+ All Categories
Home > Documents > Riya Mutual Fund Final

Riya Mutual Fund Final

Date post: 21-Feb-2018
Category:
Upload: naveensharma
View: 228 times
Download: 0 times
Share this document with a friend

of 62

Transcript
  • 7/24/2019 Riya Mutual Fund Final

    1/62

    DISSERTATION REPORT

    A STUDY OF INVESTMENT PREFERENCE IN MUTUAL FUNDS

    SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF

    MASTERS OF BUSINESS ADMINSITRATION (MBA)

    GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

    PROJECT GUIDE: SUBMITTED

    BY:

    MS. NEETU BALI KAMRA GURLEEN

    KAUR

    En!"#$n%

    N!. &'&*+*

    (MBA,&*-,&)

    MANAGEMENT EDUCATION AND RESEARCH INSTITUTE

    GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    2/62

    CERTIFICATE

    This is to certify that the project entitled A STUDY OF INVESTMENT PREFERENCE IN

    MUTUAL FUNDS prepared byG0"$$n K0 has been completed under my guidance

    and I am satised with the work carried out by her.

    The project was successfully carried out by G0"$$n K0 in partial fulllment of

    M1%$1 !2 B013n$11 A4#3n31%%3!n 2!# G00 G!53n4 S3n/6 In471%6

    Un38$13%9.

    ..

    M1 N$$%0 B"3 K#

    P/$,

  • 7/24/2019 Riya Mutual Fund Final

    3/62

    DECLARATION

    I hereby declare that the project titled A S%049 !2 In8$1%#$n% P$2$$n$ 3n M0%0"

    F0n41is an original piece of research work carried out by me under the guidance and

    supervision of M1 N$$%0 B"3 K#. The information has been collected from genuine

    & authentic source. The work has been submitted in partial fulllment of the requirement

    of !"T#$ % '("I)#"" !*I)I"T$!TI%) +'!,.

    PLACE: NE; DELHI

    SIGNATURE:

    DATE: GURLEEN KAUR

    P/$*

  • 7/24/2019 Riya Mutual Fund Final

    4/62

    ACKNO;LEDGEMENT

    -ith profound sense of gratitude and regard I e/press my sincere thanks to my guide

    and mentor M1 N$$%0 B"3 K# for h#$ valuable guidance and the condence he

    instilled in me that helped me in the successful completion of this dissertation report.

    -ithout his help this project would have been a distant a0air.

    1#$ thorough understanding of the subject and professional guidance was indeed of

    immense help to me.

    I am also greatly thankful to the faculty members of our institute who co2operated with

    me and gave me their valuable time. Acknowledgement

    222222222222222222222222222222222

    G0"$$n K0

    R!"" n! < &'&*+*

    MBA

    P/$'

  • 7/24/2019 Riya Mutual Fund Final

    5/62

    TABLE OF CONTENTS

    CHAPTER E=$0%38$ S0##9 34235

    CHAPTER , In%!40%3!n

    1istory of utual und

    Types of utual und "chemes in India

    $isk actors of utual und

    -orking of utual und

    $egulatory structure of utual und in India

    %bjective of the $esearch

    $esearch ethodology36278

    CHAPTER * L3%$%0$ R$83$> 79

    CHAPTER ' An"9131 n4 3n%$7$%%3!n !2 4% 7:2;6

    CHAPTER C!n"013!n

    indings

    $ecommendations

    ;

  • 7/24/2019 Riya Mutual Fund Final

    6/62

    A mutual fund is a scheme in which several people invest their money for a common financial cause.

    The collected money invests in the capital market and the money, which they earned, is divided based

    on the numb

    er of units, which they hold. The mutual fund industry started in India in a small way with the UTI Act

    creating what was effectively a small savings division within the RBI. ver a period of !" years thisgrew fairly successfully and gave investors a good return, and therefore in #$%$, as the ne&t logical

    step, public sector banks and financial institutions were allowed to float mutual funds and their success

    emboldened the government to allow the private sector to foray into this area. The advantages of

    mutual fund are professional management, diversification, and economies of scale, simplicity, and

    li'uidity. The disadvantages of mutual fund are high costs, over(diversification, possible ta&

    conse'uences, and the inability of management to guarantee a superior return. The biggest problems

    with mutual funds are their costs and fees it include )urchase fee, Redemption fee, *&change fee,

    +anagement fee, Account fee Transaction -osts. There are some loads which add to the cost of

    mutual fund. oad is a type of commission depending on the type of funds. +utual funds are easy to

    buy and sell. /ou can either buy them directly from the fund company or through a third party. Before

    investing in any funds one should consider some factor like ob0ective, risk, 1und +anager2s and

    scheme track record, -ost factor etc. There are many, many types of mutual funds. /ou can classify

    funds based 3tructure 4open(ended close(ended5, 6ature 4e'uity, debt, balanced5, Investment

    ob0ective 4growth, income, money market5 etc. A code of conduct and registration structure for mutual

    fund intermediaries, which were subse'uently mandated by 3*BI. In addition, this year A+1I was

    involved in a number of developments and enhancements to the regulatory framework.

    The most important trend in the mutual fund industry is the aggressive e&pansion of the foreign owned

    mutual fund companies and the decline of the companies floated by nationali7ed banks and smaller

    private sector players. Reliance +utual 1und, UTI +utual 1und, I-I-I )rudential +utual 1und, 891-

    +utual 1und and Birla 3un ife +utual 1und are the top five mutual fund company in India. Reliance

    mutual funding is considered to be most reliable mutual funds in India. )eople want to invest in this

    institution because they know that this institution will never dissatisfy the mat any cost. /ou should

    always keep this into your mind that if particular mutual funding scheme is on larger scale then ne&t

    time, you might not get the same results so being a careful investor you should take your ma0or step

    diligently otherwise you will be unable to obtain the higher turns.

    P/$@

  • 7/24/2019 Riya Mutual Fund Final

    7/62

    CHAPTER 2

    INTRODUCTION OF MUTUAL FUND

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

    investable surplus. 8e can invest in Bank 9eposits, -orporate 9ebentures, and Bonds where there is

    low risk but low return. 8e may invest in 3tock of companies where the risk is high and the returns are

    also proportionately high. The recent trends in the 3tock +arket have shown that an average retail

    investor always lost with periodic bearish tends. )eople began opting for portfolio managers with

    e&pertise in stock markets who would invest on their behalf. Thus we had wealth management services

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    8/62

    provided by many institutions. 8owever they proved too costly for a small investor. These investors

    have found a good shelter with the mutual funds.

    CONCEPT OF MUTUAL FUND:

    A mutual fund is a common pool of money into which investors place their contributions that are to be

    invested in accordance with a stated ob0ective. The ownership of the fund is thus 0oint or :mutual;< the

    fund belongs to all investors. A single investor2s ownership of the fund is in the same proportion as the

    amount of the contribution made by him or her bears to the total amount of the fund. +utual 1unds are

    trusts, which accept savings from investors and invest the same in diversified financial instruments in

    terms of ob0ectives set out in the trusts deed with the view to reduce the risk and ma&imi7e the income

    and capital appreciation for distribution for the members. A +utual 1und is a corporation and the fund

    manager2s interest is to professionally manage the funds provided by the investors and provide a return

    on them after deducting reasonable management fees. The ob0ective sought to be achieved by +utual

    1und is to provide an opportunity for lower income groups to ac'uire without much difficulty financial

    assets. They cater mainly to the needs of the individual investor whose means are small and to manage

    investors portfolio in a manner that provides a regular income, growth, safety, li'uidity and

    diversification opportunities.

    DEFINITION::+utual funds are collective savings and investment vehicles where savings of small

    4or sometimes big5 investors are pooled together to invest for their mutual benefit and returns

    distributed proportionately;. :A mutual fund is an investment that pools your money with the money of

    an unlimited number of other investors. In return, you and the other investors each own shares of the

    fund. The funds assets are invested according to an investment ob0ective into the funds portfolio of

    investments. Aggressive growth funds seek long(term capital growth by investing primarily in stocks of

    fast(growing smaller companies or market segments. Aggressive growth funds are also called capital

    appreciation funds;.

    Why Select Mutul Fu!"#

    The risk return trade(off indicates that if investor is willing to take higher risk then correspondingly he

    can e&pect higher returns and vice versa if he pertains to lower risk instruments, which would be

    satisfied by lower returns. 1or e&ample, if an investors opt for bank 19, which provide moderate return

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    9/62

    with minimal risk. But as he moves ahead to invest in capital protected funds and the profit(bonds that

    give out more return which is slightly higher as compared to the bank deposits but the risk involved

    also increases in the same proportion. Thus investors choose mutual funds as their primary means of

    investing, as +utual funds provide professional management, diversification, convenience and

    li'uidity. That doesn2t mean mutual fund investments risk free. This is because the money that ispooled in are not invested only in debts funds which are less riskier but are also invested in the stock

    markets which involves a higher risk but can e&pect higher returns. 8edge fund involves a very high

    risk since it is mostly traded in the derivatives market which is considered very volatile.

    HISTORY OF MUTUAL FUNDS IN INDIA:

    The mutual fund industry in India started in #$=> with the formation of Unit Trust of India, at the

    initiative of the ?overnment of India and Reserve Bank. The history of mutual funds in India can be

    broadly divided into four distinct phases

    FIRST PHASE$ 1%&'()*:Unit Trust of India 4UTI5 was established on #$=> by an Act of )arliament.

    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 #$@% UTI was de(linked from the RBI and the Industrial

    9evelopment Bank of India 4I9BI5 took over the regulatory and administrative control in place of RBI.

