MEANING

A mutual fund is just the connecting bridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund. Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns. Working of Mutual Fund

Diagram no.1 In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced.
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Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of Mutual funds are known as unit holders. The profits or losses are shared by the investors in proportion to their investments. The Mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time.

In India, A Mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

In Short, a Mutual fund is a common pool of money in to which investors with common investment objective place their contributions that are to be invested in accordance with the stated investment objective of the scheme. The investment manager would invest the money collected from the investor in to assets that are defined/ permitted by the stated objective of the scheme. For example, an equity fund would invest equity and equity related instruments and a debt fund would invest in bonds, debentures, gilts etc. Mutual fund is a 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.

Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. thus mutual funds has Variety of flavors, Being a collection of many stocks, an investors can go for picking a mutual fund might be easy. There are over hundreds of mutual funds scheme to choose from. 1. BY STRUCTURE Open Ended Schemes.
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Close Ended Schemes. Interval Schemes.

2. BY INVESTMENT OBJECTIVE Growth Schemes. Income Schemes. Balanced Schemes.

3. OTHER SCHEMES Tax Saving Schemes. Special Schemes. Index Schemes. Sector Specific Schemes.

A.Overview of existing schemes existed in mutual fund category: BY STRUCTURE 1. Open - Ended Schemes: An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes: These schemes have a pre-specified maturity period. One can invest directly in the scheme at the time of the initial issue. Depending on the structure of the scheme there are two exit options available to an investor after the initial offer period closes. Investors can transact (buy or sell) the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchanges could vary from the net asset value (NAV) of the scheme on account of demand and supply situation, expectations of unitholder and other market factors. Alternatively some close-ended schemes provide an additional option of selling the units directly to the Mutual Fund through periodic repurchase at the schemes NAV; however one cannot buy units

and can only sell units during the liquidity window. SEBI Regulations ensure that at least one of the two exit routes is provided to the investor. 3. Interval Schemes: Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

The risk return trade-off indicates that if investor is willing to take higher risk then correspondingly he can expect higher returns and vise versa if he pertains to lower risk instruments, which would be satisfied by lower returns. For example, if an investors opt for bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in capital protected funds and the profit-bonds that give out more return which is slightly higher as compared to the bank deposits but the risk involved also increases in the same proportion. Thus investors choose mutual funds as their primary means of investing, as Mutual funds provide professional management, diversification, convenience and liquidity. That doesnt mean mutual fund
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investments risk free. This is because the money that is pooled in are not invested only in debts funds which are less riskier but are also invested in the stock markets which involves a higher risk but can expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the derivatives market which is considered very volatile.

B. Overview of existing schemes existed in mutual fund category: BY NATURE 1. Equity fund: These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows:

Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS) Risk Funds, High Objectives Long-Term growth Ideal Tenure Five years and more

Funds Index

Exchange-Traded Funds (ETFs) Equity-Linked saving (ELSS) Diversified Equity Funds High schemes High

Long-term growth with

Three years and more

tax saving High growth Three years and more

2. Debt funds: The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government.

Income Funds: Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.

MIPs: Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes.

Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, interbank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds.

Funds Income Funds

Risk Medium

Objectives

Ideal Tenure

Maximizing steady, 1 year and more regular returns

Gilt Funds

Medium

Steady, returns

regular 1 year and more

Liquid Funds

Low

Earn more than bank 6 months to 1 year deposits

Short-Term Funds

Low

Earn more than bank 6 months to 1 year deposits

Flexible Funds

High

Maximize from instruments

returns 1 years and more debt

3. Balanced funds: As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. C. By investment objective:

Growth Schemes: Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation.

Income Schemes:Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes: Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).
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Money Market Schemes: Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

D. Other schemes

Tax Saving Schemes:Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weightage. And hence, the returns from such schemes would be more or less equivalent to those of the Index.

Advantages of Investing in Mutual Funds:

1. Professional Management - The basic advantage of funds is that, they are professional managed, by well qualified professional. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio. A mutual fund is considered to be relatively less expensive way to make and monitor their investments.

2. Diversification - Purchasing units in a mutual fund instead of buying individual stocks or bonds, the investors risk is spread out and minimized up to certain extent. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others.

3. Economies of Scale - Mutual fund buy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors. 4. Liquidity - Just like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want. 5. Simplicity - Investments in mutual fund is considered to be easy, compare to other available instruments in the market, and the minimum investment is small. Most AMC also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis.

Disadvantages of Investing in Mutual Funds:

1. Costs The biggest source of AMC income, is generally from the entry & exit load which they charge from an investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon. 2. Dilution - Because funds have small holdings across different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful

fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money. 3. Taxes - when making decisions about your money, fund managers don't consider your personal tax situation

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Pointers to Measure Mutual Fund Performance

MEASURES STANDARD DEVIATION DESCRIPTION IDEAL RANGE

Standard Deviation allows to evaluate the volatility Should be near to its mean of the fund. The standard deviation of a fund return. measures this risk by measuring the degree to which the fund fluctuates in relation to its mean return.

BETA

Beta is a fairly commonly used measure of risk. It

Beta > 1 = high risky

basically indicates the level of volatility associated Beta = 1 = Avg with the fund as compared to the benchmark. Beta <1 = Low Risky values range

R-SQUARE

R- square measures the correlation of a funds R-squared

movement to that of an index. R-squared describes between 0 and 1, where 0 the level of association between the fund's volatility represents no correlation and and market risk. ALPHA Alpha is the difference between the returns one 1 represents full correlation. Alpha is positive = returns of

would expect from a fund, given its beta, and the stock are better then market return it actually produces. It also measures the returns. unsystematic risk . Alpha is negative = returns of stock are worst then market. Alpha is zero = returns are same as market. SHARPE Sharpe Ratio= Fund return in excess of risk free The higher the Sharpe ratio, return/ Standard deviation of Fund. Sharpe ratios the better a funds returns
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RATIO

are ideal for comparing funds that have a mixed relative to the amount of risk asset classes. taken.

