A

Summer Project Report on

Customer Satisfaction with Aditya Birla

Mutual Funds Schemes

Aditya Birla Capital, Madhuban Branch,

Udaipur
Submitted in partial fulfillment for the Award of Degree of

Master of Business Administration (CMAT)

Under the Supervision of Submitted by

Mr. Guarav Mathur Pradeep Dashora
MBA(CMAT) IIIrdSem

AT
FACULTY OF MANAGEMENT STUDIES, MOHAN LAL
SUKHADIA UNIVERSITY, UDAIPUR
 PREFACE

Project are very important for the beginners to a gain a practical knowledge about the
organization and the industry. Decision making is a fundamental about organization and
industry. Decisions regarding that what you want to do, how you want to do, what tools
and techniques must be used for the successful completion of the project. In fact it is the
researcher efficiency as a decision maker that make project fruitful for those who concern
to the area of study.

Basically when we are playing with electronics in every part of life, I used it in my project
which present the role of Digital Banking Services provided by the IDBI bank in customer
awareness and satisfaction.

This report has been prepared after the collection of information from different sources
of data which are primary and secondary and after doing a comparative research on
Digital Banking Services provided by the IDBI bank.

I had deeply analysed the customer awareness and satisfaction regarding Digital
Banking Services provided by the IDBI bank and successfully completed the data
interpretation and analysis. The main objective and purpose behind the study was to find
out the process to provide Digital Banking Services to the customers in the better way
by the bank.

I had come across several difficulties to make the objectives a reality. I am presenting
this hand carved efforts in black and white. If anywhere something is found not in tandem
to the theme then you are welcome with your valuable suggestions.
 ACKNOWLEDGEMENT

We are extremely grateful and remain indebted to our guide Mr. Siddharth Mogra
(Deputy Manager of Birla Sun Life Mutual Fund) and Mr. Guarav Mathur (Branch
Manager of Birla Sun Life Mutual Fund) for giving me opportunity to work under his
guidance on project report on “Customer Satisfaction with Aditya Birla Mutual
Fund”.

I am grateful to him for giving time & suggestion in the execution of project work.

I also acknowledge & convey thanks to the BIRLA SUN LIFE AMC for their kind and
valuable support.

Pradeep Dashora

INDEX

Preface
Acknowledgment
Executive Summary 1
Company profile 4
Introduction to topic 16
Mutual Funds Schemes 26
• Equity Funds 26
• Debt Funds 35
• Hybrid Funds 40
• Others 47
Research methodology 50
Analysis and Interpretation 59
SWOT Analysis 76
Facts and Findings 78
Conclusions 81
Suggestions 83
Questionnaire 84
Bibliography 87

Introduction: Executive summary of the project

From its inception the growth of mutual funds is very slow and it took
really long years to evolve the modern day mutual funds. Mutual Funds
emerged for the first time in Netherlands in the18th century and then got
introduced to Switzerland, Scotland and then to United States in the 19th
century. The main motive behind mutual fund investments is to deliver a form
of diversified investment solution. Over the years the idea developed and
people received more and more choices of diversified investment portfolio
through the mutual funds. In India, the mutual fund concept emerged in 1960.
The credit goes to UTI for introducing the first mutual fund in India. Monetary
Funds benefited a lot from the mutual funds. Earlier investors used to invest
directly in the stock market and many times suffered from loss due to wrong
speculation. But with the coming up of mutual funds, which were handled by
efficient fund managers, the investment risks were lowered by a great extent.
The diversified investment structure of mutual funds and diversified risk
contributed tremendously in the growth of mutual funds. With the passage of
time many new mutual funds emerged. Not only this, the methods and ways
of selling these funds also changed with time. But, the growth of mutual funds
has not stopped. It is continuing to evolve to a better future, where the
investors will get newer opportunities.

In this era of globalization and competition, the success of an industry

is determined by the market performance of its stock. The investors too like to
invest only in the stock of those companies from which they can get maximum
gains. In early years of growth of mutual fund industry, investors were available
only with few investment avenues to invest their money. But with the passage
of time a lot of opportunities are available to the investors for investing their
money in different investment channels. One such channel is to invest in
mutual funds along with effective financial management. Mutual funds have
seen a tremendous growth in the last few years. This is the result of combined
efforts of the brokerage houses and the fund managers who come to one’s
rescue by educating the investors and making them aware of the mutual fund
schemes by different modes of promotion.

