SUMMER INTERNSHIP

REPORT

ON

COMPARITIVE ANALYSIS OF RELIANCE MUTUAL FUNDS WITH OTHER EXISTING MUTUAL FUNDS...

Submitted in fulfillment for the award ofMaster of business administration (G.B.T.U. Lucknow)

SESSION: 2010-2012

FOR THE PARTIAL FULFILLMENT OF TWO YEAR DEGREE IN

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MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF: SUBMITTED BY: SANJAY KUMAR ANSHIKA BAJPAIBranch Manager MBA-Final yrReliance Mutual Fund Roll No.-1034970004

MAHARANA INSTITUTE OF PROFESSIONAL STUDIES

(AFFILIATED BY GAUTAM BUDDH TECHNICAL UNIVERSITY)APPROVED BY AICTE, MINISTERY OF HRD, GOVT. OF INDIA,

PREFACE

With the growth of rapid industrialization the need of management is felt every

where .management, A research report provides the most natural condition under which a

student can learn and got success in implementing the theoretically learned in to the practical and

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current environment of daily practices done by the people (investor) it helps a student to learn, to

improve, to improvise, to experiment, to find knowledge in all possible ways and to translate that

knowledge into action.

MBA is a foundation stone to the management career. The classroom learning needs to practical

exposure. To develop concrete managerial and administrative skills of potential manager, it is

important that the interaction to the real environment be there.

The project is a real life venture for me. It is a great privilege that you have spread your for

reading this. In forthcoming pages, an attempt has been made to present the different aspect of

my project.

Date (Anshika Bajpai)

Place: Kanpur

ACKNOWLEDGMENT

If words are considered as a symbol of approval and taken of appreciation then let the words

play the heralding role expressing my gratitude.

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First of all I thank to my Gracie god who blessed me with all kind of facilities that had been

provided to me for completion of my report.

I’m also grateful to my teacher for guiding me to learn and helped me on project on

COMPARITIVE ANALYSIS OF RELIANCE MUTUAL FUND WITH OTHER EXISTING

MUTUAL FUNDS.

My endless appreciation goes to my all respected faculty who has stood by my side and give me

moral support whenever I was low and boosted my will power. Finally, I would like to express

my solidarity towards the RELIANCE GROUP for providing me with such an opportunity.

Thank You

TABLE OF CONTENTS

INTRODUCTION 7-8

HISTORY OF THE RELIANCE COMPANY 9-10

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COMPANY PROFILE 11-13

RELIANCE MUTUAL FUND PROFILE 14-19

Reliance Mutual Fund - Accelerating Growth

About the project

HISTORY OF MUTUAL FUND 20-62

Advantages of mutual funds

Disadvantages of mutual funds

Risks involved in mutual funds

Various mutual fund scheme

Types of mutual fund

Different types of funds

Costs involved in mutual fund

The values of your fund

Some of the existing asset management company

Development of mutual fund in India

Graphical representation

Mutual funds organizations

Flow chart

Frequently used terms in mutual funds

Structure of Indian mutual fund

Working of mutual fund

OBJECTIVE OF THE STUDY 63-64

SCOPE OF THE STUDY 65-66

RESEARCH METHODOLOGY 67-70

USE OF THE PROJECT 71

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IMPORTANCE OF THE STUDY 72-73

RESEARCH ANALYSIS AND INTERPRETATION 74-90

FINDINGS 91-92

SWOT ANALYSIS 93-96

Strengths

weakness

RECOMMENDATIONS 97-98

CONCLUSION 99-100

ANNEXURE 101-105

BIBLIOGRAPHY 106

Introduction6

There are a lot of investment avenues available today in the financial market for an investor with

an investable surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where

there is low risk but low return. He may invest in Mutual of companies where the risk is high

and the returns are also proportionately high. The recent trends in the Mutual Market have shown

that an average retail investor always lost with periodic bearish tends. People began opting for

portfolio managers with expertise in Mutual markets who would invest on their behalf. Thus we

had wealth management services provided by many institutions. However they proved too costly

for a small investor. These investors have found a good shelter with the mutual funds.

Like most developed and developing countries the mutual fund cult has been catching on in

India. The reasons for this interesting occurrence are:

# Mutual funds make it easy and less costly for investors to satisfy their need for capital growth,

income and/or income preservation.

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# Mutual fund brings the benefits of diversification and money management to the individual

investor, providing a Opportunity for financial success that was once available only to a select

few.

History of Reliance Company

The reliance group founded by Dhirubhai. H. Ambani (1932-2002) is India’s largest private

sector enterprise. He is credited to have brought about the equity cult in India in the late

seventies and is regarded as an icon for enterprise in India. He epitomized the spirit 'dare to

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dream and learn to excel’. The Reliance Group is a living testimony to his indomitable will,

single-minded dedication and an unrelenting commitment to his goals.

Unit Trust of India is the first Mutual Fund set up under a separate act, UTI Act in 1963, and

started its operations in 1964 with the issue of units under the scheme US-641. In 1978 UTI was

delinked from the RBI and Industrial Development Bank of India (IDBI) took over the

Regulatory and administrative control in place of RBI.

In the year 1987 Public Sector banks like State Bank of India, Punjab National Bank, Indian

Bank, Bank of India, and Bank of Baroda have set up mutual funds.

Apart from these above mentioned banks Life Insurance Corporation [LIC] and General

Insurance Corporation [GIC] too have set up mutual fund. LIC established its mutual fund in

June 1989.while GIC had set up its mutual fund in December 1990.The mutual fund industry had

assets under management of Rs. 47,004 crores.

With the entry of Private Sector Funds a new era has started in Mutual Fund Industry .e.g:-

Principal Mutual Fund.

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Company Profile

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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 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.

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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.

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, fiber 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.

"Growth has no limit at Reliance. I keep revising my vision.

Only when you can dream it, you can do it."

Reliance mutual fund profile

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Reliance Mutual Fund - Accelerating Growth

Reliance Mutual Fund, a part of the Reliance Anil Dhirubhai Ambani Group is the No. 1 Mutual

Fund in India. Reliance Mutual Fund offers investors a well rounded portfolio of products to

meet varying investor requirements. Reliance Mutual Fund has a presence in over 100 cities

across the country, an investor base of over 3.9 million and manages assets over Rs. 67,598

Crores as on August 31, 2007. 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 and mutual funds, life and general insurance, private

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

No.1 basis Assets under Management (AUM) as on August 31, 2007.

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ABOUT PROJECT

MUTUAL FUND

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A mutual fund is nothing more than a collection of Mutuals and/or bonds. You can think of a

mutual fund as a company that brings together a group of people and invests their money in

Mutuals, bonds, and other securities. Each investor owns shares, which represent a portion of the

holdings of the fund.

You can make money from a mutual fund in three ways:

1) Income is earned from dividends on Mutuals and interest on bonds. A fund pays out. Nearly

all income it receives over the year to fund owners in the form of a distribution.

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2) If the fund sells securities that have increased in price, the fund have a capital gain. Most

funds also pass on these gains to investors in a distribution.

