Reliance MutualFund

8/12/2019 Reliance MutualFund

1/53

Chapter 1

INTRODUCTION

Indian financial institutions have played a dominant role in asset

formation and intermediation, and contributed substantially in

macroeconomic development. In this process of development Mutual

Funds have emerged as strong financial intermediary and playing

important role in bringing stability to financial system and efficiency to

asset allocation.

Mutual Funds now represent perhaps the most appropriate

investment avenues for the most of the investors, as financial market

became more and more sophisticated and complex. They have opened

new vistas to investors and imparted much needed liquidity to the system.

In the process they have challenged, hitherto, dominant role of

commercial banks in financial markets and national economy.

1


2/53

WHAT IS MUTUAL FUND?

Mutual Fund is a trust that pools the savings of a number of

investors ! its shareholders called as unit holders ! who share a common

financial goal. The money thus collected is then invested in a variety of

different securities. Investments may be in stocks, bonds, money market

securities or some combination of these. Those securities are

professionally managed on behalf of the unit holders, and each investor

holds a pro rata share of the portfolio ! entitled to any profits when the

securities are sold, but sub"ect to any losses in value as well. In brief

mutual fund is a vehicle through which one can invest in stocks # bonds.

Managed by an Asset Management Cmpany !AMC" #

The company that puts together a mutual fund is called an M$.

n M$ may have several mutual fund schemes with similar or varied

investment ob"ectives. The M$ hires a professional money manager,

who buys and sells securities in line with the fund%s stated ob"ective.

&ll M$'s (egulated by )*+I, Funds overned by +oard of

-irectors

)*+I is the regulatory authority of MFs. )*+I has the following

broad guidelines pertaining to mutual funds/

$


3/53

MFs should be formed as a Trust under Indian Trust ct and

should be operated by sset Management $ompanies 0M$s1.

MFs need to set up a +oard of Trustees and Trustee $ompanies.

They should also have their +oard of -irectors.

The net worth of the M$s should be at least (s.2 crore.

M$s and Trustees of a MF should be two separate and distinct

legal entities.

The M$ or any of its companies cannot act as managers for any

other fund.

M$s have to get the approval of )*+I for its rticles and

Memorandum of ssociation.

ll MF schemes should be registered with )*+I.

MFs should distribute minimum of 345 of their profits among the

investors. In addition, every mutual fund has a board of directors that is

supposed to represent the shareholders% interests, rather than the M$'s

%


4/53

HISTOR& OF MUTUAL FUND

In India, the first Mutual funds started in the shape of the 6nit

Trust of India in 7389, which was set up under the 6TI $T, 738: to

operate both as a financial institution # an investment trust. It was only

in the second half of eighties, public sector banks were permitted to set up

mutual funds, with )+I # $anara bank taking lead. Mutual Funds in

India 07389 ; -ifferent provisions of

the 6TI ct laid down the structure of management, scope of business,

powers and functions of the Trust as well as accounting, disclosures and

regulatory requirements for the Trust.

In the year 733


5/53

IM(ORTANT (HAS)S OF TH) HISTOR& OFMUTUAL

FUNDS

738:;73?@/ The unit trust of India

738:;733:/ Aublic sector banks # financial institutions.

733:;7338/ Bpened to private sector players.

7338;7333/ Implementation of the new )*+I regulations.

7333;


6/53

M+t+a, F+nd Operat-n F,. Chart

/


7/53

STRUCTUR) OF INDIAN MUTUAL FUNDS

0

Spnsr

Cmpany

C+std-an

Asset

Management

Cmpany

M+t+a,

+nds

2an3er

Reg-ster

Transer Agent

)stab,-shes M+t+a, F+nd as

a Tr+st

Reg-ster MF .-th S)2I

H,d Un-t h,ders4 F+nd -nMF

)ns+re Cmp,-an5es .-th

S)2I 6 enters -nt

agreementwith )*+I

Manages F+nd as per

S)2Iuidelines # M$

(r7-de Ne5essary

$ustodian)ervices

(r7-de 2an3-ng Ser7-5es

(r7-de reg-ster Ser7-5es

6 A5t as Transer Agent

Managed by 2ard

Tr+stees

App-ntedby2ard1

Tr+stees


8/53

bove figure gives exact idea about structure of Indian Mutual Funds.

