Analysis of Mutual Fund Schemes of Reliance Money By Mohammed Sarfaraz Siddique

ALLANA INSTITUE OF MANAGEMENT SCIENCE, PUNE. 1

A PROJECT REPORT

ON

“ANALYSIS OF MUTUAL FUND SCHEMES OF

RELIANCE MONEY.”

FOR

RELIANCE MONEY

Submitted to University of Pune

In the partial fulfillment of

MASTERS IN BUSINESS ADMINISTRATION

Submitted By

MOHAMMED SARFRAZ MOHAMMED SIDDIQUE

ALLANA INSTITUTE OF MANAGEMENT SCIENCES.

(2007-2009)


DECLARATION

I, the undersigned hereby declare that project report entitled “ANALYSIS OF MUTUAL

FUND SCHEMES OF RELIANCE MONEY” has been submitted under the guidance of

Prof. Pradnya P.M. This is the original work done by me.

Date:

Place:

MOHAMMED SARFRAZ


CERTIFICATE

This is to certify that the project report on “Analysis of mutual fund schemes of Reliance

Money“ completed by Mr. Mohammed Sarfraz student of the MBA course of the

University Of Pune, conducted by our Institute. The report is submitted in partial

fulfillment of the MBA course curriculum as per the rules of the University of Pune.

INTERNAL GUIDE DIRECTOR

Mrs.PRADNYA P.M. Dr. K.K. SINGH


ACKNOWLEDGEMENT

A successful project work is a result of the organized and well coordinated teamwork. So

at the completion of the project .

I take this opportunity to thank Mr. Abdullah Centre Manager of Reliance Money, for

his valuable advice and direction which he provided to me during the course of my

project. I am grateful to Dr. K.K.Singh and to all the members & the faculty of AIMS,

PUNE for their constant support and inspiration throughout the lifespan of the project.

I express my deep sense of gratitude and sincere thanks to my project guide

Prof. Pradnya for her constant guidance, co operation and advice which helped me in

completing the project successfully.

Last but not the least, I would like to thank all my family members and friends for their

constant co operation and inspiration and direct or indirect help without which this

project could not be completed.

MOHAMMED SARFRAZ


CONTENTS

Chapter

No.

INDEX Page No.

1.

Executive summary 07

2.

Introduction to the study 09

3.

Objective of the study 13

4.

Scope of the study 15

5.

Company Profile 17

6.

Theoretical Background 23

7. Mutual Fund Schemes Of Reliance Money.

34

8.

Limitation of the study 47

9.

Findings 49

10.

Suggestions 51

11.

Research Methodology 53

10.

Conclusion 55

11.

Bibliography 57


EXECUTIVE SUMMARY


I had undertaken a project titled “Analysis of Mutual Fund Schemes For Reliance

Money”

This project work consists of the analytical and different schemes of mutual funds which

Reliance Money which provides to give the concept of what is the difference in their

schemes.

The methodology that was adopted for framing the project was primary and secondary

data. This project is restricted to Pune area only.

In my project, I have shown the different products and utility of it to the customer. This

project highlights on the peculiarities of the product since they are traded in the market.

The project was studied with the help of brochure, magazine and net.

Even a dialogue was carried with the top executive so that it can help me to shape my

project and get the exact idea where the position of product lies and its status.

Customers are the king. They were interviewed and their opinion was taken into

consideration so that I can correlate my information with the theory part.

Since customers were rigid they didn’t reveal the exact information about the product

.Even keeping in mind the duration of the project there were certain limitations for it. As

people were not ready to spare some time and discuss the product or answer to the query

raised by me.

So, I have to drawn some of the conclusion on the basis of the brochures and material of

the company being provided.


INTRODUCTION TO THE STUDY


INTRODUCTION TO MUTUAL FUNDS:

A mutual fund is an investment vehicle where a person or group of persons, called mutual

fund managers, choose a group of stocks and sell them in one package. Mutual Funds are

generally lower risk investment for a beginner or intermediate investor because;

The managers are experts.

Having a large number and variety of stocks is less risky than owning one stock

If the prices per share of some stocks go down, others

can go up, possibly keeping the price (NET ASSET VALUE), of the mutual

fund stable or going up.

Mutual funds are also recommended for those who do not have the time, energy or desire

to research their own stocks.

Every mutual fund and fund family comes with a prospectus read the prospectus before

investing. The prospectus not only helps you to understand what you are investing in, but

it helps you to understand mutual funds and stocks in general.


