FINAL PROJECT REPORT ON
Consumer Awareness Of The Different Investment Plan
For
Sundaram Finance
By
submitted
In Partial fulfillment for the award of the degree
MASTER OF BUSINESS ADMINISTRATION
Batch 2009-2011
To
Punjab Technical University, Jalandhar
NEW DELHI INSTITUTION OF MANAGEMENT
F-13, Phase-1,Okhla, New Delhi
New Delhi Institution Of Management Page 1
FINAL PROJECT REPORT ON
Consumer Awareness Of The Different Investment Plan
For
Sundaram Finance
Under The Guidance Of
Prof.R.K.Sharma
And
Mrs.Sayanti Banerjee
Submitted by:- Submitted to:-
Soumitra Khawas Prof.R.K.Sharma
9212760358,D-49
New Delhi Institution Of Management Page 2
DECLERATION
I hereby declare that this Project Report entitled “CONSUMER AWARENESS OF
DIFFERENT INVESTMENT PLAN” submitted in the partial fulfilment of the
requirement of Master of Business Administration (MBA) of NEW DELHI
INSTITUTION OF MANAGEMENT, NEW DELHI is based on primary & secondary
data found by me in various departments, books, magazines and websites. The
information submitted is true & original to the best of my knowledge.
Date of Project Submission:-
Signature of the student:-
Faculty Comment:-..................................................................................................
...................................................................................................................................
.....................................................................................................................................
.................................................................................................................................
....................................................................................................................................
Signature of the faculty guide: – Signature of research methodology guide:-
Name: Name:
New Delhi Institution Of Management Page 3
ACKNOWLEDGEMENT
I take this opportunity to express my gratitude to all of them who in some or the
other way to helped me to accomplish this project.The project study cannot be
completed without their guidance , assistance, inspiration and kind co-operation.
For successfully accomplishment of task apart from hard work the
most important requisite is the right direction and guidance for which I would like to
express my special thanks to Prof.R.K.Sharma who helped me a lot during this
project.
I would also like to extend my thanks to my members and friends
for their support and lastly, I would like to express my gratefulness to the parent’s for
seeing me through it all.
New Delhi Institution Of Management Page 4
EXECUTIVE SUMMERY
In few years all different investment plan has emerged as a tool for ensuring one’s
financial well being. Investment plan have not only contributed to the India growth
story but have also helped families tap into the success of Indian Industry. As
information and awareness is rising more and more people are enjoying the benefits of
investing in all investment plans. The main reason the number of investors remains
small is that nine in ten people with incomes in India do not know that investment plan
exist. But once people are aware of mutual fund, equity, commodity, life insurance etc
investment opportunities, the number who decide to invest in all investment plan
increases to as many as one in five people. The trick for converting a person with no
knowledge of mutual funds to a new Mutual Fund customer is to understand which of
the potential investors are more likely to buy mutual funds and to use the right
arguments in the sales process that customers will accept as important and relevant to
their decision This Project gave me a great learning experience and at the same time it
gave me enough scope to implement my analytical ability. The analysis and advice
presented in this Project Report is based on market research on the saving and
investment practices of the investors and preferences of the investors for investment in
different investment option. This Report will help to know about the investors
Preferences in Mutual Fund means Are they prefer any particular Asset Management
Company (AMC)Which type of Product they prefer, Which Option (Growth or
New Delhi Institution Of Management Page 5
Dividend) they prefer or Which Investment Strategy they follow (Systematic
Investment Plan or One time Plan).
TABLE OF CONTENTS
Chapter - 1 INTRODUCTION..………………………………………..........7
Chapter - 2 COMPANY PROFILE……………………………….....................8
Chapter -3 INTRODUCTION OF DIFFERENT INVESTMENT TERM.......12
Chapter - 4 OBJECTIVES AND SCOPE………………………...................41
Chapter - 5 RESEARCH METHODOLOGY..............................................43
Chapter - 6 DATA ANALYSIS AND INTERPRETATION.......................46
Chapter - 7 FINDINGS AND CONCLUSIONS..........................................60
Chapter - 8 SUGGESTIONS & RECOMMENDATIONS..........................64
Chapter-9 BIBLIOGRAPHY.....................................................................67
Chapter-10 QUESTIONAIRE……………………………………………….68
New Delhi Institution Of Management Page 6
INTRODUCTION
Sundaram Finance Ltd incorporated in 1954 has grown today into one of the most trusted financial services groups in India.
Today, the activities of the group span savings products like Deposits and Mutual Funds, Car and Commercial Vehicle Finance, Insurance, Home Loans, Software Solutions, Business Process Outsourcing, Tyre Finance, Fleet Cards and Logistics Services.
Subsequently, the equity shares of the company have been delisted from Madras Stock Exchange Limited (MSE) with effect from January 27, 2004, in accordance with SEBI (Delisting of Securities) Guidelines, 2003, for voluntary delisting
The strength of the Group lies in the quick completion of transactions, long association with transporters for generations and the intimate knowledge of the market and its nuances.
The Group has a vast network of over 400 branches to cater to the financing needs of our customers. The company was started with a paid-up capital of Rs.2.00 Lakhs and later went public in 1972.The Company's shares were listed in the Madras Stock Exchange in 1972 and in the National Stock Exchange in January 1998.
Sundaram Finance Group is driven by value and culture, where individual initiatives are encouraged. For nearly fifty years, SFians have created an asset of immense value - the Sundaram Finance Group?s reputation for integrity and high standards of business conduct. This reputation, built over many years, is reflected in each business or personal transaction. Integrity in all actions and thought is necessary for every employee or prospective employee of Sundaram Finance Group.
Obsession for Excellence, Speed, Openness to new ideas, Aggressive Goals, Accountability & Commitment are some of the virtues that we expect from our employees.
The Sundaram Finance Group has been established on a bedrock of honesty, transparency and a reputation for customer service across more than one hundred locations in India.
New Delhi Institution Of Management Page 7
COMPANY PROFILE
Website : www.sundaramfinance.in
About the Company
Date of Establishment 1953Revenue 215.604 ( USD in Millions )Market Cap 24287.303796 ( Rs. in Millions )Corporate Address 21,Patullos Road,Chennai-600002, Tamil Nadu
www.sundaramfinance.inManagement Details Chairperson - S Viji
MD - T T SrinivasaraghavanDirectors - A Rangaswami, Arnoon Raman, Aaron Raman, S Narayanan, S Prasad, S Ravindran, S Venkatesan, S Viji, Sram, Srinivas Acharya, T R Seshadri, T T Srinivasaraghavan
Business Operation Finance NBFCBackground Sundaram Finance, a Sundram Group company, was
incorporated in 1954, with the object of financing the purchase of commercial vehicles and passenger cars. The company was started with a paid-up capital of Rs.2.00 Lakhs and later went public in 1972.