Mutual Fund comprises four separate entities, namely

)ponsor $ompany,

Mutual Fund Trust,

sset Management $ompany 0M$1 and

$ustodian.

There are of course independent entities that assist in business like

+anks, (egistrar and Transfer gents. Dow let's discuss in brief about

these main four entities, their functions and their obligations.

The )ponsor for Mutual Fund can be any person, who acting alone

or in combination with another body establishes mutual fund and gets it

registered with )*+I. )ome important point about sponsor/

Ee is required to contribute at least 945 or 74 crore of asset

management company.

Ee must have sound track record and general reputation of fairness

and integrity in all his business.

s per )*+I regulations, the mutual fund is to be formed by the

sponsor and register with )*+I.

8


9/53

The +oard of Trustees manages the mutual funds and the sponsor

executes trust deeds in favor of trustees. The mutual fund raises money

through sale of unit under one or more schemes for investing in securities

accordance with )*+I guidelines. It is the "ob of the trustees to see that

the schemes floated and managed by M$, are accordance with trust

deeds and )*+I guidelines. )ome important points about Trustees/

t least half of the trustees should be independent person.

The M$ or its employees cannot act as trustee.

Do person who is appointed as trustee of one mutual fund can

appoint trustee of other mutual fund unless he is independent

trustee and prior permission is obtain from mutual fund in which he

is a trustee.

The trustee appoint custodian and supervise their activity.

ll schemes launched by M$ needs to be approved by the

trustees and copies of offer document are to be filed with )*+I.

s per )*+I guidelines sset Management $ompany 0M$1 is

appointed by the trustees to float the schemes for mutual fund and

manage the fund raised by selling units under a scheme. The M$ must

9


10/53

act as per )*+I guidelines, the trust deed and the management agreement

between trustee and M$. )ome important points about the M$/

The M$ should be register with )*+I

Det worth of M$ should be in form of cash and the entire asset

should be held in the name of M$.

M$ cannot give or guarantee loans.

M$ is prohibited from acquiring any asset 0out of schemes

property1 that would involve assumption of unlimited liability.

It is required to disclose the schemes particulars and the base of

D calculations.

The )*+I regulations provide for the appointment of the $ustodian

by the trustees of the mutual fund for carrying on activity of safe keeping

of the securities or participating in any clearing system on behalf of

mutual fund. )ome important point about the $ustodian/

$ustodian must have sound track record and adequate relevant

experience.

t time of appointment, the $ustodian should not be associated

with the M$ or act as sponsor or trustee to any mutual fund.

1:


11/53

T&()S OF MUTUAL FUND

F,. 5hart types M+t+a, F+nd

11


12/53

CLASSIFICATION ACCORDIN; TO IN


13/53

have a fixed maturity period. Investors can conveniently buy and sell

units at Det sset alue 0D1 related prices which are declared on a

daily basis. The key feature of open;ended schemes is liquidity.

C,seended +nd@ S5heme

close;ended fund or scheme has a stipulated maturity period

e.g. 2;@ Gears. The fund is open for subscription only during a specific

period at the time of launch of the scheme. Investors can invest in the

scheme at the time of the initial public issue and thereafter they can buy

or sell the units of the scheme on the stock exchanges where the units are

listed. In order to provide an exit route to the investors, some close ended

funds give an option of selling back to units to the mutual fund through

periodic repurchase at D related prices )*+I regulations stipulated

that at least one of the two exit route is provided to the investor i.e. either

repurchase facility or through listing on stock exchanges. These mutual

funds scheme dis close D generally on weekly basis.

1%


14/53

S5heme a55rd-ng t In7estment Ob>e5t-7e

)cheme can also be classified as growth scheme, income

scheme, or balanced scheme considering its investment ob"ective. )uch

scheme may be open;ended or close ended scheme as describe earlier.

)uch scheme may be classified mainly as fallows/;

;r.th@ )+-ty Or-ented S5heme

The aim of growth funds is to provide capital appreciation over

the medium to long term. )uch schemes normally invest a ma"or part of

their corpus in equities such funds have comparatively high risks. These

schemes provide a different options to the investors like dividend options,

capital appreciation, etc # 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 the later date. rowth schemes are good for investors having a

long term outlook seeking appreciation over a period of time.

