Reliance Money Mutual Fund2

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INTRODUCTION


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INTRODUCTION TO MUTUAL FUND

Mutual fund is a trust that pools the savings of a number of investors who share a common

financial goal. This pool of money is invested in accordance with a stated objective. The joint

ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. 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 appreciations

realized are shared by its unit holders in proportion 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. A Mutual Fund is an investment tool that allows small investors access to

a well-diversified portfolio of equities, bonds and other securities. Each shareholder

participates in the gain or loss of the fund. Units are issued and can be redeemed as needed.

The funds Net Asset value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of industries and sectors

and thus the risk is reduced. Diversification reduces the risk because all stocks may not move

in the same direction in the same proportion at the same time. Mutual fund issues units to the

investors in accordance with quantum of money invested by them. Investors of mutual funds

are known as unit holders.

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When an investor subscribes for the units of a mutual fund, he becomes part owner of the

assets of the fund in the same proportion as his contribution amount put up with the corpus

(the total amount of the fund). Mutual Fund investor is also known as a mutual fund

shareholder or a unit holder.

Any change in the value of the investments made into capital market instruments (such as

shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is

defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a

scheme is calculated by dividing the market value of scheme's assets by the total number of

units issued to the investors.

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ADVANTAGES OF MUTUAL FUND

Portfolio Diversification

Professional management

Reduction / Diversification of Risk

Liquidity

Flexibility & Convenience

Reduction in Transaction cost

Safety of regulated environment

Choice of schemes

Transparency

DISADVANTAGE OF MUTUAL FUND

No control over Cost in the Hands of an Investor

No tailor-made Portfolios

Managing a Portfolio Funds

Difficulty in selecting a Suitable Fund Scheme

Mutual funds can be 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.

RISK V/S. RETURN:

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The entire mutual fund industry operates in a very organized way. The investors, known as

unit holders, handover their savings to the AMCs under various schemes. The objective of

the investment should match with the objective of the fund to best suit the investors needs.

The AMCs further invest the funds into various securities according to the investment

objective. The return generated from the investments is passed on to the investors or

reinvested as mentioned in the offer document.

Before we understand what is mutual fund, its very important to know the area in

which mutual funds works, the basic understanding of stocks and bonds.

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Stocks : Stocks represent shares of ownership in a public company. Examples of public

companies include Reliance, ONGC and Infosys. Stocks are considered to be the most

common owned investment traded on the market.

Bonds : Bonds are basically the money which you lend to the government or a company,

and in return you can receive interest on your invested amount, which is back over

predetermined amounts of time. Bonds are considered to be the most common lending

investment traded on the market. There are many other types of investments other than

stocks and bonds (including annuities, real estate, and precious metals), but the majority of

mutual funds invest in stocks and/or bonds.

What Is Mutual Fund

A mutual fund is just the connecting bridge or a financial intermediary that allows a

group of investors to pool their money together with a predetermined investment objective.

The mutual fund will have a fund manager who is responsible for investing the gathered

money into specific securities (stocks or bonds). When you invest in a mutual fund, you are

buying units or portions of the mutual fund and thus on investing becomes a shareholder or

unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to

others they are very cost efficient and also easy to invest in, thus by pooling money together

in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than

if they tried to do it on their own. But the biggest advantage to mutual funds is

diversification, by minimizing risk & maximizing returns.

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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

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Balanced funds: As the name suggest they, are a mix of both equity and debt funds. They

invest in both equities and fixed income securities, which are in line with pre-defined

investment objective of the scheme. These schemes aim to provide investors with the best of

both the worlds. Equity part provides growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment

parameter viz,

Each category of funds is backed by an investment philosophy, which is pre-defined in the

objectives of the fund. The investor can align his own investment needs with the funds

objective and invest accordingly.

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Guidelines of the SEBI for Mutual Fund Companies :

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To protect the interest of the investors, SEBI formulates policies and regulates the mutual

funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to

time.

SEBI approved Asset Management Company (AMC) manages the funds by making

investments in various types of securities. Custodian, registered with SEBI, holds the securities

of various schemes of the fund in its custody.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board of

trustees must be independent.

The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual

funds that the mutual funds function within the strict regulatory framework. Its objective is to

increase public awareness of the mutual fund industry. AMFI also is engaged in upgrading

professional standards and in promoting best industry practices in diverse areas such as

valuation, disclosure, transparency etc.

Documents required (PAN mandatory):

Proof of identity :

1. Photo PAN card

2. In case of non-photo PAN card in addition to copy of PAN card any one of the following:

driving license/passport copy/ voter id/ bank photo pass book.

Proof of address (any of the following ) :latest telephone bill, latest electricity bill, Passport,

latest bank passbook/bank account statement, latest Demat account statement, voter id, driving

license, ration card, rent agreement.

Offer document: An offer document is issued when the AMCs make New Fund Offer(NFO).

Its advisable to every investor to ask for the offer document and read it before investing. An

offer document consists of the following:11


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OBJECTIVE OF THE

STUDY


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OBJECTIVES OF THE STUDY

It is said that an objective well defined is half done. Thus in order to make sure that the

proper survey ensures defining clear-cut objective and outline is a prerequisite.

Objective serves as torchlight in a project. It lays down a well-defined path between start and

the end and that is the goal. As also an objective is well defined and it is important for the

research study that a scholar undergoes.

It is an action, a purpose, which is directed to a person to conduct a study. It represents a fact

having actual existence of outside the mind or a goal for which the study is to be conducted.

The objective of our study is:-

1) To know the various functions which are conducted for day-to-day operations in

Reliance Money.

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2) To know the various norms adopted by Reliance Money.

3) To know the various products and services rendered to its customers.

