIX History of Mutual Fund. 35
I.XV Structure of Mutual Fund. 36
I.XVI AMC’s operating currently. 37
II Problem Statements and Objectives of Study.

II.I Problem Statements. 40
II.II Objectives of Study. 41
III Research Methodology.

III.I Methodology of Study. 43
III.II Research Methodology. 43
III.III Assumptions. 43
III.VI Literature Survey. 44
III.V Probability Sampling. 44
III.VI Sampling Size. 45
III.VII Execution of Project. 45
IV Limitations.
IV.I Limitations. 47
V Analysis of Mutual Fund.
V.I Analysis on the basis of Schemes. 49
V.II Comparison between Bank and MF Industry. 50
VI Data collection
VI.I Questionnaire 53
VI.II Personal Visits. 54
VI.III Telephonic Information. 54
VII Interpretation of Data.

VII.I 56
Percentage of Investment to Total Income.
VII.II Investment in Financial Product in Percentage. 57
VII.III Awareness of Mutual Fund. 58
VII.IV Perception of Mutual Fund. 59
VII.V Comparison between Risk Investment and Returns. 60
VII.VI Identification of Mutual Fund Industry. 61
VII.VII Comparison on the basis of place. 62
VII.VIII Risk taken ability by different Age Groups. 63
VII.VIX Percentage of total Income Invest in Mutual Fund. 64
VIII Project Findings and Recommendations.

VIII.I Project Findings. 66
VIII.II Recommendations. 66
IX Bibliography. 67
EXECUTIVE SUMMARY:-
The project titled “MUTUAL FUNDS FOR INDIVIDUAL INVESTORS IN

INDIA” being carried out for METLIFE INDIA INSURANCE CO. LTD.
Metlife operates in various financial products and services like, Consultancy, Mutual
Fund, Registrar and Transfer Agent, Research, Mapin etc.
The evaluation of financial planning has been increased through decades, which is best
seen in customer rise. Now a day’s investment of saving has assumed great importance.
According to the study of the markets, it is being observed that markets are doing well
in Mutual fund. In near future a proper financial planning is required to invest money in
all type of financial product because there is good potential in market to invest.
In this project the great emphasis is given to the investor’s mind in respect to
investment in Mutual Fund .The needs and wants of the client is taken into
consideration.
I hope Metlife, Pune will recognize this as well as take more references from this
project report.
The main objective of this project is to know the Mutual Funds for individual investors
in India and also to know the investing pattern of people in different Financial Project.
IT sector has been given more emphasis for the study of the project because it is the
only sector where all type of Age group, Income class and different level of people are
represented.
After analyzing the feedback the conclusion has been made that the Indian financial
market is having lots of potential customer the only thing is to give a proper guidance to
the prospective customers.
COMPANY PROFILE
COMPANY PROFILE
MetLife Inc. is a leading provider of insurance and other financial services to
millions of individual and institutional customers throughout the United States.
Through its subsidiaries and affiliates, MetLife Inc. offers life Insurance, annuities,
automobile and homeowner’s insurance and retail banking services to individuals, as
well as group insurance, reinsurance and retirement and savings products and services
to corporations and other institutions. Outside the U.S., the MetLife Companies have
direct insurance operations in Asia Pacific, Latin America and Europe.
MetLife is one of the largest insurance and financial services companies in the
U.S. The company’s unparalleled franchises and brand names uniquely position it to be
the pre eminent provider of protection and savings and investment products in the U.S.
In addition, MetLife’s international operations are focused on emerging markets where
the demand for insurance and savings and investment products is expected to grow
rapidly in the future.
MetLife’s well recognized brand names, leading market positions, competitive

and innovative product offerings and financial strength and expertise will help drive
future growth and enhance shareholders value, building on a long history of tradition
and integrity.
Their services are widely networked across India. Their services have
increasingly offered customer oriented convenience, which they provide to a spectrum
of investors, high-net worth or otherwise, with equal dedication and competence.
But true to their spirit, this success is not their final destination, but just a
platform to launch further enhanced quality services to provide investors the latest in
convenient, customer-friendly products.
Over the years they have ensured that the trust of their customers is their biggest
returns. Factors such as their success in the Electronic custody business has helped
build on their tradition of trust even more. Consequentially their retail client base
expanded very fast.
To empower the investor further they have made serious efforts to ensure that
their research calls are disseminated systematically to all their clients through various
delivery channels like email, chat, SMS, phone calls etc.
In the future, their focus will be on the emerging businesses and to meet this
objective, they have enhanced their manpower and revitalized their knowledge base
with enhances focus on Futures and Options as well as the commodities business.
CHAPTER:-I
INTRODUCTION:-
INTRODUCTION
Financial planning is the process of identifying one’s wealth accumulation and

protection goals and developing a coordinated plan to help priorities one’s future
financial decision. Financial planning should be taken as seriously as a medical
prescription, as it deals with ones financial health. It should be seen not just as a means
of achieving financial security, but as making a vital contribution to one’s overall
happiness and peace of mind.
Financial planning can be manageable or overwhelming depending upon how one