MUTUAL FUND INDUSTRY IN INDIA

The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry. In the past decade, Indian mutual fund industry had seen a dramatic improvement, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase, the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470 billion in March 1993 and till April 2004, it reached the height of 1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry. The main reason of its poor growth is that the mutual fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product

correctly abreast of selling.The mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under-: First Phase 1964- 87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management. Second Phase-1987-1993 (Entry of Public Sector Funds) : Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canara 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 in 1989 and GIC in 1990. The end of 1993 marked Rs.47,
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004 as assets under management. Third Phase - 1993-2003 (Entry of Private Sector Funds) : With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds Fourth Phase Since 2003 : This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29, 835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not comes under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes

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THE PROCEDURE FOR REGISTERING A MUTUAL FUND WITH SEBI An applicant proposing to sponsor a Mutual fund in India must submit an application in Form A along with a fee of Rs.25, 000. The application is examined and once the sponsor satisfies certain conditions such as being in the financial services business and possessing positive net worth for the last five years, having net profit in three out of the last five years and possessing the general reputation of fairness and integrity in all business transactions, it is required to complete the remaining formalities for setting up a Mutual fund. These include inter alia, executing the trust deed and investment management agreement, setting up a trustee company/board of trustees comprising two- thirds independent trustees, incorporating the asset management company (AMC), contributing to at least 40% of the net worth of the AMC and appointing a custodian. Upon satisfying these conditions, the registration certificate is issued subject to the payment of registration fees of Rs.25.00 lacs for details; see the SEBI (Mutual funds) Regulations, 1996.

EVALUATING PORTFOLIO PERFORMANCE

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It is important to evaluate the performance of the portfolio on an ongoing basis. The following factors are important in this process:

1. Consider long-term track record rather than short-term performance. It is important because long-term track record moderates the effects which unusually good or bad short-term performance can have on a fund's track record. Besides, longer-term track record compensates for the effects of a fund manager's particular investment style.

2. Evaluate the track record against similar funds. Success in managing a small or in a fund focusing on a particular segment of the market cannot be relied upon as an evidence of anticipated performance in managing a large or a broad based fund.

3.Discipline in investment approach is an important factor as the pressure to perform can make a fund manager susceptible to have an urge to change tracks in terms of stock selection as well as investment strategy.

4.The objective should be to differentiate investment skill of the fund manager from luck and to identify those funds with the greatest potential of future success.

INVESTOR'S FINANCIAL PLANNING AND ITS RESULTS. Planning for long term objectives Many people get overwhelmed by the thought of retirement and they think how they will ever save the huge money that is required to lead a peaceful and happy retired life. However, the fact is that if we save and invest regularly over a period of time, even a small sum of money can be adequate. It is a proven fact that the real power of compounding comes with time. Albert Einstein called compounding "the eighth wonder of the world" because of its amazing abilities. Essentially, compounding is the idea that one can make money on the money one has already earned. That's why, the earlier one starts saving, the more time money gets to grow.

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Through Mutual funds, one can set up an investment programme to build capital for retirement years. Besides, it is an ideal vehicle to practice asset allocation and rebalancing thereby maintaining the right level of risk at all times. It is important to know that determination and maintaining the right level of risk tolerance can go a long way in ensuring the success of an investment plan. Besides, it helps in customizing fund category allocations and suitable fund selections. There are certain broad guidelines to determine the risk tolerance. These are: Be realistic with regard to volatility. One needs to seriously consider the effect of potential downside loss as well as potential upside gain. Determine a "comfort level" i.e. If one is not confident with a particular level of risk tolerance, and then select a different level. Regardless of the level of risk tolerance, one should adhere to the principles of effective diversification i.e. The allocation of investment assets among different fund categories to achieve a variety of distinct risk/reward objectives and a reduction in overall portfolio risk. It helps to reassess risk tolerance every year. The risk tolerance may change due to either major adjustment in return objectives or to a realization that an existing risk tolerance is inappropriate for one's current situation. Market cap of a company signifies its market value, which is equal to the total number of shares outstanding multiplied by the current stock price. The market cap has a role to play in the kind of returns the stock might deliver and the risk or volatility that one may have to encounter while achieving those returns.For example, large companies are usually more stable during the turbulent periods and the mid cap and small cap companies are more vulnerable. As regards the allocation to each segment, there cannot be a standard combination applicable to all kinds of investors. Each one of us has different risk profile, time horizon and investment objectives. Besides, while deciding on the allocation, one has to keep in mind the fact whether the allocation is being done for an existing investor or for a new investor. While for an existing investor, the allocation that already exists has to be considered, for a new investor the right way to begin is by considering funds that invest predominantly in large cap stocks. The exposure to mid and small caps can be enhanced over a period of time.

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It is always advisable to take help of professionals to decide the allocation as well as select the appropriate funds. However, investors themselves have an important role to play in this process. All award-winning funds may not be suitable for everyone Many investors feel that a simple way to invest in Mutual funds is to just keep investing in award winning funds. First of all, it is important to understand that more than the awards; it is the methodology to choose winners that is more relevant. A rating firm generally elaborates on the criteria for deciding the winners i.e. consistent performance, risk adjusted returns, total returns and protection of capital. Each of these factors is very important and has its significance for different categories of funds. Besides, each of these factors has varying degree of significance for different kinds of investors. For example, consistent return really focuses on risk. If someone is afraid of negative returns, consistency will be a more important measure than total return i.e. Growth in NAV as well as dividend received. A fund can have very impressive total returns overtime, but can be very volatile and tough for a risk adverse investor. Therefore, all the award winning funds in different categories may not be suitable for everyone. Typically, when one has to select funds, the first step should be to consider personal goals and objectives. Investors need to decide which element they value the most and then prioritize the other criteria. Once one knows what one is looking for, one should go about selecting the funds according to the asset allocation. Most investors need just a few funds, carefully picked, watched and managed over period of time.

Regulatory Authorities To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time. MF either promoted by public or by private sector entities including one promoted by foreign entities is governed by these Regulations.

SEBI approved Asset Management Company (AMC) manages the funds by making investments in various
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types of securities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody. According to SEBI Regulations, two thirds of the directors of Trustee Company or board of trustees must be independent. The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual funds that the mutual funds function within the strict regulatory framework. Its objective is to increase public awareness of the mutual fund industry.

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 holders 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 a high professional and ethical standard in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset

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management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conductof the association. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Association of Mutual Fund of India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry It develops a team of well-qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds. At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

ICICI Prudential Asset Management Company enjoys the strong parentage of Prudential plc, one of UK's largest players in the insurance & fund management sectors and ICICI Bank, a well-known and trusted name in financial services in India. ICICI Prudential Asset Management Company, in a short span oftime, has forged a position of pre-eminence in the Indian Mutual Fund industry as one of the largest asset management companies in the country with average assets under management of Rs. 82,460.91 Crore. The Company manages a comprehensive range of schemes to meet the varying investment needs of its investors spread across 230 cities in the country. ICICI Prudential Asset Management Company Ltd. (IPAMC) is the joint venture between ICICI Bank a well-known and trusted name in financial services in India and Prudential Plc one of UKs largest players in the insurance and financial services sectors. Instituted in the year 1998, the company has forged a position of preeminence in the Indian Mutual Fund industry as the third largest asset management company in the country
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contributing significantly to the growth of the Indian mutual fund industry.