The currently common mode of community investments, mutual funds have

taken time in coming to India, while these have been a dominant feature for
the last several years in the investment markets in the west and in the country
of their origin, in USA they have become as ancient as money itself. Their
slow coming into the country is due essentially to the Unit Trust of India having
dominated the scene as the only institution of its kind all this time. After two
decades of UTI monopoly some public sector organizations like LIC (1989),
GIC (1991), SBI (1987), Can Bank (1987), and India Bank (1990) have been
permitted to set up mutual funds. The important characteristics of mutual
funds are:
 1. Investors purchase mutual fund shares from the fund itself (or through
a broker for the fund) instead of from other investors on a secondary
market, such as the New York Stock Exchange or Nasdaq Stock
Market.
2. The price that investors pay for mutual fund shares is the fund's per
share net asset value (NAV) plus any shareholder fees that the fund
imposes at the time of purchase (such as sales loads)
3. Mutual funds generally create and sell new shares to accommodate
new investors. In other words, they sell their shares on a continuous
basis, although some funds stop selling when, for example, they
become too large.
4. The investment portfolios of mutual funds typically are managed by
separate entities known as "investment advisers" that are registered
with the SEC.

The present study analyses the mutual fund investments in relation to investors’ behavior.
Investors’ opinion and perception has been studied relating to various issues
like type of mutual fund scheme, main objective behind investing in mutual
fund scheme, role of financial advisors and brokers, investors’ opinion
relating to factors that attract them to invest in mutual funds, sources of
information, deficiencies in the services provided by the mutual fund
managers, challenges before the Indian mutual fund industry etc. This study
is very important in order to judge the investors’ behavior in a market like
India, where the competition increases day by day due to the entry of large
number of players with different financial strengths and strategies.

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 realised are 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.

Company Profile: Aditya Birla Sun Life Asset Management

Company Ltd.

Aditya Birla Sun Life Asset Management Company Ltd. (BSLAMC), is a joint venture
between the Aditya Birla Group and the Sun Life Financial Services Inc. of Canada. The
joint venture brings together the Aditya Birla Group’s experience in the Indian market and
Sun Life’s global experience.
Established in 1994, Birla Sun Life Mutual Fund has emerged as one of India’s leading
flagships of Mutual Funds business managing assets of a large investor base. It’s
solutions offer a range of investment options, including diversified and sector specific
equity schemes, fund or fund schemes, hybrid or monthly income funds, a wide range of
debt and treasury products and offshore funds.
Birla Sun Life Asset Management Company has one of the largest team of research
analysts in the industry, dedicated to tracking down the best companies to invest
in. BSLAMC strives to provide transparent, ethical and research-based investments
and wealth management services.

It’s the 3rd largest assets management company in India by domestic AAUM as published
by AMFI for the quarter ended March 2018 and as one of the Top 5 Fund Managers in
India (excl. LIC).

Aditya Birla Capital Limited (ABCL) is one of the largest financial services players in
India.
Formerly known as Aditya Birla Financial Services Limited, ABCL is the holding company
of all the financial services businesses of the Aditya Birla Group. With a strong presence
across the life insurance, asset management, private equity, corporate lending, structured
finance, project finance, general insurance broking, wealth management, equity, currency
and commodity broking, online personal finance management, housing finance, pension
fund management, health insurance and asset reconstruction business, ABCL is
committed to serving the end-to-end financial services needs of its retail and corporate
customers under a unified brand — Aditya Birla Capital.

Subsidiaries:
 Aditya Birla Money
 Aditya Birla Sun Life Asset Management Company
 Aditya Birla Finance Limited
 Aditya Birla Sun Life Insurance
 Aditya Birla Health Insurance Co. Ltd.
 Aditya Birla Housing Finance Limited
 Aditya Birla Insurance Brokers Limited
 Aditya Birla ARC Limited
 Aditya Birla Money Insurance Advisory Service
  Aditya Birla Sun Life Trustee Company Pvt. Ltd.
 Aditya Birla Financial Services Private Limited
 Aditya Birla Stressed Asset AMC Private Limited
 Aditya Birla Trustee Company Private Limited
Through various subsidiaries, Aditya Birla Capital is in the business of life
insurance, asset management, private equity, corporate finance, structured
finance, insurance broking, wealth management, equity broking, currency
broking, commodity broking, financial advisory services, housing finance, pension
fund management and health insurance.