    The first scheme launched by UTI was Unit 3cheme #$=. At the end of #$%% UTI hadRs.=,@ crores

    of assets under management.

    SECOND PHASE $ 1%)*(1%%+4*6TR/ 1 )UBI- 3*-TR 1U6935C #$%@ marked the entry of

    non( UTI, public sector mutual funds set up by public sector banks and ife Insurance -orporation of

    India 4I-5 and ?eneral Insurance -orporation of India4?I-5. 3BI +utual 1und was the first non( UTI

    +utual 1und established in Dune #$%@ followed by -anbank +utual 1und 49ec %@5, )un0ab 6ational

    Bank +utual 1und 4Aug %$5, Indian Bank +utual 1und 46ov %$5, Bank of India 4Dun $5, Bank of

    Baroda +utual 1und 4ct $!5. I- established its mutual fund in Dune #$%$ while ?I- had set up its

    mutual fund in 9ecember#$$. At the end of #$$>, the mutual fund industry had assets under

    management of Rs.@,crores.

    THIRD PHASE $ 1%%+(2,,+4*6TR/ 1 )RIEAT* 3*-TR 1U6935C Fith the entry of private

    sector funds in #$$>, a new era started in the Indian mutual fund industry, giving the Indian investors a

    P/$+

  • 7/24/2019 Riya Mutual Fund Final

    10/62

    wider choice of fund families. Also, #$$> was the year in which the first +utual 1und Regulations

    came into being, under which all mutual funds, e&cept UTI were to be registered and governed. The

    erstwhile Gothari )ioneer 4now merged with 1ranklin Templeton5 was the first private sector mutual

    fund registered in Duly #$$>. The #$$> 3*BI 4+utual 1und5 Regulations were substituted by a more

    comprehensive and revised +utual 1und Regulations in #$$=. The industry now functions under the3*BI 4+utual 1und5 Regulations #$$=. 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 ac'uisitions. As at the end of Danuary !>, there were >> mutual funds with total assets of

    Rs. #,!#,%" crores. The Unit Trust of India with Rs.,"# crores of assets under management was

    way ahead of other mutual funds.

    FOURTH PHASE $ SINCE FE-RUARY 2,,+C In 1ebruary !>, following the repeal of the Unit

    Trust of India Act #$=> UTI was bifurcated into two separate entities. ne is the 3pecified Undertakingof the Unit Trust of India with assets under management of Rs.!$,%>" crores as at the end of Danuary

    !>, representing broadly, the assets of U3 = scheme, assured return and certain other schemes. The

    3pecified Undertaking of Unit Trust of India, functioning under an administrator and under the rules

    framed by ?overnment of India and does not come under the purview of the +utual 1und Regulations.

    The second is the UTI +utual 1und td, sponsored by 3BI, )6B, BB and I-. It is registered with

    3*BI and functions under the +utual 1und Regulations. Fith the bifurcation of the erstwhile UTI

    which had in +arch ! more than Rs.@=, crores of assets under management and with the setting

    up of a UTI +utual 1und, conforming to the 3*BI +utual 1und Regulations, and with recent mergers

    taking place among different private sector funds, the mutual fund industry has entered its current

    phase of consolidation and growth. As at the end of 3eptember, !, there were !$ funds, which

    manage assets of Rs.#">#% crores under !#schemes.

    ADVANTA.ES OF MUTUAL FUNDS:

    If mutual funds are emerging as the favorite investment vehicle, it is because of the many advantages

    they have over other forms and the avenues of investing, particularly for the investor who has limited

    resources available in terms of capital and the ability to carry out detailed research and market

    monitoring.

    The following are the ma0or advantages offered by mutual funds to all investorsC

    P/$&

  • 7/24/2019 Riya Mutual Fund Final

    11/62

    #. )ortfolio 9iversificationC *ach investor in the fund is a part owner of all the fund2s assets, thus

    enabling him to hold a diversified investment portfolio even with a small amount of investment that

    would otherwise re'uire big capital.

    !. )rofessional +anagementC *ven if an investor has a big amount of capital available to him, he

    benefits from the professional management skills brought in by the fund in the management of the

    investor2s portfolio. The investment management skills, along with the needed research into available

    investment options, ensure a much better return than what an investor can manage on his own. 1ew

    investors have the skill and resources of their own to succeed in today2s fast moving, global and

    sophisticated markets.

    >. ReductionH9iversification f RiskC Fhen an investor invests directly, all the risk of potential loss is

    his own, whether he places a deposit with a company or a bank, or he buys a share or debenture on his

    own or in any other from. Fhile investing in the pool of funds with investors, the potential losses are

    also shared with other investors. The risk reduction is one of the most important benefits of a collective

    investment vehicle like the mutual fund.

    . Reduction of Transaction -ostsC Fhat is true of risk as also true of the transaction costs The

    investor bears all the costs of investing such as brokerage or custody of securities. Fhen going through

    a fund, he has the benefit of economies of scale< the funds pay lesser costs because of larger volumes, a

    benefit passed on to its investors.

    ". i'uidityC ften, investors hold shares or bonds they cannot directly, easily and 'uickly sell. Fhen

    they invest in the units of a fund, they can generally cash their investments any time, by selling their

    units to the fund if open(ended, or selling them in the market if the fund is close(end. i'uidity of

    investment is clearly a big benefit.

    =. -onvenience and 1le&ibilityC +utual fund management companies offer many investor services that

    a direct market investor cannot get. Investors can easily transfer their holding from one scheme to the

    other< get updated market information and so on.

    @. Ta& BenefitsC Any income distributed after +arch >#, !! will be sub0ect to ta& in the assessment of

    all Unit holders. 8owever, as a measure of concession to Unit holders of open(ended e'uity(oriented

    funds, income distributions for the year ending +arch >#, !>, will be ta&ed at a concessional rate of

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    12/62

    #."J. In case of Individuals and 8indu Undivided 1amilies a deduction upto Rs. $, from the Total

    Income will be admissible in respect of income from investments specified in 3ection %,including

    income from Units of the +utual 1und. Units of the schemes are not sub0ect to Fealth(Ta& and ?ift(

    Ta&.

    %. -hoice of 3chemesC +utual 1unds offer a family of schemes to suit your varying needs over a

    lifetime.

    $. Fell RegulatedC All +utual 1unds are registered with 3*BI and they function within the provisions

    of strict regulations designed to protect the interests of investors. The operations of +utual 1unds are

    regularly monitored by 3*BI.

    #. TransparencyC /ou get regular information on the value of your investment in addition to disclosure

    on the specific investments made by your scheme, the proportion invested in each class of assets andthe fund managers investment strategy and outlook.

    DISADVANTA.ES OF INVESTIN. THROU.H MUTUAL FUNDS:

    #. N/ C/!t0/l /e0 C/t:An investor in a mutual fund has no control of the overall costs of

    investing. The investor pays investment management fees as long as he remains with the fund,

    albeit in return for the professional management and research. 1ees are payable even if the

    value of his investments is declining. A mutual fund investor also pays fund distribution costs,

    which he would not incur indirect investing. 8owever, this shortcoming only means that there is

    a cost to obtain the mutual fund services.!. N/ T3l/0(M"e P/0t4/l3/:Investors who invest on their own can build their own portfolios of

    shares and bonds and other securities. Investing through fund means he delegates this decision

    to the fund managers. The very(high(net(worth individuals or large corporate investors may find

    this to be a constraint in achieving their ob0ectives. 8owever, most mutual fund managers help

    investors overcome this constraint by offering families of funds( a large number of different

    P/$,

  • 7/24/2019 Riya Mutual Fund Final

    13/62

    schemes( within their own management company. An investor can choose from different

    investment plans and constructs a portfolio to his choice.>. M!53!5 A P/0t4/l3/ O4 Fu!":Availability of a large number of funds can actually mean

    too much choice for the investor. 8e may again need advice on how to select a fund to achieve

    his ob0ectives, 'uite similar to the situation when he has individual shares or bonds to select.

    . The W3"/6 /4 P0/4e3/!l M!5e6e!t:Thats right, this is not an advantage. The average

    mutual fund manager is no better at picking stocks than the average nonprofessional, but

    charges fees.". N/ C/!t0/lC Unlike picking your own individual stocks, a mutual fund puts you in the

    passenger seat of somebody else2s car=. D3lut3/!:+utual funds generally have such small holdings of so many different stocks that

    insanely great performance by a funds top holdings still doesn2t make much of a difference in a

    mutual funds total performance.@. -u03e" C/tC +any mutual funds speciali7e in burying their costs and in hiring salesmen who

    do not make those costs clear to their clients.

    TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

    Fide variety of +utual 1und 3chemes e&ists to cater to the needs such as financial position, risk

    tolerance and return e&pectations etc. thus mutual funds has Eariety of flavors, Being a collection of

    many stocks, an investors can go for picking a mutual fund might be easy. There are over hundreds ofmutual funds scheme to choose from. It is easier to think of mutual funds in categories, mentioned

    belowC

    -Y STRUCTURE:

    #. O7e! ( E!"e" Sche6e:An open(end fund is one that is available for subscription all through the

    year. These do not have a fi&ed maturity. Investors can conveniently buy and sell units at 6et Asset

    Ealue 4K6AEK5 related prices. The key feature of open(end schemes is li'uidity.

    !. Cl/e ( E!"e" Sche6e:A closed(end fund has a stipulated maturity period which generally ranging

    from > to #"years. The fund is open for subscription only during a specified period. Investors can

    invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of

    P/$*

  • 7/24/2019 Riya Mutual Fund Final

    14/62

    the scheme on the stock e&changes where they are listed. In order to provide an e&it route to the

    investors, some close(ended funds give an option of selling back the units to the +utual 1und through

    periodic repurchase at 6AE related prices. 3*BI Regulations stipulate that at least one of the two e&it

    routes is provided to the investor.