approaches it. Without guidance; it’s hard to know what one needs and when one needs
it. With right information, tools and timeline, the choices become much easier.
In fact too many people are investing in MUTUAL FUNDS. After all it’s common
knowledge that investing in mutual fund is {or at least should be} better than simply
letting your cash waste in a saving account, but for most people that’s where the
understanding of funds end. It doesn’t help that mutual fund sale people speak a strange
language that, that sounding sort of English, is interspersed with jargon like NAV,
load/no-load, etc.
Originally MUTUAL FUNDS were heralded as a way for the little guy to get a piece of
a market. Instead of spending all the free time buried in the financial pages of
ECONOMIC TIMES all one has to do is buy a mutual funds and be set on his way to
financial freedom. But it’s not that easy. MUTUAL FUNDS are in excellent idea in
theory but in reality they haven’t always delivered. Not all mutual funds are created
equal, and investing in mutual fund isn’t easy as throughing one’s money at the first
sales person who solicits business.
I.I WHAT ARE MUTUAL FUNDS:-
Needs for capital growth, income and/or income preservation. And a mutual fund
brings the benefit of diversification and money management to the individual investors,
providing an opportunity The popularity of MUTUAL FUNDS over the past few years
has soared. The reasons MUTUAL FUNDS make it easy and less costly for investors to
satisfy therefore financial success that was once available only to the very rich.
A MUTUAL FUND is a body corporate registered with the Securities and Exchange
Board of India (SEBI) that pools up the money from individual/ corporate investors and
invests the same on behalf of the investors / unit holders in equity shares, govt.
securities, Bonds call money market etc. and distributes the profits. In other words a
mutual fund allows an investor to indirectly take a position in a basket of asset.
UNIT TRUST OF INDIA is the first mutual fund set up under a separate Act, UTI Act
in 1963 and started its operation in 1964 with the issue of unit under the scheme US-64.
Currently public sector banks like SBI, Canara bank, Bank of India, and Institution like
IDBI, GIC, and LIC HDFC Foreign institution like Alliance Morgan Stanley,
Templeton, Principle HSBC and private financial Co. like first India mutual fund DSP
Merrill Lynch, Sundaram, Kotak etc.have floated their own mutual funds.
Presently there are 33 mutual funds in India and close to 400 mutual fund schemes.
Currently the total fund under the mutual fund management in India are a little over Rs.
1,39,000 crores. The private funds account for around 77 percent.
ONE CAN MAKE MONEY FROM MUTUAL FUND IN THREE WAYS:-
 Income is earned from dividends and interest on bonds. A fund pays out nearly
all income it receives over the year to fund owners in the form of a distribution.
 If the fund sell securities that have increased in price, the fund have a capital
gain most fund also pass on this gain to investor in a distribution.
 If fund holding increases in price but are not sold by the fund manager, the fund
shares increase in price. One can sell then this mutual fund shares the profit.
I.II GROWTH OF MUTUAL FUNDS: -
The Mutual Fund industry in India has been on a roll as the Asset under Management
continues to see strong spurt in growth. The asset under management swelled to Rs.
1,67,978 cr. by May 31st 2005 from Rs 1,01,565 cr. in January 2000. This apart the
industry has also seen a spurt in the number of schemes on offer, which amount to 460
at present, catering to varied needs of investors.
A booming economy, soaring stock market, and a conductive regulatory environment,
amongst a slew of other factor have added to the growth of the industry.
Given a huge opportunity in sub-urban and ruler markets, which lie hitherto untapped,
and growing income level in the country, the industries future looks bright.
I.III THE PHASES OF GROWTH: -
The Indian Mutual Fund industry has come a long way since the inception of UTI in
1963. According to AMFI the evolution of industry can be broadly divided into four
phases, which mark its transaction from the period when UTI ruled the roost to a period
of competition and increased awareness among investors.
FIRST PHASE (1964-87)
UTI remained the only Mutual Funds player in the country till 1987. UTI started its
operation in July 1964 with a view to encouraging savings and investments and
participation in the income, profits and gains accruing to the cooperation from the
Acquisition, holding, management and disposal of securities. UTI witnessed a slow and
steady growth over the 1970s and 1980s and by the end of 1988 it had an AUM of Rs.
67bn. It still continues to be the largest player in the Domestic Mutual Fund industry
with a AUM of Rs.23500 cr. as on March 31st, 2005.
SECOND PHASE (1987-93)
Public Sector Mutual Funds set up by public sector banks, Life Insurance Corporation
of India and the General Insurance Corporation of India entered the market in 1987.The
first known UTI mutual fund was the SBI mutual fund established in June 1987,
followed by Canara Bank mutual fund in December 1987, Punjab National bank mutual
fund in August 1989,Indian Bank mutual fund in November 1989,Bank of India mutual
fund in June 1990 and Bank of Baroda mutual fund in October 1992.LIC set up its
mutual fund in June 1989 while GIC established its mutual fund in December 1990.
During this period, the total asset of the industry grew to about Rs.610 bn with the total
No. of schemes increasing to about 167 by the end of 1994.
THIRD PHASE (1993-2003)
This phase marked the entry of private sector funds. The phase also signaled the
intensification of the competition. Both domestic and foreign players entered the
market, offering a wide variety of schemes to investors. Kothari Pioneer Mutual Fund
was the first private sector fund to be established in association with the foreign funds.
The opening up of the market to private players saw the international players like
Morgan Stanley, Jar dine Fleming, JP Morgan, George Soros and Capital International
entering the market.
FOURTH PHASE (SINCE FEB 2003)
In February 2003 the Unit Trust of India Act 1963 was repealed and UTI was bifurcated
into two separate entities: Specified undertaking of the Unit Trust of India, which is still
under the government of India, and the UTI Mutual Fund Limited. This was done in the
wake of the severe payment crisis that the UTI suffered on account of its assured return
schemes of US – 64 that finally resulted in an adverse impact on the Indian capital
markets .US - 64 was the first scheme launched by UTI with the significant equity
exposure and the returns of which are not linked to the market.
I.IV TYPES OF MUTUAL FUNDS : -
Mutual Funds have specific investment objectives such as growth of capital, safety of
principal current income or tax exempt income, one can select one fund or any number
of different funds to help one meets ones specific goals. In general mutual fund fall
under 3 general categories : -
 Equity fund invest in shares of common stocks.
 Fixed income funds invest in government or corporate securities which offer
fixed rate of returns.
 Balanced fund invest in a combination of both stocks and bonds.
AGGRESSIVE GROWTH FUNDS :-
These funds seek to provide maximum growth of capital with secondary emphasis on
dividend or interest income. They invest in common stocks with a high potential for
rapid growth and capital appreciation.
Aggressive growth funds are suitable for those investors who can afford to assume the
risk of potential loss in value of their investment in the hope of achieving substantial
and rapid gains. They are not suitable for investors who must conserve their principal or
who must maximize their current income.
GROWTH FUNDS:-
Like aggressive growth funds, growth fund generally invests in stocks for growth rather
than income. They are considered more conservative in their approach because they
usually invest in established companies to achieve long-term growth. Growth fund
provides low current income but the investor principal is more stable then it would be in
an aggressive growth fund. While the growth potential may be less over the short term,
many growth funds have superior long-term performance records.
These funds are suitable for growth oriented investors but not investors who are unable
to assume risk or who are dependent on maximizing current income from there
investments.
GROWTH AND INCOME FUNDS:-
Growth and income funds seek long-term growth of capital as well as current income.
The investments strategies use to reach these goals vary among funds.
Growth and income funds have low to moderate stability of principal and moderate
potential for current income and growth. They are suitable for investors who can
assume some risk to achieve growth of capital but want to maintain a moderate level of
current income.
FIXED INCOME FUNDS:-
The goal of fixed income fund is to provide high current income consistent with the
level of capital. Growth of capital is of secondary importance.
Fixed income funds offer a higher level of current income than money market funds,
but a lower stability of principal. Fixed income funds are suitable for investors who
want to maximize current income and who can assume a degree of capital risk in order
to do so.
EQUITY FUNDS:-
Funds that invest in stocks represent the largest category of mutual fund. Generally the
investment objective of this class of fund is long-term capital growth with some
income. There are however many type of equity funds.
BALANCED FUNDS:-
The Balanced funds aims to provide both growth and income. These funds invest in
both shares and fixed income securities in the proportion indicated in their offer
documents. It is an idea for investors who are looking for the combinations of income
and moderate growth.
MONEY MARKET FUNDS/ LIQUID FUNDS:-
For the cautious investors these funds provide a very high stability of principal while
seeking a moderate to high current income. They invest in highly liquid; virtually risk
free, short-term debt securities of agencies of the Indian government, banks and
corporation and treasury bills. Because of their short-term investments, money market
mutual funds are able to keep a virtually constant unit price; only the yield fluctuates.
Money market funds are suitable for those investors who want high stability of
principal and current income with immediate liquidity.
SPECIALITY / SECTOR FUNDS:-
These funds invest in securities of a specific industry or sector of the economy such as
health care, technology, leisure, utilities or precious metals. The funds enable investor
to diversify holding among many companies within an industry, a more conservative
approach than investing directly in one particular company.
Sector funds offer a opportunity for sharp capital gains in cases where the fund’s
industry is “in favor” but also entail the risk of capital losses when the industry is out of
favor. While sectors funds restrict holdings to a particular industry, other specialty
funds such as index funds gives investors a broadly diversified portfolio and attempt to
mirror the performance of various market averages.
OPEN ENDED SCHEMES:-
Open-ended schemes do not have a fixed maturity period. Investors can buy or sell
units at NAV- related prices from and to the mutual fund on any business day. These
schemes have unlimited capitalization, open-ended schemes do not have a fixed
maturity, there is no cap on the amount you can buy from the fund and the unit capital
keep growing. These funds are not generally listed on any exchange.
Open-ended schemes are preferred for their liquidity. Such funds can issue and redeem
units any time during the life of schemes. Hence unit capital of open-ended funds can
fluctuate on a daily basis. The advantages of open ended schemes are: -
1. Any time exit option
2. Any time enter option.
CLOSE ENDED SCHEMES:-
Close-ended schemes have fixed maturity periods. Investors can buy into these funds
during the period when these funds are open in the initial issue. After that such scheme
cannot issue new units except in case of bonus or right issue. However after the initial
issue you can buy or sell units of the schemes on the stock exchange where they are
listed. The market price of the unit could vary from the NAV of the schemes due to
demand and supply factor
I.V MUTUAL FUNDS IN INDIA:-
Mutual Funds in India
UTI Private sector