4) To know whether the services provided by Reliance Money is able to attain its

customers satisfaction or not.

5) To find and try to bridge the gap between the expectations and experiences of the

customers in case of dissatisfaction.

6) To know how the branch functions in terms of sales and operations.

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SCOPE OF THE STUDY


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SCOPE OF THE STUDY

A big boom has been witnessed in Mutual Fund Industry in resent times. A large number of

new players have entered the market and trying to gain market share in this rapidly improving

market.

The research was carried on in Moradabad. I had been sent at one of the branch of State Bank

of India Moradabad where I completed my Project work. I surveyed on my Project Topic Astudy of preferences of the Investors for investment in Mutual Fund on the visiting customers

of the Reliance Boring Canal Road Branch.

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The study will help to know the preferences of the customers, which company, portfolio,

mode of investment, option for getting return and so on they prefer. This project report may

help the company to make further planning and strategy.

16LITERATURE REVIEW


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LITERATURE REVIEW

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. Though the growth was slow, but

it accelerated from the year 1987 when non-UTI players entered the Industry.

In the past decade, Indian mutual fund industry had seen a dramatic improvement, both

qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending

phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the

fund family raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it reached the

height if Rs. 1540 billion.

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The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund

industry can be broadly put into four phases according to the development of the sector. Each

phase is briefly described as under.

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament 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)

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). RELIANCE Mutual Fund was the first non- UTI Mutual Fund 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)

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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. As at the end of January 2003, there were 33 mutual funds

with total assets of Rs. 1,21,805 crores.

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 January 2003, representing

broadly, the assets of US 64 scheme, assured return and certain other schemes

The second is the UTI Mutual Fund Ltd, sponsored by RELIANCE, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. consolidation and

growth. As at the end of September, 2004, there were 29 funds, which manage assets of

Rs.153108 crores under 421 schemes.

Mutual Fund Companies in India

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and

1987 marked the existance of only one mutual fund company in India with Rs. 67bn assets

under management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI).

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By the end of the 80s decade, few other mutual fund companies in India took their position

in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual

Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual

Fund. The succeeding decade showed a new horizon in Indian mutual fund industry. By the

end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds

started penetrating the fund families. In the same year the first Mutual Fund Regulations

came into existance with re-registering all mutual funds except UTI. The regulations were

further given a revised shape in 1996.Kothari Pioneer was the first private sector mutual

fund company in India which has now merged with Franklin Templeton. Just after ten years

with private sector players penetration, the total assets rose up to Rs. 1218.05 bn. Today

there are 33 mutual fund companies in India.

Reliance Mutual Fund

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882. The

sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the

Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which was

changed on March 11, 2004. Reliance Mutual Fund was formed for launching of 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.

Major Mutual Fund Competing Companies of Reliance

ABN AMRO Mutual Fund

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ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India)

Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd.

was incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN

AMRO Mutual Fund.

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life

Financial. Sun Life Financial is a golbal organisation evolved in 1871 and is being

represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from

India. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment.

Recently it crossed AUM of Rs. 10,000 crores

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the

sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of

BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the

custodian.

HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers nemely Housing

Development Finance Corporation Limited and Standard Life Investments Limited.

HSBC Mutual Fund

HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets

(India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the

Trustee Company of HSBC Mutual Fund.

ING Vysya Mutual Fund

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ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee

Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management

(India) Pvt. Ltd. was incorporated on April 6, 1998.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the

largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on

13th of October, 1993 with two sponsorers, Prudential Plc. and ICICI Ltd. The Trustee

Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset

Management Company Limited incorporated on 22nd of June, 1993.

Sahara Mutual Fund

Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation

Ltd. as the sponsor. Sahara Asset Management Company Private Limited incorporated on

August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid-up capital of the AMC

stands at Rs 25.8 crore.

State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshor

fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the

largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out

of which 15 have already yielded handsome returns to investors. State Bank of India Mutual

Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs

spread over 18 schemes.

Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsor for Tata

Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment

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manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited.

Tata Asset Management Limited's is one of the fastest in the country with more than Rs.

7,703 crores (as on April 30, 2005) of AUM.

Kotak Mahindra Mutual Fund

Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is

presently having more than 1,99,818 investors in its various schemes. KMAMC started its

operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to

investors with varying risk - return profiles. It was the first company to launch dedicated gilt

scheme investing only in government securities.

Unit Trust of India Mutual Fund

UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the

UTI Mutual Fund with the support of UTI Trustee Company Privete Limited. UTI Asset

Management Company presently manages a corpus of over Rs.20000 Crore. The sponsorers

of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank

of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual

Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, Equity

Funds and Balance Funds.

Standard Chartered Mutual Fund

Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard

Chartered Bank. The Trustee is Standard Chartered Trustee Co.Pvt.Ltd.

Franklin Templeton India Mutual Fund

The group, Frnaklin Templeton Investments is a California (USA) based company with a

global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial

services groups in the world. Investors can buy or sell the Mutual Fund through their

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financial advisor or through mail or through their website. They have Open end Diversified

Equity schemes, Open end Sector Equity schemes, Open end Hybrid schemes, Open end Tax

Saving schemes, Open end Income and Liquid schemes, Closed end Income schemes and

Open end Fund of Funds schemes to offer.

Morgan Stanley Mutual Fund India

Morgan Stanley is a worldwide financial services company and its leading in the market in

securities, investmenty management and credit services. Morgan Stanley Investment

Management (MISM) was established in the year 1975. It provides customized asset

management services and products to governments, corporations, pension funds and non-

profit organisations. Its services are also extended to high net worth individuals and retail

investors. In India it is known as Morgan Stanley Investment Management Private Limited

(MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the first close

end diversified equity scheme serving the needs of Indian retail investors focussing on a

long-term capital appreciation.