Heritage

The Aditya Birla Group is the parent company of Aditya Birla Capital, a USD 40 billion
Indian multinational in the league of Fortune 500. Anchored by an extraordinary force of
over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group operates
in 36 countries across the globe. About 50 percent of its revenues flow from its
overseas operations. The Aditya Birla Group is a dominant player in all its areas of
operations. The group has strategic joint ventures with global majors such as Sun Life
(Canada), AT&T (USA), the TATA Group and NGK Insulators (Japan). For more
information on the Aditya Birla Group, please visit www.adityabirla.com.

The Aditya Birla Group has been adjudged the best employer in India and among the
top 20 in Asia by the Hewitt-Economic Times and Wall Street Journal Study 2007. The
origins of the group lie in the conglomerate once held by one of India's foremost
industrialists Mr. Ghanshyam Das Birla.

Sun Life Financial Inc.

 It is a leading international financial services organization providing a diverse range of
wealth accumulation and protection products and services to individuals and corporate
customers. Chartered in 1865, Sun Life Financial Inc. and its partners today have
operations in key markets worldwide, including Canada, USA, the United Kingdom,
Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda.

Vision and values

"To be a leader and role model in a broad-based and integrated financial services
business."
The 4 pillars of our vision that will help us achieve it are:

 To be a leader – we are committed to being a leader in all facets of our businesses,

rather than being just another participant in this race.
 To be a role model – we will not become leaders by cutting corners or making
compromises. Whatever we do, we will strive to be the best in class. And if we are the
best, then our customer will have no reason to go elsewhere – therefore our leadership
is assured, on pure merit.
 To be a broad-based player – we are committed to meeting all the felt and unfelt
needs of our target customer. And thereby, we can retain him or her across their needs
and life-stages.
 We aim to be an integrated player –we believe that this approach gives us a
competitive edge through sharing of best practices, deriving cross – business synergies
& providing talent pool with world of opportunity to grow.

Mission
 Achieving superior and consistent investment results.
 Creating a 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.

Heritage
During past one decade since its incorporation, the Company has come a long way to
become one of the largest financial services players in India. Year 2017 marks a
milestone, with the Company becoming a pure play listed holding company of all the
financial services businesses of the Aditya Birla Group.
 To mark this new phase in its journey, and in line with its new unified brand identity, the
Company was rechristened as ‘Aditya Birla Capital Limited’ in June 2017. The
synopsis of its journey over past 10 years from 2007-2017 is as follows:

 From 5 business lines to a well-diversified portfolio of 12 business lines

 Aggregate AUM1 has grown 10 times to Rs. 2,463 billion

 Lending book (including Housing Finance) has grown 65 times to Rs. 388 billion

 Aggregate2 revenues have grown 6 times to Rs. 106 billion

 From Investment phase to aggregate2 earnings before tax of Rs. 11.5 billion

Achievements:
 In pursuit of our leadership vision

o Among the Top 5 Private Diversified NBFCs in India

o One of the largest Private Life Insurance Companies in India

o One of the largest Asset Management Companies in India

o One of the largest General Insurance Brokers in the country

 In pursuit of our desire to be a role model

o A leading non-bank financial services player with a strong focus on quality of growth

o Renowned for risk management, people practices, sales management, investor

education, product innovation & fund management capabilities

o Among the best 3 financial services players to work for [As per a study by Great Place
to Work Institute, 2016]

 We have continued to build a Broad based & Integrated financial services

business

o We continue to be one of the few players in the industry with a diversified portfolio that
allows us to meet almost any customer need across the entire spectrum of his / her
lifecycle
o Our integrated play has helped us gain a competitive edge by allowing us to share best
practices, derive cross-business synergies & provide our talent pool an opportunity to
grow their career through cross-functional and cross-sectoral experience

o Our distributors and partners see tremendous value in association with our businesses

o We are successfully expanding the market for our offerings, along with our market share
in each of our businesses

Milestones:

The company is a subsidiary of Grasim Industries and manages assets worth ₹2.46
trillion (US$36 billion) and had over 12,000 employees as of March, 2017.

