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SUMMER TRAINING PROJECTREPORT
ON
COMPRATIVE STUDY RELIANCE MUTUALFUND & THEIR PRODUCTS i.e. SIP, STP &
SWP WITH DESCRIPTION CUSTOMERPERCEPTION TOWARDS MUTUAL FUNDS
In partial fulfillment of the requirement for
MASTER OF BUSINESS ADMIMISTRATION
U.P. Technical University Lukcnow
Submitted by
ANKIT PANDHIJA
MBA (2009-2011)
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HINDUSTAN INSTITUTE OF MANAGEMENT AND
COMPUTER STUDIES FARAH MATHURA (U.P.)
ACKNOWLEDGMENT
I am grateful to all those who have helped me directly or indirectly in
company this project. I firmly believe that there is always scope for
improvement and accordingly. I shall took forward to received
suggestions.
First of all I would like to thank God for his grace .I am further
thankful to Reliance Mutual Fund, Agra which give me chance to
held my project study upon of it
. I further want to thank to Mr. Brijesh Dwevedi who guide me
and help taking right direction in field work. I further welcome
inspiration and suggestion to make it best.
I sincerely believe that the road of improvement is never ending.
Hence I shall forward to end gratefully acknowledge all suggestions
received. I am highly grateful to Mrs. Abhilasha Singh faculty of
HIMCS Agra for acting as a Guiding star for me. Who helped me in
their own way to complete this interim report. my sincere apologies is
who helped me in a variety of wage and Whose name could not be
individually acknowledged.
ANKIT PANDHIJA
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DECLARATION
I hereby declare that this Project Report entitled Comparativestudy reliance mutual fund & their products i.e.SIP, STP & SWP with description customer
perception towards mutual funds submitted in the partialfulfillment of the requirement of Master of Business Administration
(MBA) of Hindustan Institute of Management & Computer Studies is
based on primary & secondary data found by me in various departments,
books, magazines and websites & Collected by me in under guidance of
Brijesh Dwevedi (R.M).
DATE: 13/08/2010 ANKIT
PANDHIJA
PLACE AGRA MBA
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TABLE OF CONTENTS
CHAPTER I.
Objective
Limitation
Methodology
CHAPTER II
Industry profile
History and organization of Mutual Fund in India
Mutual Fund companies in India
Recent trend in Mutual Fund Industry
CHAPTER III..
Introduction about Mutual Funds
Mutual fund : why?
Mutual fund :what is it ?
Mutual fund :what is it made of?
Different type of MF
CHAPTER IV.
Company profile
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Introduction
Product and service of reliance MF
Why Reliance Mutual Fund ?
CHAPTER V..
SWOT Analysis
CHAPTER VI.
Analysis and interpretation of Mutual of data
CHAPTER VI ..
Findings
CHAPTER VIII
Recommendation
CHAPTER IX..
Conclusion
CHAPTER X. .
Objectives
Limitation
CHAPTER XI..
Questionnaire
Bibliography.
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ABSTRACT
Probably nothing can define the spirit of being mutual better than this
verse. And who else to understand it better than the mutual fund industry. It
seems the mutual fund industry in India is slowly but surely beginning to
recognize this aspect for the better. Today, there is greater emphasis on the
role of the industry, the regulator. Securities and Exchange board of India
(SEBI) and industry body, Association of Mutual Funds in India (AMFI) on
creating awareness among investors and improving investor services. In
fact, the efforts of both the regulator as well as AMFI are laudable for
promoting the cause of investor education religiously. The one product
caters to all needs approach has given way to offering products which suite
the specific needs of investors ala product innovation. There is also
increased emphasis on convenience in terms of comfortable transaction
services to investors by using delivery or distribution platforms like the
Internet, ATMs, Corporate brokers, etc. Infect, distribution innovation has
come to play a key role in the growth of the industry. Industry players are
using different distribution channels to increase their market penetration.
However, a significant change that is being witnessed now is the swift
response on part of the regulator to safeguard investors interests. Thanks to
the collective efforts of SEBI and AMFI, and also the industry players, the
domestic mutual fund industry has been untouched by the depression of late
trading, inside trading etc., which affected the US Mutual Fund industry in
recent times. However, that is not to say that the Indian Mutual Fund
Industry is completely problem-free. Issues such as low penetration in bothsemi urban as well rural areas (mutual funds have so far been largely and
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urban affair that too in big cities), poor investor awareness and exploitation
of this fact by industry players, as demonstrated by the mutual fund IPO
commotion and excessive focus on corporate and other big pocket investors
at the expense of retail investors are some of the issues that industry needs to
address.
With the increase in domestic saving s and improvement in
deployment of investment through markets, the need and scope for mutual
fund operation has increased tremendously. Mutual funds are not only best
suited for the purpose but also are capable of meeting this challenge
effectively. Professionals who manage mutual funds are considered to have
a better knowledge of market behavior. Another important reason is that the
dividends and capital gains are reinvested automatically in mutual funds
and, hence, are not frittered away. Mutual funds also create awareness
among the urban and rural middle-class about the benefits of investments in
capital markets through profitable and safe avenues, and are able to gather a
large amount of the surplus funds available with this section.
Within short span of time mutual fund operation has become an integral part
of the Indian financial scene and is balanced for rapid growth in the near
future. The mutual fund industry has been remarkably flexible over the last
decade in spite of varying economic conditions, capital market scams, and
increasing competition. Today, numerous schemes, tailored to meet the
diversified needs of savers, are being offered by many institutions. In thisproject an attempt has been made to evaluate the awareness and perception
of mutual fund on different parameter
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OBJECTIVES
The main aim of undertaking this study is to accomplish the following
objective:
Conducting a market survey and understanding the customer
perception.
Analyzing the market survey and thereby finding out the investment
pattern of the customer.
Proper understanding and evaluation of mutual funds as an investment
option
Analysis customer awareness about Mutual fund.
Proper understanding and analysis of the perspective investor about
this financial product .
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LIMITATIONS
Though the present study aimed to achieve the above-
mentioned objectives in full earnest and accuracy, it was
in a weak position due to certain limitations. Some of the
limitations of this study may be summarized as follows :
Getting accurate responses from the respondents due
to their inherent problems was difficult. They were
partial, and refused to cooperate.
Very few people have knowledge about Mutual funds and the other
products of the Mutual Funds .
Locating the target respondents was very time
consuming.
Sample size was limited due to the limited period of
days allocated for the survey.
The selection of respondents to cover the various strata of the society
was tedious and time consuming.
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METHODOLOGY
The objective of the present study can be accomplished by conducting asystematic market survey. Market Research is a systematic design,
collection, analysis and reporting of data and finding that are relevant to
different market situation facing by the company. The marketing
research process that will be adopted in the present study consist of the
following stages:
1. Defining the problem and research objective:
The research objective state that what information is needed to solve the
problem. Here the objective of other research is awareness and
perception of Mutual fund as an Investment option and what are the
benefits that the investor will get by investing in Mutual funds.
2. Developing research plan:
Once the problem is defined, the next step is to prepare a plan for getting
the information needed for the research. The present study will adopt
exploratory approach where in there is a need to gather a large amount
of information before making a conclusion if required. The descriptive
and casual approaches may also be used.