Escorts Mutual Fund

Escorts Mutual Fund was setup on April 15, 1996 with Escorts Finance Limited as its

sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was

incorporated on December 1, 1995 with the name Escorts Asset Management Limited.

Alliance Capital Mutual Fund

Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital

Management Corp. of Delaware (USA) as sponsorer. The Trustee is ACAM Trust Company

Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the

corporate office in Mumbai.

Benchmark Mutual Fund

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Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd.

as the sponsorer and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company.

Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Asset

Management Company Pvt. Ltd. is the AMC.

Canbank Mutual Fund

Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the

sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993 is

the AMC. The Corporate Office of the AMC is in Mumbai.

LIC Mutual Fund

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It

contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted

as a Trust in accordance with the provisions of the Indian Trust Act, 1882. The Company

started its business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed

Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC

Mutual Fund.

Future of Mutual Funds in India

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

that by 2010 March-end, the total assets of all scheduled commercial banks should be Rs

40,90,000 crore.

The annual composite rate of growth is expected 13.4% during the rest of the decade. In the

last 5 years we have seen annual growth rate of 9%. According to the current growth rate, by

year 2010, mutual fund assets will be double.

Some facts for the growth of mutual funds in India

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100% growth in the last 6 years.

Number of foreign AMC's are in the que to enter the Indian markets like Fidelity

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

Our saving rate is over 23%, highest in the world. Only channelizing these savings in

mutual funds sector is required.

We have approximately 29 mutual funds which is much less than US having more than

800. There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are

concentrating on the 'A' class cities. Soon they will find scope in the growing cities.

Mutual fund can penetrate rurals like the Indian insurance industry with simple and limited

products.

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

Emphasis on better corporate governance.

Trying to curb the late trading practices.

Introduction of Financial Planners who can provide need based advice.

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COMPANY PROFILE


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COMPANY PROFILE

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RELIANCE INDUSTRIES LIMITED

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Reliance Group Holdings has grown from a small office data-processing equipment

firm in 1961 into a major insurance and financial-services group in one generation under one

chief.

Reliance's insurance operations constitute the nation's 27th-largest property and

casualty operation. The parent company also includes a development subsidiary in

commercial real estate. Reliance's international consulting group contains several

subsidiaries in energy, environment, and natural resources consulting. A financial arm

invests in other businesses, primarily television stations.

Reliance Insurance started as the Fire Association of Philadelphia in 1817, organized

by 5 hose and 11 engine fire companies. It became the nation's first association of volunteer

fire departments.

Business got a boost as a result of the Great Chicago Fire of 1871.The association

soon developed a field of agents to write policies across the country. For the first two years,

shareholders received dividends twice a year of $5 a share, which increased gradually to $10

in 1876.

In 1972, the Reliance insurance group divided its pool so that Reliance Insurance

Company and its subsidiaries handled most standard lines, while United Pacific Insurance

Company handled the nonstandard and other operations.

In 1977, the company moved into real estate, forming Continental Cities

Corporation, which became Reliance Development Group, Inc. This division handled all real

estate operations of the parent company and other subsidiaries.

Reliance Capital Group, L.P. constituted the investment branch of the Reliance

conglomerate.

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In December 1989, Reliance Capital sold its investment, Days Corporation, parent company

of Days Inn of America, the world's third-largest hotel chain; it had been purchased in 1984.

Reliance Industries Limited. The Group's principal activity is to produce and

distribute plastic and intermediates, polyester filament yarn, fibre intermediates, polymer

intermediates, crackers, chemicals, textiles, oil and gas. The refining segment includes

production and marketing operations of the Petroleum refinery. The petrochemicals segment

includes production and marketing operations of petrochemical products namely, High and

Low density Polyethylene.

RELIANCE MUTUAL FUND

This group dominates this key area in the financial sector..This mega business houses

show that it has assetsunder management ofRs. 90,938 crore(US$ 22.73 billion) and an

investor base of over6.6 million (Source:www.amfiindia.com).Reliances mutual fund

schemes are managed by Reliance Capital Asset Management Limited(RCAM), a subsidiary

of

Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM.

The company notched up a healthy growth of Rs. 16,354 crore(US$ 4.09 billion)in

assets under management in February2008 and helped propel the total industry-wide AUM

to Rs. 565,459 crore (US$ 141.36 billion)(Source: indiainvestments.com). A sharp rise

infixed maturity plans (FMPs) and collection of Rs. 7000 crore (US$ 1.75 billion) through

new fund offers (NFOs) created this surge. In AU rankings, Reliance continues to be in the

number one spot.

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India's Best Offering: Reliance Mutual Fund

Investing has become global. Today, a lot of countries are waking up to the reality that

in order to gain financial growth, they must encourage their citizens to not only save but also

invest. Mutual funds are fast becoming the mode of investment in the world.

In India, a mutual fund company called the Reliance Mutual Fund is making waves. Reliance

is considered India's best when it comes to mutual funds. Its investors number to 4.6 billion

people. Reliance Capital Asset Management Limited ranks in the top 3 of India's banking

companies and financial sector in terms of net value.

The Anil Dhirubhai Ambani Group owns Reliance; they are the fastest growing investment

company in India so far. To meet the erratic demand of the financial market, Reliance

Mutual Fund designed a distinct portfolio that is sure to please potential investors. Reliance

Capital Asset Management Limited manages RMF.

Vision And Mission

Reliance Mutual Fund is so popular because it is investor focused. They show their

dedication by continually dishing out innovative offerings and unparalleled service

initiatives. It is their goal to become respected globally for helping people achieve their

financial dreams through excellent organization governance and customer care. Reliance

Mutual fund wants a high performance environment that is geared at making investors

happy.