The company's shares were listed in the Madras Stock Exchange in 1972 and in the National Stock Exchange in January 1998.
Subsequently, the equity sharesFinancials Total Income - Rs. 11147.69 Million ( year ending
Mar 2009) Net Profit - Rs. 1507.314 Million ( year ending Mar 2009)
Company Secretary S Venkatesan
New Delhi Institution Of Management Page 8
BankersAuditors Brahmayya & Co
VV
COMPANY HISTORY
Sundaram Finance, a Sundram Group company, was incorporated in 1954, with the object of financing the purchase of commercial vehicles and passenger cars. The company was started with a paid-up capital of Rs.2.00 Lacks and later went public in 1972.
The company's shares were listed in the Madras Stock Exchange in 1972 and in the National Stock Exchange in January 1998.
Subsequently, the equity shares of the company have been delisted from Madras Stock Exchange Limited (MSE) with effect from January 27, 2004, in accordance with SEBI (Delisting of Securities) Guidelines, 2003, for voluntary delisting.
Sundaram has grown today into one of the most trusted financial services groups in India. Today, the activities of the group span savings products like deposits and mutual funds, car and commercial vehicle finance, insurance, home loans, software solutions, business process outsourcing, tyre finance, fleet cards and logistics services. The strength of the Group lies in the quick completion of transactions, long association with transporters for generations and the intimate knowledge of the market and its nuances.
The Group has a vast network of over 400 branches to cater to the financing needs of our customers.
Sundaram Finance is one of the oldest and largest providers of finance for the acquisition of commercial vehicles of all makes. The commercial vehicle finance provided by it helps the small operators to acquire vehicles with minimum hassle and documentation. It provides customised financing options to suit the needs.
Large fleet operators also find it easy to expand their fleet through the finance provided by the company. It also offers special schemes, supported by the manufacturers, where the rates are highly competitive. The finance schemes
New Delhi Institution Of Management Page 9
are easy to understand and without any hidden costs.
The other Group Companies:
Lakshmi General Finance (since merged with SFL on 1/4/2005) Sundaram BNP Paribas Asset Management Sundaram BNP Paribas Home Finance Royal Sundaram Alliance Insurance Sundaram InfoTech Solutions Sundaram Business Services Sundaram Finance Distribution Limited In freight Logistics Solutions Limited
Products / Services Offered
Deposits Car Finance Commercial Vehicle Finance Fleet Card Mutual Fund Life Insurance General Insurance Health Advisory
KEY EXECUTIVES
S.L Name Designation
1 S Viji Chairman
3 T T Srinivasaraghavan Managing Director
2 S Venkatesan Company Secretary
4 S Narayanan Director
5 T R Seshadri Director
6 S Ravindran Director
New Delhi Institution Of Management Page 10
7 S Prasad Director
8 Arnoon Raman Director
9 Srinivas Acharya Director
COMPETITORS
CompanySales
(Rs.Million)
Current
Price
Change (%)
P/E Ratio
MarketCap.
(Rs.Million)
52-WeekHigh/Lo
w
Rel. Capital 29475.50 733.95 -3.94 53.11 180282.19 987/611
Shri ram Trans. Fin
44402.30 587.70 -0.24 15.18 132536.82 614/282
Mah. Finan 13790.46 454.60 -3.73 12.85 44050.98 484/210
I Bull Fin 14208.09 135.00 -3.30 15.86 41884.54 220/93
Manappuram Gen Fin
1605.33 73.70 -0.41 20.95 25086.39 840/22
Sund.Fin 10918.18 437.20 -0.90 10.71 24287.30 457/250
Shriram City 9277.41 468.50 2.26 11.86 23044.17 557/322
New Delhi Institution Of Management Page 11
Union
BajAutFin 5941.33 474.30 -0.15 19.41 17357.52 509/135
Cholamandalam Invest
10985.33 127.10 -1.09 90.65 13969.42 140/49
Future Capital 1295.64 186.50 0.95 68.47 11857.29 305/140
Sigrun Holdings
0.01 20.00 4.99 0.00 10704.80 84/12
SREI Infra Fin 3222.70 79.85 -1.42 8.32 9274.16 94/45
India Securities
66.13 40.15 -1.59117.3
78012.59 41/2
Seagull Leaf in
24.65 24.80 0.00 0.00 4344.41 0/0
PNB Gilts 755568.82 25.20 -0.79 9.27 3402.19 36/21
Shree Nath Comm&Fin
0.67 399.40 3.20840.9
92388.41 411/18
GE Capital 1738.10 107.30 0.00 0.00 2174.30 108/106
Database Finance
44.65 38.25 0.00 0.00 2039.99 0/0
Bengal & Assam
161.53 192.90 -1.10 6.94 1675.06 230/50
First Leasing 1881.40 52.05 -0.57 3.40 1186.25 70/39
TVS Finance 315.14 24.60 0.00 40.69 1018.46 25/24
MuthootCapital
170.42 144.95 -3.69 13.13 942.18 189/46
New Delhi Institution Of Management Page 12
WHAT IS INVESTMENT?
An asset or item that is purchased with the hope that it will generate income or appreciate in the future.
In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.
In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.
Images for investment:-
PURPOSE OF INVESTING
Higher current income
Saving money for major purchases
Planning for the retirement
Shelter for taxes
New Delhi Institution Of Management Page 13
Is Investment and Speculation same?
Basis Investment Speculation
Time frame Long Term Short Term
Nature of Reward Interest or Dividends Speculative gains
Commonly used instruments for investments
Stock , Bonds, Mutual Funds Stock , Bonds, Mutual Funds
Risk involved Less risk High risk involved
Analysis/ Information Trading is done after thorough study (fundamental analysis), past performances etc.
Trading is usually done on Rumors, Hot tips, Inside dopes etc.
TYPES OF INVESTMENT AVENUES
Equities
Bonds
Mutual Funds
Real Estate
Gold ETF’s
Commodities, Futures and Options
Insurance
New Delhi Institution Of Management Page 14
FACTORS CONSIDERED IN THE CHOICE OF INVESTMENTS
Risk
Market risk
Interest Rate risk
Default risk
Purchasing power risk
Foreign Exchange Risk
Political Risk
Marketability and Liquidity
Tax consideration
What is a Bond?
A bond is an instrument in writing which gurentees to repay the principal of the plus the interest to the bondholder.