1986, Aditya Birla Group got into the financial service business with a non-bank financial
institution called Birla Growth Fund. later renamed it as Birla Global Finance Limited.

1994, Aditya Birla Group set up Birla Sun Life Asset Management to enter the mutual
fund business as an equal joint venture with Sun Life Financial of Canada.
2001, Birla Sun Life Insurance Company Limited was founded as a joint venture between
Aditya Birla Group and Sun Life Financial of Canada with Aditya Birla Nuvo (then Indian
Rayon) and Birla Global Finance together holding 74% of the company's equity shares
and Sun Life Financial holding 26%.
As of 2016, the company had approximately 400 branches across India and
approximately 57,000 agents.

2005, the group decided to consolidate its business and as part of this exercise, it merged
Birla Global Finance Limited into Aditya Birla Nuvo. At the time of the merger, Birla
Global Finance had assets worth approximately INR160 billion under its management.

2007, Aditya Birla Capital (incorporated as Aditya Birla Financial Services Limited as
a 100% subsidiary of Aditya Birla Nuvo) subsequently became the holding company for
financial service businesses of the group.

2009, Aditya Birla Capital acquired a controlling stake Apollo Sindhoori Capital
Investments, a securities broking firm. The company was later renamed Aditya Birla
Money.
2012, Company launched MyUniverse, an online personal finance management portal.

2014, the mutual fund crossed INR 1 trillion in assets under its management. It became
the fourth largest mutual fund in India. In the same year, Birla Sun Life Mutual Fund
bought out ING Mutual Fund, the Indian mutual fund business of ING Group. In 2017,
the company added the prefix "Aditya" and became Aditya Birla Sun Life Mutual Fund.

2016, Aditya Birla Capital launched Aditya Birla Health Insurance Company, a
standalone health insurance provider in India. The company is a joint venture with
Aditya Birla Capital holding 51% of the company and MMI Holdings of South
Africa holding the remaining 49%. As of 2017, the company had 60 branches spread
across 34 cities in India.
Sun Life Financial (India) Insurance Investment Inc. increased its stake in Aditya
Birla Sun Life Insurance Company Limited, from 26% to 49%.

2017, Aditya Birla Financial Services was renamed Aditya Birla Capital.

2018, became the 3rd largest assets management company in India by domestic AAUM
as published by AMFI for the quarter ended March 2018 and as one of the Top 5 Fund
Managers in India (excl. LIC).

The Present:

Having total assets under management (AUM) of over Rs. 2500 billion for quarter end
June 2018, ABSLAMC is the third largest fund house in India based on domestic
average AUM as published by the Association of mutual Funds of India (AMFI). The
wide range of product as well as structured asset classes and sound investment
performance has helped the company garner around 6.4 million investor folios as of 30 th
June 2018.
With a pan India presence across 247 locations, ABSLMF is committed to
deepening mutual fund penetration in the country. It has introduced user-friendly
services and conveniences which simplify mutual fund processes with digitalization for
both – investors as well as distribution partners.
 INTRODUCTION TO TOPIC

Customer Satisfaction with Aditya Birla Mutual

Fund

The customer satisfaction is the relationship between the customer expectations and the
product’s perceived performance. If the product matches the expectations, the customer
is satisfied, if it exceeds, the customer is highly satisfied.

Customer satisfaction has become increasingly important, as more firms look at whether
all attempts to improve quality, price, and service of the product and generate sufficient
sales and profit.

Company should examine the Customer expectation and preferences, how well the firm
is meeting those expectations. For measuring the customer satisfaction, company should
use the tools like suggestion and findings systems, Survey, customer analysis,
Precaution in measuring customer satisfaction and Ghost shopping.

Investment is a commitment of funds made in the expectation of some positive return. If

the investment is properly undertaken, the returns will match with the risk the investor
assumes. Investment goals vary from person to person, business to business. While
some want security, others give more weightage to returns alone.

There are various types of investments options in Mutual Funds such as Equity oriented
funds, Debt oriented funds and a Hybrid option. As far as the returns are high the risk
involved is also more. A concept, which balances the risk and returns, is mutual funds.

MUTUAL FUNDS:

What are mutual funds?

A mutual fund is a pool of money managed by a professional Fund Manager.