Today, in a span of just over 12 years, the company has forged a position of preeminence as one of the largest Asset Management Companys in the country, contributing significantly towards the growth of the Indian mutual fund industry.

We are currently managing a corpus of Rs. 73551.95 Crores of Assets under Management (AUM - as on Mar 2011 Month-end) in Mutual Fund Schemes, in addition to our Portfolio Managements Services, inclusive of EPFO*, and International Advisory Mandates for clients across international markets in asset classes like Debt, Equity and Real Estate with primary focus on risk adjusted returns.

As an Asset Management Company, we have over 15 years of experience and are currently managing a comprehensive range of schemes of more than 46 Mutual funds and a wide range of PMS Products for our investors, spread across the country. We service this investor base with our own branch network of over 160 branches and a distribution reach of over 42,000 channel partners.

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Sponsors :

ICICI Bank is India's second-largest bank with total assets of Rs. 3,634.00 billion (US$ 81 billion) at 31st March, 2010 and profit after tax Rs. 40.25 billion (US$ 896 million) for the year ended 31st March, 2010. The Bank has a network of 2016 branches and about 5219 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange

Prudential plc is an international financial services group with significant operations in Asia, the US and the UK. They serve approximately, 25 million customers and have 290 billion in assets under management. They are among the leading capitalized insurers in the world with an Insurance Groups Directive (IGD) capital surplus estimated at 3.4 billion .

The Group is structured around four main business units: Prudential Corporation Asia (PCA) PCA is a leading life insurer in Asia with presence in 12 markets and a top three position in seven key locations: Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, and Vietnam. PCA provides a comprehensive range of savings, protection and investment products that are specifically designed to meet the needs of customers in each of its local markets. PCAs asset management business in Asia has retail operations in 10 markets and it independently manages assets on behalf of a wide range of retail and institutional investors across the region.
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Jackson National Life Insurance Company Jackson is one of the largest life insurance companies in the US, providing retirement savings and income solutions to more than 2.8 million customers. It is also one of the top five providers of variable and fixed index annuities in the US. Founded nearly 50 years ago, Jackson has a long and successful record of providing effective retirement solutions for their clients. Prudential UK & Europe (PUE) PUE is a leading life and pensions provider to approximately 7 million customers in the UK.It has a number of major competitive advantages including significant longevity experience, multi-asset investment capabilities, a strong investment track record, a highly respected brand and financial strength. PUE continues to focus on its core strengths including its annuities, pensions and investment products where it can maximize the advantage it has in offering with-profits and other multi-asset investment funds. M&G M&G is Prudentials UK and European fund management business with total assets under management of 174 billion (as at December 31, 2009).M&G has been investing money for individual and institutional clients for nearly 80 years. Today it is among the largest investors in the UK stock market, as well as being a powerhouse in fixed-income investments. Prudential plc of the United Kingdom is not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America. Management team of ICICI Prudential Mr.Nimesh Shah- Managing Director & Chief Executive Officer Mr. B Ramakrishna - Executive Vice President Mr. Raghav Iyengar - National Head Sales and distribution Mr. Kalyan Prasath - Head - Information Technology Mr. Hemant Agarwal - Head - Operations Mr. Ashish Kakkar - Head - Human Resources Mr. Aashish Somaiyaa - Head Retail Business
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Fund Management Mr. S. Naren - Chief Investment Officer - Equity Mr. Chaitanya Pande - Head Fixed Income Board of Directors: Asset Management Company Ms. Chanda Kochhar - Chairperson Mr. Barry Stowe Mr. Suresh Kumar Mr. Vijay Thacker Mr. Dileep C. Choksi Mr. N.S. Kannan Mr. Nimesh Shah Mr. C. R. Muralidharan Directors of the Trustee Company Mr. M. S. Parthasarthy Mr. M. N. Gopinath Mr. Keki Bomi Dadiseth Mr. Vinod Dhall Mr. Sandeep Batra Awards and Recognition ICICI Prudential Mutual Fund bagged the maximum number of5-Star ratings according to latest Value Research Rating Radar. The ratings as on 31st ofDecember, 2009 state that ICICI Prudential Mutual Fund has topped the list of fund houseswith maximum of number of 5-Star ratings - 8 funds of ICICI Prudential Mutual Fund areranked as 5-Star in various categories. 13 of its funds ranked either 5-Star or 4-Star
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invarious categories. 5-Stars indicate that a fund is in the top 10 per cent of its category interms of historical risk-adjusted returns and 4-Star indicate that a fund is in the next 22.5%.

These ratings are a composite measure of historical risk-adjusted average monthly returns.In case of equity funds, it is based on weighted average monthly returns for the last 3-yearand 5-year period. In the case of debt funds this rating is based on the weighted averageweekly returns for the last 18 months and 3-year periods and in case of short-term debtfunds - weekly returns for the last 18 months.All rankings are as of December 31, 2009 and there were total 321 funds in variouscategories in which the Funds of ICICI Prudential Mutual Fund received either 5-Star or 4-S tar rating.The 5-Star rated funds of ICICI Prudential Mutual Fund are as follows: ICICI Prudential Infrastructure Fund ICICI Prudential Index Fund Retail Option ICICI Prudential Flexible Income Plan Premium Option ICICI Prudential Long-Term Plan Regular Option ICICI Prudential Liquid Plan Institutional I Option ICICI Prudential Liquid Plan - Super Institutional Option ICICI Prudential Gilt Fund - Investment Plan - PF Option ICICI Prudential Gilt Fund Treasury Plan

ICICI Prudential AMC has constantly been on the forefront of innovation and has introduced products aligned to meet customer needs leading to a well-diversified product portfolio. As acknowledgment of our efforts , we have received valued recognition from various organizations of international repute. 1.Bloomberg UTV Financial Leadership Awards 2011 2.Morning Star Mutual Fund Awards 2011

India Debt Fund House Award 2011

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3.Business World Mutual Fund Awards 2010 4.NDTV Profit Mutual Fund Awards 2010 5.Lipper Fund Awards 2010 India

7 INVESTMENT TIPS TO IMPROVE RETURNS

1. Know your risk profile

Before you take a decision to invest in equity funds, it is important to assess your risk tolerance. Risk tolerance depends on certain factors like emotional temperament, attitude and investment experience. Remember, Vwhile ascertaining the risk tolerance, it is crucial to consider one's desire to assume risk as the capacity to assume the risk. It helps to understand different categories of overall risk tolerance, i.e. Conservative, moderate or aggressive. While a conservative investor will accept lower returns to minimise price volatility, a moderate investor would be all right with greater price volatility than conservative risk tolerances to pursue higher returns. An aggressive investor wouldn't mind large swings in the NAVs to seek the highest returns. Though identifying the desire for risk is a tough job, it can be made easy by defining one's comfort zone.