Development of the Global Mutual Funds Industry

Structural changes in the global economic environment have, over the year, led to

the emerged of a strong market economy and facilitated the growth of the mutual

fund industry, particularly since the 1980s’. A market economy depends more on

growth led by the stock market than by bank finance. Since the mutual fund

industry is a strong pillar of the stock market system, it got a boost with the

emergence of a strong market economy. Mutual funds found increasing acceptance

also because they have the capacity to absorb the instability and uncertainties that

characterize the stock market system. The rise in inflation, reduction in real interest

and growing complexities in the market provide tremendous opportunities to mutual

funds. For these reasons, mutual fund industry began to thrive well particularly

during the 1990s’ in not only the developed countries, but the newly industrialized

and developing countries as well.

The immediate boos to mutual fund, however, was provided by the prolonged

economic boom in the US, which fuelled dynamic growth in the stock market, and

consequently in the mutual fund industry. In India too, the growth of the stock

market in the early 1990s, gave rise to unprecedented growth in the mutual fund

industry.

Growth was unprecedented in the 1990s, with the total increasing from

US$4156451 million in 1993 to US$7651618 million in 1998. While the assets of

the U.S. and non-U.S. mutual funds were 49.8% and 51.2%, respectively, in 1993

they amounted to 63.9% and 36.1% respectively. During the same period, the assets

of open ended mutual funds worldwide grew by 17% p.a. The growth of asset of

non US mutual funds, however was much lower.


In terms of the open ended mutual fund investment companies worldwide, with an

unprecedented rise from 24474 in 1993 to 35424 in 1996. However the number

decline marginally to 31570 in 1998.

The rising trend continued in the US though, with the number increasing from

4537 in 1993 to 6254 in 1996 and to 7248 in 1998. commensurately, the share

of US increased from 18.5% to 77%.

The top five countries in terms of the open ended mutual funds in 1998 US,

France, Japan, Spain, and UK.


OBJECTIVE OF THE STUDY


Objectives:-

1. To study the various offers of the company, services ranging from equities,

commodities, portfolio management etc.

2. The objective of the study was to collect information on the various securities

revolving in the market & thus providing customer service to clients to help them

invest capital in profitable plans.

3. To know about returns of the fund which one is beneficial.

4. To know their portfolio management.


SCOPE OF THE STUDY


Scope of the study:-

The study covers various aspects of mutual fund like basic concept, types,

future of mutual fund in India & the schemes etc. But it does not cover these aspects in

detail relating with the legal aspects and the provisions made in different acts.

The time horizon selected for the study is from April 2007 to March 2008.

All the schemes have been analyzed with the consideration of this time frame.


COMPANY PROFILE


COMPANY PROFILE:

Reliance Capital Ltd is a part of the Reliance - Anil Dhirubhai Ambani Group, and is

ranked among the 25 most valuable private companies in India.

Reliance Capital is one of India's leading and fastest growing private sector financial

services companies, and ranks among the top 3 private sector financial services and

banking groups, in terms of net worth.

Reliance Capital has interests in asset management and mutual funds, life and general

insurance, private equity and proprietary investments, stock broking, depository services,

distribution of financial products, consumer finance and other activities in financial

services.

The Reliance Anil Dhirubhai Ambani Group is one of India's top 2 business houses, and

has a market capitalization of over Rs.2,90,000 crore (US$ 75 billion), net worth in

excess of Rs.55,000 crore (US$ 14 billion), cash flows of Rs. 11,000 crore (US$ 2.8

billion) and net profit of Rs. 7,700 crore (US$ 1.9 billion).

Reliance Capital Ltd. is a Non-Banking Financial Company (NBFC) registered with the

Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. RCL

was incorporated as a public limited company in 1986 and is now listed on the Bombay

Stock Exchange and the National Stock Exchange (India). With a net worth of over Rs

3,300 crore and over 165,000 shareholders, Reliance Capital has established its presence

as a leading player in the financial services sector in the country. On conversion of

outstanding equity instruments, the net worth of the company will increase to about Rs

4,100 crore.

Reliance Capital sees immense potential in the rapidly growing financial services sector

in India and aims to become a dominant player in this industry and offer fully integrated

financial services. It is headed by Anil Ambani.

http://en.wikipedia.org/wiki/Anil_Ambani


Reliance Capital is one of India’s 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 has interests in asset management and mutual funds, life and

general insurance, private equity and proprietary investments, stock broking and other

activities in financial services.


I have done my project in Reliance Money and the

study of mutual funds of Reliance products or schemes.