RMF aims to do business lawfully and without stepping on other people. They want to be

able to create portfolios that will ensure the liquidity of the investment of people in India as

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well as abroad. Reliance Mutual Fund also wants to make sure that their shareholders realize

reasonable profit, by deploying funds wisely. Taking appropriate risks to reach the

company's potential is also one of Reliance Mutual Fund's objectives.

Schemes

To make their packages more attractive, Reliance Mutual Fund created proposals called The

Equity/ Growth scheme, Debt/Income Scheme, and Sector Specific Scheme.

i. Debt/Income Scheme, and Sector Specific Scheme.

The Equity/ Growth scheme give medium to long term capital increase. The major

part of the investment is on equities and they have fairly high risks. The scheme gives the

investors varying options like, capital augmentation or dividend preference. The choices

are not deadlocked because if you want you may change the options later on.

Providing steady and regular income is one of the Debt/Income Scheme's primary

goals. The Debt/Income scheme has in its portfolio government securities, corporate

debentures fixed income securities, and bonds. returns on Sector Specific Scheme are

dependent on the performance of the industry at which your money is invested upon.

Compared to diversified funds this is a lot more risky and you will need to really give

your time on observing the market.

Although RMF is gaining good ground in the financial market, remember that they

are a risk taking bunch. They give higher profit because they take a lot of risks. So, if

you are faint hearted, then Reliance Mutual Fund is not for you.

GROWTH OF RELIANCE MONEY THROUGH RECOGNITION

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Growth through Recognition

Reliance has merited a series of awards and recognitions for excellence for businesses and

operations.

Corporate Ranking and Ratings:

Reliance featured in the Fortune Global 500 list of Worlds Largest Corporations for the

fourth consecutive year.

Ranked 269th in 2007 having moved up 73 places from the previous year.

Featured as one of the worlds Top 200 companies in terms of Profits.

Among the top 25 climbers for two years in a row.

Featured among top 50 companies with the biggest increase in Revenues.

Ranked 26th within the refining industry.

Reliance is ranked 182nd in the FT Global 500 (up from previous years 284th rank).

Petro Fed, an apex hydrocarbon industry association, conferred the Petro Fed 2007

awards in the categories of Refinery of the Year and Exploration & Production -

Company of the Year.

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Brand Reliance was conferred the Bronze Award at The Buzziest Brands Awards

2008, organized by agencyfaqs!

Institute of Economic Studies conferred the Udyog Ratna award in October 2007

for contributions to the industry.

Chemtech Foundation conferred the Hall of Fame in February 2008 for sterling

contributions to the industry.

Chemtech Foundation conferred the Outstanding Achievement - Oil Refining for

work at the Jamnagar Manufacturing Division.

Petroleum Federation of India conferred the Refinery of the Year Award - 2007 to

Jamnagar Manufacturing Division

The Plastics Export Promotion Council - PLEXCOUNCIL Export Award in the

category of Plastic Polymers for the year 2006-2007 was awarded to Reliance being

the largest exporter in this category.

HEALTH:-

Jamnagar Manufacturing Division was conferred the Golden Peacock Award for

Occupational Health & Safety - 2007 by Institute of Directors.

Jamnagar Manufacturing Division was conferred the ICC Award for Water

Resource Management in Chemical Industry.

Jamnagar Manufacturing Division was conferred the Good House Keeping Award

from Baroda Productivity Council.

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Jamnagar Manufacturing Division was conferred the BEL-IND Award for the best

scientific paper at the 58th National Conference of Occupational Health.

Naroda Manufacturing Division was conferred the Safety Award and Certificate of

Appreciation presented by Gujarat Safety Council & Directorate of Industrial Safety

& Health, Gujarat State for the recognition of safety performance at the 29th State

Level Annual Safety Conference.

Dahej Manufacturing Division received BSC 5-Star rating from British Safety

Council, UK.

Dhenkanal Manufacturing Division received the 2nd Prize for Longest Accident

Free Period from the Honble Minister of Labour, State of Orissa.

Hoshiarpur Manufacturing Division bagged the First Prize in Safety in Punjab,

organized by Punjab Safety Council.

Patalganga Manufacturing Division won the Gold Medal at CASHe (Change Agents

for Safety, Health and Environment) Conference. It also won the III Prize in Process

Management category for Presentation on Safety through Design in chemical process

industry in Petrosafe 2007 Conference.

Kurkumbh Manufacturing Division won the Greentech Safety Award silver trophy

for outstanding achievement in safety management in chemical sector.

Hazira Manufacturing Division received the TERI Corporate Environmental Award

(Certificate of Appreciation) for PET recycling project.

Nagothane Manufacturing Division received the Shrishti G-Cube Award for Good

Green Governance from Minister for Commerce and Industry, on World Earth Day.

Training and Development:-

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Jamnagar Refinery was adjudged the winner of the Golden Peacock National

Training Award -2007.

Patalganga Manufacturing Division won the ASTD (American Society for Training

& Development) Excellence in Practice Award for innovative practice titled

Learning Functions role as Business partner: Empowering people with Knowledge

to achieve Business Goals.

Reliance won the CNBC TV-18 instituted Jobstreet.com Jobseekers Employer of

Choice Award.

Energy Excellence:-

Exploration & Production (E&P) Division won The Infraline Energy Excellence

Awards 2007: Hydrocarbon Columbus Award for Excellence in Petroleum

Exploration.

Patalganga Manufacturing Division won the First Prize in Energy Conservation in

State of Maharashtra organized by Maharashtra Energy Development Agency

(MEDA).