3) If fund holdings increase in price but are not sold by the fund manager, the fund's .Shares

increase in price. You can then sell your mutual fund shares for a profit.

Funds will also usually give you a choice either to receive a check for distributions or to

Reinvest the earnings and get more shares.

The competition among funds has led to the launch of newer products, tailor-made to suit the

requirements of investors. Mutual funds now offer products for the entire range of needs of

investors. The encouraging response to index funds and sector funds shows the growing maturity

among investors. Open-end funds, which provide liquidity to investors at daily NAV related

prices, are growing in popularity. The funds have be en adopting technology to provide good

service to investors and with the proposed introduction of electronic funds transfer and the

growing trend towards E-Commerce; the efficiency of service will increase even further.

In the coming year’s mutual funds as saving intermediaries will play a greater role in

bringing the gap between investors and issuers, especially in the area of equity funds ?At present

these funds represents 13% of BSE market capitalization. This is expected to go up with

increasing flows into financial savings, especially the mutual fund with the

growth and stability in the capital market flows into equity funds are expected to go up.

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A Mutual Fund is a trust that pools the savings of a number of investors who share a

common financial goal. The money thus collected is then invested in capital market instruments

such as shares, debentures and other securities. The income earned through these investments

and the capital appreciation realized is shared by its unit holders in proportion to the number of

units owned by them. Thus a Mutual Fund is the most suitable investment for the common man

as it offers an opportunity to invest in a diversified, professionally managed basket of securities

at a relatively low cost.

Mutual funds, also referred to as investment companies, offer an alternative investment

choice for individuals with a long-term horizon. The way they operate is that individual investor

money are pooled and invested in many different companies. Assets are professionally

managed to meet various investment objectives. They issue and sell shares to share holders and

also redeem them (buy them back) upon request. Prices of shares are set daily at the close of

business, based on the value of all investments in the mutual fund’s portfolio. Their major

advantages are diversification and professional management, which are not readily available to

small investors outside the mutual fund arena. Money market mutual funds are short-term funds .

They invest in short-term cash and cash equivalent instruments, such as Treasury bills,

certificates of deposit, and short-term notes. Mutual funds may own Mutual and bonds of many

different companies.

A mutual fund is the ideal investment vehicle for today’s complex and modern financial

scenario. Markets for equity shares, bonds and other fixed income instruments, real estate,

derivatives and other assets have become mature and information driven. Price changes in these

assets are driven by global events occurring in faraway places. A typical individual is unlikely to

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have the knowledge, skills, inclination and time to keep track of events, understand their

implications and act speedily. An individual also finds it difficult to keep track of ownership of

his assets, investments, brokerage dues and bank transactions etc.

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History of mutual fund

In 1924 three Boston securities executives pooled their money together to create the first mutual

fund. The idea of pooling money together for investing purposes started in Europe in the mid-

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1800s. The first pooled fund in the U.S was created in 1893 for the faculty and staff of Harvard

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

Massachusetts Investors Trust.

However in India UTI was the first to introduce mutual funds in the Indian markets and it

commenced its operations from July 1964, Government allowed public sector banks and

institutions to set up mutual funds.

In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives

of SEBI are – to protect the interest of investors in securities and to promote the development of

and to regulate the securities market.

As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds

to protect the interest of the investors. SEBI notified regulations for the mutual funds in1993.

Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital

market. The regulations were fully revised in 1996 and have been amended thereafter from time

to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the

interests of investors.

All mutual funds whether promoted by public sector or private sector entities including those

promoted by foreign entities are governed by the same set of Regulations. There is no distinction

in regulatory requirements for these mutual funds and all are subject to monitoring and

inspections by SEBI. The risks associated with the schemes launched by the mutual funds

sponsored by these entities are of similar type. It may be mentioned here that Unit Trust of India

(UTI) is not registered with SEBI as a mutual fund (as on January15, 2002. The end of

millennium marks 36 years of existence of mutual funds in our country. The ride through these

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36 years is not been smooth. Investor opinion is still divided. While some are for mutual funds

others are against it.

MUTUAL FUND SCHEMES

Mutual funds offer a variety of schemes to investor so as to provide steady income or growth or

both. They differ according to the investment policies. The funds like individual investor have

different goals. Of the investor who will first ascertain his investment objectives, thinking that

the units of a fund have an investment goal paralleling his objectives

FUND MUTUAL BASICS:

As you probably know, mutual funds have become extremely popular over the last 20years.

What was once just another obscure financial instrument is now a part of our daily lives.

In fact, too many people, investing means buying mutual funds. After all, it's common

knowledge that investing in mutual funds is (or at least should be) better than simply letting your

cash waste away in a savings account, but, for most people, that's where the understanding of

funds ends. It doesn't help those mutual fund sales people speak a strange language that,

sounding sort of like English, is interspersed with jargon like MER, NAVPS, load/no-load, etc.

Originally mutual funds were heralded as a way for the little guy to get a piece of the market.

Instead of spending all your free time buried in the financial pages of the investment Journal, all

you have to do is buy a mutual fund and you'd be set on your way to financial freedom. As you

might have guessed, it's not that easy. Mutual funds are an excellent idea in theory, but, in

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reality, they haven't always delivered. Not all mutual funds are created equal, and investing in

mutual’s isn't as easy as throwing your money at the first salesperson who solicits your business.

ADVANTAGES OF MUTUAL FUND

1-Professional Management - The primary advantage of funds (at least theoretically) is the

professional management of your money. Investors purchase funds because they do not have the

time or the expertise to manage their own portfolio. A mutual fund is a relatively inexpensive

way for a small investor to get a full-time manager to make and monitor investments.

2-Diversification - By owning shares in a mutual fund instead of owning individual Mutual

Or bonds, your risk is spread out. The idea behind diversification is to invest in a large number

of assets so that a loss in any particular investment is minimized by gains in others. In other

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words, the more Mutuals and bonds you own, the less any one of them can hurt you (think about

Enron). Large mutual funds typically own hundreds of different Mutuals in many different

industries. It wouldn't be possible for an investor to build this kind of a portfolio with a small

amount of money.

3-Economies of Scale - Because a mutual fund buys and sells large amounts of securities at

a time, its transaction costs are lower than you as an individual would pay.

4-Liquidity - Just like an individual Mutual, a mutual fund allows you to request that your

shares be converted into cash.

5-Simplicity- Buying a mutual fund is easy.

DISADVANTAGES OF MUTUAL FUND

1-Professional Management- Did you notice how we qualified the advantage of

professional management with the word "theoretically"? Many investors debate over whether or

not the so-called professionals are any better than you or I at picking Mutuals. Management is by

no means infallible, and, even if the fund loses money, the manager still takes his/her cut. .

2-Costs- Mutual funds don't exist solely to make your life easier--all funds are in it for a Profit.