1'


15/53

In5me @ Debt Or-ented S5heme

The aim of income funds is to provide regular and steady income

to investors. )uch schemes generally invest in fixed income securities

such as bonds, corporate debentures, overnment securities and money

market instruments. )uch funds are less risky compared to equity

schemes these funds are not affected because of fluctuations in equity

markets. Eowever opportunities of capital appreciation are also limited in

such funds. The D of such funds likely to increase in the short run and

voice versa. Eowever, long term investor may not bother about these

fluctuations.

2a,an5ed +nd

The aim of balanced funds is to provide both growth and regular

income as such scheme invest both in equities and fixed income securities

in the proportion indicated in there offer documents. These are

appropriate for investor looking for moderate growth. They generally

invest 94;845 in equity and debt instruments. These funds are also

affected because of fluctuations in the share prices in the stock markets.

Eowever, D of such funds are likely to be less volatile compared to

pure equity funds.

1*


16/53

Mney Mar3et r L-+-d F+nd

These funds are also income funds and their aim is to provide

easy liquidity, preservation of capital and moderate income. These

schemes invest exclusively in safer short term instrument such as treasury

bills, certificate of deposit, commercial paper and inter;bank call money,

government securities, etc. returns on this scheme fluctuate much less

compared to other funds. These funds are appropriate for compared to

other funds. These funds are appropriate for corporate and individual

investors as a means to park their surplus funds for short periods.

;-,t F+nd

These funds invest exclusively in government securities.

overnment securities have no default risk. Ds of this scheme also

fluctuate due to change in interest rates and other economic factors as is

the case income or debt oriented schemes.

1/


17/53

IndeB F+nd

Index fund replicate the portfolio of a particular index such as the

+)$ sensitive index, )#A D)* 24 index 0Difty1 etc. These schemes

invest in the securities in the same weightage comprising of an index.

Ds such schemes would rise or false accordance with the rise or fall in

the index, through not exactly by the same percentage due to some factors

known as &tracking error in technical terms. Decessary disclosures in

this regard are made in the offer document of the mutual fund scheme.

There are also exchange traded index funds launched by the mutual funds

which are traded on the stock exchange.

10


18/53

A s+mmary -s presented -n the tab,e be,. the 7ar-+s +nds

and the-r -n7estment b>e5t-7es

SCH)M)

T&()

TIM)

HORION

RISE

(ROFIL)

T&(ICAL

IN


19/53

2)N)FITS OF MUTUAL FUND

Following are some benefits in investing in Mutual Funds/

(ress-na, management#

Mutual funds hire full;time, high;level investment professionals.

Funds can afford to do so as they manage large pools of money. The

managers have real;time access to crucial market information and are

able to execute trades on the largest and most cost;effective scale.

D-7ers--5at-n#

Mutual funds invest in a broad range of securities. This limits

investment risk by reducing the effect of a possible decline in the value of

any one security. Mutual fund unit;holders can benefit from

diversification techniques usually available only to investors wealthy

enough to buy significant positions in a wide variety of securities.

L. Cst#

mutual fund let%s you participate in a diversified portfolio for as

little as (s.2,444H;, and sometimes less. nd with a no;load fund, you pay

little or no sales charges to own them.

L-+-d-ty#

19


20/53

In open;ended schemes, you can get your money back promptly at

net asset value 0D1 related prices from the mutual fund itself. Jith

close;ended schemes you can sell your unit at stock exchange at

prevailing market price or avail of the facility of direct purchase at D

related prices which close;ended schemes offers periodically.

Transparen5y#

Gou get regular information on the value of your investment in

addition to disclosure on the specific investments made by the mutual

fund scheme.

Ch-5e S5hemes#

Mutual Funds offer a family of schemes to suit your varying needs

over lifetime.

We,, reg+,ated#

ll mutual funds are register with )*+I and they functions within

the provisions of strict regulation design to protect interest of investor.

The operations of Mutual funds are regularly monitored by )*+I.

$:


21/53

Ret+rn (tent-a,#

Bver medium to long;term, Mutual Funds have the potential to

provide higher returns as they invest in a diversified basket of securities.

Transparency

Flexibility

$hoice of schemes

Tax benefits

Jell regulated

$1


22/53

Chapter $

O2=)CTI


23/53

Chapter %

IM(ORTANC) AND SCO() OF TH) STUD&

71 The scope of the pro"ect is to conduct comparative study of

mutual fund I have selected specific schemes of mutual fund. i.e rowth

scheme.