Public
Foreign Houses Indian Houses

JV’s with foreign
Partners
Birla Capital TATA

Templeton
Prudential ICICI JM
Alliance
Alliance Capital Morgan Stanley
Kothari Pioneer
Banks
SBI Institutions
CANARA GIC
PNB LIC etc.
BOI etc.
I.VI HOW LONG TO KEEP INVESTMENT TO GET MAXIMUM
RETURNS:-
Get desired returns technically open-ended funds you can withdraw your investments
even within a week, but to positive time frame is required are:
Funds Time Period
Equity Funds 3 Years (plus)
Balanced Funds 18 months to 3 Years
MIP’s 1 Year (plus)
Income Funds 6 months to 1 Year
Liquid Funds few days to 6 months
I.VII WHAT RETURNS CAN I EXPECT IF I KEEP MY MONEY FOR

SUGGESTED TIME FRAMES:-
Funds Returns
Sector funds 22% to 25% p.a

Balance funds 15% to 18% p.a
MIP’s Pension Plans 12% to 15% p.a
Income Funds 10% to 12% p.a
Liquid Funds 7% to 9% p.a
The above-mentioned returns in the table are indicative and not assured. All
investments in MUTUAL FUNDS are securities and are subject to market risk and the
NAVs of the schemes may go up and down depending upon the factors and forces
affecting the security market including the fluctuations in the internal rates .The past
performance of the MUTUAL FUNDS is not indicative of future performance.
THE RISK RETURN GRAPHS FOR VARIOUS FUNDS:-
Sector Funds
R
E Equity Funds
T
U Balanced Funds
R
N Income Funds
S
Liquid Funds
RISKS
The above Graph shows the Risk and Returns generated by different Funds. Liquid
Funds are less Risky and also generate less Returns where as Sector Funds are more
Risky but generate more Returns by the example of above two Funds it is clear that
Risk and Returns are directly proportional to each other. Other Funds like Equity
Funds, Balanced Funds and Income Funds are also gives the same percentage of
Returns as the Risk involved.
I.VIII ADVANTAGE OF MUTUAL FUND:-

The advantages of investing in a Mutual Fund are:
• Diversification: The best mutual funds design their portfolios so individual

investments will react differently to the same economic conditions. For example,
economic conditions like a rise in interest rates may cause certain securities in a
diversified portfolio to decrease in value. Other securities in the portfolio will
respond to the same economic conditions by increasing in value. When a
portfolio is balanced in this way, the value of the overall portfolio should
gradually increase over time, even if some securities lose value.
• Professional Management: Most mutual funds pay topflight professionals to

manage their investments. These managers decide what securities the fund will
buy and sell.
• Regulatory oversight: Mutual funds are subject to many government regulations

that protect investors from fraud.
• Liquidity: It's easy to get your money out of a mutual fund. Write a check, make
a call, and you've got the cash.
• Convenience: You can usually buy mutual fund shares by mail, phone, or over
the Internet.
• Low cost: Mutual fund expenses are often no more than 1.5 percent of your
investment. Expenses for Index Funds are less than that, because index funds are
not actively managed. Instead, they automatically buy stock in companies that
are listed on a specific index.
• Transparency: Mutual Fund schemes are said to be Transparent because they

show the clear allocation of Funds to Investors.
• Flexibility: Mutual funds are flexible because they change time to time and also
if an Investors wants his money back before the maturity of the Fund He/she can
easily redeem it.
I.IX DRAWBACKS OF MUTUAL FUNDS:-
Mutual funds have their drawbacks and may not be for everyone:
• No Guarantees:
No investment is risk free. If the entire stock market declines in value, the value of
mutual funds shares will go down as well, no matter how balanced the portfolio.
Investors encounter fewer risks when they invest in mutual funds than when they
buy and sell stocks on their own. However, anyone who invests through a mutual
fund runs the risk of losing money.
• Fees and commissions:
All funds charge administrative fees to cover their day-to-day expenses. Some
funds also charge sales commissions or "loads" to compensate brokers, financial
consultants, or financial planners. Even if you don't use a broker or other financial
adviser, you will pay a sales commission if you buy shares in a Load Fund.
• Taxes:
During a typical year, most actively managed mutual funds sell anywhere from 20
to 70 percent of the securities in their portfolios. If your fund makes a profit on its
sales, you will pay taxes on the income you receive, even if you reinvest the money
you made.
• Management risk:
When you invest in a mutual fund, you depend on the fund's manager to make the
right decisions regarding the fund's portfolio. If the manager does not perform as
well as you had hoped, you might not make as much money on your investment as
you expected. Of course, if you invest in Index Funds, you forego management risk,
because these funds do not employ managers.
I.X ASSOCIATION OF MUTUAL FUNDS IN INDIA:-
With the increase in mutual fund players in India, a need for mutual fund association in
India was generated to function as a non-profit organization. Association of Mutual
Funds in India (AMFI) was incorporated on 22nd August 1995.
AMFI is an apex body of all Asset Management Companies (AMC), which has been
registered with SEBI. Till date all the AMCs are that have launched mutual fund
schemes are its members. It functions under the supervision and guidelines of its Board
of Directors.
Association of Mutual Funds India has brought down the Indian Mutual Fund Industry
to a professional and healthy market with ethical lines enhancing and maintaining
standards. It follows the principle of both protecting and promoting the interests of
mutual funds as well as their unit holder
The objectives of Association of Mutual Funds in India:-
The Association of Mutual Funds of India works with 30 registered AMCs of the
country. It has certain defined objectives, which juxtaposes the guidelines of its Board
of Directors. The objectives are as follows:
 This mutual fund association of India maintains high professional and ethical
standards gin all areas of operation of the industry.
 It also recommends and promotes the top class business practices and code of
conduct which is followed by members and related people engaged in the
activities of mutual Fund and asset management. The agencies that are by any
means connected or involved In the field of capital markets and financial
services also involved in this code of conduct Of the association.
 AMFI interacts with SEBI and works according to SEBIs guidelines in the
mutual fund Industry.
 Association of Mutual Fund in India do represent the Government of India, the