About Reliance Money:

Reliance Money is a group company of Reliance Capital; one of India's leading and

fastest growing private sector financial services companies, ranking among the top 3

private sector financial services and banking companies, in terms of net worth. Reliance

Capital is a part of the Reliance Anil Dhirubhai Ambani Group.

Reliance Money which commenced commercial operations in April 2007 has over

300,000 customers and 4,300 outlets in more than 3,500 locations across India.

Reliance Money is a comprehensive electronic transaction platform offering a wide range

of asset classes. Its Endeavour is to change the way India transacts in financial markets

and avails financial services. Reliance Money is a single window, enabling you to access,

amongst others in Equities, Equity & Commodities Derivatives, Mutual Funds, IPO’s,

Life & General Insurance products, Off share Investments, Money Transfer, Money

Changing and Credit Cards.

Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Average

Assets Under Management (AAUM) of Rs. 84563.92 Crs (AAUM for June 30th 08 ) and

an investor base of over 68.38 Lakhs.

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of

the fastest growing mutual funds in the country.

RMF offers investors a well-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 India’s leading and fastest growing private sector financial


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.


ABOUT RELIANCE MUTUAL FUND:

Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Average

Assets Under Management (AAUM) of Rs. 84563.92 Crs (AAUM for June 30th 08 ) and

an investor base of over 68.38 Lakhs.

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of

the fastest growing mutual funds in the country.

RMF offers investors a well-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 India’s leading and fastest growing private sector financial


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.


THEORETICAL BACKGROUND


ORIGIN OF MUTUAL FUND INVESTING:-

When three Boston Securities executives pooled their money together in 1924 to create

the first mutual fund, they have no idea how popular mutual funds would become. The

idea of pooling money for investing purposes started in Europe in mid 1800s. The first

pooled in the US was created in 1893 for the faculty and staff of Harvard University. On

March 21st, 1924 the first official mutual fund was born. It was called the Massachusetts

Investors Trust. After one year the Massachusetts Investor Trust grew from $ 50000 in

assets to 3, 92,000 in assets (with around 200 share holders). In contrast there are more

than 10000 mutual funds in US today totaling around $7 trillion (with approximately 83

million individual investors) according to the Investment Company Institute.


Concept of Mutual Funds:

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 Operation Flow Chart


Organization of Mutual Funds in India:-

There are many entities involved and the diagram below illustrates the organizational set

up of a mutual fund:

Organization of a Mutual Fund


Mutual Funds 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 dramatic improvements, 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 bn 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.


Types of mutual fund schemes

By structure o open - ended schemes

o close - ended schemes

o interval schemes

By investment objective o growth schemes

o income schemes

o balanced schemes

o money market schemes

Other schemes o tax saving schemes

o special schemes

index schemes

sector specific schemes

Balanced fund --- has three objectives moderate long term growth of

capital, moderate income, and moderate stability.


Advantages of Mutual Funds:

The advantages of investing in a Mutual Fund are:

Diversification: The best mutual funds design their portfolios so individual

investments will react differently to the same economic conditions. For example,

economic conditions like a rise in interest rates may cause certain securities in a

diversified portfolio to decrease in value. Other securities in the portfolio will

respond to the same economic conditions by increasing in value. When a portfolio

is balanced in this way, the value of the overall portfolio should gradually

increase over time, even if some securities lose value.

Professional Management: Most mutual funds pay topflight professionals to

manage their investments. These managers decide what securities the fund will

buy and sell.

Regulatory oversight: Mutual funds are subject to many government regulations

that protect investors from fraud.

Liquidity: It's easy to get your money out of a mutual fund. Write a check, make

a call, and you've got the cash.

Convenience: You can usually buy mutual fund shares by mail, phone, or over

the Internet.

Low cost: Mutual fund expenses are often no more than 1.5 percent of your

investment. Expenses for Index Funds are less than that, because index funds are

not actively managed. Instead, they automatically buy stock in companies that are

listed on a specific index


Phases of mutual funds

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 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 in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 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 February 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 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

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.


Performance of Mutual Funds in India:-

Let us start the discussion of the performance of mutual funds in India from the day the

concept of mutual fund took birth in India. The year was 1963. Unit Trust of India invited

investors or rather to those who believed in savings, to park their money in UTI Mutual

Fund.

For 30 years it goaled without a single second player. Though the 1988 year saw some

new mutual fund companies, but UTI remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to

satisfactory level. People rarely understood, and of course investing was out of question.