    >. I!te0l Sche6e: Interval 3chemes are that scheme, which combines the features of open(ended

    and close(ended schemes. The units may be traded on the stock e&change or may be open for sale or

    redemption during pre(determined intervals at 6AE related prices

    -Y NATURE:

    #8 E9u3ty Fu!"C These funds invest a ma&imum part of their corpus into e'uities holdings. The

    structure of the fund may vary different for different schemes and the fund manager2s outlook on

    different stocks. The *'uity 1unds are sub(classified depending upon their investment ob0ective, asfollowsC L 9iversified *'uity 1unds L +id(-ap 1unds L 3ector 3pecific 1unds L Ta& 3avings 1unds

    4*335 *'uity investments are meant for a longer time hori7on, thus *'uity funds rank high on the

    risk(return matri&.

    !. Det Fu!"C The ob0ective of these 1unds is to invest in debt papers. ?overnment authorities,

    private companies, banks and financial institutions are some of the ma0or issuers of debt papers. By

    investing in debt instruments, these funds ensure low risk and provide stable income to the investors.

    9ebt funds are further classified asC L ?ilt 1undsC Invest their corpus in securities issued by?overnment, popularly known as ?overnment of India debt papers. These 1unds carry 7ero 9efault

    risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed

    by ?overnment. L Income 1undsC Invest a ma0or portion into various debt instruments such as bonds,

    corporate debentures and ?overnment securities. L +I)sC Invests ma&imum of their total corpus in debt

    instruments while they take minimum e&posure in e'uities. It gets benefit of both e'uity and debt

    market. These scheme ranks slightly high on the risk(return matri& when compared with other debt

    schemes.

    L 3hort Term )lans 43T)s5C +eant for investment hori7on for three to si& months. These funds

    primarily invest in short term papers like -ertificate of 9eposits 4-9s5 and -ommercial )apers 4-)s5.

    3ome portion of the corpus is also invested in corporate debentures. L i'uid 1undsC Also known as

    P/$'

  • 7/24/2019 Riya Mutual Fund Final

    15/62

    +oney +arket 3chemes, These funds provides easy li'uidity and preservation of capital. These

    schemes invest in short(term instruments like Treasury Bills, inter(bank call money market, -)s and

    -9s. These funds are meant for short(term cash management of corporate houses and are meant for an

    investment hori7on of #day to > months. These schemes rank low on risk(return matri& and are

    considered to be the safest amongst all categories of mutual funds.

    >. -l!ce" Fu!":As the name suggest they, are a mi& of both e'uity and debt funds. They invest in

    both e'uities and fi&ed income securities, which are in line with pre(defined investment ob0ective of the

    scheme. These schemes aim to provide investors with the best of both the worlds. *'uity part provides

    growth and the debt part provides stability in returns. 1urther the mutual funds can be broadly

    classified on the basis of investment parameter vi7, *ach category of funds is backed by an investment

    philosophy, which is pre(defined in the ob0ectives of the fund. The investor can align his own

    investment needs with the funds ob0ective and invest accordingly.

    -Y INVESTMENT O-;ECTIVE:

    .0/

  • 7/24/2019 Riya Mutual Fund Final

    16/62

    one that does not charge a commission for entry or e&it. That is, no commission is payable on purchase

    or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work.

    OTHER SCHEMES

    T= S3!5 Sche6e:Ta&(saving schemes offer ta& rebates to the investors under ta& laws prescribed

    from time to time. Under 3ec.%% of the Income Ta& Act, contributions made to any *'uity inked

    3avings 3cheme 4*335 are eligible for rebate. Inde& 3chemesC Inde& schemes attempt to replicate the

    performance of a particular inde& such as the B3* 3ense& or the 63* ". The portfolio of these

    schemes will consist of only those stocks that constitute the inde&. The percentage of each stock to the

    total holding will be identical to the stocks inde& weightage. And hence, the returns from such schemes

    would be more or less e'uivalent to those of the Inde&.

    Sect/0 S7ec343c Sche6e:These are the fundsHschemes which invest in the securities of only thosesectors or industries as specified in the offer documents. e.g. )harmaceuticals, 3oftware, 1ast +oving

    -onsumer ?oods41+-?5, )etroleum stocks, etc. The returns in these funds are dependent on the

    performance of the respective sectorsHindustries. Fhile these funds may give higher returns, they are

    more risky compared to diversified funds. Investors need to keep a watch on the performance of those

    sectorsHindustries and must e&it at an appropriate time.

    NET ASSET VALUE >NAV?C 3ince each owner is a part owner of a mutual fund, it is necessary to

    establish the value of his part. In other words, each share or unit that an investor holds needs to beassigned a value. 3ince the units held by investor evidence the ownership of the fund2s assets, the value

    of the total assets of the fund when divided by the total number of units issued by the mutual fund gives

    us the value of one unit. This is generally called the 6et Asset Ealue 46AE5 of one unit or one share.

    The value of an investor2s part ownership is thus determined by the 6AE of the number of units held.

    Clcult3/! /4 NAV:et us see an e&ample. If the value of a fund2s assets stands at Rs. # and it has

    #investors who have bought # units each, the total numbers of units issued are #, and the value of

    one unit is Rs. #. 4#H#5. If a single investor in fact owns > units, the value of his ownership of

    the fund will be Rs. >.4#H#M>5. 6ote that the value of the fund2s investments will keep

    fluctuating with the market(price movements, causing the 6et Asset Ealue also to fluctuate. 1or

    e&ample, if the value of our fund2s asset increased from Rs. # to #!,the value of our investors

    P/$@

  • 7/24/2019 Riya Mutual Fund Final

    17/62

    holding of > units will now be 4#!H#M>5 Rs. >=. The investment value can go up or down,

    depending on the markets value of the fund2s assets.

    MUTUAL FUND FEES AND EXPENSES

    +utual fund fees and e&penses are charges that may be incurred by investors who hold mutual funds.

    Running a mutual fund involves costs, including shareholder transaction costs, investment advisory

    fees, and marketing and distribution e&penses. 1unds pass along these costs to investors in a number of

    ways.

    18 TRANSACTION FEES

    i5 )urchase 1eeC It is a type of fee that some funds charge their shareholders when they buy shares.

    Unlike a front(end sales load, a purchase fee is paid to the fund 4not to a broker5 and is typically

    imposed to defray some of the funds costs associated with the purchase.

    ii5 Redemption 1eeC It is another type of fee that some funds charge their shareholders when they sell or

    redeem shares. Unlike a deferred sales load, a redemption fee is paid to the fund 4not to a broker5 and is

    typically used to defray fund costs associated with a shareholders redemption.

    iii5 *&change 1eeC *&change fee that some funds impose on shareholders if they e&change 4transfer5 to

    another fund within the same fund group or Kfamily of funds.K

    28 PERIODIC FEES

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    18/62

    i5 +anagement 1eeC +anagement fees are fees that are paid out of fund assets to the funds investment

    adviser for investment portfolio management, any other management fees payable to the funds

    investment adviser or its affiliates, and administrative fees payable to the investment adviser that are

    not included in the Kther *&pensesK category. They are also called maintenance fees.

    ii5 Account 1eeC Account fees are fees that some funds separately impose on investors in connection

    with the maintenance of their accounts. 1or e&ample, some funds impose an account maintenance fee

    on accounts whose value is less than a certain dollar amount.

    +8 OTHER OPERATIN. EXPENSES

    Transaction -ostsC These costs are incurred in the trading of the funds assets. 1unds with a high

    turnover ratio or investing in illi'uid or e&otic markets usually face higher transaction costs. Unlike the

    Total *&pense Ratio these costs are usually not reported.

    LOADS

    9efinition of a oad funds e&hibit a K3ales oadK with a percentage charge levied on purchase or sale

    of shares. A load is a type of -ommission 4remuneration5. 9epending on the type of load a mutual fund

    e&hibits, charges may be incurred at time of purchase, time of sale, or a mi& of both. The different types

    of loads are outlined below.

    F0/!t(e!" l/":Also known as 3ales -harge, this is a fee paid when shares are purchased. Also

    known as a Kfront(end load,K this fee typically goes to the brokers that sell the funds shares. 1ront(end

    loads reduce the amount of your investment. 1or e&ample, lets say you have Rs.#, and want to

    invest it in a mutual fund with a "J front(end load. The Rs." sales load you must pay comes off the

    top, and the remaining Rs.$" will be invested in the fund. According to 6A39 rules, a front(end load

    cannot be higher than %."J of your investment.

    -c@(e!" l/":Also known as 9eferred 3ales -harge, this is a fee paid when shares are sold. Also

    known as a Kback(end load,K this fee typically goes to the brokers that sell the funds shares. The

    amount of this type of load will depend on how long the investor holds his or her shares and typically

    decreases to 7ero if the investor holds his or her shares long enough.

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    19/62

    Leel l/" L/< l/":It2s similar to a back(end load in that no sales charges are paid when buying the

    fund. Instead a back(end load may be charged if the shares purchased are sold within a given

    timeframe. The distinction between level loads and low loads as opposed to back(end loads is that this

    time frame where charges are levied is shorter.

    N/(l/" Fu!":As the name implies, this means that the fund does not charge any type of sales load.

    But, as outlined above, not every type of shareholder fee is a Ksales load.K A no(load fund may charge

    fees that are not sales loads, such as purchase fees, redemption fees, e&change fees, and account fees.