Reserve Bank of India and other related bodies on matters relating to the Mutual
Fund Industry.
 It develops a team of well qualified and trained Agent distributors. It implements

a programmer of training and certification for all intermediaries and other
engaged in the mutual fund industry.
 AMFI undertakes all India awareness programmed for investor’s in order to

promote Proper understanding of the concepts and working of mutual funds.
 At last but not the least association of mutual fund of India also disseminate
Information’s on Mutual Fund Industry and undertakes studies and research
either directly or in association with other bodies.
I.XI FUTURE OF MUTUAL FUND IN INDIA:-
By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore. It is

estimated that by 2010 March-end, the total assets of all scheduled commercial banks
should be Rs 40,90,000 crores.
The annual composite rate of growth is expected 13.4% during the rest of the decade. In
the last 5 years we have seen annual growth rate of 9%. According to the current
growth rate, by year 2010 the asset will be double.
Let us discuss the following table:
Aggregate deposits of Scheduled Com Banks in India (Rs.Crore)

Mar-
Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Sep-04 4-Dec
04
60541 85159 98914
Deposits 1131188 1280853 - 1567251 1622579
0 3 1
Change in %
- 15 14 13 12 - 18 3
over last yr
Source – RBI
Mutual Fund AUM’s Growth

Mar- Mar- Mar- Mar- Mar-
Month/Year Mar-04 Sep-04 4-Dec
98 00 01 02 03
13762 15114
MF AUM's 68984 93717 83131 94017 75306 149300
6 1
Change in % over
- 26 13 12 25 45 9 1
last yr
Source - AMFI
Some facts for the growth of mutual funds in India:-
 100% growth in the last 6 years.
 Number of foreign AMC's are in the queue to enter the Indian markets like Fidelity
Investments, US based, with over US$1trillion assets under management worldwide.
 Our saving rate is over 23%, highest in the world. Only channelizing these savings in
mutual funds sector is required.
 We have approximately 29 mutual funds which is much less than US having more than
800. There is a big scope for expansion.
 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are
concentrating on the 'A' class cities. Soon they will find scope in the growing cities.
 Mutual fund can penetrate rural like the Indian insurance industry with simple and
Limited products.
 SEBI allowing the MF's to launch commodity mutual funds.
 Emphasis on better corporate governance.
 Trying to curb the late trading practices.
 Introduction of Financial Planners who can provide need based advice.
I.XII REGULATORY ASPECT :-
Schemes of mutual funds:-
 The Asset management company shall launch no schemes unless the trustees
approve such scheme and a copy of the offer has been filed with the Board.
 Every mutual fund shall along with the offer documents of each scheme pay
filing fees.
 The offer document shall contain disclosures which are adequate in order to
enable the investors to make informed investment decision including the
disclosure non maximum investments proposed to be made by the scheme in the
listed securities of the group companies of the sponsor. A close-ended scheme
shall be fully redeemed at the end of the maturity period. “Unless a majority of
the unit holders otherwise decide for its rollover by passing a resolution”.
 The mutual fund and asset management company shall be liable to refund the
application money to the applicants:-
 If the mutual fund fails to receive the minimum subscription amount referred to
in clause (i) of sub- regulation.
 If the moneys received from the applicants for units are in excess of subscription
as referred to in clause (ii) of sub-regulation.
o The asset management company shall issue to the applicant whose
 application has been accepted, unit certificates or a statement of accounts
 specifying the number of units allotted to the applicant as soon as possible
 but not later than six weeks from the date of closure of the initial
 subscription list and or from the date of receipt of the request from the unit
 Holders in any open ended scheme.
Rules Regarding Advertisement:-
 The offer document and advertisement materials shall not be misleading or

contain any statement or opinion, which are incorrect or false.
Investment objectives and valuation policies:-
 The price at which the units may be subscribed or sold the price at which such
unit may at any time be repurchased by the mutual fund shall be made available
to the investors.
General Obligation:-
• Every asset management company for each scheme shall keep and maintain
proper book of accounts, records and document, for each scheme so as to explain
its transaction and to disclose at any point of time the financial position of each
scheme and in particular give a true and fair view of the state of affairs of the
fund and intimate to the board the place where such books of accounts, records
and documents are maintained.
• The financial year for all the scheme shall end as of March 31 of each year.
Every mutual fund or the asset management company shall prepare in respect of
each financial year an annual report and annual statement of accounts of the
schemes and the fund as specified in Eleventh Schedule.
• Every mutual fund shall have the annual statement of accounts audited by an
auditor who is not in any way associated with the auditor of the asset
management comp
Procedure for Action In Case Of Default:-
 On and from the date of the suspension of the certificate or the approval, as the
case may be, the mutual fund, trustees or asset management company, during the
period of suspension and shall be subject to the direction of the Board with
regard to any records, documents, or securities that may be in its custody or
control relating to its activities as mutual funds, trustees or the asset management
company.
Restrictions on Investments:
 A mutual fund scheme shall not invest more than 15% of its NAV in debt
instrument issued by a single issuer, which are rated not below investment grade
by a credit rating agency authorize to carry out such activity under the act. Such
investment limit may be extended to 20% of the NAV of the scheme with the
prior approval of the Board of Trustees and the Board of Asset Management
Company.
 A mutual fund Scheme shall not invest more than 10% of its NAV in unrated
debt instrument issued by a single issuer and the total investment in such
instruments shall not exceed 25% of the NAV of the Board of Trustees and the
Board of Asset management.
 No mutual funds under all its schemes should own more than 10% of any
company’s paid up capital carrying voting rights.
 Such transfers are done at the prevailing market price for quoted instrument on
spot basis.
 The securities so transferred shall be in conformity with the investment
objectives of the scheme to which such transfer has been made.
 A scheme may invest in another scheme under the same asset management
company or any other mutual fund without charging any fees, provided that
aggregated intercourse inter scheme investment made by all schemes under the
same management or in schemes under the management of any other asset
management company shall not exceed 5% of the net asset value of the mutual
fund. The initial issue expenses in respect of any scheme may not exceed 6% of
the funds raised under that scheme.
 Every mutual fund shall buy and sell securities on the basis of deliveries and
shall in all cases of purchases, take delivery of relative securities and in all cases
of sale, deliver the securities and shall in no case put itself in a position whereby
it has to make short sale or carry forward transaction or engage in Badla finance.
 Every mutual fund shall get the securities purchased or transferred in the name
of the mutual fund on account of the concerned scheme, wherever investments
are intended to be of long-term nature.
 Pending deployment of funds of a scheme a mutual fund can invest the funds of
the scheme in short term deposits of scheduled commercial banks.
 No mutual fund scheme shall make any investment in ;
o Any unlisted security of an associate or group company of the sponsor or
o Any security issued by way of private placement by an associate or group
company of the sponsor.
The listed securities of group companies of the sponsor which is in excess of 30% of
the net assets (of all the schemes of a mutual fund)
 No mutual fund scheme shall invest more than 105 of its NAV in the equity
shares or equity related instrument of any company. Provided that, the limit of
10 percent shall not be applicable for investments in index fund or sector or
industry specific schemes.
 A Mutual fund scheme shall not invest more than 5% of its NAV in the equity
shares or equity related investments in case of open-ended schemes and 10 % of
its NAV in case of close ended schemes.
I.XIII HOW TO JUDGE A MUTUAL FUND:-
Consider this – The Indian mutual fund (MF) industry reached Rs. 1,50,537 crore in
December 2004. The industry witnessed a 100% growth in the last six years. By year
2010, MF assets are expected to double. India has 29 MF’s compared to 800 in the US.
In the last one year, the number of retail investors in India has increased steadily. The
big question is how to judge a MF before investing? It is important for an investor to
consider a fund's performance over several years. Different fund managers adopt
different strategies to improve performance. While one fund manager may have played
it cautious by investing in good quality stocks over the years and given a return of 30%
over a five-six year period, another one who invested in speculative stocks may have
struck gold in that year, thereby outperforming tits counterpart by a long way. Thus it is
important to look at consistency of returns over a period of time rather than going by
absolute returns generated in the short term.
Let us look at the advantages of investing in a MF. To begin with, you don't have to
make your investment decisions. Your money is handled by top professionals hired by
fund houses who decide what securities the fund will buy and sell. Moreover, MF
industry is highly regulated, thus, protecting investors from fraud. Regulators block
funds from having more than a certain percentage of the fund in any one firm. This
prevents from over exposure in one particular industry or stock. It's easy to get your
money out of a MF. It is very convenient to buy a MF unit over phone or Internet.
An investor should consider certain drawbacks before investing in MF. Unlike a fixed
deposit, MF does not give any guarantee on returns. If the entire stock market declines
in value, the value of MF shares will go down as well. An investor has to shell out an
entry and exit load.
When you invest in a MF, you depend on the fund's managers to make the right
decisions regarding the fund's portfolio. If the manager does not perform well, you
might not make as much money on you investment as you expected. The short-term
focus of money managers and pressure from unit holders for immediate performance
are obstacles to long-term growth.Most funds lack the cash reserves to pay off the
massive redemptions which will follow a market panic. Fund managers can change
without notice.
I.XIV THE HISTORY OF MUTUAL FUNDS:-
THE INDIAN TIMELINE:-
1963: UTI is India’s first mutual fund.