But yes, some 24 million shareholders were accustomed with guaranteed high returns by

the beginning of liberalization of the industry in 1992. This good record of UTI became

marketing tool for new entrants. The expectations of investors touched the sky in

profitability factor. However, people were miles away from the preparedness of risks

factor after the liberalization.

The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me

concentrate about the performance of mutual funds in India through figures. From Rs.

67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure

had a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started

falling in the year 1992. Those days, the market regulations did not allow portfolio shifts

into alternative investments. There was rather no choice apart from holding the cash or to

further continue investing in shares. One more thing to be noted, since only closed-end

funds were floated in the market, the investors disinvested by selling at a loss in the

secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market

scandal, the losses by disinvestments and of course the lack of transparent rules in the


whereabouts rocked confidence among the investors. Partly owing to a relatively weak

stock market performance, mutual funds have not yet recovered, with funds trading at an

average discount of 1020 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and

competitive environment in mutual funds. Some of them were like relaxing investment

restrictions into the market, introduction of open-ended funds, and paving the gateway for

mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving.

The more the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and

higher profitability within a short span of time, more and more people will be inclined to

invest until and unless they are fully educated with the dos and don’ts of mutual funds.


SCHEMES OF MUTUAL

FUND IN RELIANCE

MONEY


SCHEMES OF RELIANCE MONEY:-

1. Equity/Growth Schemes:

The aim of growth funds is to provide capital appreciation over the medium to long-

term. Such schemes normally invest a major part of their corpus in equities. Such funds

have comparatively high risks. These schemes provide different options to the investors

like dividend option, capital appreciation, etc. and the investors may choose an option

depending on their preferences. The investors must indicate the option in the application

form. The mutual funds also allow the investors to change the options at a later date.

Growth schemes are good for investors having a long-term outlook seeking appreciation

over a period of time.

Reliance Natural Resources Fund : (An Open Ended Equity Scheme) The primary investment objective of the scheme is to

seek to generate capital appreciation & provide long-term growth opportunities by

investing in companies principally engaged in the discovery, development, production, or

distribution of natural resources and the secondary objective is to generate consistent

returns by investing in debt and money market securities.

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 portfolio constituted of equity & equity related securities

of top 100 companies 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


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 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.

Reliance Regular Savings Fund:-

(An Open-ended Scheme.) Equity Option: The primary investment objective of this

option is to seek capital appreciation and/or to generate consistent returns by actively

investing in Equity &Equity-related Securities.

Balanced Option:

The primary investment objective of this option is to generate consistent returns and

appreciation of capital by investing in mix of securities comprising of equity, equity

related instruments & fixed income instruments.

Reliance Long Term Equity Fund:

(An close-ended Diversified Equity Scheme.) The primary investment objective of the

scheme is to seek to generate long term capital appreciation & provide long-term growth

opportunities by investing in a portfolio constituted of equity & equity related securities


and Derivatives and the secondary objective is to generate consistent returns by investing

in debt and money market securities.

Reliance Equity Advantage Fund:

(An open-ended Diversified Equity Scheme.) The primary investment objective of the


opportunities by investing in a portfolio predominantly of equity & equity related

instruments with investments generally in S & P CNX Nifty stocks and the secondary

objective is to generate consistent returns by investing in debt and money market

securities


2. Debt/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,

Government securities and money market instruments. Such funds are less risky

compared to equity schemes. These funds are not affected because of fluctuations in

equity markets. However, opportunities of capital appreciation are also limited in such

funds. The NAVs of such funds are affected because of change in interest rates in the

country. If the interest rates fall, NAVs of such funds are likely to increase in the short

run and vice versa. However, long term investors may not bother about these fluctuations.

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 unit holders and the

secondary objective is growth of capital.

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 market 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.

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 Floating Rate Fund: (An Open End Liquid 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 shall

predominantly be made in debt Instruments.

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 Interval Fund:

(A Debt Oriented Interval Scheme) The primary investment objective of the scheme is to

seek to generate regular returns and growth of capital by investing in a diversified

portfolio


Reliance Liquid plus Fund:

(An Open-ended Income Scheme.) The investment objective of the Scheme is to generate

optimal returns consistent with moderate levels of risk and liquidity by investing in debt

securities and money market securities.