It is a trust that collects money from a number of investors who share a common
investment objective and invests the same in equities, bonds, money market instruments
and/or other securities. And the income / gains generated from this collective investment
is distributed proportionately amongst the investors after deducting applicable expenses
and levies, by calculating a scheme’s “Net Asset Value” or NAV. Simply put, the money
pooled in by a large number of investors is what makes up a Mutual Fund.

Mutual funds are ideal for investors who either lack large sums for investment, or for
those who neither have the inclination nor the time to research the market, yet want to
grow their wealth. The money collected in mutual funds is invested by professional fund
managers in line with the scheme’s stated objective. In return, the fund house charges
a small fee which is deducted from the investment. The fees charged by mutual funds
are regulated and are subject to certain limits specified by the Securities and Exchange
Board of India (SEBI).

India has one of the highest savings rate globally. This penchant for wealth creation
makes it necessary for Indian investors to look beyond the traditionally favoured bank
FDs and gold towards mutual funds. However, lack of awareness has made mutual funds
a less preferred investment avenue.

Mutual funds offer multiple product choices for investment across the financial spectrum.
As investment goals vary – post-retirement expenses, money for children’s education or
marriage, house purchase, etc. – the products required to achieve these goals vary too.
The Indian mutual fund industry offers a plethora of schemes and caters to all types of
investor needs.

The flow chart below describes broadly the working of a mutual fund:
Organization of Mutual Funds:

There are many entities involved and the diagram below illustrates the organizational set
up of a mutual fund:

The History of Indian Mutual Funds:

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:

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 Mutual Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation
of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June
1987 followed by Canra Bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund
(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda
Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set
up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47,004
crores.

Third Phase – 1993-2003 (Entry of Private Sector Mutual 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 – April 2014

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 (SUUTI) 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.
Following the global melt-down in the year 2009, securities markets all over the world
had tanked and so was the case in India. Most investors who had entered the capital
market during the peak, had lost money and their faith in MF products was shaken
greatly. The abolition of Entry Load by SEBI, coupled with the after-effects of the global
financial crisis, deepened the adverse impact on the Indian MF Industry, which struggled
to recover and remodel itself for over two years, in an attempt to maintain its economic
viability which is evident from the sluggish growth in MF Industry AUM between 2010 to
2013.

Fifth (current) Phase – since May 2014

Taking cognizance of the lack of penetration of MFs, especially in tier II and tier III cities,
and the need for greater alignment of the interest of various stakeholders, SEBI
introduced several progressive measures in September 2012 to "re-energize" the Indian
Mutual Fund industry and increase MFs’ penetration.

In due course, the measures did succeed in reversing the negative trend that had set in
after the global melt-down and improved significantly after the new Government was
formed at the Center.

Since May 2014, the Industry has witnessed steady inflows and increase in the AUM as
well as the number of investor folios (accounts).

 The Industry’s AUM crossed the milestone of ₹10 Trillion (₹10 Lakh Crore) for the
first time as on 31st May 2014 and in a short span of two years the AUM size has
crossed ₹15 lakh crore in July 2016.
  The overall size of the Indian MF Industry has grown from ₹ 3.26 trillion as on 31st
March 2007 to ₹ 15.63 trillion as on 31st August 2016, the highest AUM ever and
a five-fold increase in a span of less than 10 years !!
 In fact, the MF Industry has more doubled its AUM in the last 4 years from ₹ 5.87
trillion as on 31st March, 2012 to ₹ 12.33 trillion as on 31st March, 2016 and
further grown to ₹ 15.63 trillion as on 31st August 2016.
 The no. of investor folios has gone up from 3.95 crore folios as on 31-03-2014 to
4.98 crore as on 31-08-2016.
 On an average 3.38 lakh new folios are added every month in the last 2 years
since Jun 2014.

The growth in the size of the Industry has been possible due to the twin effects of the
regulatory measures taken by SEBI in re-energizing the MF Industry in September 2012
and the support from mutual fund distributors in expanding the retail base.

MF Distributors have been providing the much needed last mile connect with investors,
particularly in smaller towns and this is not limited to just enabling investors to invest in
appropriate schemes, but also in helping investors stay on course through bouts of
market volatility and thus experience the benefit of investing in mutual funds.

In fact, even though FY 2015-16 was not a very good year for the Indian securities
market, the MF Industry witnessed steady positive net inflows month after month, even
when the FIIs were pulling out in a big way. This was largely because of the ‘hand-
holding’ of the investors by the MF distributors and convincing them to stay invested
and/or invest at lower NAVs when the market had fallen.