2. Don't have too many schemes in your portfolio

While it is true that diversification helps in earning better returns with a lower level of fluctuations, it becomes counterproductive when one has too many funds in the portfolio. For example, if you have 15 funds in your portfolio, it does not necessarily mean that your portfolio is adequately diversified. To determine the right level of diversification, one has to consider factors like size of the portfolio, type of funds and allocation to different asset classes. Therefore, it is possible that a portfolio having 5 schemes may be adequately diversified whereas another one with 10 schemes may have very little diversification. Remember, to have a well-balanced equity portfolio, it is important to have the right level of exposure to different segments of the equity market like large cap, mid-cap and small cap. In addition, for a decent portfolio size, it is all right to have some exposure in the sector and specialty funds.
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3. Longer time horizon provides protection from volatility

As an equity fund investor, you need to understand that volatility is an integral part of the stock market. However, if you remain focused on the long-term objectives and follow a disciplined approach to investing, you can not only handle volatility properly but also turn it to your advantage.

4. Understand and analyze 'Good Performance'

'Good performance' is a subjective thing. Ideally, to analyze performance, one should consider returns as well as the risk taken to achieve those returns. Besides, consistency in terms of performance as well as portfolio selection is another factor that should play an important part while analyzing the performance. Therefore, if an investment in a Mutual fund scheme takes you past your risk tolerance while providing you decent returns; it cannot always be termed as good performance. In fact, at times to ensure that your investment remains within the parameters defined in the investment plan, you may to be forced to exit from that scheme. In other words, you need to assess as to how much risk did the fund manger subject you to, and did he give you an adequate reward for taking that risk. Besides, you also need to consider whether own risk profile allows you to accept the revised level of risk

5. Sell your fund, if you need to

There is no standard formula to determine the right time to sell an investment in Mutual fund or for that matter any investment. However, you can definitely benefit by following certain guidelines while deciding to sell an investment in a Mutual fund scheme. Here are some of them: You may consider selling a fund when your investment plan calls for a sale rather than doing so for emotional reasons. You need to hold a fund long enough to evaluate its performance over a complete market cycle, i.e. around three years or so. Many of us make the mistake of either holding on to funds for too long or exit in a hurry. It is important to do a thorough analysis before taking a decision to sell. In other words, if you take a wrong decision, there is always a risk of missing out on good rallies in the market or getting out too early thus missing out on
26

potential gains. You should consider coming out of a fund if its performance has consistently lagged its peers for a period of one year or so. It doesn't make sense to hold a fund when it no longer meets your needs. If you have made a proper selection, you would generally be required to make changes only if the fund changes its objective or investment style, or if your needs change.

6. Diversified vs. Concentrated Portfolio

The choice between funds that have a diversified and a concentrated portfolio largely depends upon your risk profile. As discussed earlier, a well - diversified portfolio helps in spreading the investments across different sectors and segments of the market. The idea is that if one or more stocks do badly, the portfolio won't be affected as much. At the same time, if one stock does very well, the portfolio won't reap all the benefits. A diversified fund, therefore, is an ideal choice for someone who is looking for steady returns over the longer term. A concentrated portfolio works exactly in the opposite manner. While a fund with a concentrated portfolio has a better chance of providing higher returns, it also increases your chances of underperforming or losing a large portion of your portfolio in a market downturn. Thus, a concentrated portfolio is ideally suited for those investors who have the capacity to shoulder higher risk in order to improve the chances of getting better returns.

7. Review your portfolio periodically

It is always a good idea to review your portfolio periodically. For example, you may begin reviewing your portfolio on a half-yearly basis. Besides, you may be required to review your portfolio in greater detail when your investments goals or financial circumstances change

HOW TO REDUCE RISK WHILE INVESTING:

Any kind of investment we make is subject to risk. In fact we get return on our investment purely and solely because at the very beginning we take the risk of parting with our funds, for getting higher value back at a later date. Partition itself is a risk.
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 Well known economist and Nobel Prize recipient William Sharpe tried to segregate the total risk faced in any kind of investment into two parts - systematic (Systemic) risk and unsystematic (Unsystemic) risk. Systematic risk is that risk which exists in the system. Some of the biggest examples of systematic risk are inflation, recession, war, political situation etc. Inflation erodes returns generated from all investments e.g. If return from fixed deposit is 8 per cent and if inflation is 6 per cent then real rate of return from fixed deposit is reduced by 6 per cent. Similarly if returns generated from equity market is 18 per cent and inflation is still 6 per cent then equity returns will be lesser by the rate of inflation. Since inflation exists in the system there is no way one can stay away from the risk of inflation. Economic cycles, war and political situations have effects on all forms of investments. Also these exist in the system and there is no way to stay away from them. It is like learning to walk. Anyone who wants to learn to walk has to first fall; you cannot learn to walk without falling. Similarly anyone who wants to invest has to first face systematic risk; there can never make any kind of investment without systematic risk. Another form of risk is unsystematic risk. This risk does not exist in the system and hence is not applicable to all forms of investment. Unsystematic risk is associated with particular form of investment. Suppose we invest in stock market and the market falls, then only our investment in equity gets affected OR if we have placed a fixed deposit in particular bank and bank goes bankrupt, than we only lose money placed in that bank.

OBJECTIVE OF THE RESEARCH

The purpose of research is to discover answers to questions through the procedures. Though each research has its own specific purpose. 1. To find out whether people were really aware of mutual fund. 2. To find out how people think about ICICI PRUDENTIAL MUTUAL FUND COMPANY 3. To understand the mutual fund business and products of ICICI PRUDENTIAL MUTUAL FUND COMPANY.
28

application of scientific

4. To find out the peoples perception about mutual fund. 5. To find out what respondents expect from ICICI PRUDENTIAL MUTUAL FUND COMPANY. 6. To understand Consumer buying behavior. 7. To come out with conclusion and suggestions based on the analysis and the

Interpretation of data. 8. To understand the history behind the concept of Mutual Fund. 9. To understand Mutual Fund as an investment avenue. 10. To conduct a study of consumer behavior on Mutual Fund in India.