Jamnagar Manufacturing Division won the Oil & Gas Conservation Award -2007

from the Centre for High Technology, Ministry of Power & Natural Gas for the

excellent performance in reduction/elimination of steam leaks in the plant.

Jamnagar Manufacturing Division was the recipient of the Infraline Energy Award-

2007 by Ministry of Power.

Hazira Manufacturing Division won the Government of India Energy Conservation

Award (2007) conferred by the Bureau of energy efficiency and Ministry of Power.

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Hazira Manufacturing Division was adjudged Excellent Energy Efficient Unit at

Energy Summit - 2007 by CII.

Vadodara Manufacturing Division received the CII award for Excellence in Energy

Management - 2007 as energy efficient unit. This division also received the 2nd prize in

National Energy Conservation Award 2007 from Bureau of Energy efficiency,

Ministry of Power, Government of India.

The Companys manufacturing divisions at Vadodara and Hazira were honoured with

CII-National award for excellence in water management - 2007 as water efficient unit in

Within the fence category. Additionally, Hazira Manufacturing Division was honoured

as water efficient unit Beyond the Fence category.

Quality:-

For the first time ever, globally, a petrochemical company bagged the Deming Prize

for Management Quality. The Quality Control Award for Operations Business Unit

2007 was awarded to the Hazira Manufacturing Division for Outstanding

Performance by Practicing Total Quality Management.

QUALTECH PRIZE 2007, which recognizes extraordinary results in improvement

and innovation, was won by Hazira Manufacturing Division for its Small Group

Activity Project.

Vadodara Manufacturing Divisions Polypropylene-IV (PP-IV) plant was conferred

the Spheripol Process Operability Award-2006 for the highest operability rate with

an on stream factor 98.97% by M/s. BASELL, Italy.

Allahabad Manufacturing Division won the Excellent Category Award at National

Convention of Quality Circle (NCQC) - 07.

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Six-Sigma:-

Lean Six sigma project on Reducing retention time of caustic soda lye tankers at

Jamnagar won the 1st prize in the national level competition held by Indian

Statistical Institute (ISI).

Patalganga Manufacturing Divisions Six Sigma Project on Improve Transfer

Efficiency for Automatic winders in PFY won the 2nd Prize for Best design for Six

Sigma Project in International Six Sigma Competition organized by IQPC

(International Quality and Productivity center).

Barabanki Manufacturing Division won the 3rd prize in All India Six Sigma case

study contest 2008 for the Case study on Reduction of waste of Plant 2 from 16%

to 8%.

Hoshiarpur Manufacturing Division won the 2nd prize in Six Sigma competition at

National Level organized by ISI and Quality Council of India (in manufacturing

category), while Dhenkanal and Barabanki Manufacturing Divisions won the 3rd

prize.

Vadodara Manufacturing Divisions Six Sigma project won the 1st prize as the Best Six

Sigma project at National level by CII.

Technology, R&D and Innovation:-

Vadodra Manufacturing Divisions R&D bagged an award from Indian Institute of

Chemical Engineers for Excellence in Process / Product Development for the work

on Eco friendly Process for Acetonitrile Recovery.

DSIR National Award for R&D Efforts in Industry (2007) was conferred on Hazira

Manufacturing Division for the Cyclehexane Recovery Project.

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Patalganga Manufacturing Divisions Project titled Augmentation of ETP and use of

biogas in Fired heaters won the Best Innovative Project from CII.

Reliance bagged the Innovation Award at Tech Converge 2007 for innovative

developments in short-cut fibres.

Hazira Manufacturing Division won the Golden Peacock Innovation Award - 2007 for

its Cyclohexane Recovery Process.

Information Technology:-

CIO of the Year Award for the best IT-enabled organization in India for the Year

2007.

Ones to Watch - CIO - USA Award, for figuring among the top 20 organizations

fostering excellence in IT team.

The Skoch Challenger Award conferred for the best IT Head (managing the most

IT enabled organization) of the Year 2007.

Best IT Implementation Award, by PC Quest for Knowledge Management Systems

portal (KMS).

CIO Excellence Award for Chemical Industry Information Technology Forum for

exemplary Information Technology implementation amongst global chemical

companies.

CTO Forum Hall of Fame Award for the best CIOs in India for not only providing

service to their

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41

PRODUCT PROFILE


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PRODUCT PROFILE

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CATEGORIES OF MUTUAL FUND:

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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.

Equity funds: These funds invest in equities and equity related instruments. 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.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that they

invest in companies offering high dividend yields.

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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 option for 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 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.

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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.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of

the fund.

Return Safety Volatility Liquidity Convenienc

e

Equity High Low High High Moderate

Bonds Moderate High Moderate Moderate High

Co.

Debentures

Moderate Moderate Moderate Low Low

Co. FDs Moderate Low Low Low Moderate

Bank

Deposits

Low High Low High High

PPF Moderate High Low Moderate High

Life

Insurance

Low High Low Low Moderate

Gold Moderate High Moderate Moderate Gold

Real Estate High Moderate High Low Low

Mutual

Funds

High High Moderate High High

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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.

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 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.

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

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performance of those sectors/industries and must exit at an appropriate time. They may also

seek advice of an expert.

48

RESEARCH

METHODOLOGY


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RESEARCH METHODOLOGY

This report is based on primary as well secondary data, however primary data

collection was given more importance since it is overhearing factor in attitude studies.

One of the most important users of research methodology is that it helps in identifying

the problem, collecting, analyzing the required information data and providing an

alternative solution to the problem .It also helps in collecting the vital information thatis required by the top management to assist them for the better decision making both

day to day decision and critical ones.

Data sources: Research is totally based on primary data. Secondary data can be used

only for the reference. Research has been done by primary data collection, and primary

data has been collected by interacting with various people. The secondary data has

been collected through various journals and websites.

