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Reliance Mutual Fund Recovered

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COMPANY PROFILE Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Assets Under Management (AUM) of Rs. 48,828 crore (AUM as on 30th Apr 2007) and an investor base of over 3.1 million. 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 115 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 Ltd., a wholly owned subsidiary of Reliance Capital Ltd. Reliance Capital Ltd. 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 1
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Page 1: Reliance Mutual Fund Recovered

COMPANY PROFILE

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

Management (AUM) of Rs. 48,828 crore (AUM as on 30th Apr 2007) and an investor

base of over 3.1 million.

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 115 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

Ltd., a wholly owned subsidiary of Reliance Capital Ltd.

Reliance Capital Ltd. 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 Ltd. has interests in asset management, life and general insurance,

private equity and proprietary investments, stock broking and other financial services.

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Investment Manager : Reliance Capital Asset Management Limited. The Sponsor, the

Trustee and the Investment Manager are incorporated under the Companies Act 1956.

General Risk Factors : Mutual Funds and securities investments are subject to market

risks and there is no assurance or guarantee that the objectives of the Scheme will be

achieved. As with any investment in securities, the NAV of the Units issued under the

Scheme can go up or down depending on the factors and forces affecting the capital

markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the

future performance of the Scheme. The Sponsor is not responsible or liable for any loss

resulting from the operation of the Scheme beyond their initial contribution of Rs.1 lakh

towards the setting up of the Mutual Fund and such other accretions and additions to the

corpus. The Mutual Fund is not guaranteeing or assuring any dividend/ bonus. The

Mutual Fund is also not assuring that it will make periodical dividend/bonus

distributions, though it has every intention of doing so. All dividend/bonus distributions

are subject to the availability of the distributable surplus in the Scheme. For details of

scheme features apart from those mentioned above and scheme specific risk factors,

please refer to the provisions of the offer document. Offer Document and KIM is

available at all the DISCs/ Distributors of RMF.

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RELIANCE MUTUAL FUND

Reliance mutual fund, promoted by the Anil Dhirubhai Ambani (ADAG) group, is one of

the fastest growing mutual funds in India having doubled its assets over the last one year.

In March, 2006, the Reliance mutual fund emerged as the largest private sector fund

house in the country, overtaking Prudential ICICI which has been holding that position

for many years.

The sponsor of the fund is Reliance Capital Limited, the financial services arm of ADAG.

Reliance Capital Asset Management Limited, a wholly owned subsidiary of Reliance

Capital Limited, acts as the AMC to the fund. Directors of the company include Amitabh

Jhunjhunwala, a senior executive of ADAG. Amitabh Chaturvedi is the managing

director of the AMC.

As of end August 2006, Reliance mutual fund has Rs 28,753 crore of assets under

management. Reliance Equity Fund, launched by Reliance MF in early 2006, is the

largest mutual find scheme in the country with a fund size of over Rs 5,500 crore.

Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act,

1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor and Reliance Capital

Trustee Co. Limited (RCTCL), as the Trustee.

RMF has been registered with the Securities & Exchange Board of India (SEBI) vide

registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital

Mutual Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide

SEBI's letter no. IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was

formed to launch various schemes under which units are issued to the Public with a view

to contribute to the capital market and to provide investors the opportunities to make

investments in diversified securities.

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The main objectives of the Trust are :

To carry on the activity of a Mutual Fund as may be permitted at law and

formulate and devise various collective Schemes of savings and investments for people

in India and abroad and also ensure liquidity of investments for the Unit holders.

To deploy Funds thus raised so as to help the Unit holders earn reasonable

returns on their savings and

To take such steps as may be necessary from time to time to realise the effects

without any limitation.

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Here is a list of mutual funds of Reliance:

Debt/Income Funds

Reliance Income Fund

Reliance Monthly Income Plan

Reliance Fixed Term Scheme

Reliance Gilt Securities Fund

Reliance Liquid Fund

Reliance Medium Term Fund

Reliance Short Term Fund

Reliance Floating Rate Fund

Reliance NRI Income Fund

Reliance Fixed Maturity Fund Series - I

Reliance Fixed Maturity Fund Series - II

Reliance Liquidity Fund

Reliance Regular Savings Fund

Reliance Fixed Tenor Fund

Reliance Fixed Tenor Fund Plan B

Reliance Fixed Horizon Fund Plan A & B

Equity Funds

Reliance Growth Fund

Reliance Vision Fund

NRI Equity Fund

Reliance Index Fund

Reliance Equity Opportunities Fund

Reliance Tax Saver (ELSS) Fund

Reliance Equity Fund

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Sector Specific Funds

Reliance Banking Fund

Reliance Diversified Power Sector Fund

Reliance Pharma Fund

Reliance Media & Entertainment Fund

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OUR CORPORATE GOVERNANCE POLICY

Reliance Capital Asset Management Ltd. has a vision of being a leading player in the

Mutual Fund business and has achieved significant success and visibility in the market.

However, an imperative part of growth and visibility is adherence to Good Conduct in the

marketplace. At Reliance Capital Asset Management Ltd., the implementation and

observance of ethical processes and policies has helped us in standing up to the scrutiny

of our domestic and international investors.

Management

The management at Reliance Capital Asset Management Ltd. is committed to good

Corporate Governance, which includes transparency and timely dissemination of

information to its investors and unitholders. The Reliance Capital Asset Management

Limited Board is a professional body, including well-experienced and knowledgeable

Independent Directors. Regular Audit Committee meetings are conducted to review the

operations and performance of the company.

Employees

Reliance Capital Asset Management Ltd. has a preset code of conduct for all its officers.

It has a clearly defined prohibition on insider trading policy and regulations. The

management believes in the principles of propriety and utmost care is taken while

handling public money, making proper and adequate disclosures.

All personnel at Reliance Capital Asset Management Ltd. are made aware of the dos and

donts as part of the Dealing policy laid down by the Securities and Exchange Board of

India (SEBI). They are taken through a well-designed HR program, conducted to impart

work ethics, the Code of Conduct, information security, Internet and e-mail usage and a

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host of other issues.