The mutual fund industry is masterful at burying costs under layers of jargon .Because funds

have small holdings in so many different companies, high returns from a few Investments often

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don't make much difference on the overall return. Dilution is also the result of a successful fund

getting too big. When money pours into funds that have had strong Success, the manager often

has trouble finding a good investment for all the new money

3-Taxes- When making decisions about your money, fund managers don't consider your

personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is

triggered, which affects how profitable the individual is from the sale. It might have been more

advantageous for the individual to defer the capital gains liability

RISKS INVOLVED IN MUTUAL FUND

In short, how stable is the company or entity to which you lend your money when you invest?

How certain are you that it will be able to pay the interest you are promised, or repay your

principal when the investment matures?

Inflation risk

Changing interest rates affect both equities and bonds in many ways. Investors are

reminded that “predicting” which way rates will go is rarely successful. A diversified portfolio

can help in offsetting these changes.

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Effect of loss of key professional and inability to adopt

An industries’ key asset is often the personnel who run the business i.e. intellectual properties of

the key employees of the respective companies. Given the ever-changing complexion of few

industries and the high obsolescence levels, availability of qualified, trained and motivated

personnel is very critical for the success of industries in few sectors. It is, therefore, necessary to

attract key personnel and also to retain them to meet the changing environment and challenges

all investments involve some form of risk, which should be evaluated them potential Rewards

when an investment is selected.

Managing risk

At times the prices or yields of all the securities in a particular market rise or fall due to broad

outside influences. When this happens, the Mutual prices of an out standing, highly profitable

company and a fledgling corporation may be affected.

This change in price is due to “market risk”.

Interest rate risk

Sometimes referred to as “loss of purchasing power”. Whenever inflation sprints forward faster

than the earnings on your investment, you run the risk that you will actually be able to buy less,

not more. Inflation risk also occurs when prices rise faster than your returns.

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Credit risk

The sector offers. Failure or inability to attract/retain such qualified key personnel may impact

the prospects of the companies in the particular sector in which the fund invests.

Exchange risks

A number of companies generate revenues in foreign currencies and may have investments or

expenses also denominated in foreign currencies. Changes in exchange rates may, therefore,

have a positive or negative impact on companies which in turn would have an effect on the

investment of the fund.

Investment risks

The sectoral fund schemes, investments will be predominantly in equities of select companies in

the particular sectors. Accordingly, the NAV of the schemes are linked to the equity performance

of such companies and may be more volatile than a more diversified portfolio of equities.

Changes in government policy

Changes in Government policy especially in regard to the tax benefits may impact the business

prospects of the companies leading to an impact on the investments made by the fund.

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VARIOUS MUTUAL FUND SCHEME

Mutual Fund Schemes:-

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk

tolerance and return expectations etc. The table below gives an overview into the existing types

of schemes in the Industry.

By Structure

# Open - Ended Schemes

# Close - Ended Schemes

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# Interval Schemes

By Investment Objective

Growth Schemes

Income Schemes

Balanced Schemes

Money Market Schemes

Types of Mutual Fund

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Mutual Funds: Different Types of Funds

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No matter what type of investor you are there is bound to be a mutual fund that fits your style.

According to the last count there are over 10,000 mutual funds in North America! That means

there are more mutual funds than Mutuals. It's important to understand that each mutual fund has

different risks and rewards. In general, the higher the potential return, the higher the risk of loss.

Although some funds are less risky than others, all funds have some level of risk--it's never

possible to diversify away all risk. This is a fact for all investments.

Each fund has a predetermined investment objective that tailors the fund's assets, regions

of investments, and investment strategies. At the fundamental level, there are three

varieties: of mutual funds

1) Equity funds (Mutual)

2)Fixed-income funds (bonds)

3) Money market funds

All mutual funds are variations of these three asset classes. For example, while equity Funds that

invest in fast-growing companies are known as growth funds, equity funds that Invest only in

companies of the same sector or region is known as specialty funds. Let’s go over the many

different flavors of funds. We'll start with the safest and then Work through to the more risky.

Money Market Funds

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The money market consists of short-term debt instruments, mostly T-bills. This is a safe Lace to

park your money. You won't get great returns, but you won't have to worry about losing your

principal. A typical return is twice the amount you would earn in a regular checking/savings

account and a little less than the average certificate of deposit (CD).We've got a whole tutorial

on the money market if you'd like to learn more about it.

Bond/Income Funds

Income funds are named appropriately: their purpose is to provide current income on a steady

basis. When referring to mutual funds, the terms "fixed-income," "bond," and" income" are

synonymous. These terms denote funds that invest primarily in government and corporate debt.

While fund holdings may appreciate in value, the primary objective of these funds is to provide a

steady cash flow to investors. As such, the audience for these funds consists of conservative

investors and retirees.

Bond funds are likely to pay higher returns than certificates of deposit and money market

Investments, but bond funds aren't without risk. Because there are many different types of

Bonds, bond funds can vary dramatically depending on where they invest. For example, a fund

specializing in high-yield junk bonds is much more risky than a fund that invests in government

securities; also, nearly all bond funds are subject to interest rate risk, which means that if rates

go up the value of the fund goes down.

Balanced Funds

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The objective of these funds is to provide a "balanced" mixture of safety, income, and capital

appreciation. The strategy of balanced funds is to invest in a combination of fixed-income and

equities. A typical balanced fund might have a weighting of 60% equity and40% fixed-income.

The weighting might also be restricted to a specified maximum or minimum for each asset class.

A similar type of fund is known as an asset allocation fund. Objectives are similar to those of a

balanced fund, but these kinds of funds typically do not have to hold a specified percentage of

any asset class. The portfolio manager is therefore given freedom to switch the ratio of asset

classes as the economy moves through the business cycle.

Equity Funds

Funds that invest in Mutual represent the largest category of mutual funds. Generally, the

investment objective of this class of funds is long-term capital growth with some income. There

are, however, many different types of equity funds because there are many different types of

equities. A great way to understand the universe of equity funds is to use a style box, an example

of which is below.

The idea is to classify funds based on both the size of the companies invested in and the

investment style of the manager. The term "value" refers to a style of investing that looks for

high quality companies that are out of favor with the market. These companies are characterized

by low P/E ratios, price-to-book ratios, and high dividend yields, etc.

The opposite of value is growth, which refers to companies that have had (and are expected to

continue to have) strong growth in earnings, sales, and cash flow, etc. A compromise between

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value and growth is "blend," which simply refers to companies that are neither value nor growth

Mutuals and so are classified as being somewhere in the middle.

For example , a mutual fund that invests in large-cap companies who are in strong

financial shape but have recently seen their share price fall would be placed in the upper

left quadrant of the style box (large and value). The opposite of this would be a fund that

invests in startup technology companies with excellent growth prospects. Such a mutual

would reside in the bottom right quadrant

Global/International Fu nds

An international fund (or foreign fund) invests only outside your home country.

Global funds invest anywhere around the world, including your home country.

It's tough to classify these funds as either riskier or safer. On the one hand they tend to be more

volatile and have unique country and/or political risks. But, on the flip side, they can, as part of a

well-balanced portfolio, actually reduce risk by increasing diversification. Although the world's

economies are becoming more inter-related, it is Likely that another economy somewhere is

outperforming the economy of your home Country.