3. Collection and Sources of Data:
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To collect the data, relevant information is necessary as regards to the
project; as a result data was collected by using two ways:
Primary Data
Secondary Data.
Primary Data:
In this the information is being possessed with first hand information,
which is new and fresh.
The tools used by us for the primary data are:
Questionnaire
Face-to-Face Interview
Observation
Secondary data:
The information that is received with the help of Journals, Magazines,Financial reports or which is already present with the company.
References used from management books
Gathered information through World Wide Web (www).
Support and knowledge provided by Faculty and Company guide.
4. Sampling Plan:
Sampling unit: The customers will be stratified and segmented
according to their age, income, cultural background, gender,
education, etc(Demography).
Sampling size: A survey was conducted for one hundred respondents.
5. Analyze the collected information:
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This involves converting raw material in to useful information. It
involves tabulation of data and using statically measures on them for
developing frequency distribution and calculating the averages and
dispersions.
6. Report research findings:
This phase will mark the culmination of the marketing research efforts.
The report with the research finding is a formal written document.
INDUSTRY PROFILE
HISTORY AND ORGANIZATION OF MUTUAL FUNDS IN
INDIA
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. The
history of mutual funds in India can be broadly divided into four distinct phasesFirst 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 launchedby 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):
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
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established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab
National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank
of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its
mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
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 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:
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs.29,835 crores as at the end of
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January 2003, representing broadly, the assets of US 64 scheme, assured return and
certain other schemes. The Specified Undertaking of Unit Trust of India,
functioning under an administrator and under the rules framed by Government of
India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It
is registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000
crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth. As at the end of September, 2004, there
were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
The graph indicates the growth of assets over the years.
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Graph 1: The graph showing Growth in assets under management through
Mutual Funds
What is Systematic Transfer Plan (STP)Imagine a scenario when you want to invest a big lump sum amount in stock
market ? As markets are volatile and can go up or down very soon , there is
always risk of loosing a big chunk of your investment (Learn about Stock
Markets) . Take a case where you want to invest 10 lacs in Equity Mutual
funds and suddenly market crashes for next 2 months, In this case a big
chunk of your investment will be lost, on the other hand if market moves uppretty fast, you can make a good profit. Here you have to decide your main
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focus. If its minimizing risk and getting good decent returns in long-term,
You should use something called Systematic Transfer Plan (STP) .
What is STP (Systematic TransferPlan)
You should first understand SIP . SIP is way of investing in Mutual funds
monthly, where a fixed amount of money goes from your Bank Account to
Mutual funds, so if you do a SIP of 1,000 for 1 yr, it means that every month
on a fixed date (chosen by you) 1,000 will be invested in a Fixed Mutual
fund you choose. Lets understand STP now, In STP we invest a lump sum
amount in some Mutual Fund and then a fixed sum is transferred from that
mutual fund to another mutual fund .
Mutual Fund and then a fixed sum is transferred from that mutual fund to
another mutual fund .
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Why and When to use STP
When will it work : STP will make sense from DEBT -> EQUITY when
markets are mayvery volatile and you dont want to take risk with your
money in a short span of time, If you invest through STP in markets and
markets fall or have lots of volatile moves, then this situation will be better
than the one time investment option. This is still better than putting money
in Bank and doing a SIP, because at least you money is earning some returns
on debt part in STP .
When will it not work : Incase markets are already at the end of a Bear
market and markets can starts it upmove anytime, in that case STP will not
deliver the best returns like SIP, one time investment is a good choice in that
case. But then you never know that when will markets start go up. Given
that a retail investor does not have all the tools and time to research the
markets, its not advisable to invest lump sum in any case. Its better to get
4-5% less returns than to see a huge downside of your money in short time,
Smart investors think about returns, Smartest ones take care of risk first .
Understand How to time markets using Nifty PE analysis
SWP : However If you redeem your units in mutual funds every
month and get it deposited in your Bank accounts , its called SWP
(systematic Withdrawal Plan) , which is recommended to liquidate
your mutual funds corpus after you see a good bull market to protect
your investment .
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4 advantages of STP
STP has 4 advantages and works in 4 ways for you . They are :
Works as SIP : You can invest in a Debt funds and from there you can start
a STP to an Equity Fund , so it works like a systematic Investment Plan
(SIP) .
Works as SWP : So STP can also work like SWP, because with some funds
you can do transfer from Equity funds to Debt Funds, so when markets look
risky to you, you can start a STP from Equity -> Debt funds, which will act
like SWP .
Liquidity : Generally one does STP from Debt -> Equity funds, so your
money is invested in Debt fund. This means you can sell it anytime if you
want. Hence it works like a Emergency Fund also. Incase you need money
urgently, it can act like a liquid asset (at least for the time being in the start
when you have more money in Debt fund)
Growth in Money : Not to forget that your money is invested in Debt
funds, so your money is also growing at debt returns , at least the part which
is lying in the debt funds .
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Some Helpful Tips
Invest in ELSS , If you want to invest in ELSS schemes and have
lump sum money , better put it in a debt funds and do a STP .
Rebalance your portfolio, Use STP as a tool to rebalance your asset
allocation, when your equity part goes up , start STP from Equity-
Debt for 6 months or 1 yr, and bump up your debt part and if your
Debt part goes up, do Debt -> Equity STP . Power of Asset Allocation
and Portfolio Rebalancing
Take advantage of market condition , If markets have gone too
high now and every other person on the road is talking about Stock
and stock markets are more famous than Saas Bahu Serials,
immediately start your STP from Equity to Debt (literally Rush) . On
the other hand when markets are deep down and Why dont you buy
stocks is feels abusive and everyone face looks like some body hasdied at home when you mentions stock markets, know that its a time
to start a STP from your Debt > Equity (Literally rush again) . You
dont need to see any indicators to predict the markets, the two real
life scenarios I have described here are enough, try to remember
markets around 2007 End(bull market) and Jan 2009 (markets lowest
point) . STP can be used as switching mechanism in ULIP , though
its very restrictive and with less choices .
Using STP when an important goal is near, If you are saving for
some important goal like Child Education , Buying Home or
Retirement and your goal is approaching near by , dont wait till
target date , you dont want to see your Money dip by 40-50% within
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6 months or so if markets suddenly crash , start moving your money
out of equity and transfer it to Debt now through STP .
Two types of STP
There are two types of STP plans , Fixed and Capital Appreciation. In Fixed
Plan means a fixed sum will be transfered to the target mutual funds , on the
other hand in Capital Appreciation , only the amount of capital which is
appreciated gets transferred , that was the original lumpsum amount invested
in the start is protected . Capital Appreciation choice is only with Growth
Plan and not dividend plan . Here is the list of all the STP Plans as of now .
Important Points
Typically, a minimum of six such transfers are to be agreed on by
investors in STP , just like SIP
Generally most of the mutual funds allow Debt -> Equity STP and not
reverse , Only handful of Mutual Funds like Kotak allows it .
STP is a facility for convenience , when the transfer happens from one
mutual funds to another its still considered as selling of mutual funds
and then buying another one , so tax rules applies in the same way .
Most of the funds allow only Monthly and Quarterly STP , some
allow weekly and fortnightly also .
There can be some minimum amount requirement for starting an STP
like say at least 1,00,000 needs to be invested in Debt funds to start a
STP to Equity . Some restriction like this will be there .