Meaning-: Research methodology is a system of principles or methods of procedure in any discipline, such as education, research, diagnosis, or treatment. It is the section of a research proposal in which the methods to be used are described. The research design, the population to be studied, and the research instruments, or tools, to be used are discussed in the research methodology. Basic research methodologies The types of basic research methodologies this unit will introduce you to are: Quantitative research Qualitative research

Each of these methodologies helps you find out different things in different ways. They can be used on their own, or in a variety of combinations. You may even want to use elements of each to make up your own way of going about research. But first it is important to try to understand what each methodology entails.
29

Quantitative research: Quantitative research (the word quantitative comes from the word quantity) involves information or data in the form of numbers. This allows us to measure or to quantify a whole range of things. For example: the number of people who live below the poverty line; the number of children between specific ages who attend school; the average spending power in a community; or the number of adults who have access to computers in a village or town. Qualitative research: The aim of qualitative research is to deepen our understanding about something, and usually this means going beyond the numbers and the statistics. Qualitative research helps us to give reasons why the numbers tell us what they do. It is often contrasted to quantitative research and they are very often used together to get the bigger picture of what we are trying to find out. Qualitative research helps us flesh out the story.

RESEARCH
Research is a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation.Research is an academic activity and as such the term should be used in a technical sense.

CLIFFORD WOODY defined research-: Research comprises defining and redefining problems, formulating hypothesis or suggested

solutions; collecting, organizing and evaluating date; making deductions and reaching conclusion; and at least carefully testing the conclusions to determine whether they fit the formulating hypothesis

FRANCIES RUMMER defined research-: It is a careful inquiry or examination to discover new information or relationship and to expand or verify existing knowledge. Research is the solution of the problem, whether created or already generated. When research is done, some new out come, so that the problem (created or generated) to be solved
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TYPES OF RESEARCH
Market research is learning about business markets so that investment or business decisions can be made. The kinds of questions that get asked here include: Who are the potential customers? What do the customers need? Who are the competitors? And what is the market environment? Economic research has its own way of going about things. For instance, it may involve specially constructed formulas and equations that facilitate an understanding of the economic environment. It may ask questions such as: Are the economic fundamentals in place? What are the economic trends in the manufacturing or mining sectors? Of course, some of the questions economic research asks may be similar to those market research asks.1 Scientific research may involve a whole range of sophisticated and specialist research instruments, such as mathematical or chemical formulas and very specialized methodologies. Media research will involve looking at issues such as media content and audience. Its own kind of specific instruments such as ways of measuring audience preferences and its spending power 2 have been developed for this.

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Social research is quite a broad term and may involve different kinds of research: from gathering information on the population (demographics) to the attitudes and behaviors of people in a community or country.

LIMITATIONS OF THE RESEARCH

Sample size was restricted to Jaipur city as it was difficult to approach people that, because of time constraint. So, sample size was limited Improper decision: Many respondents did not have sufficient time to answer/fill the questionnaire. Inadequate information: Some of the questions were not answered/filled properly or accurately. Time limitation: I had only 50 working days time for project; it was insufficient to reach each and every segment and prospect.

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SAMPLING UNIT PLAN:

Sampling unit plan is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure that the researcher would adopt in selecting the items from sample. Deciding the sampling plan requires the following decisions: Sampling unit :( who is to be surveyed) It gives the target population that will be sampled. This research is carried in only Jaipur. The reason for selecting this sampling was to find out the consumer behavior of mutual fund amongst the retail and corporate investors. It is presumed that the sampling unit states above only fall in this category. Universe: The universe of this research was Jaipur. Sampling size :( How many people should be surveyed?) To achieve reliable results it was not possible to target the entire population or even a substantial portion. The project sample size is of 120. Contact method: Once the sampling plan has been determined the researcher must decide how the subject

should be contracted i.e. mail, telephone etc. The researchers got the data of the ICICI PRUDENTIAL MUTUAL FUND Company and send the questionnaire through email. This is the easiest way to get to know about peoples perception.

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SOURCE OF DATA The research plan can call for gathering primary data, secondary data or both. Primary data is gathered for the specific purpose of for a specific research project. Secondary data is the data which was collected for another purpose and already exist somewhere. Primary Data: Primary data is a term for data collected on source which has not been subjected to processing or any other manipulation. It is also known as raw data. The primary data collection was the most important part of the project. A personal interview was conducted with the help of questionnaire and the required information was collected from the respondents. Information was collected through field research. Secondary Data: The secondary data means data that are already available i.e. they refer to the data which have already been collected and segregated by someone else. To understand mutual fund in a better way, researcher had referred to books Making mutual funds work for you and Mutual fund testing programme by AMFI, Mumbai and visited the websites www.mutualfundindia.com and www.amfiindia.com, before starting the fieldwork.

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Mutual funds of ICICI Prudential

1.ICICI Prudential Focused Blue chip Equity Fund It is an open-ended equity scheme, aims to maximize long-term total returns, from a focused and optimally diversified portfolio that is invested in equity and equity related securities of about 20 companies belonging to the large cap domain. This strategy has the potential to generate positive returns from being overweight on certain high conviction stock picks. Investment Philosophy This fund invests in about 20 equity and equity related securities, and seeks to generate long term capital appreciation. The portfolio is mandated to select stocks from among the Top 200 stocks in terms of market capitalization on the NSE. This fund adopts a bottom-up approach to Stock Selection and the fund manager has the flexibility to choose between stocks across all themes, sectors and investment styles.

Investor Profile

Investors looking at the comfort of investments in large-cap companies. Investors seeking the benefits of concentrated bets on the stock ideas by way of potentially higher returns.

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Key Benefits

Higher Liquidity due to broader investor participation Relatively lower volatility compared to mid and small cap stocks Large caps generally recover faster than small and mid cap stocks Benefit of optimal diversification strategy targeted at long term capital appreciation .

2.ICICI Prudential Gold Exchange Traded Fund World over, Gold is a subject of economic interest and is viewed as an avenue for investments. But in India, it has a deeper significance as it appeals to a number of emotions, from a form of adornment to a status symbol. Through the years gold's appeal in India has evolved from an object of pure aesthetic value to a commodity which offers itself as an avenue for investment and wealth creation. ICICI Prudential Gold Exchange Traded Fund, an open-ended exchange traded fund, aims to provide investment returns that, before expenses, closely track the performance of domestic prices of Gold derived from the LBMA AM fixing prices. Investment Philosophy This fund is a passively managed open-ended Exchange Traded fund, which invests in gold bullion and instruments with gold as underlying, so as to provide investment returns that, before expenses, closely track the performance of domestic prices of Gold derived from the LBMA AM fixing prices. The fund is not actively managed and it does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of gold.