One of the core objectives of Reliance Capital Asset Management Ltd. is to identify

issues considered sensitive by global corporate standards, and implement

policies/guidelines in conformity with the best practices as an ongoing process.

Reliance Capital Asset Management Ltd. gives top priority to compliance in true letter

and spirit, fully understanding its fiduciary responsibilities.

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RELIANCE CAPITAL LIMITED

Corporate & Registered Office

Reliance Capital Ltd. H Block, 1st Floor, Dhirubhai Ambani Knowledge

City, Koparkhairne, Navi Mumbai - 400 710.Tel. 022 – 30327000, Fax. 022

- 30327202

Reliance Capital Asset Management Ltd.

is a wholly owned subsidiary of Reliance Capital Limited, the sponsor. The

entire paid-up capital (100%) of Reliance Capital Asset Management Ltd is

held by Reliance Capital Ltd.

Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd

(RCL). Reliance Capital is India’s fastest growing private sector financial

services company. Ranking among the top 3 private sector banking and

finance companies in India, with a shareholder base of over 1.3 million.

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

and general insurance, private equity and proprietary investments, stock

broking and other financial services with a net worth in excess of Rs. 5,262

crore (as of March 31, 2007)

Reliance Capital Ltd. has contributed Rupees One Lac as the initial

contribution to the corpus for the setting up of the Mutual Fund. Reliance

Capital Ltd. is responsible for discharging its functions and responsibilities

towards the Fund in accordance with the Securities and Exchange Board of

India (SEBI) Regulations.

The Sponsor is not responsible or liable for any loss resulting from the

operation of the Scheme beyond the contribution of an amount of Rupees

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one Lac made by them towards the initial corpus for setting up the Fund and

such other accretions and additions to the corpus.

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About Reliance Capital Asset Management Ltd.

Reliance Capital Asset Management Limited (RCAM), a company

registered under the Companies Act, 1956 was appointed to act as the

Investment Manager of Reliance Mutual Fund.

Reliance Capital Asset Management Limited is a wholly owned subsidiary

of Reliance Capital Limited, the sponsor. The entire paid-up capital (100%)

of Reliance Capital Asset Management Limited is held by Reliance Capital

Limited.

Reliance Capital Asset Management Limited was approved as the Asset

Management Company for the Mutual Fund by SEBI vide their letter no

IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an

Investment Management Agreement (IMA) with RCAM dated May 12,

1995 and was amended on August 12, 1997 in line with SEBI (Mutual

Funds) Regulations, 1996. Pursuant to this IMA, RCAM is authorised to act

as Investment Manager of Reliance Mutual Fund. The networth of the Asset

Management Company including preference shares as on March 31, 2005 is

Rs.30.13 crores. Reliance Mutual Fund has launched twenty five Schemes

till date, namely: Reliance Vision Fund (September 1995), Reliance Growth

Fund (September 1995) Reliance Income Fund (December 1997), Reliance

Liquid Fund (March 1998), Reliance Medium Term Fund (August 2000),

Reliance Short Term Fund (December 2002), Reliance Fixed Term Scheme

(March 2003), Reliance Banking Fund (May 2003), Reliance Gilt Securities

Fund (July 2003), Reliance Monthly Income Plan (December 2003),

Reliance Diversified Power Sector Fund (March 2004) Reliance Pharma

Fund ( May 2004), Reliance Floating Rate Fund (August 2004), Reliance

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Media & Entertainment Fund (September 2004), Reliance NRI Equity Fund

(October 2004), Reliance NRI Income Fund (October 2004), Reliance Index

Fund (January 2005), Reliance Equity Opportunities Fund (February 2005),

Reliance Fixed Maturity Fund - Series I (March 2005), Reliance Fixed

Maturity Fund - Series II (April 2005), Reliance Regular Saving Fund (May

2005), Reliance Liquidity Fund (June 2005), Reliance Tax Saver (ELSS)

Fund (July 2005), Reliance Fixed Tenor Fund (November 2005) and

Reliance Equity Fund (Feb 2006).

RCAM has been registered as a portfolio manager vide SEBI Registration

No. INP000000423 and renewed effective 1st August, 2003. RCAM has

commenced these activities. It has been ensured that key personnel of the

AMC, the systems, back office, bank and securities accounts are segregated

activity wise and there exists systems to prohibit access to inside

information of various activities. As per SEBI Regulations, it will further

ensure that AMC meets the capital adequacy requirements, if any, separately

for each such activity.

RCAM has been appointed as the Investment Manager of "Reliance India

Power Fund", a Venture Capital Fund registered with SEBI vide

Registration no.IN/VCF/05-06/062 dated June 16, 2005 but this activity is

yet to commence.

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Name and Address Other Directorships

Mr. Amitabh Chaturvedi *

Raheja Empress,

Flat No. 1201/1202,

12th Floor, Veer Savarkar Marg,

Opp. Siddhi Vinayak Temple,

Prabhadevi, Mumbai - 400 025.

Senior Corporate Executive

 

Director :

Reliance Asset Management (Singapore) Pte

Limited,

Reliance Asset Management (Mauritius) Limited,

Reliance Infoinvestments Limited.

Financial Planning Standards Board of India

 

Mr. Kanu Doshi

102, Shivala, Khatau Road,

Cuffe Parade, Mumbai - 400 005.

Chartered Accountant

Chairman :

Matrix Advisors (India) Private Limited

Director :

BOB Capital Markets Limited,

Peoples Financial Services Limited

Alphaplus Investment Management Private

Limited.

 

Mr. Manu Chadha

C-35, Malcha Marg,

Chankyapuri,

New Delhi - 110 021.

Chartered Accountant

Director :

TRC Financial Services Limited, Himalayan Crest

Power Limited, GIC Housing Finance Limited, Kotla

Hydro Power Limited,

Ispat Industries Limited,

TRC Corporate Consulting (P) Limited

Brady Air Limited.

Partner :

M/s T.R. Chadha & Co., Chartered Accountants

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 Mr. Sushil C. Tripathi, I.A.S.