Advantages of Bonds over Stocks
Bonds, while a more conservative investment than stocks, can offer certain investors some very attractive features:
Safety
Reliable income
Potential for capital gains
Diversification (especially for an otherwise all-equity portfolio)
Tax advantages
New Delhi Institution Of Management Page 15
Types of bonds
• Secured and unsecured loans.
• Senior and subordinate bonds.
• Convertible and non-convertible bonds.
• Treasury bonds and corporate bonds
• Junk bonds
Bond yield measures
One Period Rate of Return
Current Yield
Yield to Maturity ( YTM )
Capital Gain ( Loss )
Realized Yield
One-Period Rate of Return
Rate of return over a single holding period =
Price gain or loss during the period + Coupon Interest
Purchase period at the begining of holding period
Current Yield
Rate of return earned if the bond is purchased at
Current market price and if coupon interest is paid =
Coupon Interest Current Market Price
New Delhi Institution Of Management Page 16
Capital Gain (Loss )
Market Value at the end of t years =
C * PVIFA r, (n –t) + F * PVIF r, (n – t)
Where
C = Coupon
r = Reinvestment Rate
n = Term to maturity
t = Holding Period
F = Redemption Price
Yield to Maturity (YTM)
Rate of return earned by an investor who holds the bond till maturity .
YTM = KD in the formula
YTM equates the present value of cash flows to the current market price.
Relationship between YTM & Coupon Rate
YTM = Coupon Þ bond is selling at par
(P0 = PN)
YTM > Coupon Þ bond is at a discount
(P0 < PN)
YTM < Coupon Þ bond is at a premium (P0 > PN)
New Delhi Institution Of Management Page 17
Assumptions underlying YTM
1. All coupon and principal payments are made as per the schedule.
2. The bond is held to maturity.
3. The coupon payments are fully and immediately reinvested at precisely the same interest rate as the promised YTM.
It is the rate that equates the future value of the purchase price to the total cash flow realized on the bond.
P * FVIF r, n = Total returns + Purchase price
Risks Faced by a Bond Investor
Default risk
Interest rate risk (price risk)
Reinvestment risk
Call risk
Inflation risk
Foreign exchange risk
Liquidity risk
Bond investment strategies
Matching strategy
Laddered strategy
Barbell strategy
Interest rate strategy
New Delhi Institution Of Management Page 18
Realized Yield ( RY )
How to read bond table
Indian Equity Market- More popularly known as the Indian Stock Market
Market capitalization of nearly $600 billion
Third biggest after China($2,347.4 billion) and Hong Kong($1,293.7 billion) in the Asian region
Supervised by SEBI (Securities Exchange Board of India)
The Indian equity market depends on three factors :
1) Funding into equity from all over the world
2) Corporate houses performance
3) Monsoons major ones
23 stock exchanges – BSE and NSE
New Delhi Institution Of Management Page 19
New York Stock Exchange The London Stock Exchange
House Ter Beurze in Bruges, Belgium, was one of the first stock exchanges
Advantages of Investing in Shares
Capital Appreciation
Bonus shares
Dividend earnings
Portfolio
Long term benefits and return on investment
Simple method
Easily cashable
Liquidity
Disadvantages of Investing in Shares
No guaranteed return
Last to get paid
Volatility in stock prices
Do not enjoy all the rights
New Delhi Institution Of Management Page 20
Investment Process
1. Get a Broker
2. Get a Demat Account
o With banks, financial institutions, broking firms, NBFC, etc
3. Get a PAN
4. Check if you need a UIN
Exchange Traded Funds
ETF is an investment vehicle traded on a stock exchange, much like stocks.
ETF are securities that track an index, a commodity or a basket of assets like an Index fund.
ETF does not have its NAV calculated everyday like a Mutual Fund.
It is attractive coz:
Stock like features
Diversification of index
Low cost
Tax efficiency
Demat form
Gold-ETF
Gold backed Exchange Traded Funds (ETFs) are securities designed accurately to track the gold price.
It tracks the performance of Gold Bullion
It provides investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that participation through the trading of a security on stock exchange.
While investing in Gold, few points need to be considered:
Volatility
Entry time matters
New Delhi Institution Of Management Page 21
Other selection factors
Investment Process
Requirements for trading:
Trading account with a stock exchange broker
Demat account as Gold ETF can be traded only in Demat form
Load Structure:
Entry Load: NilExit Load: Nil
Tax treatment:
Is taxed as per non equity mutual fund taxation rules.
Need not pay Wealth tax.
Opportunities-why to invest?
No worry on adulteration
Gold provides diversification to the portfolio
Gold is considered as a Global Asset Class
Gold is used as a Hedge against Inflation
Gold is considered to be less volatile compared to equities
Held in Electronic Form
Store of value
Extremely Liquid
New Delhi Institution Of Management Page 22
Comparison of Gold ETF with Physical Gold
Parameters Jeweller Bank Gold ETFFORM Bar or Coin Bar or Coin Demat formSECURITY Investor’s
concernInvestor’s concern
Fund house takes The responsibility
PRICING Neither standard nor transparent
Differs from bank to bank. Not standard
Transparent Will be traded at NSE
WEALTH TAX Yes Yes NoLONG TERM CAPITAL GAIN TAX
Only after 3 years
Only after 3 years
After 1 year
RESALE Conditional and Uneconomical
Banks do not buy back
At secondary Market prices
IMPURITY RISK
High Nil Nil
Advantages
Safety
Brings diversification and stability to a portfolio
Highly liquid and portable
Tool against inflation
Less regulatory intervention
Risks Involved
Are subject to market risks.
New Delhi Institution Of Management Page 23
As with any investment in securities, the NAV of the units issued under the Scheme can go up or down depending on the factors and forces affecting the Bullion Market, Capital Market and Money Market.
The Past Performance of the fund house issuing the ETF should not be construed for the future performance of the fund.
ETFs are a new concept in India compared to other parts of the world.
The sponsor of the mutual fund is not responsible or liable for any loss or shortfall resulting from the operation of the fund beyond the initial contribution made by it of an amount of Rs 1 Lac towards setting up of the Mutual Fund.
Investors are not offered any guaranteed or assured returns
Gold ETFs available in India
Benchmark Mutual Fund - Gold Benchmark Exchange Traded Scheme (NSE Symbol: GOLDBEES)
Kodak Mutual Fund - Gold Exchange Traded Fund (NSE Symbol: KOTAKGOLD)
UTI Mutual Fund - UTI Gold Exchange Traded Fund (NSE Symbol: GOLDSHARE)
Reliance Mutual Fund - Gold Exchange Traded Fund (NSE Symbol: RELGOLD)
Quantum Gold Fund - Exchange Traded Fund (ETF) (NSE Symbol: QGOLDHALF)
COMMODITY MARKETS:
• Commodities are any goods that are common and unbranded.