    SELECTION PARAMETERS FOR MUTUALFUND

    Y/u0 /Bect3e:The first point to note before investing in a fund is to find out whether your ob0ective

    matches with the scheme. It is necessary, as any conflict would directly affect your prospective returns.

    3imilarly, you should pick schemes that meet your specific needs. *&amplesC pension plans, children2s

    plans, sector(specific schemes, etc. /our risk capacity and capabilityC This dictates the choice of

    schemes. Those with no risk tolerance should go for debt schemes, as they are relatively safer.

    Aggressive investors can go for e'uity investments. Investors that are even more aggressive can try

    schemes that invest in specific industry or sectors. 1und +anager2s and scheme track recordC 3ince you

    are giving your hard earned money to someone to manage it, it is imperative that he manages it well. It

    is also essential that the fund house you choose has e&cellent track record. It also should beprofessional and maintain high transparency in operations. ook at the performance of the scheme

    against relevant market benchmarks and its competitors. ook at the performance of a longer period, as

    it will give you how the scheme fared in different market conditions.

    C/t 4ct/0:Though the A+- fee is regulated, you should look at the e&pense ratio of the fund before

    investing. This is because the money is deducted from your investments. A higher entry load or e&it

    load also will eat into your returns. A higher e&pense ratio can be 0ustified only by superlative returns.

    It is very crucial in a debt fund, as it will devour a few percentages from your modest returns. Also,

    +orning star rates mutual funds. *ach year end, many financial publications list the years best

    performing mutual funds. 6aturally, very eager investors will rush out to purchase shares of last years

    top performers. That2s a big mistake. Remember, changing market conditions make it rare that last

    P/$+

  • 7/24/2019 Riya Mutual Fund Final

    20/62

    years top performer repeats that ranking for the current year. +utual fund investors would be well

    advised to consider the fund prospectus, the fund manager, and the current market conditions. 6ever

    rely on last years top performers.

    Ty7e /4 Retu0! /! Mutul Fu!"C

    There are three ways, where the total returns provided by mutual funds can be en0oyed by investorsC

    L Income is earned from dividends on stocks 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.

    L If the fund sells securities that have increased in price, the fund has a capital gain. +ost funds also

    pass on these gains to investors in a distribution. If fund holdings increase in price but are not sold by

    the fund manager, the funds shares increase in price. /ou can then sell your mutual fund shares for a

    profit. 1unds will also usually give you a choice either to receive a check for distributions or to reinvest

    the earnings and get more shares.

    RIS FACTORS OF MUTUAL FUNDS:

    18 The R3@(Retu0! T0"e(O44:The most important relationship to understand is the risk(return trade(

    off. 8igher the risk greater the returns H loss and lower the risk lesser the returnsHloss. 8ence it is upto

    you, the investor to decide how much risk you are willing to take. Inorder to do this you must first be

    aware of the different types of risks involved with your investment decision.

    28 M0@et R3@:3ometimes prices and yields of all securities rise and fall. Broad outside influences

    affecting the market in general lead to this. This is true, may it be big corporations or smaller mid(si7ed

    P/$,&

  • 7/24/2019 Riya Mutual Fund Final

    21/62

    companies. This is known as +arket Risk. A 3ystematic Investment )lan 4:3I);5 that works on the

    concept of Rupee -ost Averaging 4:R-A;5 might help mitigate this risk.

    +8 C0e"3t R3@:The debt servicing ability 4may it be interest payments or repayment of principal5 of a

    company through its cash flows determines the -redit Risk faced by you. This credit risk is measured

    by independent rating agencies like -RI3I who rate companies and their paper. A NAAA2 rating is

    considered the safest whereas a N92 rating is considered poor credit 'uality. A well(diversified portfolio

    might help mitigate this risk.

    '8 I!4lt3/! R3@:Things you hear people talk aboutCKRs. # today is worth more than Rs. #

    tomorrow.KKRemember the time when a bus ride costed " paiseKK+ehangai Ga Damana 8ai.KThe root

    cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times people make

    conservative investment decisions to protect their capital but end up with a sum of money that can buy

    less than what the principal could at the time of the investment. This happens when inflation grows

    faster than the return on your investment. A well(diversified portfolio with some investment in e'uities

    might help mitigate this risk.

    8 I!te0et Rte R3@:In a free market economy interest rates are difficult if not impossible to predict.

    -hanges in interest rates affect the prices of bonds as well as e'uities. If interest rates rise the prices of

    bonds fall and vice versa. *'uity might be negatively affected as well in a rising interest rate

    environment. A well(diversified portfolio might help mitigate this risk.

    &8 P/l3t3cl ./e0!6e!t P/l3cy R3@:-hanges in government policy and political decision can

    change the investment environment. They can create a favorable environment for investment or vice

    versa.

    *8 L39u3"3ty R3@:i'uidity risk arises when it becomes difficult to sell the securities that one has

    purchased. i'uidity Risk can be partly mitigated by diversification, staggering of maturities as well as

    internal risk controls that lean towards purchase of li'uid securities.

    P/$,

  • 7/24/2019 Riya Mutual Fund Final

    22/62

    WORIN. OF MUTUAL FUNDS

    The mutual fund collects money directly or through brokers from investors. The money is invested in

    various instruments depending on the ob0ective of the scheme. The income generated by selling

    securities or capital appreciation of these securities is passed on to the investors in proportion to their

    investment in the scheme. The investments are divided into units and the value of the units will be

    reflected in 6et Asset Ealue or 6AE of the unit. 6AE is the market value of the assets of the scheme

    minus its liabilities. The per unit 6AE is the net asset value of the scheme divided by the number of

    units outstanding on the valuation date. +utual fund companies provide daily net asset value of their

    schemes to their investors. 6AE is important, as it will determine the price at which you buy or redeem

    the units of a scheme. 9epending on the load structure of the scheme, you have to pay entry or e&it

    load.

    STRUCTURE OF A MUTUAL FUND:

    India has a legal framework within which +utual 1und have to be constituted. In India open and close(

    end funds operate under the same regulatory structure i.e. as unit Trusts. A +utual 1und in India is

    allowed to issue open(end and close(end schemes under a common legal structure. The structure that is

    re'uired to be followed by any +utual 1und in India is laid down under 3*BI 4+utual 1und5

    Regulations, #$$=.The 1und 3ponsorC 3ponsor is defined under 3*BI regulations as any person who,

    acting alone or in combination of another corporate body establishes a +utual 1und. The sponsor of the

    fund is akin to the promoter of a company as he gets the fund registered with 3*BI. The sponsor forms

    a trust and appoints a Board of Trustees. The sponsor also appoints the Asset +anagement -ompany as

    fund managers. The sponsor either directly or acting through the trustees will also appoint a custodian

    to hold funds assets. All these are made in accordance with the regulation and guidelines of 3*BI. As

    P/$,,

  • 7/24/2019 Riya Mutual Fund Final

    23/62

    per the 3*BI regulations, for the person to 'ualify as a sponsor, he must contribute atleast J of the

    net worth of the Asset +anagement -ompany and possesses a sound financial track record over " years

    prior to registration. +utual 1unds as TrustsC A +utual 1und in India is constituted in the form of

    )ublic trust Act, #%%!. The 1und sponsor acts as a settlor of the Trust, contributing to its initial capital

    and appoints a trustee to hold the assets of the trust for the benefit of the unit(holders, who are thebeneficiaries of the trust. The fund then invites investors to contribute their money in common pool, by

    scribing to :units; issued by various schemes established by the Trusts as evidence of their beneficial

    interest in the fund. It should be understood that the fund should be 0ust a :pass through; vehicle.

    Under the Indian Trusts Act, the trust of the fund has no independent legal capacity itself, rather it is the

    Trustee or the Trustees who have the legal capacity and therefore all acts in relation to the trusts are

    taken on its behalf by the Trustees. In legal parlance the investors or the unit(holders are the beneficial

    owners of the investment held by the Trusts, even as these investments are held in the name of the

    Trustees on a day(to(day basis. Being public trusts, +utual 1und can invite any number of investors as

    beneficial owners in their investment schemes.

    T0utee:A Trust is created through a document called the Trust 9eed that is e&ecuted by the fund

    sponsor in favor of the trustees. The Trust( the +utual 1und O may be managed by a board of trustees(

    a body of individuals, or a trust company( a corporate body. +ost of the funds in India are managed by

    Boards of Trustees. Fhile the boards of trustees are governed by the Indian Trusts Act, where the trusts

    are a corporate body, it would also re'uire to comply with the -ompanies Act, #$"=. The Board or the

    Trust company as an independent body, acts as a protector of the of the unit(holders interests. The

    Trustees do not directly manage the portfolio of securities. 1or this specialist function, they appoint an

    Asset +anagement -ompany. They ensure that the 1und is managed by ht A+- as per the defined

    ob0ectives and in accordance with the trusts deeds and 3*BI regulations.

    The Aet M!5e6e!t C/67!3e:The role of an Asset +anagement -ompany 4A+-5 is to act as

    the investment manager of the Trust under the board supervision and the guidance of the Trustees. The

    A+- is re'uired to be approved and registered with 3*BI as an A+-. The A+- of a +utual 1und

    must have a net worth of at least Rs. # -rores at all times. 9irectors of the A+-, both independent

    and non(independent, should have ade'uate professional e&pertise in financial services and should be

    individuals of high morale standing, a condition also applicable to other key personnel of the A+-.