(Retd.)

27, Sector 15A,

NOIDA - 201 301(UP)

(Former Secretary to

Government of India,

Ministry of Petroleum &

Natural Gas /

Ministry of Education)

Director :

IL&FS Infrastructure Development Corporation

Limited

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INTRODUCTION

A mutual fund is created when investors put their money together in a particular fund which is providing them maximum investment opportunities. The fund thus collected through particular mutual fund scheme is managed by expertise having great knowledge of investment & market.

TYPES OF MUTUAL FUNDS

Mutual Funds are classified by structure into:

Open – Ended SchemesClose – Ended Schemes.Interval Schemes

By objective into:

Equity (Growth) SchemesIncome SchemesMoney Market SchemesTax Saving SchemesBalanced SchemesOffshore fundsSpecial Schemes like index schemes etc.

RETURN OPTION IN MUTUAL FUNDSDividend OptionGrowth OptionReinvestment Option

THE ADVANTAGES OF INVESTING IN A MUTUAL FUND ARE

Diversifications Professional Management Regulatory oversight Liquidity Convenience Low Cost

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Open – Ended Schemes

In an open- ended fund an investor can buy and sell units of the fund at NAV related prices, at any time, directly from the fund. This is called as open- ended fund because, the pool of funds is open for additional sales and purchases. The price at which the investors buy or sell units is linked to the NAV.

Open Ended Funds are offered for sale at a per-specified price, say Rs.10, in the initial offer period. After a per-specified period, say 30 days, this is declared open for sale further sales and repurchases. These transactions happen at the computed NAV related prices.

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CLOSED ENDED FUNDS

A closed ended fund is open for sale to investors for a specific period, after

which further sales are closed. Any further transaction for buying the units

or repurchasing them, happen in the secondary markets, where closed funds

are lists. Therefore new investors bye from the existing investors, and they

can liquidate their units by selling them to other willing buyers.

The price at which the units can be sold redeemed depends on the market

prices, which are fundamentally linked to the NAV. Investors in closed

funds receive either certificates of depository receipts, for their holding in

closed ended mutual fund.

INTERVAL SCHEMES

Interval Schemes are those that combine the features of open-ended and

close ended schemes. The units may be traded on the stock exchange or may

be open for sale or redemption during pre-determined intervals at NAV

related prices.

GROWTH SCHEMES

Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium.

These schemes normally invest a major part of their fund in equities and are willing to bear short-them decline in value for possible future appreciation.

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INCOME SCHEMES

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

TAX SAVING SCHEMES

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec. 88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate & 20% for a maximum investment on Rs 10,000 per financial year.

MONEY MARKET SCHEMES

Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

BALANCED SCHEMES

Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).

RETURN OPTION IN MUTUAL FUNDS

DIVIDEND OPTION

Investors who choose a dividend option as there investment, will receive dividends from the mutual funds ,as and when such dividends are declared There are further choices in the distribution of dividend .in a normal divided plan, periodicity of dividends is left to the fund manager, who may pay

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annual dividend. The timing of payouts decided by the fund manager which can vary form daily, weekly, quarterly, half yearly and annually. Investor choosing this option having affix number of units invested in the fund and earn income on this investment the NAV of these investors holdings will vary with the value of portfolio.

GROWTH OPTION

Investors who do not require periodic income distribution can choose the growth option where income earned are retained in the investment portfolio and are allowed to grow rather being distributed to the investors. The return to the investors is the rate at which his initial investment has grown over the period for which he has invested in the fund. The NAV of investors will vary with value of the investment while the number of units remains constant

REINVESTMENT OPTION

Investors reinvest the dividends that are declared by the mutual funds back into the fund itself at NAV that prevalent at the time of reinvestment .In this option the numbers of unit held by the invests will change with every reinvestment .The value f the units will be similar to that under the dividend options

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Why should you invest in Mutual Funds?

1) Reduce your risks - Mutual Funds diversify your portfolio by investing in various securities & minimise the risk.

2) Maximise your opportunities - The fund managers with the strong research take

3) Liquidity: Quick access to your money - Mutual Funds can be bought and sold on any dealing day

4) Affordability - Of course you don’t need to be millionaire to invest in mutual fund as the minimum investment in mutual fund starts from Rs.500/-. A Mutual Fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.

5) Low Costs - Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors.

6) Tax Benefits - The tax benefits that Mutual Funds investors enjoy at the moment is the treatment of long-term capital gains.

Investors have two options as regards long-term capital gains:

Tax @ 10% on capital gains without indexation (plus surcharge)

Tax @ 20% on capital gains after indexation (plus surcharge)

7) Transparency - The investor gets regular information on the value of his investment in addition to disclosure on the specific investments made by the fund, the invested in each class of assets and the fund manager's investment strategy and outlook.

8) Regulated for investor protection - All Mutual Funds in India are registered with the regulator of the Indian securities industry - the Securities and Exchange Board of India (SEBI). The funds function within the framework of regulations designed by SEBI and these regulations are

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intended to protect the interests of investors. The operations of the mutual funds are also regularly monitored by SEBI.

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THE ADVANTAGES OF INVESTING IN A MUTUAL FUND ARE:

Diversifications: 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 in 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.

Transparency Flexibility Choice of schemesTax benefitsWell regulated

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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 a 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 rose 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.

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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.

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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.

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GROWTH IN ASSETS UNDER MANAGEMENT

: .

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TYPES OF PRODUCTS OFFERED BY MUTUAL FUNDS

EQUITY FUNDS-

Equity funds are those that invest pre-dominantly in equity shares of

companies. There are variety of ways in which an equity portfolio can be

created for investors.

CHOICES FOR EQUITY FUND INVESTORS

SIMPLE EQUITY FUNDS-

These funds invest a predominant portion of-the funds mobilized in equity

related products. In most cases about 80-90% of their investments are in

equity shares. These funds have the freedom to invest both in primary and

secondary markets for equity. One variation of simple fund is the ELLS

{Equity Linked Saving Schemes). It invests at least 90% of its funds in

equity and equity linked investments in eligible for tax-rebate up to a

maximum investment of Rs. 10000 under section 88 of the Income Tax Act

and the minimum lock-in period in 3 years, in order to avail the tax rebate.