MF distributors have also had a major role in popularizing Systematic Investment Plans
(SIP) over the years. In April 2016, the no. of SIP accounts has crossed 1 crore mark
and currently each month retail investors contribute around ₹3,500 crores via SIPs.
The graph indicates the growth of assets over the last 10 years.

Types of Mutual Funds:

Wide variety of mutual funds schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. Mutual funds are favored globally for
the variety of investment options they offer. There is something for every profile and
preference. The table below gives an overview into the existing types of schemes in the
industry:

1. By Structure:
a. Open – Ended Schemes: An open-end fund is a mutual fund scheme that
is available for subscription and redemption on every business throughout
the year, (akin to a savings bank account, wherein one may deposit and
withdraw money every day). An open ended scheme is perpetual and does
not have any maturity date.
b. Close – Ended Schemes: A closed-end fund is open for subscription only
during the initial offer period and has a specified tenor and fixed maturity
date (akin to a fixed term deposit). Units of Closed-end funds can be
redeemed only on maturity (i.e., pre-mature redemption is not permitted).
Hence, the Units of a closed-end fund are compulsorily listed on a stock
exchange after the new fund offer, and are traded on the stock exchange
just like other stocks, so that investors seeking to exit the scheme before
maturity may sell their Units on the exchange.
c. Interval Schemes: Interval fund is a mutual fund scheme that combines the
features of open-ended and closed-ended schemes, wherein the fund is
open for subscription and redemption only during specified transaction
periods (STPs) at pre-determined intervals. In other words, Interval funds
allow redemption of Units only during STPs. Thus between two STPs they
are akin to closed-ended schemes and therefore, compulsorily listed on
Stock Exchanges. However, unlike typical closed-ended funds, interval
funds do not have a maturity date and hence open-ended in nature. Hence,
one may remain invested in an Interval Fund as long as one wishes to like
any open ended schemes. Hence, in a sense, interval funds are akin to
Fixed Maturity Plans (FMPs) with roll-over facility, as they allow roll over of
investments from one specified period to another.

Interval funds are typically debt oriented products, but may invest in
equities as well as per the scheme’s investment objective and asset
allocation specified in the Scheme Information Document.

Interval funds are taxed like any other mutual fund, depending on whether
the underlying portfolio is pre-dominantly invested in equities or debt
securities. If the fund invests 65% or more of its corpus in debt securities,
it is taxed like a non-equity fund. Likewise, if the fund invests 65% or more
in equities, it is taxed like an equity fund.
 2. By Investment Objective:
a. Growth/Equity Schemes: An equity fund is a mutual fund scheme that
invests predominantly in equity stocks.
 In the Indian context, as per current SEBI Mutual Fund Regulations, an equity
mutual fund scheme must invest at least 65% of the scheme’s assets in equities
and equity related instruments.
 An Equity Fund can be actively managed or passively managed. Index funds and
ETFs are passively managed.
 Equity mutual funds are principally categorized according to company size, the
investment style of the holdings in the portfolio and geography.
 The size of an equity fund is determined by a market capitalization, while the
investment style, reflected in the fund's stock holdings, is also used to categorize
equity mutual funds.

There are different types of equity mutual fund schemes and each offers a different type
of underlying portfolio that have different levels of market risk:

 Large Cap Equity Funds invest a large portion of their corpus in companies with
large market capitalization are called large-cap funds. This type of fund is known
to offer stability and sustainable returns, over a period of time.
Large Cap companies are generally very stable and dominate their
industry. Large-cap stocks tend to hold up better in recessions, but they also tend
to underperform small-cap stocks when the economy emerges from a recession.
Large-cap tend to be less volatile than mid-cap and small-cap stocks and are
therefore considered less risky.
 Mid-Cap Equity Funds invest in stocks of mid-size companies, which are still
considered developing companies. Mid-cap stocks tend to be riskier than large-
cap stocks but less risky than small-cap stocks. Mid-cap stocks, however, tend to
offer more growth potential than large-cap stocks.
 Small Cap Funds invest in stocks of smaller-sized companies. Small cap is a term
used to classify companies with a relatively small market capitalization. However,
the definition of small cap can vary among market intermediaries, but it is
 generally regarded as a company with a market capitalization of less than ₹100
crores. Many small caps are young companies with significant growth potential.
However, the risk of failure is greater with small-cap stocks than with large-cap
and mid-cap stocks. As a result, small-cap stocks tend to be the more volatile
(and therefore riskier) than large-cap and mid-cap stocks.
 The smallest stocks of the small caps are called micro-cap stocks. While the
opportunity for these companies to experience extreme growth is great, the risk
to lose a large amount of money is also possible
 Multi Cap Equity Funds or Diversified Equity Funds invests in stocks of companies
across the stock market regardless of size and sector. These funds provide the
benefit of diversification by investing in companies spread across sectors and
market capitalization. They are generally meant for investors who seek exposure
across the market and do not want to be restricted to any particular sector. They
invest in companies across different market caps and hence reduce the amount
of risk in the fund. Diversification helps prevent events that could affect a single
sector for affecting the fund, and hence reduce risk.
 Market capitalization (commonly known as market cap) is calculated by
multiplying a company’s outstanding shares by its stock price per share. A
company’s stock price by itself does not tell much about the total value or size of
a company; a company whose stock price is say ₹500 is not necessarily worth
more than a company whose stock price is say, ₹250. For example, a company
with a stock price of ₹500 and 10 million shares outstanding (a market cap of ₹5
billion) is actually smaller in size than a company with a stock price of ₹250 and
50 million shares outstanding (a market cap of ₹12.5 billion).
 Thematic Equity Funds: These funds invest in securities of specific sectors such
as Information Technology, Banking, Service and pharma sector etc., which is
specified in their scheme information documents. So, the performance of these
schemes depends on the performance of the respective sector. These funds may
give higher returns, but they also come with increased risks
 Investing in equity mutual funds comes at slightly higher risk as compared to debt
mutual funds, but they also give your money a chance to earn higher returns.
 b. Income/Debt Schemes: A debt fund is a mutual fund scheme that invests
in fixed income instruments, such as Corporate and Government Bonds,
corporate debt securities, and money market instruments etc. that offer
capital appreciation. Debt funds are also referred to as Income Funds or
Bond Funds.

Debt funds are ideal for investors who want regular income, but are risk-averse.
Debt funds invest in either listed or unlisted debt instruments, such as Corporate
and Government Bonds at a certain price and later sell them at a margin. The
difference between the cost and sale price accounts for the appreciation or
depreciation in the fund’s net asset value (NAV). Debt funds also receive periodic
interest from the underlying debt instruments in which they invest. In terms of
return, debt funds that earn regular interest from the fixed income instruments
during the fund’s tenure are similar to bank fixed deposits that earn interest. This
interest income gets added to a debt fund on a daily basis. If the interest payment
is received, say, once every year, it is divided by 365 and the debt fund’s NAV
goes up daily by this small amount. Thus, a debt scheme’s NAV also depends on
the interest rates of its underlying assets and also on any upgrade or downgrade
in the credit rating of its holdings.

A few major advantages of investing in debt funds are:

 low cost structure

 stable returns
 high liquidity
 reasonable safety
 Debt funds also score on post-tax return.

Dividends from debt funds are exempt from tax in the hands of investors. The
mutual fund, however, has to pay a Dividend Distribution Tax, which is currently
28.325 per cent in case of individuals or Hindu undivided families. While long-term
capital gains from debt funds are taxed at 10 per cent without indexation and 20 per
 cent with indexation, short-term capital gains taxes are levied according to the
income-tax bracket one belongs to.

Thus, debt funds can be a good alternative to investors for achieving their financial
goals if they do not intend to bear risk involved in equity investments.

c. Money Market Schemes: Savings bank deposits have been the retail
investors’ preferred investment option to park surplus cash. Most investors
regard these as the only avenue while some believe parking surplus cash
elsewhere can erode their capital and does not provide liquidity. CRISIL’s
recent study draws attention to a more attractive option – Liquid Fund /
Money Market Mutual Funds. The analysis underlines that surplus cash
invested in money market mutual funds earns high post-tax returns with a
reasonable degree of safety of the principal invested and liquidity.
d. Balanced Schemes: A balanced fund combines equity stock component, a
bond component and sometimes a money market component in a single
portfolio. Generally, these hybrid funds stick to a relatively fixed mix of
stocks and bonds that reflects either a moderate, or higher equity,
component, or conservative, or higher fixed-income, component
orientation.