There can be additional Switching Charges for availing STP facility
Entry load and Entry load may still apply while buying and selling of
mutual funds through STP.
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Securities Transaction Tax @ 0.25% will be deducted on equity
oriented funds at the time of redemption or switch to another scheme
in STP .
CONSUMER PERCEPTION TOWARDS MUTUAL
FUNDS CLASSIFIED AS FOLLOW Based on their structure:
Open-ended funds: Investors can buy and sell the units from the fund, at
any point of time.
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Close-ended funds: These funds raise money from investors only once.
Therefore, after the offer period, fresh investments can not be made into the
fund. If the fund is listed on a stocks exchange the units can be traded like
stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New
Fund Offers of close-ended funds provided liquidity window on a periodic
basis such as monthly or weekly. Redemption of units can be made during
specified intervals. Therefore, such funds have relatively low liquidity.
Based on their investment objective:
Equity funds: These funds invest in equities and equity relatedinstruments. With fluctuating share prices, such funds show volatile
performance, even losses. However, short term fluctuations in the market,
generally smoothens out in the long term, thereby offering higher returns
at relatively lower volatility. At the same time, such funds can yield great
capital appreciation as, historically, equities have outperformed all asset
classes in the long term. Hence, investment in equity funds should be
considered for a period of at least 3-5 years. It can be further classified as:
i) Index funds- In this case a key stock market index, like BSE Sensex
or Nifty is tracked. Their portfolio mirrors the benchmark index both in
terms of composition and individual stock weightages.
ii) Equity diversified funds- 100% of the capital is invested in equities
spreading across different sectors and stocks.
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iii|) Dividend yield funds- it is similar to the equity diversified funds
except that they invest in companies offering high dividend yields.
iv) Thematic funds- Invest 100% of the assets in sectors which are related
through some theme.
e.g. -An infrastructure fund invests in power, construction, cements
sectors etc.
v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A
banking sector fund will invest in banking stocks.
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the
investors.
Balanced fund:Their investment portfolio includes both debt and equity. As
a result, on the risk-return ladder, they fall between equity and debt funds.
Balanced funds are the ideal mutual funds vehicle for investors who prefer
spreading their risk across various instruments. Following are balanced funds
classes:
i) Debt-oriented funds -Investment below 65% in equities.
ii) Equity-oriented funds -Invest at least 65% in equities, remaining in
debt.
Debt fund:They invest only in debt instruments, and are a good optionfor investors averse to idea of taking risk associated with equities.
Therefore, they invest exclusively in fixed-income instruments like bonds,
debentures, Government of India securities; and money market
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instruments such as certificates of deposit (CD), commercial paper (CP)
and call money. Put your money into any of these debt funds depending on
your investment horizon and needs.
i) Liquid funds- These funds invest 100% in money market instruments, a
large portion being invested in call money market.
ii) Gilt funds ST- They invest 100% of their portfolio in government
securities of and T-bills.
iii) Floating rate funds - Invest in short-term debt papers. Floaters invest
in debt instruments which have variable coupon rate.
iv) Arbitrage fund- They generate income through arbitrage opportunities
due to mis-pricing between cash market and derivatives market. Funds are
allocated to equities, derivatives and money markets. Higher proportion
(around 75%) is put in money markets, in the absence of arbitrage
opportunities.
v) Gilt funds LT- They invest 100% of their portfolio in long-term
government securities.
vi) Income funds LT- Typically, such funds invest a major portion of the
portfolio in long-term debt papers.
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt
and an exposure of 10%-30% to equities.
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viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in
line with that of the fund.
CONSUMER INVESTMENT STRATEGIES
1. Systematic Investment Plan: under this a fixed sum is invested each
month on a fixed date of a month. Payment is made through post dated
cheques or direct debit facilities. The investor gets fewer units when the
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NAV is high and more units when the NAV is low. This is called as the
benefit of Rupee Cost Averaging (RCA)
2. Systematic Transfer Plan: under this an investor invest in debt
oriented fund and give instructions to transfer a fixed sum, at a fixed
interval, to an equity scheme of the same mutual fund.
3. Systematic Withdrawal Plan: if someone wishes to withdraw from a
mutual fund then he can withdraw a fixed amount each month.
RISK V/S. RETURN
RECENT TRENDS IN MUTUAL FUND INDUSTRY
The most important trend in the mutual fund industry is the aggressive
expansion of the foreign owned mutual fund companies and the decline
of the companies floated by nationalized banks and smaller private
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sector players. Many nationalized banks got into the mutual fund
business in the early nineties and got off to a good start due to the stock
market boom prevailing then. These banks did not really understand the
mutual fund business and they just viewed it as another kind of banking
activity. Few hired specialized staff and generally chose to transfer staff
from the parent organizations. The performance of most of the schemes
floated by these funds was not good. Some schemes had offered
guaranteed returns and their parent organizations had to safekeeping out
these AMCs by paying large amounts of money as the difference
between the guaranteed and actual returns. The service levels were also
very bad. Most of these AMCs have not been able to retain staff, float
new schemes etc. and it is doubtful whether, barring a few exceptions,
they have serious plans of continuing the activity in a major way. The
experience of some of the AMCs floated by private sector Indian companies was
also very similar. They quickly realized that the AMC business is a business, which
makes money in the long term and requires deep-pocketed support in the
intermediate years. Some have sold out to foreign owned companies, some have
merged with others and there is general restructuring going on The foreign owned
companies have deep pockets and have come in here with the expectation of a long
pull. They can be credited with introducing many new practices such as new product
innovation, sharp improvement in service standards and disclosure, usage of
technology, broker education and support etc. In fact, they have forced the industry
to upgrade itself and service levels of organizations like UTI have improved
dramatically in the last few years in response to the competition provided by these.
MUTUAL FUND COMPANIES IN INDIA
List of Some of the AMCs Operating in India
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Name of the AMC Nature of
ownership
Alliance Capital Asset Management (I) Private
Limited
Private Foreign
Birla Sun Life Asset Management Company Limited Private Indian
Bank of Baroda Asset Management Company
Limited
Banks
Bank of India Asset Management Company Limited Banks
Canbank Investment Management Services Limited Banks
Cholamandalam Cazenove Asset Management
Company Limited
Private Foreign
Dundee Asset Management Company Limited Private Foreign
DSP Merrill Lynch Asset Management Company
Limited
Private Foreign
Escorts Asset Management Limited Private Indian
First India Asset Management Limited Private Indian
GIC Asset Management Company Limited Institutions
IDBI Investment Management Company Limited Institutions
Indfund Management Limited Banks
ING Investment Asset Management Company
Private Limited
Private Foreign
J M Capital Management Limited Private Indian
Jardine Fleming (I) Asset Management Limited Private Foreign
Kotak Mahindra Asset Management Company
Limited
Private Indian
Kothari Pioneer Asset Management Company Private Indian
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Limited
Jeevan Bima Sahayog Asset Management Company
Limited
Institutions
Morgan Stanley Asset Management Company
Private Limited
Private Foreign
Punjab National Bank Asset Management Company
Limited
Banks
Reliance Capital Asset Management Company
Limited
Private Indian
State Bank of India Funds Management Limited Banks
Shriram Asset Management Company Limited Private Indian
Sun F and C Asset Management (I) Private Limited Private Foreign
Sundaram Newton Asset Management Company
Limited
Private Foreign
Tata Asset Management Company Limited Private Indian
Credit Capital Asset Management Company Limited Private Indian
Templeton Asset Management (India) Private
Limited
Private Foreign
Unit Trust of India Institutions
Zurich Asset Management Company (I) Limited Private Foreign
The sponsorers of Association of Mutual Funds in India
Bank Sponsored :
SBI Fund Management Ltd.