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PRIMARY MARKET FUNDS-

The primary market funds invest in equity shares, but do so only when a

primary market offering is available. The focus is on capturing the

opportunity to buy those companies which issue their equity in primary

markets.

SECTORAL FUNDS-

Sectoral funds choose to invest in one or more chosen sectors of the equity

markets. These vary depending on the investor preferences and the return

risk attributes of the sector. For Example during the technology boom in

stock markets, when prices of IT companies was rising sharply, investors

who wanted to participate in this sector could do so, by investing in sectoral

funds whose investment objective was to invest in few choosen sectors such

as information technology, media and telecommunication.

DEBT FUNDS

Debt are those that pre-dominantly invest in debt securities. These investors

are also known as Income Funds. The universe of the debt securities is

comprises of long term investments such as bond issues by central and state

governments,. Public sector organizations, public financial institutions and

private sector companies; and short-term instruments such as call money

lending; commercial papers, certificates of deposits; and treasury bills.

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SIMPLE DEBT FUNDS-

These funds invests in a portfolio of debt securities chosen from the universe

of debt securities .. The fund manager has the freedom to choose from the

universe of debt securities,Govt. securities and others, as well as long and

short term.

LIQUID FUNDS AND MONEY MARKET FUNDS-

These debt funds invest only in instruments with maturities less than a year.

The investment portfolio is very liquid, and enables investors to hold very

short horizons of a day or more. The fund is pre-dominantly invests in

money market instruments and provides investors the returns that returns

that are available on these instruments. In some cases, the funds also

provides investors with cheque writing facility, as an additional facility for

liquidity.

GILT FUNDS

A Gilt fund invests only in securities that are issued by the government, and

therefore does not carry any credit risk. These funds invest in short term and

long term securities issued by the government. These funds are preferred by

institutional investors who have to invest only in government paper. Hence

the investor usually does not have to worry about credit risk since

Government Debt is generally credit risk free. HDFC Gilt Fund is an

example of such a scheme..

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SECTORAL DEBT FUNDS-

These funds invest in a pre-specified subset of the debt markets. For

example, there are debt funds that would invest only in AAA rated debt

securities issued by the corporate sector.

BALANCED FUND-

Fund that invest both in debt and equity markets are called balanced funds.

A typical balanced fund would be almost equally interested in both the

markets. The benefits of diversification get further enhanced, as equity and

debt markets have different risks and return profiles. These funds seek to

enhance the income potential of their equity component, by bringing in debt.

HDFC Balanced Fund and HDFC Children’s Gift Fund are examples of

hybrid schemes.

THE STRUCTURE CONSISTS OF

Sponsor

Sponsor is the person who acting alone or in combination with another body

corporate establishes a mutual fund. Sponsor must contribute at least 40% of

the net worth of the Investment Managed and meet the eligibility criteria

prescribed under the Securities and Exchange Board of India {Mutual

Funds} Regulations, 1996. The Sponsor is not responsible or liable for any

loss or shortfall resulting from the operation of the Schemes beyond the

initial contribution made by it towards setting up of the Mutual Fund.

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The Mutual Fund is constituted as a trust in accordance with the provisions

of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered

under the Indian Registration Act, 1908.

Trustee

Trustee is usually a company {corporate body } or Board of Trustees {body

of individuals}. The main responsibility of the Trustee is to safeguard the

interest of the unit holders and inter-alia ensure that the AMC functions in

the interest of investors and in accordance with the Securities and Exchange

Board of India {Mutual Funds} Regulations, 1996, the provisions of the

Trust Deed and the Offer Documents of the respective Schemes. At least 2/3

rd directors of the Trustee are independent directors who are not associated

with the Sponsor in any manner.

Asset Management Company {AMC}

The AMC is appointed by the Trustee as the Investment Manager of the

Mutual Fund. The AMC is required to be approved by the Securities and

Exchange Board of India {SEBI} to act as an asset management company of

the Mutual Fund. At lest 50% of the directors of the AMC are independent

directors who are not associated with the Sponsor in any manner. The AMC

must have a net worth of at least 10 crore at all times.

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Registrar and Transfer Agent

The AMC if so authorized by the Trust Deed appoints the Registrar and

Transfer Agent to the Mutual Fund. The Registrar processes the application

form, redemption requests and dispatches account statements to the unit

holders. The Registrar and Transfer agent also handles communications with

investors and updates investor records.

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MAJOR PLAYERS IN MUTUAL FUNDS IUNDUSTY

PRUDENTIAL ICICI MUTUAL FUNDNet worth – as on Mar 31st , 2002 of Rs 69..89 crores.

Objective- To provide Indian investor mutual fund products to suit a variety of investment needs and to suit different risks and maturity profiles.

KEY INDICATORS:

SCHEMES-

Equity Funds-

Prudential ICICI-

Growth Plan Tax Plan FMCG Plan Technology Plan Power Plan Index Plan Dynamic Plan

34

No. of schemes 66 No. of schemes including option 121Equity Schemes 15Debt Schemes 59Short term debt Schemes 17Equity & Debt 4Gilt Fund 6

As of May 1998 As on June 30,2004Assets under Management Rs. 160 Crore Rs.16,246,91 CroreNumber of Funds Managed 2 17

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Debt Funds-

Prudential ICICI-

Liquid Plan

Income Plan

Gilt Plan

Monthly Income Fund

Sweep Plan

Gilt Investment-PF

Fixed Maturity Plan

Short term Plan

Flexible Rate Plan

Deposit plus NRI series

Income Multiplier Fund

Funds Balanced-

1. Prudential ICICI Balanced Fund

2. Prudential ICICI Child Care Plan

Birla Sun Life AMC

It places a lot of emphasis on quality of management and risk control. This

is done through extensive analysis that includes factory visit and field

research. It has largest team of research analyst in the industry

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SCHEMES-

Equity Schemes

Birla Advantage Fund

Birla Divident Fund

Birla Equity Plan

Birla Index Plan

Birla India Opportunities Fund

Birla Midcap Fund

Birla MNC Fund

Birla Tax Plan 98

Debt Schemes

Birla Bond Exchange

Birla Bond Index Fund

Birla Floating Rate Fund

Institutional Plan for BCP

Birla MIP

Birla Cash Plus

Institutional Plan for BB

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).