(eliance diversified power sector fund.

(eliance Index fund Difty plan.

(eliance +anking fund.

(eliance media and entertainment fund.

(eliance D(I equity fund.


24/53

Chapter '

H&(OTH)SIS

71 It is found that (eliance Mutual Fund 0(MF1 is the biggest Mutual

Fund house in India.


25/53

Chapter *

R)S)ARCH M)THODOLO;&

&(esearch Methodology is a human activity based on intellectual

investigation and is aimed at discovering, interpreting, and revising

human knowledgeon different aspects of the world.

R)S)ARCH D)SI;N#

research design indicates a primary interpretation of design

research is that it is concerned with undertaking research into the design

process. )econdary interpretations would refer to undertaking research

within the process of design. . It provides guidelines for the researcher to

know whether he is on the right track and is he moving in the right

direction. The research design specifies the methods # procedures for

collecting and analyCing the needed information. It is a frame work for

research plan of action.

$*
http://en.wikipedia.org/wiki/Intellectualhttp://en.wikipedia.org/wiki/Discovery_(observation)http://en.wikipedia.org/wiki/Interpretation_(logic)http://en.wikipedia.org/w/index.php?title=Revising&action=edit&redlink=1http://en.wikipedia.org/wiki/Knowledgehttp://en.wikipedia.org/wiki/Discovery_(observation)http://en.wikipedia.org/wiki/Interpretation_(logic)http://en.wikipedia.org/w/index.php?title=Revising&action=edit&redlink=1http://en.wikipedia.org/wiki/Knowledgehttp://en.wikipedia.org/wiki/Intellectual


26/53

DATA COLL)CTION#

The whole data collected from secondary sources only. The

method which I used was secondary data. 6nder this method I have

collected external secondary data from the "ournals published from

companies.

Se5ndary Data

The secondary data collected through following basis/;

$ompany (ecords.

Fact sheets.

=ournals.

MagaCines.

SAM(L)

Samp,e s-e#





$/


27/53


The )ample used for the research is randomly selected.

LIMITATION OF (RO=)CT #

imitation of the pro"ect title, &to study of various schemes of

(eliance mutual. The study has been restricted with reference to the

following basis of the various schemes only.

Bb"ective of schemes.

Aortfolios of schemes.

D of schemes.

nnual returns of schemes.

$0


28/53

Chapter /

COM(AN& (ROFIL)

INTRODUCTION OF R)LIANC) MUTUAL FUND

(eliance Mutual Fund 0(MF1, a part of the (eliance nil

-hirubhai mbani roup, is India's leading Mutual Fund, with ssets

under management of (s @@,@82 $rores 06M as on :4th Dovember


29/53

e5t-7es the Tr+st are #

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

and formulate and devise various collective )chemes of savings and

investments for people in India and abroad and also ensure liquidity of

investments for the 6nit holders.

To deploy Funds thus raised so as to help the 6nit holders earn

reasonable returns on their savings.

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

the effects without any limitation.

$9


30/53

%:


31/53

A2OUT R)LIANC) MUTUAL FUND

(eliance Mutual Fund offers investors a well rounded portfolio of

products to meet varying investor requirements. (eliance Mutual Fund

has a presence in :44 cities across the country and constantly endeavors

to launch innovative products and customer service to increase value of

investors. (eliance Mutual Fund schemes are managed by (eliance

$apital sset Management td, a wholly owned subsidiary of (eliance

$apital td.

(eliance $apital limited is a financial services a company. The

$ompany has interests in asset management and mutual funds, life and

general insurance, private equity and investments, stock broking and

other activities in financial services.

In pril


32/53

(eliance Mutual Fund 0(MF1 is the biggest Mutual Fund house in

India. It has been sponsored by (eliance $apital td 0($1. ($ has

been promoted by (eliance Industries td., one of India%s largest private

sector enterprises. (eliance $apital sset Management td manages the

investments of (eliance Mutual Fund.

(eliance mutual funds have now gone ahead of 6nit Trust of India

06TI1 to become India%s largest mutual fund by 6M 0assets under

management1. ccording to FMI 0ssociation of Mutual Funds of

India1 (eliance%s 6M was (s :3444 crore in =anuary compared to (s

:@244 crore of 6TI.