BOB Asset Management Co. Ltd.
Canbank Investment Management Services Ltd.
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UTI Asset Management Company Pvt. Ltd.
Institutions:
GIC Asset Management Co. Ltd.
Jeevan Bima Sahayog Asset Management Co. Ltd.
Private Sector
Indian:
BenchMark Asset Management Co. Pvt. Ltd.
Cholamandalam Asset Management Co. Ltd.
Credit Capital Asset Management Co. Ltd.
Escorts Asset Management Ltd.
JM Financial Mutual Fund
Kotak Mahindra Asset Management Co. Ltd.
Reliance Capital Asset Management Ltd.
Sahara Asset Management Co. Pvt. Ltd
Sundaram Asset Management Company Ltd.
Tata Asset Management Private Ltd.
Predominantly India Joint Ventures:
Birla Sun Life Asset Management Co. Ltd.
DSP Merrill Lynch Fund Managers Limited
HDFC Asset Management Company Ltd
Predominantly Foreign Joint Ventures:
ABN AMRO Asset Management (I) Ltd.
Alliance Capital Asset Management (India) Pvt. Ltd.
Deutsche Asset Management (India) Pvt. Ltd.
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Fidelity Fund Management Private Limited
Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.
HSBC Asset Management (India) Private Ltd.
ING Investment Management (India) Pvt. Ltd.
Morgan Stanley Investment Management Pvt. Ltd.
Principal Asset Management Co. Pvt. Ltd.
Prudential ICICI Asset Management Co. Ltd.
Standard Chartered Asset Mgmt Co. Pvt. Ltd.
Association of Mutual Funds in India Publications
AMFI publishes mainly two types of bulletin. One is on the monthly
basis and the other is quarterly. These publications are of great support
for the investors to get intimation of the know-how of their parked
money.
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INTRODUCTION ABOUT MUTUAL FUND
Mutual Funds :Why ?
Professional management
Diversification and Lowered risks
Low costs
Liquidity
Transparency
Flexibility
Choice of schemes
Tax benefits
regulation
The advantages of investing in a Mutual Fund are:
Professional Management
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Mutual funds hire full-time, high-level investment professionals. Funds
can afford to do so as they manage large pools of money. The managers
have real-time access to crucial market information and are able to
execute trades on the largest and most cost-effective scale.
Diversification
Mutual funds invest in a broad range of securities. This limits
investment risk by reducing the effect of a possible decline in the value
of any one security. Mutual fund unit-holders can benefit from
diversification techniques usually available only to investors wealthy
enough to buy significant positions in a wide variety of securities.
Low Costs
A mutual fund let's you participate in a diversified portfolio for as little
as Rs.5,000/-, and sometimes less. And with a no-load fund, you pay
little or no sales charges to own them.
Liquidity
In open-ended schemes, you can get your money back promptly at net
asset value related prices from the mutual fund itself.
Transparency
You get regular information on the value of your investment in addition
to disclosure on the specific investments made by the mutual fund
scheme.
Convenience and Flexibility
You own just one security rather than many; yet enjoy the benefits of adiversified portfolio and a wide range of services. Fund managers decide
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what securities to trade collect the interest payments and see that your
dividends on portfolio securities are received and your rights exercised.
It also uses the services of a high quality custodian and registrar in order
to make sure that your convenience remains at the top of our mind.
Personal Service
One call puts you in touch with a specialist who can provide you with
information you can use to make your own investment choices. They
will provide you personal assistance in buying and selling your fund
units, provide fund information and answer questions about your
account status. Our Customer service centers are at your service and our
Marketing team would be eager to hear your comments on our schemes.
Mutual Funds : What is it ?
Mutual Fund Operation Flow Chart
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A Mutual Fund is a trust that pools the savings of a number of investors who
share a common financial goal. The money thus collected is then invested in
capital market instruments such as shares, debentures and other securities. The
income earned through these investments and the capital appreciation realized
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. The flow chart below describes
broadly the working of a mutual fund:
Mutual Fund : What is it made of ?
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Investors:
Every investor, given his financial position and personal disposition, has a certain
tendency preference to take risk (risk profile / risk appetite). The hypothesis is
that by taking an incremental risk (of losing capital, wholly or partly), it would
be possible for the investor to earn an incremental return.
But assuming risk without regularly monitoring it is foolhardy. Therefore, it
would be prudent for investors who take a risk to be able to manage this risk.
MF is a solution for investors who lack the time, or the inclination or the skills to
actively manage their investment risk in individual securities. They can delegate
this role to the MF, while retaining the right and the obligation to monitor their
investments in thescheme (which, in turn, invests in individual securities).
In the absence of a MF option, the moneys of such passive these investors
would lie either in bank deposits or other safe investment options, thus
depriving the investors of the possibility of earning a better return.
Investing through a MF would make economic sense for an investor if his
investment, over the medium to long term, fetches a return (net of all costs and
expenses) that is higher than what she would otherwise have earned by investing
directly.
Because the goal of investing is to accumulate real wealth an enhanced ability
to pay for goods and services the ultimate focus of the long-term investor must
be on real, not nominal, returns.
Trustees:
Trustees are the people within the mutual fund organization, who are responsible
to ensure for ensuring that investors interests are properly taken care of In return
for their services, they are paid trustee fees, which is normally charged to the
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scheme.
Asset Management Company (AMC):
AMCs manage the investment portfolios of schemes. An AMCs Income for an
AMC comes through from the management fees that are it charges to the
schemes. The management fee is calculated as a percentage of net assets
managed. Some countries provide forperformance basedmanagement fees as
well.
Distributors
Distributors earn a commission for bringing investors into the schemes of a MF.
This commission is an expense for the scheme,
although there are occasions when the AMC chooses to bear the cost, wholly or
partly.
Depending on the financial and physical resources at their disposal, they
distributors could be:
Tier 1 distributors (having an owned or franchised network reaching out to
investors all across the country); or
Tier 2 distributors (regional players with some reach within their region); or
Tier 3 distributors (marginal players).
It is paradoxical that distributors earn a commission from the AMC, but are
expected to safeguard the financial health of investors from whom they do not
earn a fee.
It is almost like a doctor earning a commission from the pharmaceutical
company, but expected to safeguard the physical health of the patient who does
not pay him anything.
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Registrars
The investors holding in various schemes is typically tracked by the schemes
Registrar and Transfer agent (R&T). Some AMCs prefer to handle this role in-
house. The registrar / AMC maintains an account of the investors investments
in and dis-investment from the scheme. Requests to invest more money into a
scheme, or to recover moneys against existing investments in the scheme are
processed by the R&T.
Custodian / Depository
The custodian maintains custody of thesecurities in which the scheme invests (as
distinct from the registrar who tracks the
investment by investors in the scheme). This ensures an ongoing independent
record of the investments of the scheme. The custodian also follows up on
various corporate actions, such as rights, bonus and dividends declared by
invested companies.