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The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset

Management Funds, Index Funds, Equity Funds and Balance Funds.

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.

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

Company Pvt. Ltd. Standard Chartered Asset Management Company Pvt.

Ltd. is the AMC which was incorporated with SEBI on December 20,1999.

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Association of Mutual Funds in India (AMFI)

With the increase in mutual fund players in India, a need for mutual fund

association in India was generated to function as a non-profit organisation.

Association of Mutual Funds in India (AMFI) was incorporated on 22nd

August, 1995.

AMFI is an apex body of all Asset Management Companies (AMC) which

has been registered with SEBI. Till date all the AMCs are that have launched

mutual fund schemes are its members. It functions under the supervision and

guidelines of its board of directors.

Association of Mutual Funds India has brought down the Indian Mutual

Fund Industry to a professional and healthy market with ethical lines

enhancing and maintaining standards. It follows the principle of both

protecting and promoting the interests of mutual funds as well as their unit

holders.

Objectives of ( AMFI)

The Association of Mutual Funds of India works with 30 registered AMCs

of the country. It has certain defined objectives which juxtaposes the

guidelines of its Board of Directors. The objectives are as follows:

This mutual fund association of India maintains a high professional and

ethical standards in all areas of operation of the industry.

It also recommends and promotes the top class business practices and code

of conduct which is followed by members and related people engaged in the

activities of mutual fund and asset management. The agencies who are by

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any means connected or involved in the field of capital markets and financial

services also involved in this code of conduct of the association.

AMFI interacts with SEBI and works according to SEBIs guidelines in the

mutual fund industry.

Association of Mutual Fund of India do represent the Government of India,

the Reserve Bank of India and other related bodies on matters relating to the

Mutual Fund Industry.

It develops a team of well qualified and trained Agent distributors. It

implements a prog ramme of training and certification for all intermediaries

and other engaged in the mutual fund industry.

AMFI undertakes all India awareness programme for investors in order to

promote proper understanding of the concept and working of mutual funds

At last but not the least association of mutual fund of India also disseminate

informations on Mutual Fund Industry and undertakes studies and research

either directly or in association with other bodies.

The sponsorers of Association of Mutual Funds in India

Bank Sponsored

SBI Fund Management Ltd.

BOB Asset Management Co. Ltd.

Canbank Investment Management Services Ltd.

UTI Asset Management Company Pvt. Ltd.

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Institutions

GIC Asset Management Co. Ltd.

Jeevan Bima Sahayog Asset Management Co. Ltd.

Private Sector

Indian:-

BenchMark Asset Management Co. Pvt. Ltd.

Cholamandalam Asset Management Co. Ltd.

Credit Capital Asset Management Co. Ltd.

Escorts Asset Management Ltd.

JM Financial Mutual Fund

Kotak Mahindra Asset Management Co. Ltd.

Reliance Capital Asset Management Ltd.

Sahara Asset Management Co. Pvt. Ltd

Sundaram Asset Management Company Ltd.

Tata Asset Management Private Ltd.

Predominantly India Joint Ventures:-

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Birla Sun Life Asset Management Co. Ltd.

DSP Merrill Lynch Fund Managers Limited

HDFC Asset Management Company Ltd.

Predominantly Foreign Joint Ventures:-

ABN AMRO Asset Management (I) Ltd.

Alliance Capital Asset Management (India) Pvt. Ltd.

Deutsche Asset Management (India) Pvt. Ltd.

Fidelity Fund Management Private Limited

Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.

HSBC Asset Management (India) Private Ltd.

ING Investment Management (India) Pvt. Ltd.

Morgan Stanley Investment Management Pvt. Ltd.

Principal Asset Management Co. Pvt. Ltd.

Prudential ICICI Asset Management Co. Ltd.

Standard Chartered Asset Mgmt Co. Pvt. Ltd.

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FUTURE OF MUTUAL FUND INDUSTRY

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.

Let us discuss with the following table:

Aggregate deposits of Scheduled Com Banks in India (Rs.Crore)

Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03Mar-

04Sep-04 4-Dec

Deposits 605410 851593 989141 1131188 1280853 - 1567251 1622579

Change in

% over last

yr

  15 14 13 12 - 18 3

Source - RBI

Mutual Fund AUM’s Growth

Month/YearMar-

98

Mar-

00

Mar-

01

Mar-

02

Mar-

03Mar-04 Sep-04 4-Dec

MF AUM's 68984 93717 83131 94017 75306 137626 151141 149300

Change in %

over last yr  26 13 12 25 45 9 1

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Source - AMFI

Some facts for the growth of mutual funds in India

100% growth in the last 6 years.

Number of foreign AMC's are in the queue 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.

In India there are only 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 rural like the Indian insurance industry with

simple and limited products.

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

Investment options available with different risk profiles

Equity Diversified Funds -

Diversification - Mutual Funds reduces the risk by investing in all the

sectors. Instead of putting all your money in one sector or company it's

better to invest in various good performing sectors as you reduces the risk of

getting involved in a particular sector/company which may perform or may

not.

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Who should invest - This is an ideal category for those who want to

participate in stock market & knows the risk involved in stock market but

have few rupees to invest in blue-chip stocks.

How they performed - Though the short term out look is volatile in long-term equity

diversified funds have outperformed other categories & stock markets will lesser amount

of risk than stock markets. The average returns of equity-diversified funds are 102%.