These funds invest in a mix of equities and debt, giving the investor the
best of both worlds. Balanced funds gain from a healthy dose of equities
but the debt portion fortifies them against any downturn.

Balanced funds are suitable for a medium-term horizon and are ideal for
investors who are looking for a mixture of safety, income and modest
capital appreciation. The amounts this type of mutual fund invests into each
asset class usually must remain within a set minimum and maximum.

Although they are in the "asset allocation" family, balanced fund portfolios
do not materially change their asset mix. This is unlike life-cycle, target-
date and actively managed asset-allocation funds, which make changes in
 response to an investor's changing risk-return appetite and age or overall
investment market conditions.

3. Other Schemes:
a. Tax Saving Schemes: Equity-Linked Savings Scheme (ELSS) is an equity
mutual fund investment that invests at least 80 per cent of its assets in
equity and equity-related instruments. ELSS can be open-ended or close
ended. Investments in an ELSS qualify for tax deductions under Section
80C of the Income Tax Act within the overall limit of ₹1.5 lakh. The amount
you invest in ELSS is deducted from your taxable income, which helps you
lower the amount of income tax you are liable to pay. Investments in ELSS
are subject to a three-year lock-in period and the returns from the scheme,
i.e. dividends and capital gains, are tax-free
b. Special Schemes
i. Index Schemes
ii. Sector Specific Schemes

Advantages & Disadvantages of Mutual Fund

The advantages of investing in a Mutual Fund are:

1. Professional Management
2. Diversification
3. Convenient Administration
4. Return Potential
5. Low Costs
6. Liquidity
7. Transparency
8. Flexibility
9. Choice of schemes
10. Tax benefits
11. Well regulated
The disadvantages of investing in a Mutual Fund are:

1. Cost control not in hands of an investor

2. Mutual Funds might have hidden fees
3. Poor sales charges
4. High expense ratios
5. Poor trade execution
6. High capital gains distribution (tax inefficiency)

CHAPTER 3: RESEARCH METHODOLOGY

 RESEARCH METHODOLOGY

A market research was performed to find out the satisfaction level and behavior of the
investors invested in ABSL mutual funds i.e. reasons behind their investments and how
they invest.

Thus, a questionnaire was devised using google forms to fetch the above mentioned
information from the investors. Maximum no. of questions in the questionnaire were
objective in nature which helped the people to fill it with utmost ease.

The questionnaire devised for the research is attached to the report as Annexure.

 DATA SOURCES

Research is totally based on primary data. Secondary data is used for references.
Research has been done by primary data collection and primary data has been
collected by interacting with various people and asking them to fill the questionnaire.
Secondary data has been collected through various websites, company’s factsheet
and reports.

 SAMPLING

Sampling is a process used in statistical analysis in which a predetermined number

of observations are taken from a large population.

Sampling procedure

The sample is selected deliberately, by contacting the concerned ABSL mutual funds
investors. Data was collected by asking people to fill a questionnaire prepared.

Sample size
The sample size is limited to 100 people. These 100 people are further classified
according to their age, gender, occupation and family monthly income.

Limitation of the study

 Research has been done only in Udaipur city.

 Possibility of error in data collection
 Some of the people were not so responsive.

Sampling method

In this study, convenient sampling method is being used.

 CHAPTER 4: ANALYSIS AND INTERPRETATION

RESULTS

SUGGESTIONS

IMPLICATIONS

In today’s complex financial environment, investors have unique needs which are
derived from their risk appetite and financial goals. But regardless of this, every investor
seeks to maximize his returns and safety on his investments without capital erosion

And investment in mutual funds has advantages in terms of liquidity, safety and
profitability. They can be redeemed within 24 hours and have no exit load. The study is
useful for:

 Investors looking for a reliable option in mutual fund AMC’s can evaluate through
my research the advantages and satisfaction level of other existing investors.
 Organization can evaluate the satisfaction level and perception of investors and
can improve the product facilities to attract more investors.
 It will help the students to know the fundamental and technical aspect about liquid
funds.
 It is also beneficial for the institutional investors to know the investors outlook
towards companies Mutual funds.

CONCLUSION

QUESTIONNAIRE