    The A+- cannot act as a Trustee of any other +utual 1und. Besides its role as a fund manager, it may

    P/$,*

  • 7/24/2019 Riya Mutual Fund Final

    24/62

    undertake specified activities such as advisory services and financial consulting, provided these

    activities are run independent of one another and the A+-2s resources 4such as personnel, systems etc.5

    are properly segregated by the activity. The A+- must always act in the interest of the unit(holders and

    reports to the trustees with respect to its activities.

    Cut/"3! !" De7/3t/03e:+utual 1und is in the business of buying and selling of securities in

    large volumes. 8andling these securities in terms of physical delivery and eventual safekeeping is a

    speciali7ed activity. The custodian is appointed by the Board of Trustees for safekeeping of securities

    or participating in any clearance system through approved depository companies on behalf of the

    +utual 1und and it must fulfill its responsibilities in accordance with its agreement with the +utual

    1und. The custodian should be an entity independent of the sponsors and is re'uired to be registered

    with 3*BI. Fith the introduction of the concept of demateriali7ation of shares the demateriali7ed

    shares are kept with the 9epository participant while the custodian holds the physical securities. Thus,deliveries of a fund2s securities are given or received by a custodian or a depository participant, at the

    instructions of the A+-, although under the overall direction and responsibilities of the Trustees.

    -!@e0:A 1und2s activities involve dealing in money on a continuous basis primarily with respect to

    buying and selling units, paying for investment made, receiving the proceeds from sale of the

    investments and discharging its obligations towards operating e&penses. Thus the 1und2s banker plays

    an important role to determine 'uality of service that the fund gives in timely delivery of remittances

    etc.

    T0!4e0 A5e!t:Transfer agents are responsible for issuing and redeeming units of the +utual 1und

    and provide other related services such as preparation of transfer documents and updating investor

    records. A fund may choose to carry out its activity in(house and charge the scheme for the service at a

    competitive market rate. Fhere an outside Transfer agent is used, the fund investor will find the agent

    to be an important interface to deal with, since all of the investor services that a fund provides are going

    to be dependent on the transfer agent.

    RE.ULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA:

    The structure of mutual funds in India is guided by the 3*BI. Regulations,#$$=. These regulations

    make it mandatory for mutual fund to have three structures of sponsor trustee and asset +anagement

    P/$,'

  • 7/24/2019 Riya Mutual Fund Final

    25/62

    -ompany. The sponsor of the mutual fund and appoints the trustees. The trustees are responsible to the

    investors in mutual fund and appoint the A+- for managing the investment portfolio. The A+- is the

    business face of the mutual fund, as it manages all the affairs of the mutual fund. The A+- and the

    mutual fund have to be registered with 3*BI.

    SE-I RE.ULATIONSC

    L As far as mutual funds are concerned, 3*BI formulates policies and regulates the mutual funds to

    protect the interest of the investors.

    L 3*BI notified regulations for the mutual funds in #$$>. Thereafter, mutual funds sponsored by private

    sector entities were allowed to enter the capital market.

    L The regulations were fully revised in #$$= and have been amended thereafter from time to time.

    L 3*BI has also issued guidelines to the mutual funds from time to time to protect the interests of

    investors.

    L 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. The risks associated with the

    schemes launched by the mutual funds sponsored by these entities are of similar type. There is no

    distinction in regulatory re'uirements for these mutual funds and all are sub0ect to monitoring and

    inspections by 3*BI.

    L 3*BI Regulations re'uire that at least two thirds of the directors of trustee company or board of

    trustees must be independent i.e. they should not be associated with the sponsors.

    L Also, "J of the directors of A+- must be independent. All mutual funds are re'uired to be

    registered with 3*BI before they launch any scheme.L 1urther 3*BI Regualtions, inter(alia, stipulate

    that +1s cannot guarantee returns in any scheme and that each scheme is sub0ect to ! C !" condition

    PI.e minimum ! investors per scheme and one investor can hold more than !"J stake in the corpus in

    that one schemeQ.

    L Also 3*BI has permitted +1s to launch schemes overseas sub0ect various restrictions and also to

    launch schemes linked to Real *state, ptions and 1utures, -ommodities, etc.

    P/$,

  • 7/24/2019 Riya Mutual Fund Final

    26/62

    ASSOCIATION OF MUTUAL FUNDS IN INDIA >AMFI?:

    Fith the increase in mutual fund players in India, a need for mutual fund association in India was

    generated to function as a non(profit organi7ation. Association of +utual 1unds in India 4A+1I5 was

    incorporated on !!nd August, #$$". A+1I is an ape& body of all Asset +anagement -ompanies

    4A+-5 which has been registered with 3*BI. Till date all the A+-s are that have launched mutual

    fund schemes are its members. It functions under the supervision and guidelines of its Board of

    9irectors. Association of +utual 1unds India has brought down the Indian +utual 1und Industry to a

    professional and healthy market with ethical lines enhancing and maintaining standards. It follows the

    principle of both protecting and promoting the interests of mutual funds as well as their unit holders.

    The OBect3e /4 A/c3t3/! /4 Mutul Fu!" 3! I!"3C

    The Association of +utual 1unds of India works with > registered A+-s of the country. It has certain

    defined ob0ectives which 0u&taposes the guidelines of its Board of 9irectors.

    The ob0ectives are as followsC

    L This mutual fund association of India maintains high professional and ethical standards in all areas of

    operation of the industry.

    L It also recommends and promotes the top class business practices and code of conduct which is

    followed by members and related people engaged in the activities of mutual fund and asset

    management. The agencies who are by any means connected or involved in the field of capital markets

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

    L A+1I interacts with 3*BI and works according to 3*BIs guidelines in the mutual fund industry.

    L Association of +utual 1und of India do represent the ?overnment of India, the Reserve Bank of India

    and other related bodies on matters relating to the +utual 1und Industry.

    P/$,@

  • 7/24/2019 Riya Mutual Fund Final

    27/62

    L It develops a team of well 'ualified and trained Agent distributors. It implements a programme of

    training and certification for all intermediaries and other engaged in the mutual fund industry.

    L A+1I undertakes all India awareness programme for investors in order to promote proper

    understanding of the concept and working of mutual funds.

    L At last but not the least association of mutual fund of India also disseminate informations on +utual

    1und Industry and undertakes studies and research either directly or in association with other bodies.

    AMFI Pul3ct3/!:A+1I publish mainly two types of bulletin. ne is on the monthly basis and the

    other is 'uarterly. These publications are of great support for the investors to get intimation of the

    knowhow of their parked money.

    P/$,

  • 7/24/2019 Riya Mutual Fund Final

    28/62

    MUTUAL FUNDS IN INDIA

    In #$=>, the day the concept of +utual 1und took birth in India. Unit Trust of India invited investors or

    rather to those who believed in savings, to park their money in UTI +utual 1und. 1or > years it

    goaled without a single second player. Though the #$%% year saw some new mutual fund companies,

    but UTI remained in a monopoly position. The performance of mutual funds in India in the initial phase

    was not even closer to satisfactory level. )eople rarely understood, and of course investing was out of

    'uestion. But yes, some ! million shareholders were accustomed with guaranteed high returns by the

    beginning of liberali7ation of the industry in #$$!. This good record of UTI became marketing tool for

    new entrants. The e&pectations of investors touched the sky in profitability factor. 8owever, people

    were miles away from the preparedness of risks factor after the liberali7ation. The net asset value

    46AE5 of mutual funds in India declined when stock prices started falling in the year #$$!. Those days,

    the market regulations did not allow portfolio shifts into alternative investments. There was rather no

    choice apart from holding the cash or to further continue investing in shares. ne more thing to be

    noted, since only closed(end funds were floated in the market, the investors disinvested by selling at a

    loss in the secondary market. The performance of mutual funds in India suffered 'ualitatively. The

    #$$! stock market scandal, the losses by disinvestments and of course the lack of transparent rules inthe where abouts rocked confidence among the investors. )artly owing to a relatively weak stock

    market performance, mutual funds have not yet recovered, with funds trading at an average discount of

    #! percent of their net asset value. The securities and *&change Board of India 43*BI5 came out with

    comprehensive regulation in #$$> which defined the structure of +utual 1und and Asset +anagement

    -ompanies for the first time. The supervisory authority adopted a set of measures to create a

    transparent and competitive environment in mutual funds. 3ome of them were like rela&ing investment

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

    to launch pension schemes. The measure was taken to make mutual funds the key instrument for long(

    term saving. The more the variety offered, the 'uantitative will be investors. 3everal private sectors

    +utual 1unds were launched in #$$> and #$$. The share of the private players has risen rapidly since

    then. -urrently there are > +utual 1und organi7ations in India managing #,!, crores. At last to

    P/$,

  • 7/24/2019 Riya Mutual Fund Final

    29/62

    mention, as long as mutual fund companies are performing with lower risks and higher profitability

    within a short span of time, more and more people will be inclined to invest until and unless they are

    fully educated with the dos and don2ts of mutual funds. +utual fund industry has seen a lot of changes

    in past few years with multinational companies coming into the country, bringing in their professional

    e&pertise in managing funds worldwide. In the past few months there has been a consolidation phasegoing on in the mutual fund industry in India. 6ow investors have a wide range of 3chemes to choose

    from depending on their individual profiles.