• Gold, Silver, Rubber, Pepper, Jute, Wheat, Sugar and cotton are a few popular commodities.
• Commodity market represents a formal system for the interplay of demand for and supply of commodities.
• These markets are classified into spot market and future market.
• Due to erratic weather changes and uncertain economic environment a commodity shortage (or oversupply) in a particular season lead to increase (decrease) in the price of the commodity.
• Farmers and merchant could not predict what the prices would be on a given day or season.
New Delhi Institution Of Management Page 24
• It was in this context, the farmers and food grains merchants in Chicago started negotiating for future supplies of grains in exchange for cash at a mutually agreeable price.
• Thus the farmer could lock in his price in advance thereby securing his income.
• This effectively started the system of commodity market forward contract which subsequently led to the development of future markets.
Sport Market & Future Market
Spot Market :
Commodities for immediate delivery are traded through the spot market.
The players in the spot market are actual producers and the traders of the commodity
Futures Market : facilitate contracts for future delivery of the underlying commodity either through a physical delivery or a cash settlement ( net profit / net loss from the transaction)
The major players in the future markets are hedgers, speculators, arbitrageurs and investors.
Forms of Commodity Derivative Products – Futures and Options .
While a commodity future was reintroduced in India in 2003, commodity options are yet to take off in the Indian markets.
Role of Commodity Futures Market:
It serves as a mechanism for price discovery either for the current price or to determent expected future prices.
Price quoted for a commodity on the futures market is thought to be the best measure of the actual price either current or future.
Commodity futures also help to hedge price risk and provide opportunities for speculators.
Farmers can benefit from its price discovery mechanism to decide which crops to grow.
It also enables businesses to hedge commodity and currency risk and help against earnings volatility.
New Delhi Institution Of Management Page 25
Concepts of Hedging:
In today’s dynamic environment stakeholders are exposed to price volatility particularly if it involves a future transaction. Hedging plays an important role to mitigate the risks of both parties in the transaction.
The process involves hedgers taking opposite positions in two different markets.
Hedging Process:
Examples:
A copper wire manufacturer has 100 tons of copper in his inventory and there may be a threat of inventory revaluation due to decrease in copper prices.
In such a scenario he is better off going short (Sell) on copper futures contracts to protect this against any possible decline in prices. This method is called Short Hedge
If a copper wire manufacturer has to sell copper wires to a telecom company at a predetermined price and if the delivery needs to make after four months he can take a long (Buy) position in the futures market to hedge against risk of increase in copper prices.
This method is called Long Hedge.
Indian Commodity Exchanges
There were 23 regional commodity future exchanges active in the country prior to 2003 when the Govt. opens the field for nation wise electronic exchanges.
The growth of futures trading after that was stupendous and the total turnover crossed Rs.50 lacks cores in 2008.
The three national commodity exchanges
Of this, Rs.35, 05,137 crore was contributed solely by MCX and NCDEX.
The increasing awareness and popularity of commodity futures in India and the slowdown in equity markets have contributed spectacularly to the turnover in the market. The turnover of the MCX and NCDEX reached Rs.63, 62,603 crore for the period January 2008 until March 2009.
New Delhi Institution Of Management Page 26
Major Exchanges worldwide –
Exchanges Abbreviation Location ProductsChicago Board of Trade
CBOT Chicago, US Agricultural
Chicago Mercantile Exchange
CME Chicago, US Agricultural
New York Metal Exchange
NYMEX New York, US Energy, precious metals, industrial metals
Multi Commodity Exchange
MCX India Energy, metals, precious metals, agricultural
National Multi-Commodity Exchange of India
NMCE India Metals, agricultural
National Commodity and Derivatives Exchange
NCDEX India Metals, agricultural
Tokyo Commodity Exchange
TOCOM Tokyo, Japan Energy, precious metals, industrial metals, agricultural
London Metal Exchange
LME London, UK Industrial metals, plastics
Recent Developments
The economic survey for 2008-2009 has recommended certain reforms in the commodity markets
1. Bring commodity future regulations under SEBI
• Since commodity futures are part of the financial market bringing all financial market regulations under SEBI is better.
• At present commodity futures are regulated by FMC
• 2. Lift ban on futures trading in rice, tur, urad
Futures trading of rice, tar, urad were banned in early 2007 as trading in these commodities was perceived to be causing pressure on inflation.
New Delhi Institution Of Management Page 27
Lifting of ban on these commodities will restore price discovery and price risk management.
A future in wheat was also banned but the curve was lifted in May this year.
Sugar has been put on the suspended list till December this year.
FMC had recommended to the Govt. to lift the ban on all commodities as there was no direct evidence to suggest that futures trading caused price spiral.
2. Recent Developments contd….
Involve APMCs or State Mandies to expand the scope of electronic trading
1. Two leading future exchanges in India – MCX and NCDEX that has already launched electronic exchanges.
2. There are over 7500 APMCs where trading take place in the physical form.
3. 4. Removal of the Commodity Transaction Tax (CTT)
4. At present the tax is not enforced.
What is “Insurance”?
Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events.
Commercial mechanism for transferring risk and spreading loss.
New Delhi Institution Of Management Page 28
Why do we need insurance?
New Delhi Institution Of Management Page 29
Types of Insurance
Engineering
Property & Casualty
Accident & Health
Liability
Specialized
Individual & Group
Mechanism…. Economic Concept of Insurance:
1. Insurer offers policy to cover specified risks2. Insurer collects policy premiums from customers3. Insurer invests premiums4. Insurer pays money to insured customers in the event of losses covered by
policy.
New Delhi Institution Of Management Page 30
Micro Insurance market in India
Current Insurance landscape
Penetration is abysmally low at less than 3% of insurable population* despite
The presence of an insurance market for a long period and with 16 Life Insurance and 15 General Insurance active today in the market
New Delhi Institution Of Management Page 31
Opportunities in non-life insurance
Life insurance premium as % of GDPOpportunities in life insurance
US UK Australia Korea Japan Malaysia China India
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%4.6%
3.5% 3.4% 3.4%
2.2%
1.8%
0.9%0.6%
Non-life insurance premium as % of GDP
UK Japan Korea Austrlia US Malaysia India China
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%10.7%
8.9% 8.7%
5.7%
4.4%
3.4%
2.3% 2.3%
Life insurance premium as % of GDP
Existence of products to cover various risks
Globally ranked at 54th position in terms of market penetration and 19th in premium collection
This anomaly persists due to the legacy of life insurance being positioned as a savings and tax-minimization tool rather than as a risk protection tool
Innovations are needed to overcome barriers for penetration, like:
Innovations to develop low cost distribution models using a combination of process simplifications and application of Info Tech solutions.