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Index Funds

The last but certainly not the least important are index funds. This type of mutual fund replicates

the performance of a broad market index such as the sensex and nifty. An investor in an index

fund figures that most managers can't beat the market. An index fund merely replicates the

market return and benefits investors in the form of low fees.

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COSTS INVOLVED IN MUTUAL FUND

Mutual Funds: Costs

Costs are the biggest problem with mutual funds. These costs eat into your return, and they are

the main reason why the majority of funds end up with sub-par performance. What’s even more

disturbing is the way the fund industry hides costs through a layer of financial complexity and

jargon. Some critics of the industry say that mutual fund Companies get away with the fees they

charge only because the average investor does not understand what he/she is paying for.

Fees can be broken down into two categories:

1. Ongoing yearly fees to keep you invested in the fund.

2. Transaction fees paid when you buy or sell shares in a fund (loads)

The Expense Ratio

The ongoing expenses of a mutual fund are represented by the expense ratio. This

is sometimes also referred to as the management expense ratio (MER). The expense ratio is

composed of the following:

The cost of hiring the fund manager (s) - Also known as the management fee,

This cost is between 0.5% and 1.0% of assets on average. While it sounds small,

This fee ensures that mutual fund managers remain in the country’s top echelon of

Earners. Think about it for a Second: 1% of 250 million (a small mutual fund) is

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2.5 million--fund managers are definitely not going hungry! It’s true that paying

Managers is a necessary fee, but don’t think that a high fee assures superior

Performance.

Administrative costs –

These include necessities such as postage, record keeping, customer service, cappuccino

machines, etc. Some funds are excellent at minimizing these costs while others (the ones with

the cappuccino machines in the office) are not. On the whole, expense ratios range from as low

as 0.2% (usually for index funds) to as high as 2.0%. The average equity mutual fund charges

around 1.3%-1.5%. You’ll generally pay more for specialty or international funds, which require

more expertise from manager.

.

Buying and Selling

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(You can buy some mutual funds no-load) by contacting the fund companies directly. Other

funds are sold through brokers, banks financial planners, or insurance agents. If you buy through

a third party there is a good chance they’ll hit you with a sales charge (load). That being said,

more and more funds can be purchased through no-transaction fee programs that offer funds of

many companies. Sometimes referred to as a "fund supermarket," this service lets you

consolidate your holdings and record keeping, and it still allows you to buy funds without sales

charges from many different companies.

Popular examples are Schwab’s OneSource, Vanguard’s Fund Access, and Fidelity’s

Funds Network. Many large brokerages have similar offerings. Selling a fund is as easy as

purchasing one. All mutual funds will redeem (buy back) your shares on any business day. In

the United States companies must send you the payment within seven days.

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THE VALUES OF YOUR FUND

Net asset value (NAV) , which is a fund's assets minus liabilities, is the value of a mutual fund.

NAV per share is the value of one share in the mutual fund, and it is the number that is quoted in

newspapers. You can basically just think of NAV per share as the price of a mutual fund. It

fluctuates everyday as fund holdings and shares outstanding change.

When you buy shares, you pay the current NAV per share plus any sales front-end load. When

you sell your shares, the fund will pay you NAV less any back-end load .Moses gave to his

follow eternities 10 commandments that were to be followed till: The world of investments too

has several ground rules meant for investors who are novices in their own right and wish to enter

the myriad world of investments. These come in handy for there is every possibility of losing

what one has if due care is not taken.

1. Assess yourself: Self-assessment of one’s needs; expectations and risk profile is of prime

importance failing which; one will make more mistakes in putting money in right places than

otherwise. One should identify the degree of risk bearing capacity one has and also clearly state

the expectations from the investments. Irrational expectations will only bring pain.

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2. Try to understand where the money is going: It is important to identify the nature of

investment and to know if one is compatible with the investment. One can lose substantially if

one picks the wrong kind of mutual fund. In order to avoid any confusion it is better to go

through the literature such as offer document and fact sheets that mutual fund companies provide

on their funds.

3.  One first has to decide what he wants the money for and it is this investment goal that

should be the guiding light for all investments done. It is thus important to know the risks

associated with the fund and align it with the quantum of risk one is willing to take. One should

take a look at the portfolio of the funds for the purpose. Excessive exposure to any specific

sector should be avoided, as it will only add to the risk of the entire portfolio .Mutual funds

invest with a certain ideology such as the "Value Principle" or "Growth Philosophy". Both have

their share of critics but both philosophies work for investors of different kinds. Identifying the

proposed investment philosophy of the fund will give an insight into the kind of risks that it shall

be taking in future.

4.  A common investor is limited in the degree of risk that . It is thus of key importance

that there is thought given to the process of investment and to the time horizon of the intended

investment. One should abstain from speculating which in other words would mean getting out

of one fund and investing in another with the intention of making quick money. One would do

well to remember that nobody can perfectly time the market so staying invested is the best option

unless there are compelling reasons to exit.

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5.  This old age adage is of utmost importance. No matter what the risk profile of a person

is, it is always advisable to diversify the risks associated. So putting one’s money in different

asset classes is generally the best option as it averages the risks in each category. Thus, even

investors of equity should be judicious and invest some portion of the investment in debt.

Diversification even in any particular asset class (such as equity, debt) is good. Not all fund

managers have the same acumen of fund management and with identification of the best man

being a tough task; it is good to place money in the hands of several fund managers. This might

reduce the maximum return possible, but will also reduce the risks.

6.  Investing should be a habit and not an exercise undertaken at one’s wishes, if one

has to really benefit from them. As we said earlier, since it is extremely difficult to know when

to enter or exit the market, it is important to beat the market by being systematic. The basic

philosophy of Rupee cost averaging would suggest that if one invests regularly through the ups

and downs .of the market, he would stand a better chance of generating more returns than the

market for the entire duration. The SIP s (Systematic Investment Plans) offered by all funds

helps in being systematic. All that one needs to do is to give post-dated cheques to the fund and

thereafter one will not be harried later. The Automatic investment Plans offered by some funds

goes a step further, as the amount can be directly/electronically transferred from the account of

the investment

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7. Do your homework:

It is important for all investors to research the avenues available to them irrespective of the

investor category they belong to. This is important because an informed investor is in a better

decision to make right decisions. Having identified the risks associated with the investment is

important and so one should try to know all aspects associated with it. Asking the intermediaries

is one of the ways to take care of the problem.

8. Find the right funds

Finding funds that do not charge many fees is of importance, as the fee charged ultimately goes

from the pocket of the investor. This is even more important for debt funds as the returns from

these funds are not much. Funds that charge more will reduce the yield to the investor. Finding

the right funds is important and one should also use these funds for tax efficiency. Investors of

equity should keep in mind that all dividends are currently tax-free in India and so their tax

liabilities can be reduced if the dividend payout option is used. Investors of debt will be charged

a tax on dividend distribution and so can easily avoid the payout options.

9. Keep track of your investments

Finding the right fund is important but even more important is to keep track of the way they are

performing in the market. If the market is beginning to enter a bearish phase, then investors of

equity too will benefit by switching to debt funds as the losses can be minimized. One can

always switch back to equity if the equity market starts to show some buoyancy.