    MUTUAL FUND COMPANIES IN INDIA:

    The concept of mutual funds in India dates back to the year #$=>. The era between #$=>and #$%@

    marked the e&istence of only one mutual fund company in India with Rs. =@bn assets undermanagement 4AU+5, by the end of its monopoly era, the Unit Trust of India 4UTI5. By the end of the

    %s decade, few other mutual fund companies in India took their position in mutual fund market. The

    new entries of mutual fund companies in India were 3BI +utual 1und, -anbank +utual 1und, )un0ab

    6ational Bank +utual 1und, Indian Bank +utual 1und, Bank of India +utual 1und. The succeeding

    decade showed a new hori7on in Indian mutual fund industry. By the end of #$$>, the total AU+ of the

    industry was Rs. @. bn. The private sector funds started penetrating the fund families. In the same

    year the first +utual 1und Regulations came into e&istence with re(registering all mutual funds e&cept

    UTI. The regulations were further given a revised shape in #$$=. Gothari )ioneer was the first private

    sector mutual fund company in India which has now merged with 1ranklin Templeton. Dust after ten

    years with private sector players penetration, the total assets rose up to Rs. #!#%." bn. Today there are

    >> mutual fund companies in India.

    MB/0 Mutul Fu!" C/67!3e 3! I!"3:

    L AB6 A+R +utual 1und

    L 3tandard -hartered +utual 1und

    L Birla 3un ife +utual 1und

    L 1ranklin Templeton India +utual 1und

    P/$,+

  • 7/24/2019 Riya Mutual Fund Final

    30/62

    L Bank of Baroda +utual 1und

    L +organ 3tanley +utual 1und India

    L 891- +utual 1und

    L *scorts +utual 1und

    L 83B- +utual 1und

    L Alliance -apital +utual 1und

    L I6? Eysya +utual 1und

    L Benchmark +utual 1und

    L )rudential I-I-I +utual 1und

    L -anbank +utual 1und

    L 3tate Bank of India +utual 1und

    L -hola +utual 1und

    L Tata +utual 1und

    L I- +utual 1und

    L Unit Trust of India +utual 1und

    L ?I- +utual 1und

    L Reliance +utual 1und

    1or the first time in the history of Indian mutual fund industry, Unit Trust of India +utual 1und has

    slipped from the first slot. *arlier, in +ay !=, the )rudential I-I-I +utual 1und was ranked at thenumber one slot in terms of total assets. In the very ne&t month, the UTI+1 had regained its top

    position as the largest fund house in India. 6ow, according to the current pegging order and the data

    released by Association of +utual 1unds in India 4A+1I5, the Reliance +utual 1und, with a Danuary(

    end AU+ of Rs>$,! crore has become the largest mutual fund in India n the other hand, UTI+1,P/$*&

  • 7/24/2019 Riya Mutual Fund Final

    31/62

    with an AU+ of Rs >@,">" crore, has gone to second position. The )rudential I-I-I +1 has slipped to

    the third position with an AU+ of Rs >,@=crore.It happened for the first time in last one year that a

    private sector mutual fund house has reached to the top slot in terms of asset under management

    4AU+5. In the last one year to Danuary, AU+ of the Indian fund industry has risen by =J to Rs >.>$

    lakh crore. According to the data released by Association of +utual 1unds in India 4A+1I5, thecombined average AU+ of the >" fund houses in the country increased to Rs ","#!.$$ billion in April

    compared to Rs ,$>!.%= billion in +arch Reliance +1 maintained its top position as the largest fund

    house in the country with Rs@.!" billion 0ump in AU+ to Rs %%>.%@ billion at April(end. The second(

    largest fund house 891- +1 gained Rs "$.! billion in its AU+ at Rs =>%.%billion. I-I-I )rudential

    and state(run UTI +1 added Rs =.#= billion and Rs "@.>" billion respectively to their assets last

    month. I-I-I )rudentials AU+ stood at Rs "=.$ billion at the end of April, while UTI +1 had

    assets worth Rs ".%$ billion. The other fund houses which saw an increase in their average AU+ in

    April include(-anara Robeco +1, I91- +1, 93) BlackRock, 9eutsche +1, Gotak +ahindra +1 and

    I-+1.

    P/$*

  • 7/24/2019 Riya Mutual Fund Final

    32/62

    MUTUAL FUNDS VS8 OTHER INVESTMENTS

    1rom investors2 viewpoint mutual funds have several advantages such asC

    L )rofessional management and research to select 'uality securities.

    L 3preading risk over a larger 'uantity of stock whereas the investor has limited to buy only a hand full

    of stocks. The investor is not putting all his eggs in one basket.

    L Ability to add funds at set amounts and smaller 'uantities such as S# per month

    L Ability to take advantage of the stock market which has generally outperformed other investment in

    the long run.

    L 1und manager are able to buy securities in large 'uantities thus reducing brokerage fees.

    8owever there are some disadvantages with mutual funds such asC

    L The investor must rely on the integrity of the professional fund manager.

    L 1und management fees may be unreasonable for the services rendered.

    L The fund manager may not pass transaction savings to the investor.

    L The fund manager is not liable for poor 0udgment when the investors fund loses value.

    L There may be too many transactions in the fund resulting in higher feeHcost to the investor ( This is

    sometimes call K-hurn and *arnK.

    L )rospectus and Annual report are hard to understand.

    L Investor may feel a lost of control of his investment dollars. There may be restrictions on when and

    how an investor sellsHredeems his mutual fund shares.

    C/67!y F3=e" De7/3t e0u Mutul Fu!"

    P/$*,

  • 7/24/2019 Riya Mutual Fund Final

    33/62

    1i&ed deposits are unsecured borrowings by the company accepting the deposit. -redit rating of the

    fi&ed deposit program is an indication of the inherent default risk in the investment. The moneys of

    investors in a mutual fund scheme are invested by the A+- in specific investments under that scheme.

    These investments are held and managed in(trust for the benefit of scheme2s investors. n the other

    hand, there is no such direct correlation between a company2s fi&ed deposit mobilisation, and theavenues where these resources are deployed. A corollary of such linkage between mobilisation and

    investment is that the gains and losses from the mutual fund scheme entirely flow through to the

    investors. Therefore, there can be no certainty of yield, unless a named guarantor assures a return or, to

    a lesser e&tent, if the investment is in a serial gilt scheme. n the other hand, the return under a fi&ed

    deposit is certain, sub0ect only to the default risk of the borrower. Both fi&ed deposits and mutual funds

    offer li'uidity, but sub0ect to some differencesC The provider of li'uidity in the case of fi&ed deposits is

    the borrowing company. In mutual funds, the li'uidity provider is the scheme itself 4for open(end

    schemes5 or the market 4in the case of closed(end schemes5. The basic value at which fi&ed deposits are

    encashed is not sub0ect to a market risk. 8owever, the value at which units of a scheme are redeemed

    depends on the market. If securities have gained in value during the period, then the investor can even

    earn a return that is higher than what he anticipated when he invested. But he could also end up with a

    loss. *arly encashment of fi&ed deposits is always sub0ect to a penalty charged by the company that

    accepted the fi&ed deposit. +utual fund schemes also have the option of charging a penalty on :early;

    redemption of units 4through by way of an Ne&it load2,5 If the 6AE has appreciated ade'uately, then

    even after the e&it load, the investor could earn a capital gain on his investment.

    -!@ F3=e" De7/3t e0e Mutul Fu!":

    Bank fi&ed deposits are similar to company fi&ed deposits. The ma0or difference is that banks are

    generally more stringently regulated than companies. They even operate under stricter re'uirements

    regarding 3tatutory i'uidity Ratio 43R5 and -ash Reserve Ratio 4-RR5. Fhile the above are causes

    for comfort, bank deposits too are sub0ect to default risk. 8owever, given the political and economic

    impact of bank defaults, the government as well as Reserve Bank of India 4RBI5 try to ensure that

    banks do not fail. 1urther, bank deposits upto Rs #, are protected by the 9eposit Insurance and

    -redit ?uarantee -orporation 49I-?-5, so long as the bank has paid the re'uired insurance premium

    of " paise per annum for every Rs # of deposits. The monetary ceiling of Rs #, is for all the

    deposits in all the branches of a bank, held by the depositor in the same capacity and right. BA6G3

    P/$**

  • 7/24/2019 Riya Mutual Fund Final

    34/62

    +UTUA 1U693 Returns ow Better Administrative e&p. 8igh ow Risk ow +oderate Investment

    options ess +ore 6etwork 8igh penetration ow but improving i'uidity At a cost Better uality of

    assets 6ot transparent uarterly Interest calculation *very +onth i.e. >rd, =th, $th #!th.?uarantor

    ?uarantor is needed. ?uarantor is not needed. Account 6eeded. 6ot 6eeded.

    -/!" !" Dee!tu0e e0u Mutul Fu!"

    As in the case of fi&ed deposits, credit rating of the bond H debenture is an indication of the inherent

    default risk in the investment. 8owever, unlike 19, bonds and debentures are transferable securities.

    Fhile an investor may have an early encashment option from the issuer 4for instance through a :put;

    option5, generally li'uidity is through a listing in the market. Implications of this areC

    L If the security does not get traded in the market, then the li'uidity remains on paper. In this respect, an

    open(end scheme offering continuous sale H re(purchase option is superior. L The value that the investor

    would reali7e in an early e&it is sub0ect to market risk. The investor could have a capital gain or a

    capital loss. This aspect is similar to a +1 scheme. It is possible for a professional investor to earn

    attractive returns by directly investing in the debt market, and actively managing the positions. ?iven

    the market realities in India, it is difficult for most investors to actively manage their debt portfolio.