Performance as on March 25, 2004

    Absolute Simple Annualized

Scheme Name NAV 3 Months 1 Year 3 Years Since Inception

HSBC Equity 26.27 2.34 156.87 - 124.24

India Advantage 89.57 5.58 150.63 49.44 104.25

Reliance Growth 71.84 (6.29) 147.24 88.48 73.00

Average - (3.93) 102.19 40.17 33.96

S&P Nifty 1704.45 (5.76) 68.35 15.55 -

BSE Sensex 5414.44 (4.03) 72.21 16.27 -

Category Rating ****

Index Funds -

Follow the index - These are the index-based funds, which move with the

likes of Sensex & Nifty. These fund charges NIL or very low entry/exit

loads.

Who should invest - As you have seen in last few months Nifty & Sensex

have almost come down 17% from their tops, it is a good time to invest in

Index funds with the principal of "Investing at the lower levels".

How they performed - Though the short term out look is volatile in long-

term Sensex & Nifty could do well with improving economic conditions. It

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has been seen that these Index funds have outperformed the indices making

them more attractive.

Performance as on March 25, 2004

    Absolute Simple Annualized

Scheme Name NAV3

Months1 Year

3

Years

Since

Inception

Junior BeES 31.87 (1.59) 154.25 - (65.83)

HDFC Index - Sensex Plus 56.60 (3.50) 74.82 - 44.45

SENSEX Prud ICICI

Exchange Traded54.55 (4.06) 73.77 - -

Average - (5.19) 70.70 16.62 27.80

S&P Nifty 1704.45 (5.76) 68.35 15.55 -

BSE Sensex 5414.44 (4.03) 72.21 16.27 -

Category Rating - *** -

SECTOR FUND:

Who should invest - You have to be selective while investing in these

funds, as you need to select particular sector, which will perform better in

the future. Investing in these funds carries some amount of risk but also give

you more returns.

How they performed - Sector funds have given average returns of 73% for 1 year

period. Auto, Steel, Cement have done well the year '03 & the trend will continue in year

'04 but IT, FMCG sectors are experiencing downward trend due to $ depreciation, price

war in FMCG respectively. Though short-term trend for pharma sector looks down in

long term we look forward to lot more action in the sector, as there exists a long-term,

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strong fundamental story backed by immense growth potential for the Indian

pharmaceutical companies.

Performance as on March 25, 2004

    AbsoluteSimple

Annualized 

Scheme Name NAV 3 Months1 Year 3 YearsSince

Inception

Alliance Basic

Industries27.82 1.20 135.99 83.23 42.48

UTI Growth Sector -

Petro18.37 3.77 120.55 76.94 82.88

SBI Magnum Sector –

Pharma15.82 (9.24) 111.78 32.15 15.58

Average - (7.98) 72.60 23.57 16.36

S&P Nifty 1704.45 (5.76) 68.35 15.55 -

BSE Sensex 5414.44 (4.03) 72.21 16.27 -

Category rating - **

Balanced Funds -

Balanced Act - Balanced funds gives you the stability with the potential to

grow with the equity help of equity investments. These funds invest in both

Equity & Debt markets.

Who should invest - The balanced funds are for those, who want to enjoy

the appreciation effects of equity market but at the same time like to play

safe with less volatile debt market. In this volatile market it is good to invest

in balanced funds as they carries less risk compare to equity funds.

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How they performed - In the last 12 months balanced funds have given descent

returns with the up trend in the equity markets. Balanced funds average returns are 60%

for 1-year period.

Returns as on March 25, 2004

    Absolute Simple Annualized

Scheme Name NAV 3 Months 1 Year 3 Years Since Incep.

HDFC Prudence 44.09 (1.63) 81.68 51.24 46.59

SBI Magnum Balanced 12.88 2.07 80.44 21.88 23.21

Franklin India Vista 8.39 (1.06) 77.54 16.83 (3.75)

Average   (2.05) 60.54 27.54 18.15

S&P Nifty 1704.45 (5.76) 68.35 15.55 -

Crisil Balanced Index 1409.12 (1.07) 45.22 - -

Category rating - ***

Equity Linked Tax Savings Schemes (ELSS) -

Enjoy tax benefits - These schemes are becoming more popular as

traditional ways of tax saving becoming less interesting with declining

interest rates.

Who should invest - Equity Linked Savings Schemes (ELSS) is an ideal

way to save on tax as well as staying invested in equity mutual funds How

they performed - In last 1 year these funds have given above average returns to keep

you more & more interested in saving tax as well as counting returns on your investment.

The average returns for this category are 98%.

Performance as on March 25, 2004

    Absolute Simple Annualized

Scheme Name NAV 3 Months 1 Year 3 Years Since Inception

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Birla Equity 26.90 (6.11) 137.32 53.56 46.87

Magnum Tax Gain 93 23.03 (3.43) 136.95 26.61 16.66

Tata Tax Saving 23.35 (2.73) 133.08 50.26 60.09

Average - (5.48) 98.30 37.17 51.73

S&P Nifty 1704.45 (5.76) 68.35 15.55 -

BSE Sensex 5414.44 (4.03) 72.21 16.27 -

Category rating - ****

Debt Funds -

Banking on Debt Markets - Debt funds invest in the government securities,

Corporate Bonds, Treasury Bills, etc.

Who should invest - The conservative investors like to go for capital safety.

How they performed - From Last 12 months in the declining interest rate scenario

debt funds remained flat. In 3 years debt funds have given average returns of 12%. As

equity market is looking volatile its better to invest part of your money in these funds.

Performance as on March 25, 2004

    Absolute Simple Annualized

Scheme Name NAV6

Months

1

Year

3

Years

Since

Inception

Deutsche Premier Bond –

Institutional11.17 3.31 13.65 - 9.93

Sundaram Select Debt - D

A P12.11 2.83 12.17 - 13.43

HSBC Institutional Income

– Invest11.39 3.04 11.88 - 10.61

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Average - 2.33 9.07 13.98 10.79

S&P Nifty 1704.45 25.59 68.35 15.55 -

NSE G Sec Composite

Index247.17 2.64 12.61 16.80 -

Category rating - ***

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Gilt Funds -

Government Sec. - Gilt funds invest in government securities.

Who should invest - The investors who like to avail the benefits of capital

safety with government security.