36

Investor Profile This fund is ideal for

Investors looking to diversify from other asset classes like Equity, Debt & Real Estate. Investors who already have physical gold holdings.

Key Benefits

Its cost is lower than buying, storing and insuring physical gold. Gold can be bought and sold in small quantities - as low as 1 unit (approximately equivalent to 1 gram of gold.

Unlike jewellery or coins or bars, ETF units can be liquidated easily to benefit from rise in price of gold.

Purity of gold purchased will be 99.50% or higher.

3.ICICI Prudential Balanced Fund ICICI Prudential Balanced Fund, an open-ended balanced fund, does just that. It takes care of this asset allocation by constantly investigating market outlook and performance and accordingly by increasing / decreasing equity exposure based on the market outlook and using a core debt portfolio to do the rebalancing. Investment Philosophy This fund seeks to optimize the risk-adjusted return by distributing assets between both equity and debt markets. In bullish markets equity allocation can go upto 80%. In bearish markets equity allocation can go down to 65%. This dynamic allocation along with core debt portfolio reduces the volatility of return

37

Investor Profile

Investors seeking exposure to both equity and debt markets through one fund Investors considering reasonable returns with and lower risk through diversification.

Key Benefits

Provides the twin benefits of growth from equity markets and steady income from debt markets. Lower volatility of returns and lower risk through diversification.

4.Advisory Series (FOF) It is an open ended asset allocation fund, in the nature of a Fund of Funds. Its five investment plans have been specifically designed to suit the varying needs of different investor categories based on their risk profiles, return expectations and investment goals. By investing in the specified Plans under the Fund, an investor can balance investments across a mix of three asset classes viz., Equity, Debt and Gold and take advantage of the benefits of diversification. A.ICICI Prudential Advisor Very Cautious ICICI Prudential Advisor Series - Very Cautious Plan seeks to provide reasonable returns, by making active allocation to the various debt & money market schemes of domestic or offshore mutual funds based on the interest rate outlook, the credit spreads and other such parameters.

38

Investment Philosophy The plan seeks to provide reasonable returns, commensurate with low risk while providing a high level of liquidity. The allocation of investments will be made primarily in schemes of ICICI Prudential Mutual Fund as follows:

Money market schemes/ cash and liquid plans (Maximum 70%, Minimum 0%). Debt oriented schemes (Maximum 100%, Minimum 30%).

Investor Profile This Plan is ideal for

Investors having a low risk appetite and a shorter duration of investment.

Key Benefits

Benefits of active management and regular monitoring Advisor Series enables asset allocation within a range and hence, active asset allocation is possible, which is better than static asset allocation

Tax efficiency since the investors are not subjected to Capital Gain / Loss when the Plan rebalances the portfolio (which is the case when investors buy or sell the underlying funds Directly)

The fund of fund is treated as a single fund holding, thereby reducing paperwork involved in investing in different funds

B.ICICI Prudential Advisor Cautious

39

ICICI Prudential Advisor Series - Cautious Plan seeks to provide regular income, by making active allocation to the various debt, money market schemes & gold exchange traded funds of domestic & offshore Mutual Funds, as highly rated debt instruments generally provide safety and regular income to the portfolio and the potential for capital appreciation through active management. Investment Philosophy

Debt oriented schemes (Maximum 100%, Minimum 50%) Money market schemes (Maximum 30%, Minimum 0%) To a lesser extent (Maximum 35%, Minimum 0%) in equity oriented schemes so as to generate long term capital appreciation

Gold Exchange Traded fund (Maximum 20%, Minimum 0%)

This Plan is ideal for Investors willing to accept a small amount of risk yet look for a modest rate of returns. Key Benefits

Benefits of active management and regular monitoring, Advisor Series enables asset allocation within a range and hence, active asset allocation is possible, which is better than static asset allocation

Tax efficiency since the investors are not subjected to Capital Gain / Loss when the Plan rebalances the portfolio (which is the case when investors buy or sell the underlying funds directly

40

5.ICICI Prudential Liquid Plan ICICI Prudential Liquid Plan, an open-ended liquid income fund, offers a potentially rewarding parking facility for short-term, idle cash. It provides the flexibility of withdrawing cash as and when required, and proves to be an investment through its earnings, while it is parked in the fund. The fund has been assigned "Crisil Mutual Fund Rank 1" for Growth Option, under "Open End Liquid Super Institutional Schemes" category out of 16 Schemes for 1 year period ended June 30, 2011. Past performance is no guarantee of future results. Investment Philosophy This debt funds objective is to enable idle cash to be deployed for very short periods of time. Therefore, it seeks to invest only in very liquid, short term instruments, of the highest credit quality. The intent is to protect the portfolio from risks of changes in value, by focusing on earning interest income, without taking undue risks. The portfolio is entirely made up for short term debt securities and manages to keep a low, but steady rate of growth in its Net Asset Value (NAV).

Investor Profile This fund is ideal for

Investors who have large swings in cash balances. Investors who have cyclical patterns in cash flows.

41

Key Benefits

It enables efficient and fruitful deployment of idle cash. This plan ensures a high level of liquidity and flexibility to access cash invested at a days notice. It offers a low risk option to invest in mutual funds.

6.ICICI Prudential SPICE Fund There are two approaches to reaching your goal: exploring and testing new ground or sticking to the established, long trodden path. The former employs actively investigating and assessing your every move while the later stays within the boundaries of the established. In the same way, there are two approaches to managing an investor's portfolio. One is active management, which involves choosing sectors and stocks that represent the views of the fund managers, as best suited to meet the portfolio objectives. The other is passive management, which simply means, buying into a market index. ICICI Prudential SPICE Fund, an open-ended exchange listed index linked growth scheme offers a passive choice to investors, who prefer that their portfolio closely maps the market index, the BSE SENSEX. It is an ETF (Exchange traded fund), which means investors can buy and sell at any time during the market hours, through their brokers, just like any other equity share thereby offering a greater degree of flexibility for monitoring price and reducing the time gap between investment decision and trade execution. Investment Philosophy This fund seeks to replicate the BSE SENSEX, by buying the same 30 stocks in the same proportion as they are in the index, hence the fund managers do not take any sector or stock exposure that is different from what is seen on the chosen index. The fund is therefore not actively managed, but passively replicates the index as the objective is to closely track the index.