    1urther, at times, it is difficult to e&ecute trades in the debt market even when the transaction si7e is as

    high as Rs # crore. In this respect, investment in a debt scheme would be beneficial. 9ebt securitiescould be backed by a hypothecation or mortgage of identified fi&ed and Hor current assets 4secured

    bonds H debentures5. In such a case, if there is a default, the identified assets become available for

    meeting redemption re'uirements. An unsecured bond H debenture is for all practical purposes like a

    fi&ed deposit, as far as access to assets is concerned. The investments of a mutual fund scheme are held

    by a custodian for the benefit of investors in the scheme. Thus, the securities that relate to a scheme are

    ring(fenced for the benefit of its investors.

    E9u3ty e0u Mutul Fu!"

    Investment in both e'uity and mutual funds are sub0ect to market risk. An investor holding an e'uity

    security that is not traded in the market place has a problem in realising value from it. But investment

    in an open(end mutual fund eliminates this direct risk of not being able to sell the investment in the

    P/$*'

  • 7/24/2019 Riya Mutual Fund Final

    35/62

    market. An indirect risk remains, because the scheme has to realise its investments to pay investors.

    The A+- is however in a better position to handle the situation Another benefit of e'uity mutual fund

    schemes is that they give investors the benefit of portfolio diversification through a small investment.

    1or instance, an investor can take an e&posure to the inde& by investing a mere Rs ", in an inde&

    fund.

    A"!t5e /4 Mutul Fu!" Oe0 St/c@#

    L A mutual fund offers a great deal of diversification starting with the very first dollar invested,

    because a mutual fund may own tens or hundreds of different securities. This diversification helps

    reduce the risk of loss because even if any one holding tanks, the overall value doesn2t drop by much.

    If you2re buying individual stocks, you can2t get much diversity unless you have S#G or so.

    . L 3mall sums of money get you much further in mutual funds than in stocks. 1irst, you can set up anautomatic investment plan with many fund companies that lets you put in as little as S" per month.

    3econd, the commissions for stock purchases will be higher than the cost of buying no(load fund 4f

    course, the funds various e&penses like commissions are already taken out of the 6AE5. 3maller si7ed

    purchases of stocks will have relatively high commissions on a percentage basis, although with the S#

    trade becoming common, this is a bit less of a concern than it once was.

    L /ou can e&it a fund without getting caught on the bidHask spread.

    L 1unds provide a cheap and easy method for reinvesting dividends.

    L ast but most certainly not least, when you buy a fund you2re in essence hiring a professional to

    manage your money for you. That professional is 4presumably5 monitoring the economy and the

    markets to ad0ust the funds holdings appropriately.

    A"!t5e O4 St/c@ Oe0 Mutul Fu!"#

    L The opposite of the diversification issueC If you own 0ust one stock and it doubles, you are up #J.

    If a mutual fund owns " stocks and one doubles, it is up !J. n the other hand, if you own 0ust one

    stock and it drops in half, you are down "J but the mutual fund is down #J. -uts both ways.

    P/$*

  • 7/24/2019 Riya Mutual Fund Final

    36/62

    L If you hold your stocks several years, you aren2t nicked a #J or so management fee every year

    4although some brokerage firms charge if there aren2t enough trades5.

    L /ou can take your profits when you want to and won2t inadvertently buy a ta& liability. 4This refers to

    the common practice among funds of distributing capital gains around 6ovember or 9ecember of each

    year. 3ee the article elsewhere in this 1A for more details.5

    L /ou can do a covered write option strategy. 43ee the article on options on stocks for more details.5

    L /ou can structure your portfolio differently from any e&isting mutual fund portfolio. 4Although with

    the current universe of funds I m not certain what could possibly be missing out there5

    L /ou can buy smaller cap stocks which aren2t suitable for mutual funds to invest in.

    L /ou have a potential profit opportunity by shorting stocks. 4/ou cannot, in general, short mutualfunds.5

    L The argument is offered that the funds have a KherdK mentality and they all end up owning the same

    stocks. /ou may be able to pick stocks better.

    L34e I!u0!ce e0u Mutul Fu!"

    ife insurance is a hedge against risk O and not really an investment option. 3o, it would be wrong to

    compare life insurance against any other financial product. ccasionally on account of marketinefficiencies or mispricing of products in India, life insurance products have offered a return that is

    higher than a comparable :safe; fi&ed return security O thus, you are effectively paid for getting

    insured 3uch opportunities are not sustainable in the long run.

    FUTURE PROSPECT OF MUTUAL FUNDS IN INDIA

    1inancial e&perts believe that the future of +utual 1unds in India will be very bright. It has been

    estimated that by +arch(end of !#, the mutual fund industry of India will reach Rs,$, crore,

    taking into account the total assets of the Indian commercial banks. In the coming # years the annual

    composite growth rate is e&pected to go up by #>.J.

    L #J growth in the last = years.

    P/$*@

  • 7/24/2019 Riya Mutual Fund Final

    37/62

    L 6umber of foreign A+-s are in the 'ueue to enter the Indian markets like 1idelity Investments, U3

    based, with over U3S#trillion assets under management worldwide

    L ur saving rate is over !>J, highest in the world. nly channeli7ing these savings in mutual funds

    sector is re'uired.

    L Fe have appro&imately !$ mutual funds which is much less than U3 having more than %. There is

    a big scope for e&pansion.

    L B and - class cities are growing rapidly. Today most of the mutual funds are concentrating on the A

    class cities. 3oon they will find scope in the growing cities

    . L +utual fund can penetrate rurals like the Indian insurance industry with simple and limited products.

    L 3*BI allowing the +1s to launch commodity mutual funds.

    L *mphasis on better corporate governance.

    L Trying to curb the late trading practices

    L Introduction of 1inancial )lanners who can provide need based advice.

    ooking at the past developments and combining it with the current trends it can be concluded that the

    future of +utual 1unds in India has lot of positive things to offer to its investors.

    6et Asset Ealue 46AE5 6et Asset Ealue is the market value of the assets of the scheme minus its

    liabilities. The per unit 6AE is the net asset value of the scheme divided by the number of units

    outstanding on the Ealuation 9ate. 3ale )rice 3ale price is the price you pay when you invest in a

    scheme. Also called ffer )rice. It may include a sales load. Repurchase )rice Is the price at which a

    close(ended scheme repurchases its units and it may include a back(end load. This is also called Bid

    )rice. Redemption )rice It is the price at which open(ended schemes repurchase their units and close(

    ended schemes redeem their units on maturity. 3uch prices are 6AE related. 3ales oad It is a charge

    collected by a scheme when it sells the units. Also called as N1ront(end2load. 3chemes that do not

    charge a load are called N6o oad2 schemes. Repurchase or NBack(end2 oad It is a charge collected by

    a scheme when it buys back the units from the unit holders.

    P/$*

  • 7/24/2019 Riya Mutual Fund Final

    38/62

    O-;ECTIVES

    #. To give a brief idea about the benefits available from +utual 1und investment.

    !. To study the various +utual 1unds schemes in India.

    >. bserve the fund management process of mutual funds

    . *&plore the recent developments in the mutual funds in India.

    P/$*

  • 7/24/2019 Riya Mutual Fund Final

    39/62

    ". To assess the risk of investors with reference to diversifiable risk non diversifiable risk.

    =. To study various investment alternatives and in particular investors preference towards mutual

    funds.

    @. To study the people in which age and income group prefer mutual funds over

    other investment option

    RESEARCH METHODOLO.Y

    S/u0ce /4 "t c/llect3/!

    Two sources of collecting data has been employed i.e. primary data and secondary data

    P0360y "t

    A 'uestionnaire is used as a tool for the systematic collection of relevant information. A well

    'uestionnaire consisting of simple 'uestions has been prepared directed to the respondents.

    The 'uestionnaire prepared consists of closed(ended 'uestions which includeC +ultiple choices

    Rating scale.

    The 'uestionnaire also consists of open(ended 'uestions.

    The first section of 'uestionnaire is prepared mainly for collecting the personal information about the

    respondents.

    P/$*+

  • 7/24/2019 Riya Mutual Fund Final

    40/62

    The second section contains multiple choice 'uestions. It is prepared to collect the information about

    customer perception.

    The close( ended 'uestions are very easy to answer from the 'uestionnaire responded by the

    respondents.

    Sec/!"0y Dt

    3econdary data is collected from internet.

    S67l3!5 P0/ce"u0e

    3ample si7eC !

    E=7l/0t3e 770/ch: This approach is one of the most popular approaches these days. In this

    approach, a problem is described by the researcher using 'uestionnaire or schedule.

    This approach enables a researcher to e&plore new areas of investigation.

    CHAPTER +

    L3te0tu0e Re3eJ, V", is about !@J

    the individuals who save less than #,, are #!J, followed by individuals who save more than

    #,, is %J.

    TA-LE(*:

    INVESTORS PREFERENCE FOR VARIOUS INVESTMENT

    O-;ECIVES

    OPTION RAN SCORE

    SECURITY 1

    YIELD 2 '*

    MATURITY ' +

    TAX -ENEFITS 22

    LIUIDITY + ',

    P/$'

  • 7/24/2019 Riya Mutual Fund Final

    48/62

    ;;

    75:;

    99

    73

    INVESTMENT OBJECTIVE OF INVESTOR

    "#@($ITD

    DI#>*

    !T($ITDT!E '#)#IT"

    >IF(I*ITD

    I!te070ett3/!:

    9ifferent types of investors look forward to different investment ob0ectives. +ost of he investors

    ranked #st to security, !nd rank to yield, >rd rank has been given to li'uidity, th "th ranks for

    maturity ta& benefits.