Product Simplification to enable simplicity in both underwriting and claims administration
Improving the awareness on the function of insurance products
Real Estate
Real estate is a legal term that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in location – immovable
According to The Economist, “developed economies’” assets at the end of 2010 were the following:
Residential property: $108 trillion;
Commercial property: $84 trillion;
Equities: $40 trillion;
Government bonds: $45 trillion;
Corporate bonds: $31 trillion;
Total: $268 trillion.
That makes real estate assets 60% and financial assets 40% of total stocks, bonds, and real estate assets. Assets not counted here are bank deposits, insurance “reserve” assets, natural resources, and human assets. It is not clear if all debt and equity investments are counted in the categories equities and bonds.
New Delhi Institution Of Management Page 32
BUSINESS SECTOR:
Some kinds of real estate businesses include:
Appraisal: Professional valuation services
Brokerages: A fee charged by the mediator who facilitates a real estate transaction between the two parties.
Development: Improving land for use by adding or replacing buildings
Net lease: Sharing leased property amongst tenants
Property management: Managing a property for its owner(s)
Real estate marketing: Managing the sales side of the property business
Real estate investing: Managing the investment of real estate
Relocation services: Relocating people or business to a different country
Corporate Real Estate: Managing the real estate held by a corporation to support its core business
RISKS IN REAL ESTATE:
Liquidity Risk: It is the risk that a given security or asset cannot be traded
Quickly enough in the market to prevent a loss (or make the required profit)
Types of Liquidity Risk:
Asset liquidity - An asset cannot be sold due to lack of liquidity in the
Market - essentially a sub-set of market risk. This can
be accounted for by:
Widening bid/offer spread
Making explicit liquidity reserves
Lengthening holding period for VAR calculations
Funding liquidity - Risk that liability:
Cannot be met when they fall due
New Delhi Institution Of Management Page 33
Can only be met at an uneconomic price
Can be name-specific or systemic
MARKET RISK
Market risk is the risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors. The four standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices. The associated market risks are:
Equity risk: The risk that stock prices and/or the implied volatility will change.
Interest rate risk: the risk that interest rates and/or the implied volatility will change.
Currency risk: The risk that foreign exchange rates and/or the implied volatility will change.
Commodity risk: The risk that commodity prices (e.g. corn, copper, crude oil) and/or implied volatility will change.
VOLATILITY AND SETTLEMENT RISK:-
VOLATILITY RISK: In financial markets it is the likelihood of fluctuations in the exchange rate of currencies. Therefore, it is a probability measure of the threat that an exchange rate movement poses to an investor’s portfolio in a foreign currency. The volatility of the exchange rate is measured as standard deviation over a dataset of exchange rate movements. A far more sophisticated extension of this model is the Value at Risk method, which helps to determine the actual risk exposure to a portfolio of several currencies.
SETTLEMENT RISK: It is the risk that counterparty does not deliver a security or its value in cash as per agreement when the security was traded after the other counterparty or counterparties have already delivered security or cash value as per the trade agreement.
SOVEREIGN RISK
Sovereign risk is the risk of a government becoming unwilling or unable to meet its loan obligations, or reneging on loans it guarantees. The existence of sovereign risk means that creditors should take a two-stage decision process when deciding to lend to a firm based in a foreign country. Firstly one should consider the sovereign risk quality of the country and then consider the firm’s credit quality.
New Delhi Institution Of Management Page 34
Five macroeconomic variables that affect the probability of sovereign debt rescheduling are:
Debt service ratio
Import ratio
Investment ratio
Variance of export revenue
Domestic money supply growth
OPPORTUNITIES:
Three factors have contributed much to global real estate opportunities :
Rapid Economic Growth
Changing Demographics
Phenomenon of off-shoring
INVESTMENT PROCESS:
First, the Advisory Board determines the broader framework of the real estate investment strategy and oversees the Investment Committee and Fund Management team with annual reviews of portfolio performance and approval of large transactions that are over a preset amount or percent of total portfolio.
Investment Committee oversees and approves Portfolio Setup framework, as well as Asset and Portfolio Management operations. Within this context the Investment Committee reviews semi-annually asset and portfolio performances, current and projected, for the whole portfolio and by category, such as property type, location, tenant industry etc.; reviews portfolio optimization recommendations and makes decisions regarding changes in portfolio mix in terms of property types and locations in order to maximize portfolio return prospects and minimize risk; sets and reviews risk mitigation processes both at the portfolio and at the asset level. Ideally, portfolio optimization recommendations should be based on the results of advanced portfolio analysis using reliable return and risk projections by property type and location (derived through advanced econometric and forecasting techniques) and modeling frameworks that draw from the modern portfolio theory
New Delhi Institution Of Management Page 35
The Implementation Committee executes the portfolio setup and structure, as determined by the Advisory Board and the Investment Committee. The acquisition department executes the portfolio build up process by screening properties available in the market to identify those that fit the Fund’s investment strategy, performing preliminary screening to select assets that will go through more detailed market analysis and feasibility study, negotiating transaction terms and financial structuring, preparing project documentation and analysis package to be presented to Investment Committee for final approval.
Return and risk analysis by asset should take into account each asset's cash flow prospects, given current leases, stipulated rental rates, annual rent increases, expiration dates, probabilities of renewing, probabilities and time duration for finding new tenants for non-renewed leases, and projected market rents at which new leases will be signed and renewed leases will rollover. Lease renewal probabilities, time for finding new tenants and rental rate projections should be based on market vacancy rate projections, which provide a very good indicator of market tightness.
Mutual Fund
New Delhi Institution Of Management Page 36
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities
Types of Mutual Funds
• Term of Fund
• Open - ended
• Close - ended
• Investment Objective
• Growth Funds
• Income Funds
• Balanced Funds
New Delhi Institution Of Management Page 37
Securities
Fund ManagersReturns
Investors
Mutual Funds Operations Flow Chart
• Specialized Funds etc.
• Types of Investor
• Pension Funds etc.
• Management Style
• Managed Funds
• Index Funds
• Load
• Load Funds
• No load Funds etc.