How they performed - From Last 6-12 months Gilt funds have given average

returns. As equity market is looking volatile its better to invest part of your money in

these funds as they provide adequate security to your investments. The average returns

for 1-year period are 10.41% compare to the NSE G Sec Composite Index has given

12.60% returns.

Performance as on March 25, 2004

    AbsoluteSimple

Annualized 

Scheme Name NAV6

Months1 Year 3 Years

Since

Inception

FT India Gilt Investment

Plan – Growth14.88 5.63 19.64 - 21.22

Chola Gilt Investment –

Growth17.96 6.58 16.98 19.83 19.93

Tata Gilt Securities Fund

– Growth22.25 3.33 15.46 25.46 26.36

Average - 2.56 10.41 16.19 9.58

Crisil Composite Bond

Fund Index1203.29 2.23 9.03 - -

NSE G Sec Composite

Index247.17 2.64 12.61 16.80 -

Category rating - ***

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MIP -

Monthly Income - These schemes gives you monthly income.

Who should invest - Those who seek monthly income. In the current

scenario where debt market is very volatile it's better to invest in hybrid

funds like MIP with suitable time horizon for capital appreciation.

How they performed - In Last 6-12 months MIP's have given descent

returns compare to debt funds. The average returns of MIP's stands at

15.68%, which looks good, compared to income funds.

Performance as on March 25, 2010

    Absolute Simple Annualized

Scheme Name NAV 6 Months 1 Year 3 YearsSince

Inception

Alliance MIP 19.98 8.48 20.64 17.03 21.22

FT India MIP - Plan A 15.77 7.90 19.20 16.13 16.54

SBI Magnum MIP 13.65 7.40 15.22 - 12.12

Average - 6.19 15.68 14.76 7.31

S&P Nifty 1704.45 25.59 68.35 15.55 -

Crisil MIP Blended

Index1255.07 6.15 17.34 - -

Category rating - ****

STP -

Short-term Plans - These schemes provides short-term saving option with

more liquidity than FD's to park your investments.

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with more liquidity than Bank fixed deposit.

How they performed - While savings accounts would give you 3.5% per annum,

bank FD's annually return up to 6.5%, Liquid funds would typically give you more than

5% and short-term plans 6 to 6.5% per annum. In Last 6-12 months STP's have given

descent returns.

Performance as on March 25, 2010

    Absolute Simple Annualized

Scheme Name NAV 6 Months1

Year

3

Years

Since

Inception

First India Short Term 11.15 2.77 7.90 - 7.50

Reliance Short Term 10.89 2.81 7.30 - 7.02

Deutsche Short Maturity 10.76 2.64 7.03 - 6.47

Average - 2.41 6.33 9.27 6.42

CRISIL Composite Bond

Index1203.29 2.23 9.03 - -

CRISIL short-term Bond

Index1138.91 2.19 5.68 - -

(***** Out performer **** Good Performer *** Average Performer ** Ok

Performer * Bad Performer)

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AMFI MONTHLY

Mutual Fund Data Of January 2010 (Rs. in Crores)

Table 1:-

Category Sales-All Schemes Redemption

Assets Under

 Management

    From new schemes

From Existi

ng schem

es

Total For the

Month 

Cumulative

Apr'03 to Jan'04

Total For the

Month

Cumulative

Apr'03 to

Jan'04

As on 31st Jan 2004

  No. Amount

Amount

                         

A) Bank Sponsored (5) 1 41 6364 6405 35008 5053 31934 27313

B) Institutions (3) - - 2804 2804 17802 2061 14620 7499

C) Private Sector                         1 Indian (8) 2 616 10853 11469 115775 10597 104818 21168

    2 Foreign (1) - - 2376 2376 16548 2072 14703 3656

    3 Joint Ventures :      Predominantly

Indian(5)

- - 12513 12513 114296 10741 100158 34464

    4 Joint Ventures :

Predominantly Foreign (9)

- - 18498 18498 177006 17648 157994 51272

Total (1+2+3+4) 2 616 44240 44856 423625 41058 377673 110560

Grand Total 3 657 53408 54065 476435 48172 424227 145372

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(A+B+C)

        *35370 *248979 *3417

7*23236

7 *121805

Released on 25th February 2004

Table 2:- Open End Close End Assured Returns Total

2.1No. Of

Schemes Amount No. Of Schemes Amount No. Of

Schemes AmountNo. Of

SchemesAmoun

tIncome 2 296 - - - - 2 296Growth 1 361 - - - - 1 361Balanced - - - - - - - -Liquid/Money Market

- - - - - - - -

Gilt - - - - - - - -ELSS - - - - - - - -Total 3 657 - - - - 3 657     

EXISTING SCHEMES (Rs.in Crores)

2.2Open End Close End Assured Returns Total

No Of Schemes Amount No Of

Schemes Amount No Of Schemes Amount

No Of Schemes Amount

Income 115 11720 11 ^54 3 - 129 11774Growth 120 3894 3 - - - 123 3894Balanced 36 240 2 - - - 38 240Liquid / Money Market 

33 36827 - - - - 33 36827

Gilt 31 664 - - - - 31 664ELSS 19 9 24 - - - 43 9Total 354 53354 40 54 3 - 397 53408

^Amount mobilized by new plans launched under existing schemes

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    TOTAL OF ALL SCHEMES (Rs. in Crores)

2.3Open End Close End Assured Returns Total

No. Of Schemes Amount No. Of

Schemes Amount No. Of Schemes Amount

No. Of Schemes Amount

Income 117 12016 11 54 3 - 131 12070Growth 121 4255 3 - - - 124 4255Balanced 36 240 2 - - - 38 240Liquid/Money Market 33 36827 - - - - 33 36827

Gilt 31 664 - - - - 31 664ELSS 19 9 24 - - - 43 9Total 357 54011 40 54 3 - 400 54065

Note: The change in number of schemes is because of the maturity and reclassification of existing schemes by some of the funds.

*New Schemes: Open End Income: SBI Magnum NRI Investment Fund.