Duration of Study: The study was carried out for a period of two months, from 3 rd

June to 30th July 2011.

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Sampling:

Sampling procedure: The sample was selected of them who are the

customers/visitors of Reliance Money, Boring Canal Road Branch, irrespective of

them being investors or not or availing the services or not. It was also collected

through personal visits to persons, by formal and informal talks and through filling

up the questionnaire prepared. The data has been analyzed by using

mathematical/Statistical tool.

Sample size: The sample size of my project is limited to 100 people

Sample design: Data has been presented with the help of bar graph, pie charts,

line graphs etc.

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51

FINDINGS & ANALYSIS


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FINDINGS AND ANALYSIS

1. (a) Age distribution of the Investors of Moradabad

Age Group 50

No. of Investors 10 15 40 15 10 10

1015

40

1510 10

05

10

1520

253035

4045

Less 30 31 - 35 36 - 40 41 - 45 46 - 50 more

than 50

more than 50

46 - 50

41 - 45

36 - 40

31 - 35

Less 30

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Interpretation:

According to this chart out of Mutual Fund investors of Moradabad the 40%

are in the age group of 36-40 yrs. i.e. 15%, the second most investors are in

the age group of 41-45yrs, 31 35yrs i.e. 10% and the least investors are in

the age group of below 30 yrs., 46-50yrs and more than 50yrs

(b). Educational Qualification of investors of Moradabad

Educational Qualification Number of Investors

Graduate/ Post Graduate 60

Under Graduate 30

Others 10

60

3010

010203040506070

Gradua

te/Post

Grad

uate

Under

Graduate

Others

Others

Under Graduate

Graduate/Post

Graduate

Interpretation:

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Out of 100 Mutual Fund investors 60% of the investors in Moradabad are

Graduate/Post Graduate, 30% are Under Graduate and 10% are others (under

HSC).

c). Occupation of the investors of Moradabad

.

Occupation No. of Investors

Govt. Service 20Pvt. Service 25

Business 45Agriculture 4

Others 6

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20 25

45

4 60

10

20

30

40

50

Govt.

Service

Pvt.

Service

Business Agriculture Others

Occupation of the customers

No.ofInvest

ors

Interpretation:

In Occupation group out of 100 investors, 25% are Pvt. Employees, 45% are

Businessman, 20% are Govt. Employees, 4% are in Agriculture and 6% are in others.

(d). Monthly Family Income of the Investors of Moradabad.

Income Group No. of Investors

30,000 25

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5

1520

35

25

0

5

10

15

20

25

30

35

40

Less

10000

10001 -

15000

15001 -

20000

20001 -

30000

more

30000

more 30000

20001 - 30000

15001 - 20000

10001 - 15000

Less 10000

Interpretation:

In the Income Group of the investors of Moradabad, out of 100 investors, 35%

investors that is the maximum investors are in the monthly income group Rs.

20,001 to Rs. 30,000, Second one i.e. 25% investors are in the monthly income

group of more than Rs. 30,000 and the minimum investors i.e. 5% are in the

monthly income group of below Rs. 10,000

(2) Investors invested in different kind of investments.

Kind of Investments No. of RespondentsSaving A/C 25Fixed deposits 15Insurance 20Mutual Fund 40

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25 15 2040

01020304050

Savin

gA/c

Fixed

Depo

sits

Insur

ance

M

utua

lFun

d

Kindsof

Investment

No.of

Respondents

Interpretation: From the above graph it can be inferred that out of 100 people, 25%

people have invested in Saving A/c, 20% in Insurance, 15% in Fixed Deposits, 40%

in Mutual Fund.

3. Preference of factors while investing

Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of Respondents 20 25 45 10

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Interpretation:

58

2025

45

10

0

10

20

30

40

50

Liquidity Low Risk High Return Trust


59/87

Out of 100 People, 45% People prefer to invest where there is High Return, 25%

prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 10% prefer

Trust

4. Awareness about Mutual Fund and its Operations

70

30

0

10

20

30

40

50

60

70

80

Yes No

Interpretation:

Response Yes NoNo. of Respondents 70 30

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From the above chart it is inferred that 70% People are aware of Mutual Fund

and its operations and 30% are not aware of Mutual Fund and its operations.

5. Source of information for customers about Mutual Fund

Source of information No. of RespondentsAdvertisement 10

Peer Group 15Bank 35

Financial Advisors 40

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the most

important source of information about Mutual Fund. Out of 100 Respondents,

60

1015

3540

0

5

10

15

20

25

3035

40

45

Advertisement Peer Group Bank Financial

AdvisorsSource of Information

No.ofRespondent


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Interpretation:

Out of 100 People, 60% have invested in Mutual Fund and 40% do not have

invested in Mutual Fund.

7.Reason for not invested in Mutual Fund

Reason No. of Respondents

Not Aware 65Higher Risk 5

Not any Specific Reason 30

62

65

5

010203040506070

Not Aware Higher

Risk

Not any

Specific

Reason


63/87

Interpretation:

Out of 100 people, who have not invested in Mutual Fund, 65% are not aware

of Mutual Fund, 5% said there is likely to be higher risk and 30% do not have

any specific reason.

8. Investors invested in different Assets Management Co. (AMC)

Name of AMC No. of InvestorsRELIANCE MF 25

UTI 25HDFC 15

ICICI Prudential 15Kotak 10Others 10

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25 25 15 1510

505

10

15202530

Relia

nceMF

UTI

HDFC

ICICI

Kotak

OTH

ER

N

ame

of

AMC

No. of

Investors

Interpretation:

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In Moradabad most of the Investors preferred UTI and Reliance Mutual Fund.