In a situation where securities are increasingly being dematerialized, the role of
the depository for such independent record of investments is increasing growing.
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Different types of Mutual Funds :
Wide variety of Mutual Fund Schemes exists to cater to the needs such
as financial position, risk tolerance and return expectations etc. The table
below gives an overview into the existing types of schemes in the
Industry.
TYPES OF MUTUAL FUND SCHEMESBy Structure:
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.
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Close - Ended Schemes : A closed-end fund has a stipulated maturity
period which generally ranging from 3 to 15 years. The fund is open for
subscription only during a specified period. Investors can invest in the
scheme at the time of the initial public issue and
thereafter they can buy or sell the units of the scheme on the stock
exchanges where they are listed. In order to provide an exit route to the
investors, some close-ended funds give an option of selling back the
units to the Mutual Fund through periodic repurchase at NAV related
prices. SEBI Regulations stipulate that at least one of the two exit routesis provided to the investor.
Interval Schemes: Interval funds combine the features of open-ended
and close-ended schemes. They are open for sale or redemption during
pre-determined intervals at NAV related prices.
By Investment Objective :
Growth Schemes: The aim of growth funds is to provide capital
appreciation over the medium to long- term. Such schemes normally
invest a majority of their corpus in equities. It has been proven that
returns from stocks, have outperformed most other kind of investments
held over the long term. Growth schemes are ideal for investors having
a long-term outlook seeking growth over a period of time.
Income Schemes : The aim of income funds is to provide regular and
steady income to investors. Such schemes generally invest in fixed
income securities such as bonds, corporate debentures and Government
securities. Income Funds are ideal for capital stability and regular
income.
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Balanced Schemes : The aim of balanced funds is to provide both
growth and regular income. Such schemes periodically distribute a part
of their earning and invest both in equities and fixed income
securities in the proportion indicated in their offer documents. In a
rising stock market, the NAV of these schemes may not normally keep
pace, or fall equally when the market falls. These are ideal for investors
looking for a combination of income and moderate growth.
Money Market Schemes: The aim of money market funds is to
provide easy liquidity, preservation of capital and moderate income.
These schemes generally invest in safer short-term instruments such as
treasury bills, certificates of deposit, commercial paper and inter-bank
call money. Returns on these schemes may fluctuate depending upon
the interest rates prevailing in the market. These are ideal for Corporate
and individual investors as a means to park their surplus funds for short
periods.
Load Funds: A Load Fund is one that charges a commission for entry or
exit. That is, each time you buy or sell units in the fund, a commission
will be payable. Typically entry and exit loads range from 1% to 2%. It
could be worth paying the load, if the fund has a good performance
history.
No-Load Funds: A No-Load Fund is one that does not charge a
commission for entry or exit. That is, no commission is payable on
purchase or sale of units in the fund. The advantage of a no load fund is
that the entire corpus is put to work.
Other Schemes :
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Tax Saving Schemes: These schemes offer tax rebates to the investors
under specific provisions of the Indian Income Tax laws as the
Government offers tax incentives for investment in specified avenues.
Investments made in Equity Linked Savings Schemes (ELSS) and
Pension Schemes are allowed as deduction u/s 88 of the Income Tax
Act, 1961. The Act also provides opportunities to investors to save
capital gains u/s 54EA and 54EB by investing in Mutual Funds,
provided the capital asset has been sold prior to April 1, 2000 and the
amount is invested before September 30, 2000.
Special Schemes :
Industry Specific Schemes : Industry Specific Schemes invest only in
the industries specified in the offer document. The investment of these
funds is limited to specific industries like InfoTech, FMCG, and
Pharmaceuticals etc.
Index Schemes : Index Funds attempt to replicate the performance of a
particular index such as the BSE Sensex or the NSE 50
Sector Specific Schemes: Sectoral Funds are those, which invest
exclusively in a specified industry or a group of industries or various
segments such as 'A' Group shares or initial public offerings
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COMPANY PROFILE
Reliance Mutual Fund (RMF) has been established as a trust under the
Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the
Settlor/Sponsor.
OUR FOUNDER
Dhirubhai H. Ambani
Founder Chairman,
Reliance Industries Limited,
India
December 28, 1932 - July 6,
2002
Major Group Companies:
Reliance Industries Limited,
India's largest private sector
company.
Birthplace: Chorwad, village in Saurashtra (Gujarat), India
Father's Name: Hirachand Govardhandas Ambani
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Mother's Name: Jamunaben Hirachand Ambani
INTRODUCTION
About Reliance Capital Asset Management Ltd:
Reliance Capital Asset Management Limited (RCAM), a company registered
under the Companies Act, 1956 was appointed to act as the Investment Manager
of Reliance Mutual Fund.Reliance Capital Asset Management Limited is a
wholly owned subsidiary of Reliance Capital Limited, the sponsor. The entire
paid-up capital (100%) of Reliance Capital Asset Management Limited is held by
Reliance Capital Limited.
Reliance Capital Asset Management
Limited was approved as the Asset Management Company for the Mutual Fund
by SEBI vide their letter no IIMARP/1264/95 dated June 30, 1995. The Mutual
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Fund has entered into an Investment Management Agreement (IMA) with RCAM
dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI
(Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is authorized to
act as Investment Manager of Reliance Mutual Fund. The net worth of the Asset
Management Company including preference shares as on March 31, 2005 is
Rs.30.13 crores.
RCAM has been registered as a portfolio manager vide SEBI Registration No.
INP000000423 and renewed effective 1st August, 2003.
RCAM has commenced these activities. It has been
ensured that key personnel of the AMC, the systems, back office, bank and
securities accounts are segregated activity wise and there exists systems to
prohibit access to inside information of various activities. As per SEBI
Regulations, it will further ensure that AMC meets the capital adequacy
requirements, if any, separately for each such activity.
RCAM has been appointed as the Investment
Manager of "Reliance India Power Fund", a Venture Capital Fund registered with
SEBI vide Registration no.IN/VCF/05-06/062 dated June 16, 2005 but this
activity is yet to commence.
Mr. Amitabh Chaturvedi *
Raheja Empress,
Flat No. 1201/1202,
12th Floor, Veer Savarkar Marg,
Opp. Siddhi Vinayak Temple,
Prabhadevi, Mumbai - 400 025
Director:
Reliance Asset Management (Singapore)
Pte Limited,
Reliance Asset Management (Mauritius)
Limited, Reliance Infoinvestments
Limited.
Mr. Kanu Doshi
102, Shivala, Khatau Road,Cuffe Parade, Mumbai - 400 005
Chairman: Matrix Advisors (India)
Private Limited
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Chartered Accountant
Director:
BOB Capital Markets Limited,Peoples
Financial Services Limited
Alphaplus Investment Management
Private Limited.
Mr. Manu Chadha
C-35, Malcha Marg,
Chankyapuri,
New Delhi - 110 021
Chartered Accountant
Director:
TRC Financial Services Ltd,
Himalayan Crest Power Ltd, GIC
Housing Finance Ltd., Kotla Hydro
Power Ltd., Ispat Industries Ltd, SBI
Funds Management Pvt. Ltd.