ADVANTAGES OF MUTUAL FUND
Portfolio Diversification Professional management Reduction / Diversification of Risk Liquidity Flexibility & Convenience Reduction in Transaction cost Safety of regulated environment Choice of schemes Transparency
DISADVANTAGE OF MUTUAL FUND
No control over Cost in the Hands of an Investor No tailor-made Portfolios Managing a Portfolio Funds Difficulty in selecting a Suitable Fund Scheme
Risks & Diversification strategies
Risks
Instrument Risk
Market Risk
Portfolio Risk
Business Risk
Financial Risk
New Delhi Institution Of Management Page 38
Risk in Money Market Funds
Risk in Bond Funds
Risk in Stock Funds
Strategies for risk reduction
Diversification by investment style
Diversification by investment objective
Who should invest in Mutual Funds?
Novice uninformed investors
Ordinary small investors
Risk averse investors
Retirees
Investors with time constraint
Investors on the lookout for liquidity
Steps for choosing the right Mutual Fund Scheme
Clarity of objective
Collect information from sources like Funds' prospectus and advisors
Do not be swayed by peripherals
Go through the Investment Mix carefully
Past record is not always reliable
Know your Fund Manager
Pointers for Measuring Mutual Fund Performance
Standard Deviation allows you to evaluate the volatility of the fund
Beta indicates the level of volatility associated with the fund as compared to the benchmark
R squared measuring the correlation of a fund's movements to that of an index, R-squared describes the level of association between the fund's volatility and market risk
Alpha is the difference between the returns one would expect from a fund, given its beta, and the return it actually produces. An alpha of -1.0 means the fund produced a return 1% higher than its beta would predict. An alpha of 1.0 means the fund produced a return 1% lower.
New Delhi Institution Of Management Page 39
Top 10 Funds
Rank Scheme Name Date NAV (Rs.)
Last 1 Week
Since Inception
1 Birla Sun Life Commodity Equities Fund - Gbl Pre Metals - Retail - Growth
Jun 21 , 2010
13.44 4.73 20.02
2 AIG World Gold Fund - Growth Jun 18 , 2010
13.3 4.2 15.07
3 ICICI Prudential Technology Fund - Growth
Jun 21 , 2010
15.62 3.79 4.42
4 JM Agri & Infra Fund- Growth Jun 21 , 2010
2.96 3.66 -39.43
5 DSP Blackrock World Gold Fund - Institutional Plan - Growth
Jun 21 , 2010
10.35 3.66 2.66
6 DSP Blackrock World Gold Fund - Growth
Jun 21 , 2010
16.54 3.65 19.92
7 Birla Sun Life Tax Relief 96 - Growth
Jun 21 , 2010
11.44 3.62 6.04
8 JM Equity - Growth Jun 21 , 2010
36.5 3.61 8.87
9 SBI Magnum Midcap Fund - Growth Jun 21 , 2010
22.26 3.58 16.52
10 Mire Asset China Advantage Fund - Regular - Growth
Jun 21 , 2010
9.29 3.42 -11.14
New Delhi Institution Of Management Page 40
Top 10 fund
Rank Scheme Name Date NAV (Rs.)
Last 1 Month
Since Inception
1 DSP Blackrock World Gold Fund - Institutional Plan - Growth
Jun 21 , 2010
10.35 13.71 2.66
2 DSP Blackrock World Gold Fund - Growth
Jun 21 , 2010
16.54 13.69 19.92
3 Birla Sun Life Commodity Equities Fund - Gbl Pre Metals - Retail - Growth
Jun 21 , 2010
13.44 11.74 20.02
4 ICICI Prudential FMCG - Growth Jun 21 , 2010
58.56 11.59 17.04
5 ICICI Prudential Technology Fund - Growth
Jun 21 , 2010
15.62 11.25 4.42
6 DSP Blackrock World Mining Fund - Regular - Growth
Jun 21 , 2010
9.63 10.94 -7.57
7 Franklin FMCG Fund - Growth Jun 21 , 2010
59.85 10.46 17.27
8 JM Equity - Growth Jun 21 , 2010
36.5 10.45 8.87
9 Taurus Ethical Fund - Growth Jun 21 , 2010
22.68 9.41 96.95
10 ICICI Prudential Index Fund Jun 21 , 2010
49.59 9.22 21.22
New Delhi Institution Of Management Page 41
Chapter - 4
Objectives and scope
OBJECTIVES OF THE STUDY
New Delhi Institution Of Management Page 42
1. To find out the Preferences of the investors for Asset Management
Company.
2. To know the Preferences for the portfolios.
3. To know why one has invested or not invested in different investment option.
4. To find out the most preferred channel.
5. To find out what should do to boost investment plan Industry.
Scope of the study
A big boom has been witnessed in investment plan Industry in recent times. A
large number of new players have entered the market and trying to gain market
share in this rapidly improving market.
The research was carried on in New Delhi. I surveyed on my Project Topic “A
study of awareness of the Investors for investment in different investment
option” on the visiting customers of the SF Noida Branch. The study will help to
know the preferences of the customers, which company, portfolio, mode of
investment, option for getting return and so on they prefer. This project report
may help the company to make further planning and strategy.
New Delhi Institution Of Management Page 43
Chapter – 5
Research Methodology
RESEARCH METHODOLOGY
New Delhi Institution Of Management Page 44
This report is based on primary as well secondary data, however primary data
collection was given more importance since it is overhearing factor in attitude
studies. One of the most important users of research methodology is that it helps
in identifying the problem, collecting, analyzing the required information data
and providing an alternative solution to the problem .It also helps in collecting
the vital information that is required by the top management to assist them for
the better decision making both day to day decision and critical ones.
Data sources:
Research is totally based on primary data. Secondary data can be used only for
the reference. Research has been done by primary data collection, and primary
data has been collected by interacting with various people. The secondary data
has been collected through various journals and websites.
Sampling:
Sampling procedure:
The sample was selected of them who are the customers/visitors of Sundaram
finance in India, Noida branch, irrespective of them being investors or not or
availing the services or not. It was also collected through personal visits to
persons, by formal and informal talks and through filling up the questionnaire
prepared. The data has been analyzed by using mathematical/Statistical tool.
Sample size:
New Delhi Institution Of Management Page 45
The sample size of my project is limited to 200 people only. Out of which
only 120 people had invested in different-different investment plan.
Other 80 people did not have invested in any investment option.
Sample design: Data has been presented with the help of bar graph, pie charts,
line graphs etc.
Limitation: 1. some of the persons were not so responsive.
2. Possibility of error in data collection because many of investors may have not
given actual answers of my questionnaire.
3. Sample size is limited to 200 visitors of Sundaram finance of India, Noida
Branch, and New Delhi out of these only 120 had invested in Investment option. The
sample size may not adequately represent the whole market.