1964: UTI launches US-64.
1971: UTI’s ULIP (Unit-Linked Insurance Plan) is second scheme to be
launched.
1986: UTI Mastershare, India’s first true ‘mutual fund’ scheme, launched.
1987: PSU banks and insurers allowed to float mutual funds; State Bank of
India (SBI) first off the blocks.
1992: The Harshad Mehta-fuelled bull market arouses middle-class interest
in shares and mutual funds.
1993: Private sector and foreign players allowed; Kothari Pioneer first private
fund house to start operations; SEBI set up to regulate industry.
1994: Morgan Stanley is the first foreign player.
1996: Sebi’s mutual fund rules and regulations, which forms the basis of most
current laws, come into force.
1998: UTI Master Index Fund is the country’s first index fund.
1999: The takeover of 20th Century AMC by Zurich Mutual Fund is the first
acquisition in the mutual fund industry.
2000: The industry’s assets under management crosses Rs 1,00,000 crore.
2001: US-64 scam leads to UTI overhaul.
2002: UTI bifurcated, comes under SEBI purview; mutual fund distributors
banned from giving commissions to investors; floating rate funds and
Foreign debt funds debut.
2003: AMFI certification made compulsory for new agents; fund of funds launched.
I.XV STRUCTURE OF MUTUAL FUND IN INDIA:-
The Indian mutual fund industry is dominated by the Unit Trust of India which has a
total corpus of Rs.700bn collected from more than 20 million investors. The UTI has
many funds schemes in all categories i.e. equity , balanced , income etc with some
being open ended and some being close ended . The unit schemes 1964 commonly
referred to as US 64 , which is a Balanced fund is a biggest schemes with a corpus of
about Rs. 200 billion UTI was floated by financial institution and is governed by a
special act of parliament . Most of its investors believe that UTI is government owned
and controlled which while legally incorrect, is true for all practical purposes.
The second largest category of mutual funds is the ones floated by Nationalize Banks.
Canbank Asset Management floated by Canera Bank and SBI Funds Management
floated by State Bank of India are the largest of it. GIC AMC floated by General
Insurance Corporation and Jeevan Bema Sahayog AMC floated by LIC are some of the
other prominent ones. The aggregate corpus of funds managed by this category of
AMCs is about 150bn.
The third largest category of mutual fund is the ones floated by the private sector and
by foreign Asset Management Company . The largest of these are Prudential ICICI
AMC and Birla Sunlife AMC. The aggregate corpus of asset managed by this category
of AMCs is in excess of Rs. 250bn.
I.XVI Some of AMCs operating currently are:-
NAME OF AMC OWNERSHIP

Alliance capital asset management (I)Pvt. Ltd
Private foreign
Birla Sunlife Asset Management Company ltd. Private Indian

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

Tara Asset Management Company Ltd.
Private Indian
Credit Capital Asset Management Company Ltd
Private Indian
Templeton Asset Management Company Ltd
Private foreign
Unit Trust Of India
Institution
CHAPTER:- II
PROBLEM STATEMENT AND

OBJECTIVE OF THE
STUDY:-
II.I PROBLEM STATEMENT:-
Due to the falling Rate of Interest on Bank deposits, it is obvious that Investment in
Mutual Fund will grow in year to come. However lack of knowledge of Mutual
Funds is a hindering factor in expected growth of Mutual Funds Business. Under
noted problems are envisaged in this area:
• Difficulty in convincing people for investment.
• Difficulty to change mind of the investor according to age and
Profession.
• Difficulty to make an approach to investors.
• Difficulty to take an appointment with professional people.
• Difficulty to get the documents required for formalities from investors
• Difficulty to overcome an impassionate person who wants return in less time.
• Difficulty in follow up the people whose names are being stored in a data.
• Difficulty to remove the fear of risk from the minds of investors.
II.II OBJECTIVE OF STUDY:-
In view of the problem cited above, the study aims at analyzing the following major
issues:
• MUTUAL FUNDS FOR INDIVIDUAL INVESTORS IN INDIA.
• To know the different Asset management companies involve in MUTUAL FUND.
• To know the different aspects of MUTUAL FUND according to different age,
profession etc.
• To see the interest of people in investing in MUTUAL FUNDS.
• To know the future of MUTUAL FUNDS in India.
• To know the different attitudes of people regarding risk, rate of return, period of
investment etc.
• To study the diversification of mutual fund.
CHAPTER :- III
RESERCH METHODOLOGY:
III.I METHODOLOGY OF STUDY:-
Research can be defined as systemized effort to gain new knowledge. A research is