42

Investor Profile This fund is ideal for

Investors with a passive investment philosophy and do not expect out-performance of an index, but simple tracking of the same.

Key Benefits

It enables investors to seek an exposure to the index stocks, in the same proportion as they are found in the index.

Investors who would like to buy a fund in the stock market during trading hours, rather than at NAV at the end of the day.

7.ICICI Prudential Flexible Income Plan The debt market offers its own risk-to-return tradeoff, which is triggered by changes in interest rates and the impact they have on debt securities. To a fund manager, however, the changes in the yield curve not only offers risk, but also opportunities to benefit by actively managing these risks and making use of an opening to increase returns. ICICI Prudential Flexible Income Plan, an open-ended income fund, seeks to actively manage such risks as a conscious investment strategy by allowing the fund manager to switch the allocation from a 100% debt stance to a 100% cash stance, which provides the flexibility to implement yield curve strategies, or manage interest rate volatility better.
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Investment Philosophy This debt fund invests entirely in both, short and long term debt securities of the government and the corporate sector. Its objective is to earn returns in the form of interest income and capital gains, which equals long term deployment in debt markets. The fund intends to minimize risks from liquidity and credit, while actively seeking to manage interest rate risks.

Key Benefits

A portfolio which strategically deploys funds in the debt markets to take advantage of interest rate risks.

Facilitates participation in markets that are large and institution-dominated. Provides the potential to earn total return from both interest and capital gains, with the attendant risks of capital loss as well.

8.ICICI Prudential Discovery Fund Diversification in investment styles can bring significant advantages over the long run in equity markets. It's one thing to make returns on investments in the companies that are doing well today, but something else when you employ the potential of companies that might do better tomorrow. ICICI Prudential Discovery Fund does just that. By exploiting the valuation gap with the potential to unlock value over the long term, it focuses on discovering stocks that have high potential, but are currently lying low at a discount to their inherent value.

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This open-ended diversified equity fund, invests in companies that are well managed, fundamentally strong, and chosen based on in-depth research. As it is intended to buy these companies at a discount to their fair value, there is also a margin of safety in the value of the portfolio. Diversification in investment styles can bring significant advantages over the long run in equity markets. It's one thing to make returns on investments in the companies that are doing well today, but something else when you employ the potential of companies that might do better tomorrow. Investment Philosophy This fund adopts a "Bottom-up" strategy, to identify and pick its investments based on an evaluation of several parameters such as Price / Earning, Price / Book Value and Dividend Yield. It aims to acquire stocks that are selling at discounted prices to their inherent value and is unperturbed by the overall trend in the market. The portfolio works towards being well diversified across sectors to try and reduce risk.

Investor Profile This fund is ideal for

Investors with a long-term investment horizon in equity as it could take time to unlock the value from such stocks.

Investors who are looking to further diversify their portfolios by investing in a value fund. Investors who recognize the value strategy of bargain hunting for intrinsically good stocks.

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Key Benefits

It seeks to provides a relatively stable returns over the long term by aiming to discover stocks at a discount to their fair value.

It diversifies your existing equity portfolio; an investor who diversifies across growth and value portfolios, can aim to reduce volatility of return

1. Age group of respondents Table no.1 Sr. No. Age groups No. of respondents Percentage

1.

Below 29

17

14

2.

30-39

56

47

3.

40-49

42

35

4.

Above 50

Total

120

100

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Graph no.1

50 45 40

47

35 35 30 25 20 15 10 5 0 Series1 Below 29 14 30-39 11 47 40-49 35 4 14

Above 50 4

Above table and graph shows that, there were 14% respondents which falls in the age category of below 29,47% falls in 30-39, 35% falls in the age n the age group of 40-49 and rest 4% respondent were above 50.

2. Per annum income level of respondents

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Table no.2 Sr. No. Income No. of respondents Percentage

1.

Rs.1.5lacs

27

23

2.

Rs.1.5lacs-Rs2.5lacs

63

52

3.

Rs2.5lacs-Rs.5lacs

21

17

4.

Above Rs.5lacs

Total

120

100

Graph no.2

48

60 50 40 30 20 10 0 23

52

17 7

Above table and graph shows that, in the survey, there are 23% respondent which have level up toRs.1.5lacs, 52% respondents have Income level of Rs.1.5lacs to Rs2..5lacs, 17% have income level of Rs2..5lacs to Rs.5lacs and 7% respondents have Above Rs.5lacs income.

3.Investment ObjectivesTable no.3

49

Rs.1.5lacs to Rs2.5lacs

Rs2.5.5lacs to Rs.5acs

Up to Rs.1.5lacs

Above Rs.5lacs

Sr. No.

Objectives

No. of respondents

Percentage

1.

Receiving regular income

36

30

2.

Planning for commitment

16

13

3.

Acquiring an assets

22

18

4.

Creating wealth

27

23

5.

Saving for retirement

13

11

6.

Any other

Graph no.3

50

35 30 25 20 15 10 5 0

30 23 18 13 11 5

Acquiring an assets

Receiving regular income

Above table and graphs shows that, objective behind investing in mutual funds is Receiving regular income which is 30%, other than this 13% respondents thinks Planning for commitment, 18% Acquiring an assets, 23% Creating wealth, 11% Saving for retirement and 5% respondents have other objectives.

4. Awareness of Mutual Funds-

Table no.4
51

Saving for retirement

Sr. No.

Particulars

No. of respondents

Percentage

1.

Yes

52

43

2.

No

68

57

Total

120

100

Graph no.4

52

No

57

Yes

43

Above table and chart shows that, out of 100 respondents 43% were aware about the mutual funds and rest 57% were not much aware about it.

6.Reasons for not investing in mutual funds-

Table no.6

53

Sr. No. 1.

Reasons No trust in fund managers

No. of respondents 0

Percentage 0

2.

Not enough awareness

36

54

3. 4.

Bad experience Lack of financial planning

9 0

14 0

5.

Risk

22

32

6.

Any other

Total

67

100

Graph no.6

54

60 50 40 30 20 10 0 0

54

32 14 0 0

Above table and graph shows that, the main reason for not investing in mutual funds is that the respondents were not aware about the MF, those are 54%, 14% respondents have bad experience in it, 32% though that there is a risk involved in it.

7. Reasons for investing in Mutual fundsTable no.7

55

Sr. No.