4. Some respondents were reluctant to divulge personal information which can affect the validity of all responses.
5. The research is confined to a certain part of New Delhi
.
New Delhi Institution Of Management Page 46
Chapter – 6
Data Analysis
&
Interpretation
ANALYSIS & INTERPRETATION OF THE DATA
New Delhi Institution Of Management Page 47
1. (a) Age distribution of the Investors of New Delhi
Age Group <= 30 31-35 36-40 41-45 46-50 >50
No. of
Investors
12 18 30 24 20 16
Interpretation:
According to this chart out of 120 investors of Delhi the most are in the age
group of 36-40 yrs. i.e. 25%, the second most investors are in the age group of
41-45yrs i.e. 20% and the least investors are in the age group of below 30 yrs.
(b). Educational Qualification of investors of Delhi
New Delhi Institution Of Management Page 48
<=30 31-35 36-40 41-45 46-50 >500
5
10
15
20
25
30
35
1218
3024
2016
Age group of the Investors
Inv
es
tors
inv
es
ted
in in
ve
stm
en
t p
lan
Educational Qualification
Number of Investors
Graduate/ Post Graduate
88
Under Graduate 25
Others 7
Total 120
71%
23% 6%
Graduate/Post Graduate Under Graduate Others
Interpretation:
Out of 120 investors 71% of the investors in Delhi are Graduate/Post
Graduate, 23% are Under Graduate and 6% are others (under HSC).
c). Occupation of the investors of Delhi
New Delhi Institution Of Management Page 49
.
Govt. Service
Pvt. Service Business Agriculture Others0
10
20
30
40
50
3545
30
4 6
Occupation of the customers
No
. of
Inve
sto
rs
Interpretation:
In Occupation group out of 120 investors, 38% are Pvt. Employees, 25%
are Businessman, 29% are Govt. Employees, 3% are in Agriculture and
5% are in others.
New Delhi Institution Of Management Page 50
Occupation No. of Investors
Govt. Service 30
Pvt. Service 45
Business 35
Agriculture 4
Others 6
(d). Monthly Family Income of the Investors of Delhi.
Income Group No. of Investors
<=10,000 5
10,001-15,000 12
15,001-20,000 28
20,001-30,000 43
>30,000 32
<=10 10-15 15-20 20-30 >3005
101520253035404550
512
28
43
32
Income Group of the Investorsn (Rs. in Th.)
No
. of
Inv
es
tors
Interpretation:
In the Income Group of the investors of Delhi, out of 120 investors, 36%
investors that is the maximum investors are in the monthly income
group Rs. 20,001 to Rs. 30,000, Second one i.e. 27% investors are in the
monthly income group of more than Rs. 30,000 and the minimum
investors i.e. 4% are in the monthly income group of below Rs. 10,000.
New Delhi Institution Of Management Page 51
(2) Investors invested in different kind of investments.
Saving A/c
Fixed D
eposits
Insura
nce
Mutu
al Fund
Post Office
(NSC)
Shares/D
ebenture
s
Gold/Silv
er
Real Esta
te
0 50 100 150 200 250
195148152
12075
5030
65
No.of Respondents
Kind
s of I
nves
tmen
t
Interpretation: From the above graph it can be inferred that out of 200 people, 97.5%
people have invested in Saving A/c, 76% in Insurance, 74% in Fixed Deposits, 60% in
Mutual Fund, 37.5% in Post Office, 25% in Shares or Debentures, 15% in Gold/Silver
and 32.5% in Real Estate. Most of the people wants secure investment so they are
prefer to invest in saving a/c.
New Delhi Institution Of Management Page 52
Kind of Investments No. of RespondentsSaving A/C 195Fixed deposits 148Insurance 152Mutual Fund 120Post office (NSC) 75Shares/Debentures
50
Gold/Silver 30 Real Estate 65
3. Preference of factors while investing
Factors (a) Liquidity (b) Low
Risk
(c) High
Return
(d) Trust
No. of
Respondents
40 60 64 36
20%
30%32%
18%
Liquidity Low Risk High Return Trust
Interpretation:
Out of 200 People, 32% People prefer to invest where there is High Return,
30% prefer to invest where there is Low Risk, 20% prefer easy Liquidity and
18% prefer Trust.
New Delhi Institution Of Management Page 53
4. Awareness about investment plan and its Operations
68%
33%
Yes No
Interpretation:
From the above chart it is inferred that 67% People are aware of investment
plan and its operations and 33% are not aware of it and its operations.
New Delhi Institution Of Management Page 54
Response Yes No
No. of Respondents 135 65
5. Source of information for customers about investment plan
Source of information No. of Respondents
Advertisement 18
Peer Group 25
Bank 30
Financial Advisors 62
Advertisement Peer Group Bank Financial Advisors0
10203040506070
18 25 30
62
Source of Information
No.
of R
espo
nden
ts
Interpretation:
From the above chart it can be inferred that the Financial Advisor is the most
important source of information about investment plan. Out of 135
Respondents, 46% know about it Through Financial Advisor, 22% through
Bank, 19% through Peer Group and 13% through Advertisement.
7. Reason for not invested in investment plan
Reason No. of Respondents
New Delhi Institution Of Management Page 55
Not Aware 65
Higher Risk 5
Not any Specific
Reason
10
81%
13%6%
Not Aware Higher Risk Not Any
Interpretation:
Out of 80 people, who have not invested in any plan, 81% are not aware of it,
13% said there is likely to be higher risk and 6% do not have any specific
reason.
10. Reason for not invested in SF
Reason No. of Respondents
New Delhi Institution Of Management Page 56
Not Aware 25
Less Return 18
Agent’s Advice 22
38%
28%
34%
Not Aware Less Return Agent's Advice
Interpretation:
Out of 65 people who have not invested in SF, 38% were not aware with SFMF,
28% do not have invested due to less return and 34% due to Agent’s Advice.
11. Mode of Investment Preferred by the Investors
Mode of Investment One time Investment Systematic Investment Plan (SIP)
No. of Respondents 78 42
New Delhi Institution Of Management Page 57
65%
35%
One time Investment SIP
Interpretation:
Out of 120 Investors 65% preferred One time Investment and 35 % Preferred
through Systematic Investment Plan.
14. Preferred Portfolios by the Investors
Portfolio No. of InvestorsEquity 56
Debt 20
Balanced 44
New Delhi Institution Of Management Page 58
47%
17%
37%
Equity Debt Balance
Interpretation:
From the above graph 46% preferred Equity Portfolio, 37% preferred Balance
and 17% preferred Debt portfolio
15. Option for getting Return Preferred by the Investors
Option Dividend Payout Dividend
Reinvestment
Growt
h
No. of
Respondents
25 10 8
5
New Delhi Institution Of Management Page 59
21%
8%
71%
Dividend Payout Dividend Reinvestment Growth
Interpretation:
From the above graph 71% preferred Growth Option, 21% preferred Dividend
Payout and 8% preferred Dividend Reinvestment Option.