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10. Know when to sell your mutual funds :  

Knowing when to exit a fund too is of utmost importance. One should book profits immediately

when enough has been earned i.e. the initial expectation from the fund has been met with. Other

factors like non-performance, hike in fee charged and change in any basic attribute of the fund

etc. are some of the reasons for to exit. For more on it, read " When to say goodbye to your

mutual fund .”

Investments in mutual funds too are not risk-free and so investments warrant some caution and

careful attention of the investor. Investing in mutual funds can be a dicey business for people

who do not remember to follow these rules diligently, as people are likely to commit mistakes by

being ignorant or adventurous enough to take risks more than what they can absorb. This is the

reason why people would do well to remember these rules before they set out to invest their

hard-earned money.

SOME OF THE EXISTING AMC (ASSET MANAGEMENT COMPANY)

Alliance Mutual Fund

Birla Mutual Fund

BOB Mutual Fund

BOI Mutual Fund

DSP Merrill Lynch Mutual Fund

HDFC Mutual Fund

IDBI Principal Mutual Fund

Indian Bank Mutual Fund

42

ING Mutual Fund

Kotak Mahindra Mutual Fund

LIC Mutual Fund

Morgan Stanley Mutual Fund

Pioneer ITI Mutual Fund

PNB Mutual Fund

Prudential ICICI Mutual Fund¾Reliance Capital Mutual Fund¾SBI Mutual

Fund

Standard Chartered Mutual Fund

Sundaram Mutual Fund

Tata TD Waterhouse Mutual Fun

Taurus Mutual Fund

DEVELOPMENT OF MUTUAL FUND IN INDIA

The mutual fund industry in India started in 1963 with the formation of unit trust of

India at the initiative of government of India and reserve bank of India. The history

43

Of mutual fund

In India can be divided into four phases:

FIRST PHASE : 1964 – 87

SECOND PHASE: 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS)

THIRD PHASE : 1993 – 2003 (ENTRY OF PRIVATE SECTOR FUNDS)

FOURTH PHASE: SINCE FEBURARY 2003

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 of India. The history of mutual funds

in India can be broadly divided into four distinct phases

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) 1987 marked the entry of non-

UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of

India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first

44

non- UTI Mutual Fund established in June 1987 followed by Canara bank Mutual Fund (Dec

87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of

India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June

1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual

fund industry had assets under management of Rs.47, 004 crores.  

Third Phase – 1993-2003 (Entry of Private Sector Funds)   with the entry of private sector

funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a

wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund

Regulations came into being, under which all mutual funds, except UTI were to be registered

and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the

first private sector mutual fund registered in July 1993.   The 1993 SEBI (Mutual Fund)

Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in

1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.   The

number of mutual fund houses went on increasing, with many foreign mutual funds setting up

funds in India and also the industry has witnessed several mergers and acquisitions. As at the end

of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit

Trust of India with Rs.44, 541 crores of assets under management was way ahead of other

mutual funds.  

Fourth Phase – since February 2003   In February 2003, following the repeal of the Unit

Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified

Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at

45

the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and

certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an

administrator and under the rules framed by Government of India and does not come under the

purview of the Mutual Fund Regulations.   The second is the UTI Mutual Fund, sponsored by

SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund

Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than

Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund,

conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among

different private sector funds, the mutual fund industry has entered its current phase of

consolidation and growth.  

GRAPHICAL REPRESENTATION

46

MUTUAL FUND - ORGANIZATIONS

There are many entities involved and the diagram below illustrates the

47

Organizational set up of a mutual fund:

REGULATORY BODIES

Financial System is basically responsible for the major up and downs in the

48

Economy. So, there are some regulatory bodies on it which ensures effectiveness

In the management of Fund of the investors and transparency in the transactions.

FLOW CHART

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FREQUENTLY USED TERMS IN MUTUAL FUND

NET ASSET VALUE

50

Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit

NAV is the net asset value of the scheme divided by the number of units outstanding on the

Valuation Date.

SALE PRICE

The price you pay when you invest in a scheme. Also called Offer Price. It may include a sales

load.

REPURCHASE PRICE

The price at which units under open-ended schemes are repurchased by the Mutual Fund. Such

prices are NAV related.

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REDEMPTION PRICE

The price at which close-ended schemes redeem their units on maturity. Such prices are NAV

related.

SALES LOAD

A charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes

that do not charge a load are called ‘No Load’ schemes.

REPURCHASE OR BACK END LOAD

A charge collected by a scheme when it buys back the units from the Unit holders.

STRUCTURE OF INDIAN MUTUAL FUND

INDIAN MUTUAL FUND INDUSTRY

The rising Indian mutual funds industry probably never had it better, as far as the entry of

individual or retail investors is concerned. The industry’s total AUM in December 2006 stood at

52

a hefty Rs 3, 23,597 crore, with a total of2.79 crore depositor folios, of which 2.31 crore

depositor folios had invested inequity schemes. The share of direct investors, on the other hand,

has been dropping, stating that more retail investors see mutual funds as a preferred route for

investing in the markets.

Existing and new market players as well as Exchange Traded Funds are likely to hit the market

in the coming months with a flurry of new Mutual Funds schemes. An action packed first quarter

of 2007 was forecasted to witness at Least 20 new schemes which are waiting on the sidelines to

be launched.

Market share *(%) of mutual funds companies

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PERFORMANCE SNAPSHOT!!!

The year 2006 scored high in terms of both returns and volatility. The rising Indian mutual funds

industry saw its best, as far as the entry of individual or retail investors is concerned.

In 2006, out of the 159 diversified equity funds (includes diversified equity, midcap, and equity

tax saving schemes):

20 funds (13%) out-performed the Sensex 50 funds (37%) out-performed the Nifty

The best returns generated were up to 58.3% (Tata Infrastructure Fund)

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Equity Diversified funds churned out an average 33.2% return, which Comprise of 72

funds in this category comprising of total 135 funds

Infrastructure funds stole the limelight this year with the top three Performers being

Infrastructure Fund.

TOTAL ASSET MANAGED BY VARIOUS FUND HOUSES :

The amount of assets managed by AMCs varies every year. Following is the table that depicts

the total amount of asset managed by the well known AMCs in India. It also shows the ranking

of AMCs for the year 2007, based on the above mentioned parameter.

55

FUND HOUSE JAN 2009 JAN 2008 DEC 2008

Reliance MF 39,020 16,702 36,928

UTI MF 37,535 25,617 38,109

Prudential ICICI 34,746 22,635 33,305

HDFC MF 31,425 18,591 29,635

Franklin Templeton 23,908 18,153 23,403

Birla Sun Life 21,190 13,797 17,054

SBI MF 17,552 10,839 15,086

DSP Merrill Lynch 13,440 8,976 13,517

TATA MF 13,222 8,649 12,177

Standard Chartered 12,746 9,480 12,629

Kotak Mahindra 12,674 7,397 12,062

LIC MF 12,237 6,386 11,599

HSBC 12,140 6,288 10,450

Principal

Figures in Rs crores

10,333 6,789 10,522

1 ) Birla Sun life was the best performer in January 2007 and Rs4, 136 crore to its

assets

2 ) Reliance MF has become the top mutual fund house in the country by adding a

very Impressive Rs2, 092 crore to assets under management

3) Previous Top Fund House UTI MF declined by Rs574 crore and lost its top

position to Reliance

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4) SBI MF was able to acquire 7th position by an addition of Rs2, 466 crore

5 ) Tata MF gained Rs1, 045 crore and able to secure its position in top 10.