Out of 100 Investors 25% have invested in each of them, , 15% in ICICI

Prudential, 10% in Kotak and 15% in HDFC and 5% other

9. Reason for invested in Reliance MF

Reason No. of Respondents

Better Return 65Agents Advice 35

65

35

0

1020

30

40

50

60

70

Better Return Agents Advice

Column 1

Interpretation:

Out of 100 investors of Reliance MF, 35% invested on Agents Advice, 65%

invested because of better return.

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11. Channel Preferred by the Investors for Mutual Fund Investment

Channel Financial Advisor Bank AMCNo. of Respondents 60 20 20

60

20 20

0

10

20

30

40

50

60

70

Financial Advisor Bank AMC

AMC

Bank

Financial Advisor

Interpretation:

Out of 100 Investors 60% preferred to invest through Financial Advisors,

20% through AMC and 20% through Bank.

12. Mode of Investment Preferred by the Investors

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Mode of Investment One time Investment Systematic Investment Plan (SIP)

No. of Respondents 65 35

65

35

0

10

20

30

40

50

60

70

One time

Investment

SIP

Interpretation:

Out of 100 Investors 65% preferred One time Investment and 35 % Preferred

through Systematic Investment Plan.

13. Preferred Portfolios by the Investors

Portfolio No. of Investors

Equity 46

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Debt 17Balanced 37

46

17

37

0

10

20

30

40

50

Equity Debt Balance

Interpretation:

From the above graph 46% preferred Equity Portfolio, 37% preferred Balance

and 17% preferred Debt portfolio

14. Option for getting Return Preferred by the Investors

Option Dividend Payout Dividend

Reinvestment

Growth

No. of Respondents 21 8 71

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218

71

01020304050607080

Payo

ut

Reinv

estmen

t

Growth

Interpretation:

From the above graph 71% preferred Growth Option, 21% preferred Dividend

Payout and 8% preferred Dividend Reinvestment Option.

FINDINGS

In Moradabad in the Age Group of 36-40 years were more in numbers.

The second most Investors were in the age group of 41-45 years and the

least were in the age group of below 30 years.

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In Moradabad most of the Investors were Graduate or Post Graduate

and below HSC there were very few in numbers.

In Occupation group most of the Investors were Govt. employees, the

second most Investors were Private employees and the least were

associated with Agriculture.

In family Income group, between Rs. 20,001- 30,000 were more in

numbers, the second most were in the Income group of more than

Rs.30,000 and the least were in the group of below Rs. 10,000.

About all the Respondents had a Saving A/c in Bank, 76% Invested in

Fixed Deposits, Only 60% Respondents invested in Mutual fund.

Mostly Respondents preferred High Return while investment, the

second most preferred Low Risk then liquidity and the least preferred

Trust.

Only 67% Respondents were aware about Mutual fund and its

operations and 33% were not.

Among 200 Respondents only 60% had invested in Mutual Fund and

40% did not have invested in Mutual fund.

Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told

there is not any specific reason for not invested in Mutual Fund and 6%

told there is likely to be higher risk in Mutual Fund.

Most of the Investors had invested in Reliance or UTI Mutual Fund,

ICICI Prudential has also good Brand Position among investors,

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Reliance MF places after ICICI Prudential according to the

Respondents.

Out of 55 investors of Reliance MF 64% have invested due to its

association with the Brand Reliance, 27% Invested because of

Advisors Advice and 9% due to better return.

Most of the investors who did not invested in Reliance MF due to not

Aware of Reliance MF, the second most due to Agents advice and rest

due to Less Return.

For Future investment the maximum Respondents preferred Reliance

Mutual Fund, the second most preferred ICICI Prudential, Reliance MF

has been preferred after them.

60% Investors preferred to Invest through Financial Advisors, 25%

through AMC (means Direct Investment) and 15% through Bank.

65% preferred One Time Investment and 35% preferred SIP out of

both type of Mode of Investment.

The most preferred Portfolio was Equity, the second most was Balance

(mixture of both equity and debt), and the least preferred Portfolio was

Debt portfolio.

Maximum Number of Investors Preferred Growth Option for returns,

the second most preferred Dividend Payout and then Dividend

Reinvestment.

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CONCLUSION

With the globalize economy and immense competition among countries for faster

development of their respective economies, the significance of Mutual Funds and Foreign

investment has taken manifold. With a buoyant vibrant and experienced stock market, India

today is looking ahead to surpass China in terms of foreign Investment and growth

74

CONCLUSION


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prospects. Stock exchange being the barometer of the economy plays a vital role in

showcasing growth of an economy and luring investment. While studying the role of Mutual

fund and FIIs in Stock Market, I discussed with a few persons who are into stock broking

business. And the information they have provided shows that though the investment and

participation of domestic investors are rising, still, they have not been able to prove

themselves to be as influential as mutual funds and FIIs.

Importance and the role of Mutual funds and FIIs play in the Indian stock market can be seen

from the fact that the recent surge in Sensex and NIFTY is attributed to the active

participation of FIIs in the Stock Market. Despite being aware of the Asian economic crisis

where FIIs role was of a major concern, the importance of foreign capital in the development

of economy can not be undermined in anyway so the people more emphasis on mutual fund

to earn more return increasing our benefit .

Running a successful Mutual Fund requires complete understanding of the

peculiarities of the Indian Stock Market and also the psyche of the small investors. This

study has made an attempt to understand the financial behavior of Mutual Fund investors in

connection with the preferences of Brand (AMC), Products, Channels etc. I observed that

many of people have fear of Mutual Fund. They think their money will not be secure in

Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of

people do not have invested in mutual fund due to lack of awareness although they have

money to invest. As the awareness and income is growing the number of mutual fund

investors are also growing.