New Delhi Institution Of Management Page 60
Chapter – 7
Findings and Conclusion
New Delhi Institution Of Management Page 61
Findings
In Delhi in the Age Group of 36-40 years were more in numbers. The
second most Investors were in the age group of 41-45 years and the least
were in the age group of below 30 years.
In Delhi most of the Investors were Graduate or Post Graduate and below
HSC there were very few in numbers.
In Occupation group most of the Investors were Govt. employees, the
second most Investors were Private employees and the least were
associated with Agriculture.
In family Income group, between Rs. 20,001- 30,000 were more in
numbers, the second most were in the Income group of more than Rs.30,
000 and the least were in the group of below Rs. 10,000.
About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed
Deposits, Only 60% Respondents invested in Mutual fund.
Mostly Respondents preferred High Return while investment, the second
most preferred Low Risk then liquidity and the least preferred Trust.
60% Investors preferred to Invest through Financial Advisors, 25%
through AMC (means Direct Investment) and 15% through Bank.
65% preferred One Time Investment and 35% preferred SIP out of both
type of Mode of Investment.
New Delhi Institution Of Management Page 62
The most preferred Portfolio was Equity, the second most was Balance
(mixture of both equity and debt), and the least preferred Portfolio was
Debt portfolio.
Maximum Number of Investors Preferred Growth Option for returns, the
second most preferred Dividend Payout and then Dividend Reinvestment.
Conclusion
Running a successful investment plan requires complete understanding of the
peculiarities of the Indian Stock Market and also the psyche of the small oaf all
plan investors in connection with the preferences of Brand (AMC), Products,
and Channels etc. I observed that many of people have feared of invested in
any plan. They think their money will not be secure in investment. They need
the knowledge of all plan and its related terms. Many of people do not have
invested due to lack of awareness although they have money to invest. As the
awareness and income is growing the number of investors are also growing.
“Brand” plays important role for the investment. People invest in those
Companies where they have faith or they are well known with them. There are
many AMCs in Delhi but only some are performing well due to Brand
awareness. Some AMCs are not performing well although some of the schemes
of them are giving good return because of not awareness about Brand.
Reliance, UTI, SBI, ICICI Prudential etc. they are well known Brand, they are
New Delhi Institution Of Management Page 63
performing well and their Assets Under Management is larger than others
whose Brand name are not well known like Principle, Sundaram, etc.
Distribution channels are also important for the investment. Financial Advisors
are the most preferred channel for the investment. They can change investors’
mind from one investment option to others. Many of investors directly invest
their money through AMC because they do not have to pay entry load. Only
those people invest directly who know well about plan and its operations and
those have time.
New Delhi Institution Of Management Page 64
Chapter – 8
Suggestions
And
Recommendations
New Delhi Institution Of Management Page 65
Suggestions and Recommendations
The most vital problem spotted is of ignorance. Investors should be
made aware of the benefits. Nobody will invest until and unless he is
fully convinced. Investors should be made to realize that ignorance is no
longer bliss and what they are losing by not investing.
Mutual funds offer a lot of benefit which no other single option could
offer. But most of the people are not even aware of what actually a
mutual fund is? They only see it as just another investment option. So
the advisors should try to change their mindsets. The advisors should
target for more and more young investors. Young investors as well as
persons at the height of their career would like to go for advisors due to
lack of expertise and time.
Company needs to give the training of the Individual Financial Advisors
about the Fund/Scheme and its objective, because they are the main
source to influence the investors.
Before making any investment Financial Advisors should first enquire
about the risk tolerance of the investors/customers, their need and time
(how long they want to invest). By considering these three things they
can take the customers into consideration.
New Delhi Institution Of Management Page 66
Younger people aged fewer than 35 will be a key new customer group
into the future, so making greater efforts with younger customers who
show some interest in investing should pay off.
Customers with graduate level education are easier to sell to and there
is a large untapped market there. To succeed however, advisors must
provide sound advice and high quality.
Systematic Investment Plan (SIP) is one the innovative products
launched by Assets Management companies very recently in the
industry. SIP is easy for monthly salaried person as it provides the facility
of do the investment in EMI. Though most of the prospects and potential
investors are not aware about the SIP. There is a large scope for the
companies to tap the salaried persons.
New Delhi Institution Of Management Page 67
BIBLIOGRAPHY
News paper(Business Word)
Outlook Money
Television Channel (CNBC AAWAZ)
Mutual fund hand book
Fact Sheet and Statement
www.sbimf.com
www.moneycontrol.com
www.licindia.com
www.sundaramfinance.com
www.amfiindia.com
www.onlinesearchonline.com
www.mutualfundsindia.com
New Delhi Institution Of Management Page 68
QUESTIONAIRE
1. In what type of financial instruments you invest?a) Stock b) Mutual fund
c) Fixed deposits d) Any other
2. What is the purpose of your investment?
a) Increase in the total wealth b) Tax saving
c) To fill future need d) All of the above
3. Sources that helps you in making the investment decision?
a) Financial journal/business magazines
b) Television
c) General/business newspaper
d) Brokers/agents/professional consultant
4. What factors you keep in mind while investing?
a) Risk factor b) Return
c) Risk & return d) any other
5. At what time you invest?
a) When the market is rising b) When the market is falling
c) When the market is stagnant
6) What type of portfolio you manage during different market condition (in %)?
Equity Dept
a) During rising market
b) In constant market
c) In declining market
New Delhi Institution Of Management Page 69
7. Are you aware about BSE, NSE, and SENSEX?
a) Yes b) No
8. Do you invest in equity diversified fund?
a) Yes b) No
9. Among which assets management company you would prefer to invest?
a) Reliance b) Sundram
c) SBI d) HDFC e) Others
10. Are you aware about Sundram’s BNP Paribas?
a) Yes b) No
11. Which would you prefer among the following fund type?
a) Tax saver b) Thematic fund c) Hybrid fund
d) Sectorial fund e) Equity diversified fund
12. Are you able to spot the factors responsible for fluctuation in the stock market?
a) Yes b) No
Name:-...............................................................................................................
Age:-.................................................................................................................
Occupation:-........................................................................................................
Contact no:-.........................................................................................................
Address:-.............................................................................................................
New Delhi Institution Of Management Page 70