carried out by different methodologies which have their own pros and cons. Research
methodology is a way to solve research in studying and solving research problem along
with logic behind them are defined through research methodology. Thus while talking
about research methodology we are not only talking of research methods but also
considered the logic behind the methods. We are in context of our research studies and
explain why it is being used a particular method or technique and why the others are not
used. So that research result is capable of being evaluated either by researcher himself
or by others
III.II Research Methodology:-
Research has its special significance in solving various operational and planning
problem of business and industry. Research methodology is the way to systematically
solve the research problem.
III.III ASSUMPTIONS:-
1. It has been assumed that sample of 100 respondents represents the whole
population.
2. The information given by the customer is unbiased
III.IV Literature Survey:-
The project is based on pure findings of facts. Development of Working Hypothesis:-
The Hypothesis could be developed by discussing with the concerning department
heads and guides about this exploratory research and reached to the conclusion that the
data is to be collected by personal interaction with the customers, asking them about the
services and the improvement required. First of all they are aware of mutual funds or
not and then analyzing the findings to reach to the objectives of research.
Collection of Data:-There was secondary data available for the study and also primary
data collected by carrying out by the survey which has been carried out to through
personal interviews of the customers. The sample size was roughly 100.
a. Sampling methods: - A sample is the representative of the population which
will predict the behavior of the whole universe.
b. The sampling size put under two categories: Probability sampling and non
probability sampling.
III.V Probability sampling:-
This is the process of selecting the elements or group of elements from as well defined
population by such procedure which gives every element in the population an equal
chance of being selected for observation. The sampling method use for this survey is
the area sampling which is a sub type of probability sampling.
III.VI Sampling size:-
Large sample gives reliable result than small sample. However, it is not feasible to
target entire population or even a substantial portion to achieve a reliable result. So, in
this aspect selecting the sample to study is known as sample size. Hence, for my project
my sample size was 100.The Sample Size of 100 is not enough to draw a conclusion but
as per the time assigned it was difficult to take a sample size more than 100.The Sample
Size consist of both the Professional and Business class people. IT peoples, Doctors,
Jewelers, Timber Merchants & Real estate Agents are taken as Sample .
III.VII Execution of the project:-
It is the very important step in the research process accuracy findings depends on how
systematically the study has been carried out in time so that it can make some sense
when required. I have executed the project after prior discussion with the guide and
structured in following steps:
a. Preparation of questionnaire.
b. Collection of list of some of the clients interview of the customer so that
more interaction is impossible and the variety of responses can be registered
to have a good data for analysis.
c. Visiting the corporate and asking about their feedback on the mutual funds
services they are availing. Try to find out their satisfaction level with the
existing mutual fund.
CHAPTER :- IV
LIMITATIONS:
IV.I Limitations:-
Every work has its own limitation. Limitations are extent to which the process should
not exceed. Limitations of this project are:-
1. Duration of Project was not enough to make a conclusion on such a vast subject
time constraint has become a big limitation.
2. The Sample Size being taken for drawing a conclusion was too small to get an
accurate result.
3. Changing the Mentality of people for investing in a particular Financial Product
is a very difficult task.
All the above mentioned statements are the limitations of the project. Time, Sample
Size & Mentality of investor are the main limitations of the project. The study is
being done by taking and keeping all the limitations in mind. The project is
completed in prescribed time. To find the Awareness of Mutual Fund the Sample
Size is not at all enough because the population size is much bigger than the sample
size and the last limitation was to change the mentality of the investor to invest in a
particular type of the Investment Product. As the Indian Market is having a large
number of potential customers to draw a conclusion in such a small size may not be
reliable.
CHAPTER:- V
ANALYSIS OF MUTUAL FUNDS:-
V.I ANALYSIS OF MUTUAL FUNDS ON THE BASIS OF SCHEMES:-
The schemes have been divided into 10 different categories for the purpose of
meaningful comparison. The categories are as follows:
1. Equity diversified Funds.
2. Equity ELSS Funds.
3. Equity sectoral Funds.
4. Balanced Funds.
5. Income Funds.
6. Liquid Funds.
7 .Gilt Funds.
8. MIPS (Monthly income plans)
9. Index Funds.
10. Hybrid Funds.
There are many asset management companies being involved in mutual fund but people
invest thing reputed mutual fund like ICICI PRUDENTIAL, FRANKLIN
TEMPLETON, HSBC, KOTAK, HDFC etc. All the companies have different mutual
fund schemes vary from different needs of a customer. Like in the month of June the
IPO of Kotak contra has been issued with different concept and also being accepted by
the investors. Where as, the IPO of SBI comma is been introduced in the July and till
now being appreciated by the investors. The mutual fund is been described by its
NAVs.
NAV AS ON
Sr No. SCHEME NAME 15/06/09
1 HDFC TAX SAVER 85.7
2 FRANKLIN TAX SHIELD 78.25
3 SUNDARAM TAX SAVER 15.34
4 UTI EQUITY TAX SAVING 20.59
5 PRINCIPAL TAX SAVER 122.2
ALLIANCE CAPITAL TAX RELIEF
6 96 141.14
7 PRU ICICI TAX PLAN 57.94
8 BIRLA EQUITY PLAN 43.08
In this table as on 15/07/05 HDFC TAX SAVER is having highest NAV as compared
to FRANKLIN, SUNDARAM, UTI etc. These are the top eight best equity linked
saving schemes in the mid of July.
V.II COMPARISAN BETWEEN BANKS AND MUTUAL FUNDS

IN DIFFERENT ASPECTS:-
BANKS MUTUAL FUNDS
Returns Low Better
Administrative
exp. High Low
Risk Low Moderate
Investment option Less More
Network High Penetration Low but improving
Liquidity At a cost Better
Quality of asset Not Transparent Transparent
Min. Balance between 10th and 31st of
Interest calculation month. Everyday
Guarantee Max. Rs. 1Lakh on Deposit None
In the above table the Comparison is made between Banks and Mutual Funds with
different aspects. Now a day due to low Rate of interest people prefer to invest in those
products which give more Returns in less time without Risk. Now a days also nearly
40% of people keep there money in Banks because they are less Risky (reference with
chart 8.2). The Returns expected in Mutual Funds are high where as in bank it is low
but the Guarantee of money back is more than Mutual fund. Thus both Bank and
Mutual Fund are good enough in themselves. It is depend on the Investor what type of
investment they want to do.
CHAPTER :- VI
DATA COLLECTION:
DATA COLLECTION:
Proceeding further after determines the Methodology and limitation of the study the
next step is to analyze the Data being collected for the study. Data is being collected
from various sources like:-
 Questionnaire
 Personal visit
 Telephonic Information etc.
VI.I QUESTIONAIRE:-
Questionnaire is a written form being given to the prospective investor to give
feedback about the services provided to them and also to find the satisfaction
level of the investor for a particular investment product. After filling up of form
the next step is to evaluate the form in different dimensions and draw a
conclusion.
It is difficult to get a Questionnaire filled by corporate because of time they
don’t have time to fill the Questionnaire so at the time of meeting them
personally or after that the Questionnaire is filled by us.
The Sample size taken for this study is 100 which is not enough to draw a
conclusion but due to time limitation only this much size has been taken into
consideration. After analyzing the Questionnaire the following evaluation has
been done:-
CATEGORY OF TOTAL RISK RETURN
INVESTORS INCOME
IT PEOPLE HIGH LOW HIGH