Reasons

No. of respondents

Percentage

1.

Good returns

16

30

2.

Tax-Saving

31

58

3.

Less risk

4.

Transparent

5.

Good services

6.

Any other

Total

53

100

Graph no.7

56

70 60 50 40 30 20 30 10 0 6 6 0 0 58

Above table and graph shows that, 30% respondents invest in mutual funds because of Good returns, 58% because of Tax-Saving purpose,6% Les risk, 6% Transparent, 0% invest due to Good services and 0% respondent invest for any other reasons.

8. Interest in investing in ICICI PRU MUTUAL FUND:Table no.8

57

Particulars Yes No Total Graph no.8

No. of respondents 45 55 100

Percentages 45% 55% 100%

100 80 60 40 20 0 no. of respondents

yes no total

Above table and graph shows that 45% of the respondents say that they are interested in investing in ICICI MUTUAL FUND CO.55% of the respondents say that they are not interested in investing in ICICI MUTUAL FUND CO.

9. Is money is secure in ICICI MUTUAL FUND CO:Table no.9 Particulars No. of respondents
58

Percentage

Yes No Total Graph no.9

66 34 100

66% 34% 100%

70 60 50 40 30 20 10 0 no.of respondents
yes no total

Above table and graph shows that 66% of the respondents feel their money safe in ICICI PRU MUTUAL FUND CO.34% of the respondents feel that their money is not safe in ICICI PRU MUTUAL FUND CO.

10.Preference of types of fund while investing in ICICI PRU MUTUAL FUND CO:Table no.10 Particulars Balanced fund No. of respondents 35 Percentage 35%

59

Equity fund Debt fund Total Graph no.10

29 36 100

29% 36% 100%

40 35 30 25 20 15 10 5 0 no.of respondent

Balanced fund Equity fund Debt fund

Above table and graph shows that 35% of the respondents prefer to invest in balanced fund .,29% o of the respondents prefer to invest in equity fund,36% of the respondents prefer to invest in debt fund of ICICI PRU MUTUAL FUND Co.

FINDINGS
On the basis of analysis and evaluation of data collected from the respondents the following findings were found;-. 1. Most of the respondents are not aware of the mutual fund as an investment option. 2. 30% of the respondents investment objective is receiving regular income.
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3. Most of the respondents are not aware of ICICI PRUDENTIAL as a mutual fund company. 4. 36% respondents like to invest in debt fund of ICICI PRUDENTIAL MUTUAL FUND which is maximum in other two types of fund. 5. Very few investors have bad experience in investing in ICICI PRUDENTIAL MUTUAL FUND. 6. Almost 50% of the investors are interested in investing in ICICI PRUDENTIAL MUTUAL FUND. 7. Maximum number of respondents feels their money safe in ICICI PRUDENTIAL MUTUAL FUND.

SUGGESTIONS
Since ICICI Prudential Mutual Fund Company is the largest in terms of work force, in terms of market share, in terms of no. of customers. All these positive stands of the company place at the number one position. On second aspect whatever amount of money ICICI Prudential save, can be used to increase the no. of plans, which will helpful to increase the market share of the company. Since the customers think about the companies in the industry, when they invest money in the mutual fund industry. So its necessary to increase the market share of the company. There are some recommendations. 1. People are aware of ICICI PRUDENTIAL MUTUAL FUND but to be the leader in the particular segment company should do more promotional activities.

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2. ICICI PRUDENTIAL MUTUAL FUND should make its other funds (balanced fund, equity fund) more strong as people shows less interest in them. 3. Some of the respondents have faced bad experiences while investing in the company. So the company should improve its customer services. 4. ICICI PRUDENTIAL MUTUAL FUND COMPANY should open some more branches in the semi-urban and rural areas to increase its customer share in the market. 5. ICICI PRUDENTIAL MUTUAL FUND COMPANY should train its staff and financial advisors to deal more efficiently with the customers. 6. The mutual fund market has not been fully tapped till now so ICICI PRUDENTIAL should try to grab the opportunity to make people aware about their mutual fund product

CONCLUSION
On the basis of analysis and interpretation of data and on the basis of its findings following conclusion are found -: ICICI PRUDENTIAL MUTUAL FUND IS THE largest private sector in India. The main objective of many of the responded in investing in the ICICI PRUDENTIAL MUTUAL FUND is to receive regular income. The customer services of ICICI PRUDENTIAL are good as many investors are satisfied with the services of the company.

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The analysis has revealed that ICICI is growing at a very fast pace and is one of the successful player in the mutual fund industry.

BOOKS REGARDING MUTUAL FUND INVESTMENT: John Wiley, Morningstar Mutual Fund Investing Workbook, Level 1, John Wiley

publications, 2010 Pg no.47-49 Baker Molly High Flying Adventures In The Stock Market , John Wiley Publications, 2011 Pg no.12

Rutherford Ronald K The Complete Guide To Managing A Portfolio Of Mutual Funds, Tata McGraw Hill publications, 2008 Pg no.26-27

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 C.R. Kothari Research Methodology &Techniques,Wishwa Prakashan New Delhi, 2010 Pg no.12

MAGAZINES-: Outlook Money Magazine Business World Business Today

VARIOUS WEBSITES LIKE: www.mutualfundindia.com www.amfi.com www.sebi.com www.icicipru.com

QUESTIONNAIRE
Name _________________________________

Address

_________________________________

Q1.

Age a. Less than 29 b. 40 49 c. 30-39 d. 50 and above

Q2. What is your average annual income?

a. Up to 1.5 lacs
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b. 1.5 lacs to 2.5lacs c. 2.5 lacs to 5 lacs d. 5 lacs and more

Q3. What is your investment objective? a. Receiving regular income c. Acquiring an asset e. Saving for retirement b. planning for commitment d. creating wealth

Q4.Are you aware of mutual fund? a. Yes b. No Q5.What is your reasons for not investing in mutual fund? a. No trust in fund managers b. Not enough awareness c. Bad experiences d. Lack of financial planning

Q6.What are your reasons for investing in mutual funds? a. Good returns b. Tax saving c. Less risk d. Transparency
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Q7.Are you aware of ICICI PRU as a mutual fund investment company? a. Yes b. No

Q8.Do you like to like to invest in ICICI PRU MUTUAL FUND? a. Yes b. No

Q9.Do you feel your money secure in ICICI PRU MUTUAL FUND? a. Yes b. No

Q10.In which kind of fund you prefer to invest in ICICIP PRU MUTUAL FUND? a. Balanced fund b. Equity fund c. Debt fund

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