    INVESTOR PREFERENCE FOR VARIOUS INVESTMENTS

    O-;ECTIVES

    ATTRI-UTE 1 2 + ' WEI.HTE

    D

    AVERA.E

    RAN

    SECURITY )) &' +2 % * 1

    YEILD &+ '' '& 2' 2+ '* 2MATURITY 1% 2' ' ) 2* + '

    TAX

    -ENEFIT

    ) 2 '2 12, 22

    LIUIDITY 22 '+ *2 ', 2+ ', +

    P/$'

  • 7/24/2019 Riya Mutual Fund Final

    49/62

    MODEL CALCULATION:

    ))J K &'J' K +2J+ K %J2 K *J1 1 K 2 K + K ' K

    '', K 2& K %& K1) K * 1

    )1*1

    8

    TA-LE ):

    INVESTMENT OPPURTUNITIES USUALLY

    PREFERED -Y RESPONDENTS

    OPTION NO8 OF RESPONDENTS PERCENTA.E

    -AN DEPOSIT &) ++

    SHARES +2 1&-ONDSDE-ENTURES +1 1&

    MUTUAL FUNDS +, 1

    INSURANCE 2& 1+

    REAL ESTATE 1+ *

    TOTAL 2,, 1,,

    P/$'+

  • 7/24/2019 Riya Mutual Fund Final

    50/62

    ::

    8484

    8;

    8:5

    INVESTMENT AVENUES OPTED BY RESPONDENTS

    '!)G *#?%"IT

    "1!$#"

    '%)*"H*#'#)T($#"

    (T(!> &()*"

    I)"($!)@#

    $#!> #"T!T#

    I!te070ett3/!:

    It is observed from the above chart that >>J of the individuals prefer to bank deposits, #=J of the

    individuals prefer to shares, respondents preferring bonds are #=J of with respondents preferring

    mutual funds are #"J, followed by insurance and real estate with #>J and @J.

    TA-LE(%:

    AWARENESS OF MUTUAL FUNDS

    OPTIONS NO8 OF RESPONDENTS PERCENTA.E

    YES 12' &2

    NO *& +)

    TOTAL 2,, 1,,

    P/$&

  • 7/24/2019 Riya Mutual Fund Final

    51/62

    D#" )%

    3

    93

    73

    43

    63

    833

    893

    873

    897

    54

    3

    49

    :6

    )% % $#"?%)*#)T"

    ?#$@#)T!A#

    I!te070ett3/!:

    According to the survey, most investors are aware of mutual funds. It can be observed from the above

    table that =!J of respondents are aware of +utual 1unds and the rest are not aware of +utual 1unds.

    TA-LE(1,:

    AWARENESS OF MUTUAL FUNDS IS THROU.H

    OPTIONS NO8 OF RESPONDENTS PERCENTA.E

    ADVERTISMENT 2 2&

    FRIENDS +* 1%

    FAMILY FRIENDS 1% 1,

    FINANCIAL ADVISOR && +2RELATIVES 2& 1+

    TOTAL 2,, 1,,

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    52/62

    94

    8D !*=I"%$

    I)!)@I!> !*=I"%$

    $#>!TI=#"

    I!te070ett3/!:

    According to the survey, the respondents are more aware of mutual funds through 1inancial Advisors

    who occupy >!J, followed by Advertisements !=J, 1riends #$J, Relatives #>J 1amily +embers

    #J

    TA-LE 11:

    MUTUAL FUND IS A .OOD INVESTMENT OPTION8

    OPTIONS NO8 OF RESPONDENTS PERCENTA.E

    YES 1% *%8

    NO '1 2,8

    TOTAL 2,, 1,,

    P/$,

  • 7/24/2019 Riya Mutual Fund Final

    53/62

    D#" )%

    3

    93

    73

    43

    63

    833

    893

    873

    843

    863

    8;("

    '%)* I)*#E ()*

    I!te070ett3/!:

    Based on the survey, it is found that the respondents prefer dynamic bond fund which occupies >"J,

    then follows is the bond Inde& 1und with !#J, thirdly Income )lus is seen with more percentage with

    #@, followed by ?ilt 1und, 1loating Rate 1und, i'uid 1und with #!, #, ".

    TA-LE 1':

    RESPONDENTS PREFFERIN. DIFFERENT -RANDS OF MUTUAL FUNDS

    OPTION NO8 OF RESPONDENTS PERCENTA.EFRANLIN TEMPLETON 12 1%

    HDFC & 1,

    -IRLA SUN LIFE 1) 2%

    HS-C 11 1)

    OTA MAHINDRA )

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    56/62

    DSP MERYLLICH 1, 1&

    TOTAL &2 1,,

    8!J, then comes 1und +anager with !>J, 9iversification with #$J, performance I)

    with #"J, ##J respectively.

    CHAPTER :

    F3!"3!5 C/!clu3/!

    #. The ma0ority of respondents were of the age group below !$ above =.

    !. +a0or part of the respondents belongs to service sector.

    >. Annual income of the respondents between #(! lacks prefers more of investments.

    . Respondents irrespective of ma0or investment or small are investing in some or other sources of

    investments.

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    58/62

    ". Investor2s preference when going for an investment in primarily for security.

    =. Respondents prefer Bank 9eposits as most secured avenue for investment, then preference is

    given to shares, Bonds H 9ebentures then to +utual 1unds.

    @. The role of 1inancial Advisors play a key role in making investors educated about mutual fund.

    Around >>J of the respondents choose 1inancial advisors for guidance.

    %. 1rom the 3urvey conducted it is clear that %J of the respondents feel that +utual fund is a good

    investment option.

    $. ut of total respondents, many of them prefer the current brand of mutual fund because of

    investment strategy.

    CONCLUSION

    +utual 1unds now represent perhaps most appropriate investment opportunity for most investors. As

    financial markets become more sophisticated and comple&, investors need a financial intermediary who

    provides the re'uired knowledge and professional e&pertise on successful investing. As the investor

    always try to ma&imi7e the returns and minimi7e the risk. +utual fund satisfies these re'uirements by

    providing attractive returns with affordable risks. The fund industry has already overtaken the banking

    industry, more funds being under mutual fund management than deposited with banks. Fith the

    emergence of tough competition in this sector mutual funds are launching a variety of schemes which

    P/$

  • 7/24/2019 Riya Mutual Fund Final

    59/62

    caters to the re'uirement of the particular class of investors. Risk takers for getting capital appreciation

    should invest in growth, e'uity schemes. Investors who are in need of regular income should invest in

    income plans. The stock market has been rising for over three years now. This in turn has not only

    protected the money invested in funds but has also to help grow these investments. This has also

    instilled greater confidence among fund investors who are investing more into the market through the+1 route than ever before. Reliance India mutual funds provide ma0or benefits to a common man who

    wants to make his life better than previous. India2s largest mutual fund, UTI, still controls nearly % per

    cent of the market. Also, the mutual fund industry as a whole gets less than ! per cent of household

    savings against the = percent that go into bank deposits. 3ome fund managers say this only indicates

    the sectors potential.KIf mutual funds succeed in chipping away at bank deposits, even a triple digit

    growth is possible over the ne&t few years.

    RECOMMENDATIONS

    L The awareness of mutual fund its various schemes should be increased among the people by proper

    advertising, promotion and conducting investors meets..

    L The fund manager has to be aggressive in portfolio decisions especially +I) I +I) II fund.

    LIMITATIONS

    The lack of information sources for the analysis part.

    P/$+

  • 7/24/2019 Riya Mutual Fund Final

    60/62

    Though I tried to collect some primary data but they were too inade'uate for the purposes of the

    study.

    Time availability was limiting this study.

    The data provided by the prospects may not be #J correct as they too have their limitations.

    The study is limited to selected mutual fund scheme

    -I-LIO.RAPHY

    -OOS:

    +utual 1unds in India ( 8. 3adhak,

    1inancial +anagement khan Dain

    3ecurity Analysis )ortfolio +anagement )reethi singh

    We3te V33te":

    P/$@&

  • 7/24/2019 Riya Mutual Fund Final

    61/62

    www.amfiindia.com

    www.mutual funds india.com

    www.birla sun life.com

    www.moneycontrol.com

    www.icicidirect.com

    ANNEXURE

    I"e!t343ct3/! Dt

    18 N6e /4 the 0e7/!"e!t:

    28 A5e:

    Below !! O !$> O >$ O $" O "$Above =+8 Se=:

    +ale1emale'8 A""0e

  • 7/24/2019 Riya Mutual Fund Final

    62/62

    &8 A!!ul I!c/6e

    V ne akh# O ! akh! O > akhAbove > akhsI!et6e!t P0e4e0e!ce

    #. 9o you invest any part of your savings/es6o

    !. Fhat amount do you save yearly.V !"V "V #W #I4 Ye

    >. Fhat criteria you keep in your mind while selecting an investment opportunity4rank them accordingly53ecurity/ield+aturityTa& Benefitsi'uidity. 6ormally what investment opportunities you prefer to invest your savings

    I4 Mutul Fu!"

    ". 9o you know about the +utual 1unds/es6oI4 Ye

    =. 8ow did you come to know of these brands of mutual fundsAdvertisements1riends1amily members1inancial AdvisorsRelatives@. 8ave you invested any amount in the +utual 1unds/es6oI4 Ye

    %. In which +utual funds did you invest1ranlin templeton 8dfc 93) +*R/I-8Birla sun life 8sbc kotak mahindra

    $. Fhat type of funds you prefer9ebt 1unds*'uity 1unds8ybrid 1undsI4 Det Fu!"

    #. Fhich type of schemes you preferi'uid 1und1loating Rate?ilt 1und9ynamic Bond 1undIncome )lusBond Inde& 1und

    ##. Fhat are the reasons for the preference of present brand of mutual fundsI))erformance9iversificationInvestment 3trategy1und +anager


Recommended