About Reliance Mutual Fund :
Reliance Mutual Fund (RMF) has been established as a trust under the
Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the
Settlor/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as the
Trustee.
RMF has been registered with the Securities & Exchange Board of India
(SEBI) vide registration number MF/022/95/1 dated June 30, 1995. The
name of Reliance Capital Mutual Fund has been changed to Reliance
Mutual Fund effective 11th. March 2004 vide SEBI's letter no.
IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was
formed to launch various schemes under which units are issued to the Public
with a view to contribute to the capital market and to provide investors the
opportunities to make investments in diversified securities.
Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with
Average Assets Under Management (AAUM) of Rs. 88,388 Crs (AAUM
for 30th Apr 09 ) and an investor base of over 71.53 Lacs. Reliance Mutual
Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of thefastest growing mutual funds in the country. RMF offers investors a well-
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rounded portfolio of products to meet varying investor requirements and has
presence in 118 cities across the country. Reliance Mutual Fund constantly
endeavors to launch innovative products and customer service initiatives to
increase value to investors. "Reliance Mutual Fund schemes are managed
by Reliance Capital Asset Management Limited., a subsidiary of Reliance
Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the
balance paid up capital being held by minority shareholders." Reliance
Capital Ltd. is one of Indias leading and fastest growing private sector
financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance
Capital Ltd. has interests in asset management, life and general insurance,
private equity and proprietary investments, stock broking and other
financial services
The main objectives of the Trust are:
To carry on the activity of a Mutual Fund as may be permitted at law
and formulate and devise various collective Schemes of savings and
investments for people in India and abroad and also ensure liquidity
of investments for the Unit holders;
To deploy Funds thus raised so as to help the Unit holders earn
reasonable returns on their savings and
To take such steps as may be necessary from time to time to realise
the effects without any limitation.
The Sponsors
Reliance Capital Limited Corporate & Registered Office :
Reliance Capital Ltd. H Block, 1st Floor, Dhirubhai Ambani Knowledge
City, Koparkhairne, Navi Mumbai - 400 710.Tel. 022 30327000, Fax. 022
30327202
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PRODUCTS AND SERVICES OF RELIANCE MF
Equity Schemes
Reliance Equity Fund
(An open-ended diversified Equity Scheme.) The primary investment
objective of the scheme is to seek to generate capital appreciation &
provide long-term growth opportunities by investing in a portfolioconstituted of equity & equity related securities of top 100 companies
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by market capitalization & of companies which are available in the
derivatives segment from time to time and the secondary objective is to
generate consistent returns by investing in debt and money market
securities.
Reliance Tax Saver (ELSS) Fund
(An Open-ended Equity Linked Savings Scheme.) The primary
objective of the scheme is to generate long-term capital appreciation
from a portfolio that is invested predominantly in equity and equity
related instruments.
Reliance Equity Opportunities Fund
(An Open-Ended Diversified Equity Scheme.) The primary investment
objective of the scheme is to seek to generate capital appreciation &
provide long-term growth opportunities by investing in a portfolio
constituted of equity securities & equity related securities and the
secondary objective is to generate consistent returns by investing in debt
and money market securities.
Reliance Vision Fund
(An Open-ended Equity Growth Scheme.) The primary investment
objective of the Scheme is to achieve long term growth of capital by
investment in equity and equity related securities through a research
based investment approach.
Reliance Growth Fund
(An Open-ended Equity Growth Scheme.) The primary investment
objective of the Scheme is to achieve long term growth of capital by
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investment in equity and equity related securities through a research
based investment approach.
Reliance Index Fund
(An Open Ended Index Linked Scheme.) The Investment Objective
under the Nifty Plan is to replicate the composition of the Nifty, with a
view to endeavor to generate returns, which could approximately be the
same as that of Nifty. The Investment Objective under the Sensex plan
is to replicate the composition of the Sensex, with a view to endeavor to
generate returns, which could approximately be the same as that of
Sensex.
Reliance NRI Equity Fund
(An open-ended Diversified Equity Scheme.) The Primary investment
objective of the scheme is to generate optimal returns by investing in
equity or equity related instruments primarily drawn from the
Companies in the BSE 200 Index
Debt Schemes.:
Reliance Monthly Income Plan
(An Open Ended Fund. Monthly Income is not assured & is subject to
the availability of distributable surplus ) The Primary investment
objective of the Scheme is to generate regular income in order to make
regular dividend payments to unitholders and the secondary objective is
growth of capital.Primarily the investment shall be made in debt and
money market securities (i.e. 80%) with a small exposure (i.e. upto
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20%) in equity.
Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term
Gilt Plan
Open-ended Government Securities Scheme) The primary objective of
the Scheme is to generate Optimal credit risk-free returns by investing
in a portfolio of securities issued and guaranteed by the central
Government and State Government
Reliance Income Fund
(An Open-ended Income Scheme) The primary objective of the scheme
is to generate optimal returns consistent with moderate levels of risk.
This income may be complemented by capital appreciation of the
portfolio. Accordingly, investments shall predominantly be made in
Debt & Money Instruments.
Reliance Medium Term Fund
(An Open End Income Scheme with no assured returns.) The primary
investment objective of the Scheme is to generate regular
income in order to make regular dividend payments to unit holders and
the secondary objective is growth of capital
Reliance Short Term Fund
(An Open End Income Scheme) The primary investment objective of
the scheme is to generate stable returns for investors with a short
investment horizon by investing in Fixed Income Securities of short
term maturity.
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Reliance Liquid Fund
(Open-ended Liquid Scheme). The primary investment objective of the
Scheme is to generate optimal returns consistent with moderate levels
of risk and high liquidity. Accordingly, investments shall
predominantly be made in Debt and Money Market Instruments.
Reliance Fixed Term Scheme
(Close-ended Income Scheme) The primary objective of the Scheme is
to seek to achieve regular returns / growth of capital by investing in a
portfolio of fixed income securities normally maturing in line with the
time profile of the plan with the objective of limiting interest rate
volatility.
Reliance Floating Rate Fund
(An Open End Income Scheme) The primary objective of the scheme is
to generate regular income through investment in a portfolio
comprising substantially of Floating Rate Debt Securities (including
floating rate securitized debt and Money Market Instruments and Fixed
Rate Debt Instruments swapped for floating rate returns). The
scheme shall also invest in Fixed rate debt Securities (including fixed
rate securitized debt, Money Market Instruments and Floating Rate
Debt Instruments swapped for fixed returns
Reliance NRI Income Fund
(An Open-ended Income scheme) The primary investment objective of
the Scheme is to generate optimal returns consistent with moderate
levels of risks. This income may be complimented by capital
appreciation of the portfolio. Accordingly, investments shallpredominantly be made in debt Instruments.
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Reliance Fixed Maturity Fund - Series I
(A Close Ended Income Scheme)
The primary investment objective of the Scheme is to seek to achieve
regular returns / growth of capital by investing in a portfolio of fixed
income securities normally maturing in line with the time profile of the
Plan with the objective of limiting interest rate volatility.
Reliance Fixed Maturity Fund - Series II
(A closed ended Income Scheme) The primary investment objective of
the Scheme is to seek to achieve growth of capital by investing in a
portfolio of fixed income securities normally maturing in line with the
time profile of the respective plans.