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Brand plays important role for the investment. People invest in those Companies

where they have faith or they are well known with them. There are many AMCs in

Moradabad but only some are performing well due to Brand awareness. Some AMCs are

not performing well although some of the schemes of them are giving good return because

of not awareness about Brand. Reliance, UTI, ICICI Prudential etc. they are well known

Brand, they are performing well and their Assets Under Management is larger than others

whose Brand name are not well known like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. Financial

Advisors are the most preferred channel for the investment in mutual fund. They can change

investors mind from one investment option to others. Many of investors directly invest their

money through AMC because they do not have to pay entry load. Only those people invest

directly who know well about mutual fund and its operations and those have time.

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SUGGESTIONS

77

SUGGESTIONS


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The most vital problem spotted is of ignorance. Investors should be made

aware of the benefits. Nobody will invest until and unless he is fully

convinced. Investors should be made to realize that ignorance is no longer

bliss and what they are losing by not investing.

Mutual funds offer a lot of benefit which no other single option could offer.

But most of the people are not even aware of what actually a mutual fund is?

They only see it as just another investment option. So the advisors should try

to change their mindsets. The advisors should target for more and more young

investors. Young investors as well as persons at the height of their career

would like to go for advisors due to lack of expertise and time.

The advisors may try to highlight some of the value added benefits of Mutual

funds such as tax benefit, rupee cost averaging, and systematic transfer plan,

rebalancing etc. these benefits are not offered by other options single-

handedly. So these are enough to drive the investors towards mutual funds.

Investors could also try to increase the spectrum of services offered.

Now the most important reason for not availing the services of advisors was

spotted was being expensive. The advisors should try to charge a nominal fee

at the beginning. But if not possible then they could go for offering more

services and benefits at the existing rate. They should also maintain their

decency and follow the code of ethics so that the investors could trust upon

them. Thus the advisors should try to attract more and more persons and turn

them into investors and finally their clients.

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LIMITATION

80

LIMITATIONS


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The study could not be made that comprehensive due to time constraints. Some customers

feel uncomfortable to reveal some personal information relating to income etc. it might have

happened that some more essential information could have been collected.

Time constraint.

Biases and non-cooperation of the respondents.

Financial constraint.

Geographical selectivity in study limiting to Moradabad city

People are not interested in giving personal opinion.

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BIBLIOGRAPHY

BOOKS:

Kothari C. R. Research Methodology Second Edition, Wishwa Prakashan.

82

BIBLIOGRAPHY


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Donald S. Tull , Dell I. Hawkins Marketing Research Sixth Edition, Published

by Ashok k. Ghosh , Prentice-Hall Of India Pvt. Ltd.

JOURNALS:

Indian Journal of Marketing Volume xxxiv Oct 2006

IBAT Journal of Management Volume III Number 1 Jan 2007.

Journal of Indian Management & Strategy Volume 20, No.3, July, September

2007

MAGAZINES:

Business Today , November 21, 2007 issue

Business Today , November 21, 2007 issue

WEBSITE

www.reliancemoney.com

www.iloveindia.com/finance/...mutual-funds/reliance.html

www.connect.in.com/reliance-mutual-fund/profile-393400.html

www.financialexpress.com/.../reliance-mutual-fund...fund/466822

www.moneycontrol.com/mutualfundindia

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1. Personal Details:

Name:-

Add: - Phone:-(a) Age:-

Age Group 50

(b). Qualification:-

(c). Occupation. Pl tick ()

Govt. Ser Pvt. Ser Business Agriculture Others

(d). What is your monthly family income approximately? Pl tick ().

Up toRs.10,000

Rs. 10,001 to15000

Rs. 15,001 to20,000

Rs. 20,001 to30,000

Rs. 30,001and above

2. What kind of investments you have made so far? Pl tick (). All applicable.

a. Saving account b. Fixed deposits c. Insurance d. Mutual Funde. Post Office-NSC, etc f. Shares/Debentures g. Gold/ Silver h. Real Estate

3. While investing your money, which factor will you prefer?. (a) Liquidity (b) Low Risk (c) High Return (d) Trust

4. Are you aware about Mutual Funds and their operations? Pl tick (). Yes No

5. If yes, how did you know about Mutual Fund?

a. Advertisement b. Peer Group c. Banks d. Financial Advisors

6. Have you ever invested in Mutual Fund? Pl tick (). Yes No

Graduation/PG Under Graduate Others

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7. If not invested in Mutual Fund then why?

(a) Not aware of MF (b) Higher risk (c) Not any specific reason

8. If yes, inwhich Mutual Fund you have invested? Pl. tick (). All applicable.

a.

RELIANCEMF

b. UTI c.

HDFC

d. Reliance e. Kotak f. Other. specify

9. If invested in RELIANCEMF, you do so because (Pl. tick (), all applicable).

a. RELIANCEMF is associated with State Bank of India.b. They have a record of giving good returns year after year.c. Agent Advice

10. If NOT invested in RELIANCEMF, you do so because (Pl. tick () all applicable).

a. You are not aware of RELIANCEMF.b. RELIANCEMF gives less return compared to the others.

c. Agent Advice

11. Which Channel will you prefer while investing in Mutual Fund?

(a) Financial Advisor (b) Bank (c) AMC

12. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick().

a. One Time Investment b. Systematic Investment Plan (SIP)

13. When you want to invest ,which type of funds would you choose?

a. Having only debt portfolio b. Having debt & equity portfolio. c. Only equity portfolio.

14. How wouldyou like to receive the returns every year? Pl. tick ().

a. Dividend payout b. Dividend re-investment c. Growth in NAV

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