Open End Growth: Kotak Mahindra Global India Scheme & Sundaram Monthly Income Plan. REDEMPTION / REPURCHASE DURING THE MONTH  JANUARY, 2004

Table 3:- Open End Close End Assured return TotalIncome 15183 132 - 15315Growth 2553 3 - 2556Balanced 222 1 - 223Liquid / Money Market 29133 - - 29133

Gilt 899 - - 899ELSS 18 28 - 46Total 48008 164 - 48172

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ASSETS UNDER MANAGEMENT AS ON 31st JANUARY, 2004

Table 4:- Open End Close End Assured return TotalIncome 68973 242 105 69320Growth 21651 1492 - 23143Balanced 3605 799 - 4404Liquid/Money Market 40112 - - 40112

Gilt 6617 - - 6617ELSS 541 1235 - 1776Total 141499 3768 105 145373

DATA ON FUND OF FUNDS

Table 5:- No of Schemes Sales Redemptions AUM as on 31st

Jan 2004Fund of Funds 3 197 119 721         *Note: Fund of Funds is a scheme wherein the assets are invested in the existing schemes of mutual funds and hence, the figures indicated herein are included in the tables 1 to 4 and 6. Data on fund of funds is given for information only.

Table6 :-

ASSETS UNDER MANAGEMENT AS ON 31st January, 2004

Sr. No. Name of the Asset Management Company Asset Under Management(Rs. in Crores)

A BANK SPONSORED     BOB Asset Management Co. Ltd. 346   Canbank Investment Management Services Ltd. 1814   PNB Asset Management Co. Ltd. 138   SBI Funds Management Ltd. 5354   UTI Asset Management Company Pvt. Ltd. 19661   Total A 27313       B INSTITUTIONS     GIC Asset Management Co. Ltd. 265

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  IL & FS Asset Management Co. Ltd. 2580

   Jeevan Bima Sahayog Asset Management Co. Ltd. 4654

   Total B 7499          C1 PRIVATE SECTOR      (i) INDIAN       Benchmark Asset Management Co. Pvt. Ltd. 63   Cholamandalam Asset Management Co. Ltd. 1169    Escorts Asset Management Ltd. 123   First India Asset Management Pvt. Ltd. 407   J.M.Capital Management Pvt. Ltd. 4387   Kotak Mahindra Asset Management Co. Ltd. 5173    Reliance Capital Asset Management Ltd. 7028   Sundaram Asset Management Company Ltd. 2818   Total C(i) 21168        C2 (ii) FOREIGN      Principal Asset Management Co. Pvt. Ltd. 3656   Total C(ii) 3656        

C3 (iii) JOINT VENTURES- PREDOMINANTLY INDIAN   

  Birla Sun Life Asset Management Co. Ltd. 9641   Credit Capital Asset Management Co. Ltd. 155   DSP Merrill Lynch Fund Managers Ltd. 5475    HDFC Asset Management Co. Ltd. 15320    Tata TD Asset Management Private Ltd. 3873  Total C(iii) 34464       

C4 JOINT VENTURES - PREDOMINANTLY FOREIGN   

   Alliance Capital Asset Management (India) Pvt. Ltd. 2306

   Deutsche Asset Management (India) Pvt. Ltd. 2476   HSBC Asset Management (India) Private Ltd. 3945

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  ING Investment Management (India) Pvt. Ltd. 1283

  Morgan Stanley Investment Management Pvt. Ltd. 1352

   Prudential ICICI Asset Management Co. Ltd. 15673   Standard Chartered Asset Mgmt Co. Pvt. Ltd. 8021   Sun F & C Asset Management (India) Pvt. Ltd. 222   Templeton Asset Management (India) Pvt. Ltd. 15994   Total C4(iv) 51272   Total C (i + ii +iii+iv) 110560   Total (A + B + C) 145372

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RESEARCH METHODOLOGY

Research Objective

To study about various mutual fund schemes & their utility to investors

To study the reasons behind the success of Mutual funds in India.

To study about the structure & regulatory body of mutual fund in India.

Research Design

Descriptive research design is used in order to find out which product is

giving maximum investment advantage to investors.

Data Collection design

For the purpose of data collection secondary sources like books, Journal,

Magazines, newspapers & data from company record has been used.

Analysis

Mutual fund products are market driven and for a market driven product its

designing, pricing, distribution & promotion assume critical importance. The

most important determinant of the success of any financial product is

consumer satisfaction mutual fund needs to optimize consume satisfaction

along with cost minimization in the deregulated competitive market.

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CONCLUSION

In the past decade Indian Mutual fund industry had seen dramatic

improvement both quality wise as well as quantity-wise. The private sector

entry to the fund family raised the asset under management to Rs. 420

billion in March 1993 and till April 2004 it reached the height of 1540

billion. It is estimated that by 2010 March end the total assets of mutual

funds will be doubled.

Following are the main reasons behind the growth of mutual funds in India:

No. of foreign Asset Management Companies are in queue to enter the

Indian Market like fidelity investment US based with over $1 trillion assets

under management worldwide.

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

in mutual funds sector is required.

As compared to US there are less mutual funds companies in India,

therefore, chances of expansion are more.

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SUGGESTION

There are a few things that I would advise any investor and they are:

You should know what you are buying. For example you cannot buy an

equity fund and especially a tech fund and expect that there would be

very little volatility.

You should be clear about the time frame and purpose that you are

buying for.

Most importantly, there is a tendency among investors to buy high and

sell low. You cannot be driven by sentiments Importance of systematic

investing. Always invest in smaller lots over a period of time. An initial

investor has lost about 45% since inception. But someone who has

invested over a period of time would have averaged well

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BIBLIOGRAPHY

Books

Kothari C.R-1995, “Research Methodology”, 2nd ed. wishwa prakashan

Kumar Ranjit-1995, “Research Methodology”, 2nd ed. sage publication

Pandian Punithavathy- “Security Analysis and Portfolio Management”

Chandra Prasana, 2002 “Investment Analysis and portfolio Management”, 4th ed.

Newspaper

Times of India

Economic Times

Websites

www.nseindia.com

www.reliancemutual.com

www.indiainfoline.com

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