Reliance Liquidity Fund
(An Open - ended Liquid Scheme) The investment objective of the
Scheme is to generate optimal returns consistent with moderate levels
of risk and high liquidity. Accordingly, investments shall
predominantly be made in Debt and Money Market Instruments.
Reliance Regular Savings Fund
(An Open - ended scheme)
The Investment Objectives:
Debt Option: The primary investment objective of this plan is to
generate optimal returns consistent with moderate level of risk. This
income may be complemented by capital appreciation of the portfolio.
Accordingly investments shall predominantly be made in Debt &
Money Market Instruments.
Equity Option: The primary investment objective is to seek capitalappreciation and or consistent returns by actively investing in equity /
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equity related securities.
Hybrid Option: The primary investment objective is to generate
consistent return by investing a major portion in debt & money market
securities and a small portion in equity & equity related instruments.
Sector Specific Schemes
Sector Funds are specialty funds that invest in stocks falling into a
certain sector of the economy. Here the portfolio is dispersed or spread
across the stocks in that particular sector. This type of scheme is ideal
for investors who have already made up their mind to confine risk and
return to a particular sector.
Reliance Banking Fund
Reliance Mutual Fund has an Open-Ended Banking Sector Scheme
which has the primary investment objective to generate continuousreturns by actively investing in equity / equity related or fixed income
securities of banks.
Reliance Diversified Power Sector Fund
Reliance Diversified Power Sector Scheme is an Open-ended Power
Sector Scheme.
The primary investment objective of the Scheme is to seek to generate
consistent returns by actively investing in equity / equity related or fixed
income securities of Power and other associated companies.
Reliance Pharma Fund
Reliance Pharma Fund is an Open-ended Pharma Sector Scheme.The primary investment objective of the Scheme is to generate
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consistent returns by investing in equity / equity related or fixed income
securities of Pharma and other associated companies.
Reliance Media & Entertainment Fund
Reliance Media & Entertainment Fund is an Open-ended Media &
Entertainment sector scheme. The The primary investment objective of
the Scheme is to generate consistent returns by investing in equity /
equity related or fixed income securities of media & entertainment and
other associated companies
WHY RELIANCE MUTUAL FUND ?
Reliance Mutual Fund ,a part of the Anil Dhirubhai Ambani
Group(R-ADAG) is one of the fastest growing mutual fund company
in the country.
Reliance mutual fund offer investors a well rounded portfolio of
products to meet varying investor requirements.
Reliance mutual fund has a presence over 80 cities across the country.
Reliance mutual fund investor base of over 2 million and manages
assets over Rs.88388 crore as on 30 April 2009,
(source:www.amfiindia.com)
A fund from Reliance mutual fund ,an AMC with a established track
record of consistent return.
Investor friendly personal and technological support.
Strong and consistent fund management team.
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SWOT AnalysisSTRENGTHS
Reliance Mutual Fund ,a part of the Anil Dhirubhai Ambani
Group(R-ADAG) is one of the fastest growing mutual fund
company in the country.
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Reliance mutual fund offer investors a well rounded portfolio of
products to meet varying investor requirements.
Reliance mutual fund has a presence over 118 cities across the
country,with investor base over 71.53 lacs.
Reliance mutual fund investor base of over 2 million and
manages assets over Rs.88388 crore as on April 30,2009
(source:www.amfiindia.com)
A fund from Reliance mutual fund ,an AMC with a established
track record of consistent return.
Strong and consistent fund management team.
Investor friendly personal and technological support.
Ensures better costumer services, conveniences ,communication by efficient
network.
Quality product & services High quality standard maintained.
Brand Name Reliance Mutual Fund is popular brand name
among customers.
Good image between customers.
.
WEAKNESS
Less existence in rural areas
less expenditure on advertising and promotional schemes
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OPPORTUNITIES
Jodhpur is a big industrial area so there is a huge opportunities.
Reliance mutual fund has a very good quality products &schemes
comparison to other competitor.
Reliance is first company which launched Equity fund with hedging
feature which aim to minimize risk..
Good perception among the customer.
THREATS
Less schemes provided by Reliance mutual fund comparison to
competitor.
Lot of competitor in market.
Lot of schemes are provided by competitors.
Share market may be go down in future.
The Mutual Fund is not guaranteeing or assuring any dividend/ bonus.
ANALYSIS AND INTERPRETATION OF
DATA
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Knowing the awareness and perception of the customers is very
important in any industry. this provide insight into the customer
behavior and his expectation from the industry players. a proper
understanding of the awareness and perception would definitely benefit
the players. this survey attempt to know the mutual fund investor better.
it examines some interesting choices of the retail investor including the
reasons behind investing in mutual funds and the risk tolerance levels of
the investors. the investor knowledge about the mutual funds and what
according to him are the best mutual funds is also analyzed. this udaipur
city survey was conducted to know the retail investor awareness and
perception about mutual funds. It is hoped that this survey in udaipur
city would go a long way in benefiting for reliance mutual fund.
The total sample for the study was 100 across Jodhpur city.
I. AN OVERVIEW :
This section shows an simple overview of respondents like their age
,gender, income profile, saving habits and qualification
(a) Age-profile:
Table No. I(a) showing age profile of respondents:
S. No Age No .of
respondents
Percentage
1. 20-25 19 19%
2. 25-40 40 40%
3. 40-55 21 21%
4. 55-60 15 15%
5. 60-Above 5 5%
Total 100 100%
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INTERPRETATION :
In this survey I found the maximum number of respondents belongs to
the age group of 25-40 years, followed by 40-55 years of age category.
(b) Gender-wise:
Table No. I(b) showing gender wise profile of respondents:
S. No Gender No. of
respondents
Percentage
1. Male 92 92%
2. Female 8 8%
Total 100 100%
Age-profile
40-55
21%
55-60
15%
60-Above
5%
25-40
40%
20-25
19%
20-25
25-40
40-55
55-60
60-Above
Gender-wise overview
Male
92%
Female
8%
Male
Female
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INTERPRETATION :
Table No.I(b) represents the gender ratio of the respondents in this
survey.92%of the covered respondents were male and remaining 8%
were female
(c)Income Profile:
Table No. I(c) showing income wise profile of respondents:
S. No Income No. of
respondents
Percentage
1. Less then 1.0Lakh
34 17%
2. 1.0-2.0 Lakh 38 38%
3. 2.0-3.0 Lakh 30 30%
4. 3.0-5.0 Lakh 6 6%
5. More then
5.0 Lakh
4 4%
6. No response 5 5%
Total 100 100%
Income Profile
38%
30%
6%4% 5%
17%
0%
5%
10%
15%
20%
25%
30%
35%
40%
No. of respondents
Less then 1.0 Lakh
1.0-2.0 Lakh
2.0-3.0 Lakh
3.0-5.0 Lakh
More then 5.0 Lakh
No response
INTERPRETATION :
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In this survey I found the break up of the respondents. Around 38%of
the respondents have an income between of Rs.1.0-2.0 Lakhs per annum
and 30% of respondents in between 2.0-3.0 Lakhs .it display the income
profile of respondents.
(d) Saving Habits :
.