DOCTORS HIGH LOW HIGH
TIMBER MERCHANTS HIGH HIGH HIGH
JEWELLERS HIGH HIGH HIGH
REAL ESTATE AGENTS HIGH HIGH HIGH
After analyzing the above table the conclusion was made that the business people
are more Risk taker while professional people are less Risk taker where the return
expected in both the case are high.
VI.II PERSONAL VISIT:-
The second way of collecting data is Personal Visits to the Corporates personally by
fixing an appointment. Personal Visit gives a clear picture of the conclusion drawn
in Questionnaire It gives a clear view of the client Awareness about the product
.Some of the difficulties in making Personal Visits are:-
 To take a time or appointment from the corporates.
 To convenes investor to invest in a particular product.
Personal Visit gives a clear picture about the Investment areas of both the categories
PROFESSIONAL PEOPLE BUSINESS PEOPLE
PPF LAND
KISAN VIKAS PATR GOLD
BANK ACCOUNT STOCKS
INSURANCE INSURANCE
FURTHER STUDIES etc. VEHICLES etc.
From the above table it is clear that the Professional people invest in the Value
Added items where as Business people they invest in Future Prospect assets like
land, gold etc.
VI.III TELEPHONIC INFORMATION:-
The further source of collecting data is telephonic information with the existing
customer and the prospective investors. It is very difficult to reveal the data of
investors from the company itself because it has been kept as a secret document.
After getting a data some problems too come in the way. Some are:-
 People are not ready to listen.
 People ask question like from where did you get the number?
 From this source not much of the Information is drawn.
 Few respondents where not happy with the level of customer services
endured by
 Angel broking pvt. Ltd. Particularly about the delays in replying or not
replying the queries raised by them.
CHAPTER :- VII
INTERPRETATION AND ANALYSIS OF

DATA:-
CHART:- VII.I
From the data collected through the questioner, observation made during the personal
visits the data revealed following information :-
PERCENTAGE OF INVESTMENT TO TOTAL INCOME
The following table and pie chart throw the light on the percentage of saving out of
income.
NO. of
INCOME PEOPLE PERCENTAGE
Over 50% 1 1%
30%-50% 5 5%
10%-30% 56 56%
10% &
below 38 38%
Percentage in Income People Invest
1% 5%
38%
56%
Over 50% 30-50% 10-30% Below 10%
In the above chat it has been observed that people invest mostly between 10% to
30% of their income as the moderate level of income is in the range of rupees 30,000
to 40,000. There are very few people who invest above 50% of their Income as their
income level is too high say above Rs 10,000,00. Investors are having different
responsibilities toward the society and family due to which they are not able to invest
more money in Financial product .There are many people who invest only 10% of
there income according to total Sample Size.
CHART:-VII.II
INVESTMENT IN FINANCIAL PRODUCTS
FINANCIAL INSTRUMENTS % OF INVESTMENT

INSURANCE 28%
MUTUAL FUNDS 25%
SHARE 13%
REAL ESTATES 9%
PPF 19%
BONDS 6%
These are many Financial Instrument in Indian Market. People in early days kept their
money in Bank. They think Bank is the only place where the money is safe till today
also 40% of people feel the same but many of them have started investing in other
Financial Products like Insurance, Stock Markets etc. The Post Office savings are less
preferred by the Investors due to the less Returns in more Time. Businessmen mostly
invest in tangible assets like land, building, gold etc.
6% INSURANCE
19% 28%
MUTUAL FUNDS
SHARE
REAL ESTATE
9%
PPF
13% 25% BONDS
market came into existence only from early 90s that’s why the percentage
investment in stocks is low as In this chart it is clear that people mainly invest
and keep their money in banks .Stock compared to banks. People generally
invest in risk free financial product like PPF, NSC etc. as they get tax exemption.
Investment in Insurance is also preferred by people because it is not a risky
instrument.
CHART:-VII.III
AWARENESS OF MUTUAL FUNDS OUT OF 100 PEOPLE:-
Awareness of Mutual Funds
7%
Yes
No
93%
In chart VII.III the awareness of mutual fund is determined in the percentage terms
only 7% of the total population are not aware of MUTUAL FUNDS. As Mutual
Funds of India are growing rapidly the awareness of Mutual Funds is increasing
among the Investors although & every Investor knows about Mutual Funds by its
nomenclature. They are not really aware of the concept.
CHART :- VII.IV
PERCEPTION ABOUT MUTUAL FUND
Safe 10%
Risky 28%
Other 62%
Perception of Investors
10%
Safe
28% Risky
Others
62%
From the above pie chart it is clear that people perceive mutual fund as an risky product
whereas 62% of investors believe that mutual fund gives high returns.
Only 10 % of people feel that it is safe. Out of 100 sample size it is very difficult to
determine the exact perception of investors. Due to continuous increase in mutual fund
industries the perception of people are changing slowly.
CHART :-VII. V
COMPARITIVE STUDY OF RISK , INVESTMENT AND
RETURN.
AGE
GROUP RISK RETURN INVESTMENT
25-35 60% 35% 45%
35-45 25% 15% 15%
45-60 10% 20% 10%
60& ABOVE 5% 30% 30%
Risk Return and Investment Chart

according to different age group
60%
50%
40%
30% RISK
RETURN
20%
INVESTMENT
10%
0%
25-35 45-60
In chart VII.V above it is determined that people of the age group 25-30 yrs are
more risk takers as compared to other age groups. However they are able to invest
less because they do not have any responsibility toward the society and family.
They also invest less because they don’t get proper guidance. As the age increases
the saving percentage decrease but the people above 55 are keener to invest because
they become free from all the responsibilities of the family and society. At this stage
they need continuous flow of income.
Middle age people of the age group of 35-45 yrs. are not investing much because
they are bound to many responsibilities towards family and society.
CHART:- VII.VI
IDENTIFICATION OF MUTUAL FUND COMPANIES

ASPECTS PERCENTAGE
Brand Name 39
Good Services 24
High Yield 15
Advertisement 10
Any other reason 12
40
35
30
25
Percentage 20
Series1
15
Series2
10
5
0
Brand Name Good High Yeild Advertisement Any other
Services reason
Aspects
From the above chart it is clear that Brand Name plays an important role for attracting
investors. Secondly, good services are also expected by an investor from the companies.
In other reasons investors generally pointed out the identification of the companies
known by their friends or relatives. Advertisements and high yield are the secondary
aspects of identifying the mutual fund industries.
CHART :- VII.VII
COMPARISON ON THE BASIS OF PLACE:-
Awareness in Mutual Fund out of

100 people
80 70
No of People
60
40 30 Series1
20
0
Pune Bhilai
Place
In chart VII.VII it is clear that the people staying in small town are less aware of
MUTUAL FUNDS as compared to big cities. The approximate population of Pune is 7
times more than Bhilai . Investors of small place like Bhilai are less aware of the
Mutual Fund & they feel it as a risky Financial Product where as the investors of Pune
are fully Aware of the concept of the Mutual Fund and evince interest in investing in
new IPO’s etc.
CHART :- VII.VIII
RISK TAKEN BY DIFFERENT AGE GROUP :-

AGE RISK TAKEN IN
GROUP PERCENTAGE
25-35 60
35-45 20
45-60 17
60 &
above 3
RISK TAKEN IN PERCENTAGE
3%
17%
25-35
35-45
45-60
20% 60% 60 & above
In chart VII.VIII the risk taking ability are being depicted. The person of younger
age are willing to take more risk as compared to the elder age group people. The
middle age people do not take much risk because of much responsibility toward
family and society With reference to this chart only 17% of income of middle age
people is being invested in risk prone securities.
CHART :- VII.IX
PERCENTAGE OF TOTAL INCOME INVEST IN MUTUAL