BEST EQUITY MUTUAL FUNDS:(As on 27 th   April, 2009)

Following is the ranking of the best mutual funds and their NAVs as on 27thApril, 2009. The

rankings are based on 1 year returns of the Equity Mutual Funds available in the market.

S.NO. SCHEME NAME 1 Yr. return Present

57

(%) NAV

1 DSPML Technology.com fund-growth 47.50 26.89

2 UTI Banking sector fund-growth 40.05 21.47

3 Magnum IT 36.06 28.49

4 Birla Sun life New Millennium-Growth 35.60 21.33

5 Banking Bees 32.69 590.31

6 Prudential ICICI Technology –Growth 32.59 15.99

7 Prudential ICICI Services Industries Fund –

Growth

32.07 16.02

8 UTI Software – Growth 30.09 27.71

9 Reliance Media & Entertainment – Growth 28.61 26.07

10 Birla Sun life Frontline Equity – Growth 27.90 52.81

11 Reliance Banking – Growth 27.81 39.20

12 Reliance NRI Equity Fund – Growth 26.54 24.70

13 Franklin InfoTech – Growth 25.95 52.62

14 DBS Chola Opportunity 25.85 28.63

15 Reliance Diversified Power Sector – Growth 25.16 37.71

MUTUAL FUND AT A GLANCE

A mutual fund is professionally managed firm of collective instrument that pools money

from many investors and invest it in Mutual, bonds etc.

A mutual fund is a trust registered with securities and exchange board of India.

Value of the fund

The value of each unit of mutual fund, known as net asset value (NAV)

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Formula:

Net asset scheme / No. of unit outstanding

METHODS OF MUTUAL FUND

One time payment

Systematic investment plan

SYSTEMATIC INVESTMENT PLAN:

Under this a fixed sum is invested each month on a fixed date of a month.

Payment is through post dated cheque or direct debit facilities

The investor gets the fewer units when the NAV is high and gets the more units when the

NAV is low.

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WORKING OF MUTUAL FUND

60

NNNNN

61

Objective of the study

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To study the mutual fund industry in detail.

To study the investment procedure in detail.

To find out the market risk of sip plan.

To aware the client about mutual fund investment.

To suggest better investment option according to market behavior to the client.

Expansion of mutual fund investment.

To remove the past image of mutual fund from the mind of investors.

To show the beneficiary aspect of mutual fund.

To give the updated information to the investors about the high return and less risk fund.

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Scope of the study

64

Scope of Mutual Funds has grown enormously over the years. In the first age of mutual funds,

when the investment management companies started to offer mutual funds, choices were few.

Even though people invested their money in mutual funds as these funds offered them diversified

investment option for the first time. By investing in these funds they were able to diversify their

investment in common Mutuals, preferred Mutuals, bonds and other financial securities. At the

same time they also enjoyed the advantage of liquidity. With Mutual Funds, they got the scope

of easy access to their invested funds on requirement.

But, in today’s world, Scope of Mutual Funds has become so wide, that people sometimes take

long time to decide the mutual fund type, they are going to invest in. Several Investment

Management Companies have emerged over the years, who offer various types of Mutual Funds,

Each type carrying unique characteristics and different beneficial features.

65

Research Methodology

66

1. Research Design:

A research design is a pattern or an outline of a research project’s working. It is a statement of

only the essential element of a study, those that provide the basic guidelines for the details of the

project. It comprises a series of prior decision that taken together provide master plans for

executing a research projects.

A research design serves as a bridge between what has been established i.e., the research

objectives and what is to be done, in conduct of the study to relish those objectives. If there were

no research design, the research would have only foggy notions as about what is to be done.

I have used of ‘Exploratory Type’. The research is of both qualitative as well as

quantitative type.

2. Unit of Analysis:

Investors

Characteristics of interest:

Client’s knowledge about Mutual Fund.

Client’s knowledge about Reliance.

Client’s interest in getting knowledge of Mutual Fund.

Client’s willingness to deal in Mutual Fund with Reliance.

Client’s preference in selecting tax saving instrument of investment.

Client’s preference in selecting dealer.

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3. Sources of Data:

Primary Source :

The primary data is collected using sampling method and by survey using questionnaire.

Secondary Source :

Secondary data includes information regarding present market scenario, Information regarding

Mutual Funds and competitors are collected by internet, Magazines and Newspaper and books.

4. Sample Planning:

Sample Size: 50 units.

Sample Extent: Kanpur city.

5. Sample design:

A sample design is a definite plan for obtaining a sample from a given population. It refers to the

technique or method the researcher would adopt in selecting items for the sample.

I have used convenience sampling method

6. Data collection method:

I have used survey method to collect the data.

Questionnaire plan: I have used structured for gathering the required data through

contacting respondent personally

7. Type of information:

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I have collected facts, awareness, attitude, future action plan and reason using

questionnaire.

8. Type of questions:

Close ended questions for dichotomous.

Multiple choice type

9. Data Analysis and Interpretation:

Data analysis is based on the data collected by way of questionnaires. The data is

tabulated and frequency distribution chart is prepared.

69

Use of the Project

Through this C can take the way that in which direction they should go for promoting

mutual fund.

Through this project (Awareness of Client towards Mutual Fund) we can know about

the securities market.

We can know that how many investors are aware about the mutual fund.

We can know that in which type of securities, people want to invest and why.

We can know that if investors don’t want to invest in mutual fund so what the reason

behind that is.

We can aware the investors about mutual funds beneficiary schemes.

We can know about the market potential.

By this project we can know that, which fund is growing up and which fund is going

down.

By this we can know about the co.’s that provide the mutual fund investment facilities.

We can know about the Reliance Mutual fund co. and it’s working.

We can know about the mutual fund AMC (Asset Management Company)

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Importance of the

study

Mutual funds offer inexperienced and experienced investors---who may not have a lot of

money to invest---the ability to invest in more than just one investment tool without

having to monitor or manage that investment personally and at a reduced risk.

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Every person who have no more knowledge about investment and he want to invest

anywhere so he can invest easily in mutual fund.

One of the mode to invest mutual fund that’s SIP (Systematic Investment Plan) is less

risky to invest and every investor want to invest in less price.

Mutual fund is totally depend upon the NAV value (Net Assets Value)

By purchasing a combination of Mutuals, bonds and other securities--rather than just one

single Mutual purchase--their risk is spread out over many fields and companies, instead

of just one.