Table No. I(d) showing saving habits profile of respondents:
S. No Savings No. of
respondents
Percentage
1. Up to Rs.2000
31 31%
2. Rs.2001-
5000
33 33%
3. Rs.5001-
10000
16 16%
4. Rs.10001-
20000
3 3%
5. Above
Rs.20001
1 1%
6. No Response 16 16%
Total 100 100%
Saving Habits of respondentsRs.10001-
200003%
Rs.5001-1000016%
Rs. 2001-500033%
No response16%
aboveRs.20001
1%
up to Rs.2000
31%up to Rs.2000
Rs. 2001-5000
Rs.5001-10000
Rs.10001-20000
aboveRs.20001
No response
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INTERPRETATION :
In this survey around 33% of the respondents reported to have a saving
in the range of Rs.2001-5000 per month .only 1% of the respondents
reported having in higher bracket i.e more then 20001 per month.
(e)Qualification :
Table No. I(e) showing Qualification profile of respondents:
S.No Qualification No. of
respondents
Percentag
e
1. Undergraduates 6 6%
2. Graduates 39 39%
3. Postgraduates 40 40%
4. Others 1 1%
5. No response 14 14%
Total 100 100%
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INTERPRETATION :
The surveyed group are well educated group with 40%being post
graduates and 39%being graduates. around 6% of the samples collectedwere undergraduates.
II. KNOWLEDGE OF MUTUAL FUNDS :
In the survey ,I attempted to understand from the investors their
knowledge of Mutual fund.
6%
39% 40%
1%
14%
0%
10%
20%
30%
40%
No. of respondents
Undergraduates
Graduates
Postgraduates
Others
No response
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(b) Knowledge related to share market:
Table No. II(b) showing knowledge related to share market of
respondents:
S. No Knowledge
related to
share market
No. of
respondents
Percentage
1. Yes 32 32%
2. No 64 64%
3. Cant say 4 4%
Total 100 100%
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Knowledge related to share market:
Yes
32%
No
64%
Can't say
4%
Yes
No
Can't say
INTERPRETATION :
It was found that 64% of the respondents dont know that the Mutual
fund is related to share market. they also dont know that Mutual funds
returns is affected by the fluctuation in share market.
III. Investment objective/decisions :
This section of survey was aimed at understanding the main reason
behind the investment decision made by an individual. I tried to catch
the factor that contribute to making of an investment portfolio off an
individual.
(a)Investment objective:
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S. No Investment
objective
No. of
respondents
Percentage
1. Capital Gain 21 21%2. Generate
Regular
return
6 6%
3. Secure
Future
59 59%
4. Tax benefits 14 14%
Total 100 100%
Investment Objective of Investor
capital gain
21%
generate
reguar return
6%
secure future
59%
tax benefits
14%capital gain
generate reguar return
secure futuretax benefits
INTERPRETATION :
Total number of 100 responses were generated for this question and
multiple response were sought for the various investment objectives. the
analysis brings out the fact that investor were more concerned about the
secure future(59%) and capital gains(21%), and after that they
considered tax benefits(14%) and regular return(6%) as their main
investment objectives.
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(b)Decision affecting Factors:
S. No Decision
affecting
Factors
No. of
respondents
Percentage
1. Economic
scenario
19 19%
2. Company
image
44 44%
3. Fund
performance
21 21%
4. Fund
manager
image
2 2%
5. Tax incentive 14 14%
Total 100 100%
38
88
42
4
28
0
20
40
60
80
100
No. of Respondents
DECISION AFFECTING FACTORS
Economic scenario
Company image
Fund performance
Fund manager image
Tax incentive
INTERPRETATION :
There are certain overall factors that tend to affect the investment decision
decision of the investor, such as economic scenario. I tried to know the
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respondents opinion on these macro factors that further tend to affect
their investment decisions.
This survey showed that company image acts as the determining factor
for their investment with 44%.the second most important factor was
fund performance(21%) and economic scenario(19%).
(c)Information sources regarding Mutual Funds:
S. No Information
sources
No. of
respondents
Percentage
1. Print media 29 29%
2. Electronic
media
21 21%
3. Friends/Relativ
e
6 6%
4. Financial
advisors
19 19%
5. Personal
analysis
4 4%
6. Agents 21 21%
Total 100 100%
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Information sources regarding Mutual Funds
29%
21%6%19%
4%
21% Print mediaElectronic media
Friends/Relative
Financial advisors
Personal analysis
Agents
INTERPRETATION :
In this survey I asked from the respondents about the kind of media that
affect their investment decision.29% of the respondents said that theprint media is the major influencer in making their investment decisions,
electronic media(21%) and agents(21%) were the second major
influencer in investment decision making.
(d)Priority of reason for investment:
S. No Priority for
investment
No. of
respondents
Percentage
1. Saving for
future
51 51%
2. Tax incentive 14 14%
3. Returns 23 23%
4. Future
outlook
7 7%
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5. Brand value 2 2%
6. Risk factors 3 3%
Total 100 100%
Priority of reason for investment
Tax incentive
14%
Returns
23%
Saving for future
51%
Brand value
2%
Future outlook
7%
Risk factors
3%
Saving for future
Tax incentive
Returns
Future outlook
Brand value
Risk factors
INTERPRETATION:
In this survey I found that saving for the future was the foremost
important criteria for investment in the minds of investors (51%),while
23%respondents said that they considered the returns before making
investment decisions.
IV. Risk-Return profile:
In my study I also tried to understand the risk and return matrix of an
individual investor. this was done in order to obtain information
Information on the relationship between the kind of funds an individual
investor opts to invest in and the relative expectation he has on the
return front.
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(a)Investment Avenues:
S. No Investment
Avenues
No. of
respondents
Percentage
1. Post office
schemes
12 12%
2. Insurance 4 4%
3. Banks 66 66%
4. Share market 3 3%
5. Mutual funds 7 7%
6. Govt.
securities
8 8%
Total 100 100%
Investment Avenues
Post officeschemes
12%
Insurance
4%Govt.securities
8%
Mutual funds7%
Share market
3%
Banks
66%
Post office schemes
Insurance
Banks
Share market
Mutual funds
Govt. securities
INTERPRETATION:
The risk return matrix of an individual is the key factor in framing his
investment portfolio. I asked the respondents to select the investment
avenues they would prefer to keep their investment portfolio. 66% of
investor preferred to have banks savings as one of the investment
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avenue., while 12% of the investor said that they would certainly would
like to have post office schemes as one of their preferred investment
avenue.
(b)Return expectation from Mutual funds:
S. No Return
expectation
from Mutual
funds
No. of
respondents
Percentage
1. 5%-10% 5 5%2. 11%-15% 24 24%
3. 16%-20% 31 31%
4. More then
20%
16 16%
5. Cant say 24 24%
Total 100 100%
INTERPRETATION:
Return expectation from Mutual funds
Other
40%
11%-15%
24% 5%-10%
5%
Cant say
24%
More then 20%
16%
16%-20%
31%
5%-10%
11%-15%
16%-20%
More then 20%
Cant say
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In this survey when I came to return expected ,I found that 31% of the
investor are expecting a return in range of 16%-20%,while 24%of the
investor are expecting 11%-15% rate of return but 24% of investor cant
said about return expectation.
(c) Investment pattern preferred in Mutual fund by investor :
S.
No
Investment
pattern
preferred
in Mutual
fund
No. of
respondents
Percentage
1. Growth
schemes
41 41%