FUND:-
INVESTORS % OF TOTAL INCOME INVEST IN

CATEGORY MUTUAL FUNDS
IT SECTOR
PEOPLE 50%
DOCTORS 30%
TIMBER
MERCHANTS 7%
JEWELLERS 3%
REALESTATE
AGENTS 10%
PERCENTAGE OF TOTAL INCOME INVEST IN

MUTUAL FUND
10% IT SECTOR
3% PEOPLE
7% DOCTORS
TIMBER
50%
MERCHANTS
JEWELLERS
30%
REALESTATE
AGENTS
In the Pie chart above it is clear that professional people are more indented to invest in
comparison with business people who are high risk takers. Business people are more in
dined to invest in real estate, land etc. This is because business people want money in
less time as and when required while Professional people believe in continuous flow of
money.
CHAPTER :- VIII
PROJECT FINDINGS AND
RECOMMENDATIONS:-
VIII.I PROJECT FINDINGS:-

 There is a great potential for investment in Mutual Funds as people wants to save
for various future obligation.
 Since Rate of Interest on Bank deposit is falling people will be attracted towards
investments in Mutual Funds because of high rate of returns.( with reference to
VII.IV)
 Comparatively people of small towns are less aware of other investment avenues
viz Mutual Fund.( with reference to VII.VII).
 People of young age group are ready to take risk and they can be targeted for
investment in Mutual Fund. (with reference to VII.VIII).
 Some of the people who were personally contacted showed reservation about
dealing with MetLife India Insurance Co. Ltd. (with reference to VI.III)
VIII.II RECOMMENDATION:-
• It is seen that MetLife brand is not seen enough in the market place and
hence the brand is invisible to the naked eyes of the consumer and hence
MetLife should beef up its publicity campaigns and promotional activities
so that MetLife becomes an easily recognizable brand.
• For creating a brand image in our country MetLife should go for a brand
ambassador.
• In MetLife, they should provide training to its employees in the field of

Insurance, Stock broking, Mutual fund etc.
• MetLife should conduct more surveys in order to interact with customer

to know their preferences for improving its services.
CHAPTER:-IX
BIBLIOGRAPHY:-
IX.I REFERENCES:-
1.www.njindiainvest.com
2.http://mutualfunds.about.com
3.www.shcil.com
4.I. M Panday
5.Fact Sheet of various Mutual Funds.
6. C.R.Kothari Research methodology
IX.II QUESTIONAIRE:-
1.WHAT PERCENTAGE OF INCOME DO YOU INVEST?
OVER 50%
30% TO 50%
10% TO 30%
Below 10%
2.WHAT ARE THE VARIOUS INVESTMENT SCHEMES IN WHICH YOU HAVE

INVESTED?
Insurance
Mutual funds
Shares
Real Estate
PPF (Public provident Funds)
Bonds
3.WHAT ARE THE BREAK UP IN PERCENTAGE TERMS TO YOUR

INVESTMENT?
TYPE OF INVESTMENT PERCENTAGE

INSURANCE
MUTUAL FUNDS
SHARE
REAL ESTATE
PPF
BONDS
4.ARE YOU AWARE OF MetLife?
Yes
No
5.WHAT IS YOUR PERCEPTION ABOUT MUTUAL FUNDS?
Safe
Risky
Others
6. WHAT ARE DIFFERENT TYPES OF MUTUAL FUNDS ARE YOU AWARE

OF?
Growth schemes.(provide appreciation of capital over medium to long

term)
Income schemes.(provide regular and continuous income to investor)
Balance schemes.(provide both growth and income)
Money market and Liquid Schemes.(provide easy liquidity preservation
of capital and moderate income).
Tax saving schemes.(offer tax rebates under tax laws)
Guilt funds(generating returns by investing in securities created and issued
by a central gov. or state gov.)
7. WHICH OF THEM DO YOU PREFER?

Growth schemes
Income schemes
Balance schemes
Money Market and Liquid schemes
Tax saving schemes
Guilt Funds
8. DO YOU THINK THE MUTUAL FUNDS ARE NOT AS POPULAR IN INDIA AS

IN OTHER COUNTRIES?
Risk involved as returns are not assured.
Any other reason please specify…………………………………………
9.HOW DO YOU LOOK MUTUAL FUND COMPANIES?
Brand Name
Good Service
High Yield
Advertisement
Any Other Reason……………………………...........................................
10.NAME
11.AGE
25-35
35-45
45-60
60 & above

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MUTUAL FUNDS FOR INDIVIDUAL INVESTORS IN

METLIFE INDIA INSURANCE CO. LTD

MASTER IN MARKETING MANAGEMENT

NEVILLE WADIA INSTITUTE OF MANAGEMENT

Neville Wadia Institute of Management Studies and Research , Pune - 411001

II Problem Statements and Objectives of Study.

III Research Methodology.

VII Interpretation of Data.

VIII Project Findings and Recommendations.

The project titled “MUTUAL FUNDS FOR INDIVIDUAL INVESTORS IN

MetLife’s well recognized brand names, leading market positions, competitive

Financial planning is the process of identifying one’s wealth accumulation and

Financial planning can be manageable or overwhelming depending upon how one

I.I WHAT ARE MUTUAL FUNDS:-

I.III THE PHASES OF GROWTH: -

FIXED INCOME FUNDS:-

OPEN ENDED SCHEMES:-

Mutual Funds in India

UTI Private sector

Foreign Houses Indian Houses

Birla Capital TATA

I.VII WHAT RETURNS CAN I EXPECT IF I KEEP MY MONEY FOR

Sector funds 22% to 25% p.a

I.VIII ADVANTAGE OF MUTUAL FUND:-

• Diversification: The best mutual funds design their portfolios so individual

• Professional Management: Most mutual funds pay topflight professionals to

• Regulatory oversight: Mutual funds are subject to many government regulations

• Transparency: Mutual Fund schemes are said to be Transparent because they

• Fees and commissions:

I.X ASSOCIATION OF MUTUAL FUNDS IN INDIA:-

 Association of Mutual Fund in India do represent the Government of India, the

 It develops a team of well qualified and trained Agent distributors. It implements

 AMFI undertakes all India awareness programmed for investor’s in order to

By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore. It is

Let us discuss the following table:

Aggregate deposits of Scheduled Com Banks in India (Rs.Crore)

Mutual Fund AUM’s Growth

 100% growth in the last 6 years.

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

mutual funds sector is required.

800. There is a big scope for expansion.

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

 Emphasis on better corporate governance.

 Trying to curb the late trading practices.

 Introduction of Financial Planners who can provide need based advice.

Schemes of mutual funds:-

o The asset management company shall issue to the applicant whose

Rules Regarding Advertisement:-

 The offer document and advertisement materials shall not be misleading or

Investment objectives and valuation policies:-

Procedure for Action In Case Of Default:-

THE INDIAN TIMELINE:-

1963: UTI is India’s first mutual fund.

I.XV STRUCTURE OF MUTUAL FUND IN INDIA:-

NAME OF AMC OWNERSHIP

Birla Sunlife Asset Management Company ltd. Private Indian

Sundaram Newton Asset Management Company ltd Private foreign

PROBLEM STATEMENT AND

Research can be defined as systemized effort to gain new knowledge. A research is

ANALYSIS OF MUTUAL FUNDS:-

V.II COMPARISAN BETWEEN BANKS AND MUTUAL FUNDS