Reliance Fixed Horizon Fund –I:

(A closed ended Scheme) The primary investment objective of the scheme is to seek to

generate regular returns and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund –II:

(An closed ended Scheme.) The primary investment objective of the scheme is to seek to


Reliance Fixed Horizon Fund –III:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to


portfolio

Reliance Fixed Tenor Fund:

(An Close-ended Scheme.) The primary investment objective of the Plan is to seek to


Reliance Fixed Horizon Fund -Plan C:

(An closed ended Scheme.) The primary investment objective of the scheme is to seek to



Reliance Fixed Horizon Fund - IV:



portfolio

Reliance Fixed Horizon Fund - V:



portfolio of: -

Central and State Government securities and

Other fixed income/ debt securities normally maturing in line with the time profile of

the scheme with the objective of limiting interest rate volatility

Reliance Fixed Horizon Fund - VI:



portfolio of: -


Other fixed income/ debt securities normally maturing in line with the time profile of the

series with the objective of limiting interest rate volatility


Reliance Fixed Horizon Fund - VII:



portfolio of: -


Other fixed income/ debt securities normally maturing in line with the time profile of the

series with the objective of limiting interest rate volatility.


3. Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or

industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Fast

Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are

dependent on the performance of the respective sectors/industries. While these funds may

give higher returns, they are more risky compared to diversified funds. Investors need to

keep a watch on the performance of those sectors/industries and must exit at an

appropriate time. They may also seek advice of an expert.

Reliance Banking Fund Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the

primary investment objective to generate continuous returns 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 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 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.

4. Exchange Traded Fund

Reliance Gold Exchange Traded Fund:

(An open-ended Gold Exchange Traded Fund) the investment objective is to seek to

provide returns that closely correspond to returns provided by price of gold through

investment in physical Gold (and Gold related securities as permitted by Regulators from

time to time). However, the performance of the scheme may differ from that of the

domestic prices of Gold due to expenses and or other related factors.


LIMITATION OF THE

STUDY


Limitation of the Study:

1. This study is limited to only schemes of mutual fund.

2. This study is restricted to Pune city only.

3. The study is limited up to the mutual funds operating in India.

4. The returns of mutual fund are related to the share market conditions and hence it is

difficult to measure them accurately.


FINDINGS


FINDINGS:

Most of the investors want guaranteed returns from the investment.

Every fund has some what percentage in debt product to avoid high risk of

market.

The investors are aware of mutual funds they do not invest in proportionate.

Midcap fund has high risk but potential of high returns.

Most of the investors are interested in banks that too in saving deposit and it is

very popular tool of investment.


SUGGESTIONS


If investor wants to diversify their allocation to reduce risk then they should select

Reliance Money as their allocation in equity and debt is in proportion.

Investor should be made aware of the schemes existing in market according to

their portfolio.

Reliance Money should attract investors to invest in mutual funds by introducing

new schemes.

While investing, investors should not only take in to consideration their past

performance asset allocation and the returns given during their inception.


RESEARCH METHODOLOGY


The research methodology helps to build the project on the basis of data collected.

I have collected the data which has helped me to frame the project through primary and

secondary data.

PRIMARY DATA:

In this case, I had discussion with the company guide and senior colleagues to gather the

information related to my project work and then I approached the customers of Reliance

Money.

During my project not only the primary data helped me but I have to take help of the

secondary data.

Secondary Data:

In this case, I have referred to various books, magazines, company brochure, net etc.to

extract the information that was needed for my project.


CONCLUSION


CONCLUSION:

From the analysis it is found that most of the customers go with bank

deposits because of current needs. They should divert their investors mind from bank

saving deposit and make them aware of the high returns gained by investing in mutual

fund.

Guidance is an important criterion for the investors to make them aware

about mutual fund schemes and their returns. Hence asset management companies

should start promotional campaigns for exploring the knowledge and information about

the mutual fund.

Hence by analyzing the schemes of Reliance mutual fund it can be stated

that most of the investors invest in ELLS. The representatives of Reliance Money are

able to satisfy all the queries offered by the clients. In turn, helping them to serve in a

better way.


BIBLIOGRAPHY


BIBLIOGRAPHY:

THE INDIAN FINANCIAL SYSTEM BY VASANT DESAI.

FINANCIAL INSTITUTIONS & MARKETS BY MUKUND MAHAJAN.

FINANCIAL SERVICES MARKETS BY ANIL AGASHA.

MARKETING & FINANCIAL SERVICES BY V.A. AVDHANI.

BROACHURE of THE COMPANY.

WEBSITES:-

www.reliancemoney.com

www.googlesearch.com

http://www.reliancemoney.com/

http://www.googlesearch.com/

Date post:	06-May-2015
Category:	Economy & Finance
Upload:	jaydeep-chaurasia
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Analysis of Mutual Fund Schemes of Reliance Money By Mohammed Sarfaraz Siddique

Economy & Finance