Arudential I$I$I MF is now in the third position with 6M of

:9@24 crore and E-F$ MF is at fourth position with 6M of :7244

crore. Total 6M of all mutual funds in India 0except Taurus and

*scorts1 is now at (s :


33/53

R)LIANC) CA(ITAL LIMIT)D #

>(eliance Mutual Fund schemes are managed by (eliance $apital

sset Management imited., a subsidiary of (eliance $apital imited,

which holds 3:.:@5 of the paid;up capital of ($M, the balance paid up

capital being held by minority shareholders.>, the sponsor. (eliance

Mutual Fund 0(MF1 has been sponsored by (eliance $apital td 0($1.

The promoter of ($ is *nterprises Arivate imited. (eliance

$apital imited is a Don +anking Finance $ompany.

(eliance $apital imited is one of the India's leading and fastest

growing financial services companies, and ranks among the top three

private sector financial services and banking companies, in terms of

networth.

(eliance $apital has interests in asset management and mutual

funds, life and non;life insurance, private equity and proprietary

investments, stock broking and other activities in the financial services

sector.

%%


34/53

SCH)M)S OF R)LIANC) MUTUAL FUND

;r.th S5heme

(eliance Datural (esources Fund

(eliance *quity Fund

(eliance ision Fund

(eliance rowth Fund

(eliance D(I *quity Fund

Se5tr Spe5--5 S5hemes

(eliance +anking Fund

(eliance -iversified Aower )ector Fund

(eliance Media # *ntertainment Fund

DebtGIn5me S5hemes

(eliance Income Fund

(eliance Monthly Income Alan

(eliance iquidity Fund

%'


35/53

Chapter 0

DATA ANAL&SIS AND INT)R(R)TATION

T)T OF STATISTICAL R)(R)S)NTATION

The main aim of the pro"ect is to conduct comparative study of mutual

fund I have selected specific schemes of mutual fund. i.e rowth scheme.






%*


36/53

S5heme St+dy

F6D-

DM*

Re,-an5e

d-7ers--ed

p.er

se5tr

+nd

!;r.th"

Re,-an5e

IndeB

F+nd

N-ty

p,an

!;r.th"

Re,-an5e

2an3-ng

+nd

!;r.th"

Re,-an5e

med-a 6

enterta-nment

+nd

!;r.th"

Re,-an5e

NRI

)+-ty

F+nd

!;r.th"

Fund Type Bpen

*nded

Bpen

*nded

Bpen

*nded

Bpen *nded Bpen

*nded

Investment rowth rowth rowth rowth rowth

Inception

-ate

74 May,


37/53

Cmparat-7e st+dy m+t+a, +nd s5hemes

The parameters are se,e5ted n the ,,.-ng gr+nds#

Bb"ective of schemes.

Aortfolio of schemes.

D of schemes.

bsolute (eturns of schemes.

%0


38/53

1" Cmpar-sn b>e5t-7es s5hemes

Ob>e5t-7es

O

S5hemes

S5heme 1 S5heme $ S5heme % S5heme ' S5heme *

To seek to

continuous

(eturns by

investing in

equity #

equity

related or

fixed;

income

securities of

power #

other

associated

companies.

The ob"ective

of Difty Alan is

to replicate the

composition of

the Difty, with

a view to

endeavor to

generate

returns, which

could

approximately

be the same as

that of Difty.

The

primary

investment

ob"ective

of the

)cheme is

to seek to

generate

continuous

returns by

actively

investing in

equity H

equityrelated or

fixed

income

securities

of banks.

To generate

continuous

(eturns by

investing in

equity #

equity related

or fixed;

income

securities of

media #

entertainment

# other

associated

companies.

To generate

optimal

(eturns by

investing in

equity #

equity

related

instruments

primarily

drawn from

the

companies

in the +)*


39/53

$" Cmpar-sn s5hemes by (rt,-s

D+rat-n (rt,-s S5heme

1

S5heme

$

S5heme

%

S5heme

'

S5heme

*

:7

-ec,


40/53

NA

Date post:	03-Jun-2018
Category:	Documents
Upload:	hardik-kinhikar
View:	222 times
Download:	0 times

Reliance MutualFund

Documents