Purchasing into a mutual fund automatically provides the investor with an experienced

investment manager to oversee their investment. This is because the mutual fund is

composed of different investment securities and requires a competent professional to

oversee it from the onset.

It is one of the easiest ways of investing your saving money

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Research analysis and

interpretation

MUTUAL FUND ADVISORS SUGGESTION ABOUT INVESTMENT

73

INTERPRETATION:

Mutual fund advisor will suggest the investors to invest in mutual fund investment more because

it is les risky than any investment. In mutual fund the investor can invest in sip (systematic

investment plan) which is depend upon NAV (net asset value) which is less risky and whenever

investors want to close that scheme they can. And it is profitable because its profit is based on

average basis.

REASONS FOR CHOOSING ABOVE

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INTERPRETATION:

After analysis we have got that lots of investors want to invest just for security purpose. because

most of the investors want to secure or their money, so for holding the money they want to invest

in somewhere so that they can safe their money for future .and a persons who have no

knowledge about security market, they can also be invest in mutual funds.

INVESTORS WHO KNOW ABOUT THE MUTUAL FUND SERVICES

PROVIDED BY RELIANCE

75

INTERPRETATION:

After analysis we have known that most of the investors don’t know about the mutual fund

services which has been provided by Reliance just because of publicity, Reliance doesn’t show

that it provides mutual fund services along with other services such as: pan card services, d.p.

services, share trading services, IPOs services etc. that’s why most of the peoples are unknown

about the Reliance mutual fund services.

INVESTORS INTERESTED TO INVEST IN MUTUAL FUND

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INTERPRETATION:

After analysis we have seen that most of the investors are not interested to invest in mutual fund

just because of:

Past image of mutual fund.

Because of unawareness.

They are unaware about the mutual fund benefits.

They don’t want to take risk

A INVESTORS WANTS TO INVEST ON WHICH BASIS

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INTERPRETATION:

After analysis we have got the result that most of the investors want to invest in any

securities on the basis of rate of return, when they invest in any believable security so

they expected or anticipated that they will got the expected rate of return ,

Some people invest on the basis of safety purpose , some small investors mostly invest

their money for saving and for getting into near future

Businessman mostly invests their money on securities just for saving the tax because

invested money always is tax free

A PERSON WANTS TO TAKE INFORMATION ABOUT MUTUAL FUND

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INTERPRETATION :

By above analysis we can know that most of the clients,

Persons or investors want to know about the mutual fund benefits, schemes, and

Each and every information, because now a days every persons or investors want to

Get information about everything so that on time he can utilize optimum utilization

Of resources in a right way and could get profit.

A PERSON WHO WANT TO DO THE JOB IN RELIANCE MUTUAL FUND

79

INTERPRETATION:

After analysis we got that investors don’t want to do the job in Reliance because:

80

Because lots of persons have no time for joining that and there is lack of management in

each dept. of Reliance that is also be reason that persons don’t want to do job in Reliance

Some persons don’t want just because of lack of knowledge about investment.

Some persons don’t want to do the job in Reliance because they don’t want to expand

their business.

Some persons gave no answers on such issues.

A INVESTORS WHO WANT TO ATTEND THE SEMINAR PROVIDED BY RELIANCE

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INTERPRETATION:

By above evaluation we can see that some investors are interested to join the seminar on

mutual fund which has been organized by Reliance because they actually want to know

the actual situation of mutual fund that : benefits ,why this investment exist, why they

should invest over there.

Most of the persons don’t want to attend seminar because

They have no time for such type of activities.

They don’t trust on mutual fund investment.

They think that these all are rubbish thing.

ON WHICH COMPANIES THE CLIENT BELIEVES MORE

82

INTERPRETATION:

83

We all know that most of the investors or persons are interested to invest in public co. or

government co. in which there is less chance to drop out the invested money while on the other

hand less of the persons are not interested to invest in private sector because there is more risk

than public sectors.

Same as we can see in the above chart that most of the investors want to invest in reliance co.

because investors has made the mind set that we will get always the profit in investing over there

while only small investors who invest very small amount in security invest in private co. such as:

hdfc , icici. Other.

WHY THE CLIENTS BELIEVE ONLY ABOVE CHOOSING FUND

84

INTERPRETATION:

Most of the investors or clients want to invest in public co. because most of the clients

think that/;

It is risk free means to say there is less risk to invest in that type of funds, that is a

trustworthy co.

Some investors invest just because of good return, peoples perception towards that co. is

that it will never incurred loss and it will not cheat the investors.

Reliance is one of the most powerful and reputed co. even we can say MNC co. so just

because of good positioned in the market investors want to invest over there.

CLIENTS WANT TO GET ADVISORY SERVICES FROM RELIANCE

85

INTERPRETATION:

Investors who have already invested in mutual fund they all want advisory services from

Reliance, in advisory services; we can know NAV (net assets value) of each fund on daily basis.

So investors want to get those services so that they can take right decision on right time, if he

sees that he is getting loss in investing fund so by this services he can switch from loss fund to

profitable fund. So all the investors want to get that type of services from Reliance.

CLIENTS ATTITUDE TOWARDS DSP BLACK ROCK FUND WHICH

PROVIDE 100% RETURN NOW A DAYS

86

INTERPRETATION:

We have seen that most of the investors don’t want to invest in dsp black rock fund, which is

international co. , they don’t want to invest because they know that now a days the NAV of this

fund is very low approx. (14 -15 rs.) so on this the 100% return is not so hectic for the org. and

market is totally based upon uncertainty and always be fluctuating so he thinks that may be

dspblack rock will not provide same return in future so the investors may get lost, so they don’t

want to invest in this. Only those investors would like to invest in this fund who invests for short

term.

INVESTORS WOULD LIKE TO INVEST IN

87

INTERPRETATION:

We can see that most if the investors want to invest in debt funds because there is a solid reason

behind this is that the debt funds provide the fixed rate of interest to the investors, there is no risk

in that type of funds for the investors.

While only big investors want to invest in equity market because equity fund provide the

dividend according to performance of the org. if there will be profit in org so investors will get

the dividend otherwise they will have to face loss

That’s why investors want to invest in debt funds rather than equity market.

WHICH TYPE OF INSTRUMENT CURRENTLY INVESTED IN

88

INTERPRETATION:

Now a day’s most of the investors want to invest in others funds such as:

FD’s

INSURANCE

Etc.

After that the investors mostly focus on to invest in debt market just for reducing the risk.

After that they want to invest in equity market for getting more profit.

Then investors want to invest in commodity market just for saving money in near future.

89

Findings

1) After getting in depth research study of Reliance, I came to know that Reliance is not

much popular as other brands operating in Kanpur city. Bajaj Allianz, HDFC, ICICI are

having much higher tapped market in respect to mutual funds.

2) Reliance as an investment option in Mutual Fund does not possess much proficiency and

potential customers in Kanpur city. Though the financial advisors advise their clients to

go for Mutual Fund as an investment option. About 42% of advisors advise their clients

to invest in Mutual Funds, followed by investing in Insurance sector.

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3) The advisors after having a deep thought says that it is the Returns that make them

convince their clients to go for investment in mutual funds. 36% of advisors said that it is

the Returns which make a person to invest in Mutual Fund. Followed by Risk which is

quite lesser in other investment options.

4) A huge lot of advisors showed a positive response in dealing of for Mutual Fund. About

60% of them said that they are interested in dealing for Mutual Funds, because that

results in higher brokerage.

5) As far as Reliance is concerned about 91% of the advisors said that they are not aware of

the services provided by Reliance, including Mutual Fund.

6) When asked, 53% of advisors said that they are not interested to work with Reliance

Securities, to the contrary with they don’t have any such expansion plans and they have

little knowledge about Reliance.

7) In Kanpur city advisors don’t have an appropriate knowledge about Reliance as an

Investment hub.

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Swot Analysis

A type of fundamental analysis of the health of a company by examining its strengths(S),

weakness (W), business opportunity (O), and any threat (T) or dangers it might be exposed to.

# I. STRENGTHS

Brand strategy : as opposed to some of its competitors (e.g. HSBC), Reliance ADAG

operates a multi-brand strategy. The company operates under numerous well-known

brand names, which allows the company to appeal to many different segments of the

market.

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Distribution channel strategy : Reliance is continuously improving the distribution of

its products. Its online and Internet-based access offers a combination of excellent growth

prospects and its retail direct business also saw growth of 27% in 2002 and 15% in 2003.

Various sources of income : Reliance has many sources of income throughout the

group, and this diversity within the group makes the company more flexible and resistant

to economic and environmental changes.

Large pool of installed capacities.

Experienced managers for large number of Generics.

Large pool of skilled and knowledgeable manpower .

An increasing liberalization of government policies.

# II. WEAKNESS

Emerging markets : since there is more investment demand in the United States, Japan

and the rest of Asia, Reliance should concentrate on these markets, especially in view of

low global interest rates.

Mutual funds are like many other investments without a guaranteed return: there is

always the possibility that the value of your mutual fund will depreciate. Unlike fixed-

income products, such as bonds and Treasury bills, mutual funds experience price

fluctuations along with the stocks that make up the fund. When deciding on a particular

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fund to buy, you need to research the risks involved – just because a professional

manager is looking after the fund, that doesn’t mean the performance will be stellar.

Fees : In mutual funds, the fees are classified into two categories: shareholder fees and

annual operating fees. The shareholder fees, in the forms of loads and redemption fees

are paid directly by shareholders purchasing or selling the funds. The annual fund

operating fees are charged as an annual percentage – usually ranging from 1-3%. These

fees are assessed to mutual fund investors regardless of the performance of the fund. As

you can imagine, in years when the fund doesn’t make money, these fees only magnify

losses.

III. OPPORTUNITIES

Potential markets : The Indian rural market has great potential. All the major market

leaders consider the segments and real markets for their products. A senior official in a

one of the leading company says foray into rural India already started and there has been

realization that the rural market is both price and quantity conscious.

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Entry of MNCs : Due to multinationals are entering into market job opportunities are

increasing day by day. Also India Mutual Fund majors are tie up with other financial

institutions.

# IV. THREATS

Hedge funds : sometimes referred to as as hot money, are also causing a threat for mutual

funds have gained worldwide notoriety for bringing the markets down. Be it a crash in

the currency, A stock or A bond market, A usually a hedge fund prominently figures

somewhere in the picture.

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Recommendations

There is high potential market. For mutual fund investors Kanpur city but this market

need to bed explored as investors are still hesitated to invest their money in mutual fund.

In Kanpur city, investor has inadequate knowledge of mutual fund, so proper marketing

of various scheme is required, co. should arrange more and more seminar about mutual

fund.

Co. should also provide the knowledge of growth rate and expected growth rate of

mutual fund in India.

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Reliance must be concentrate on the management of the co. so that every work can be

done in a proper way.

Reliance must be advertising its tie up co. fund along with their features that the

investors can invest in that type of fund in Reliance.

Reliance must be provided the advice to investors about mutual fund growing fund.

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Conclusion

The awareness level of investors is low who are interested in dealing in mutual

fund :

Most of investors are totally unaware about this investment.

Very less people knows about the service of Reliance.

Past image of mutual fund is not good.

Reliance can promote the investors by advertising, hording, and by interviews to invest

in this fund.

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Most of the investors want to invest in public co.’s fund just because of safety purpose.

Most of the investors want to safer side in investment.

Most of the investors want to invest in debt funds because those are the risk free funds;

it gives the interest on investment.

Most of the investors don’t know about the mutual funds so they want advisory services

from reliance which could provide them whole information about the market situation of

mutual fund.

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Annexure

We assure you that all the information that will be collected from you will

remain fully confidential and use only for study purpose.

NAME: ___________________________________

DESIGNATION/ADDRESS: ____________________________________________

EMAIL ID: ______________________ PHONE NO.:___________________

1) As a financial advisor which investment options you will suggest your customers:

a) Shares ( )

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b) Insurance ( )

c) Mutual fund ( )

d) Fixed deposit ( )

2) Please indicate reason for choosing above :

a) Return ( )

b) Risk ( )

c) Safety ( )

d) Tax benefit ( )

e) Others ( )

3) Do you know about the mutual fund services provided by the Reliance :

a) Yes ( )

b) No ( )

4) Are you interested to invest in mutual fund :

a) Yes ( )

b) No ( )

5) Do you invest your money on which basis :

a) Return ( )

b) Safety ( )

c) Tax saving ( )

d) Others ( )

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6) Do you want to collect information about mutual fund investment:

a) Yes ( )

b) No ( )

7) Will you like to work in Reliance Mutual Fund Ltd. , which deals with mutual fund :

a) Yes ( )

b) No ( )

8) In future will you attend the seminar arranged by Reliance to guide the investors

about mutual fund :

a) Yes ( )

b) No ( )

9) In which co. you believe more :

a) Hdfc

b) Icici

c) Reliance

d) Dsp black rock

e) Any other fund _________________________

10) Why you believe only such kind of fund :

a) Return ( )

b) Good market position ( )

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c) Risk free ( )

d) Any other reason ( )

11) Do you want the advisory services of Reliance :

a) Yes ( )

b) No ( )

12) Now a days DSP black rock fund provides the 100 % return so do you want to invest

in this fund :

a) Yes ( )

b) No ( )

c) If yes/no why ______________________

13) If you have Rs. 100 , in which of these assets classes would you like to invest :

a) Equity ( )

b) Debt ( )

c) Commodities ( )

d) Derivatives ( )

14) Which type of instrument are currently invested in :

a) Mutual fund (equities) ( )

b) Debt funds ( )

c) Currency & Commodities ( )

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d) Others_____________________

Bibliography

WEBSITE :

http://www.moneycontrol.com

http://www.amfi.com

http://www.Reliance .com//v2/

www.amfiindia.com

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MAGAZINES :

S.Gopichand, the finapolis , Reliance Mutual Fund Ltd..,volume 4 , 2010

PunithavathyPandian , Security Analysis And Portfolio Management , Vikas Publishing

House , 2001

Thank you

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