NAME

NEHAL AGHARA

GUIDED BY KULDEEP JOBANPUTRA

SUBMITTED TO SAURASHTRA UNIVERSITY

COLLEGE

R.P.BHALODIA COLLEGE

DECLARATION.
I Undersigned , Aghara Nehal G. student of T.Y.B.B.A is of Shree R.P.Bhalodia College declare that the findings presented in this report ! o"n "or# and is carried out under super$ision and guidance of ! facult! e %ers of college. The pro&ect report is not fa#e, it is

prepared %! a $isit to the reputed institution.

This pro&ect "or# has not %een su% itted to an! other uni$ersit! or for an! other e'a ination.

(ate ) Place ) RA*+,T. Signature (Aghara Nehal)

ACKNOWELEDGMENT
The pro&ect report on R-.IANC- /utual 0und "ould ha$e %een i possi%le "ithout the support of "ould li#e than# the encouraging e. I "ould firstl! li#e to than# Saurashtra Uni$ersit! for gi$ing us the opportunit! to undergo the training part of ser$ice sector ,i.e. the %an# and #no"ing there "or#ings . Then I "ould li#e than# to our college Shree R.P.Bhalodia College for supporting encourage e to prepare the report, and also ! facult! e %ers to e to e to undergo the training sections of %an# and help an! persons directl! and indirectl!. I all for sparing their $alua%le ti e and

o$erco e the %urden of studies also. I "ould no" li#e than# R-.IANC- /utual 0und institute to allo" e to ta#e training for preparing the report and the head of depart ent /r./a!ur to help e in understanding the concept of utual fund , and other staff e %ers of institute. I "ould li#e to than# ! fa il! and friends for their support.

PREFACE
Practical training is an i portant part of anage ent studies. ,nl!

#no"ledge of %oo#s is not enough. /ar#eting research pla!s an i portant role in the de$elop ent of a student as it allo" the student to interact "ith different indi$iduals in the field fro getting the per ission for the pro&ect upto the co pletion of the pro&ect. This helps the student to get a"are a%out the future he or she is going to face. (uring the acade ic !ear 1223 4 526 as a part of our studies I ha$e undergone the pro&ect "or# on ser$ice sector i.e. Reliance /utual 0und. It "as reall! a great e'perience for i pro$e ! #no"ledge a%out e , and it has helped e a lot to utual funds and "or#ing of institute .It

also help us in de$eloping our personalit! and contacts "ith the finance institute, "hich helps us in future to acco plish our goals . This pro&ect is $er! helpful to e$er! reader as it pro$ide all infor ation a%out funds and its in$est ent criteria. utual

INDEX.

SR. NO.

TOPICS. GENERAL INFORMATION PRODUCTS DEPARTMENT MARKETING DEPARTMENT RESEARCH METHODOLOGHY ANALATICAL FINDINGS

PAGE NO. 6-14 15-33 34-36 3 -4! 41-4"

COMMENTS RECOMMENDATIONS S$OT ANALYSIS CONCLUSION BIBLIOGRPHY

5!-51 5#-53 54-56 5 -5% 5"-6!

-7-CUTI8- SU//ARY.
The economy is highly influenced by the financial system of the country The Indian Financial System has been broadly divided into two segment the organized and the unorganized. n investor has a wide array of investment avenues available. !conomic well being in the long run de"ends significantly on how wisely he invests. For today#s com"le$ financial scenario a %utual Fund is the ideal investment o"tion. %ar&ets for other investment avenues have become information driven. The %utual Fund Industry in India began with the setting of the 'nit Trust of India ('TI) in *+,4 by the -overnment of India. !ver since then this industry has witnessed numerous changes and growth. In *+./ "ublic sector ban&s and insurance com"anies were "ermitted to set u" %utual Funds. Securities !$change 0oard of the India (S!0I) formulated the %utual Fund (1egulation) *++32 which for the first time established a com"rehensive regulatory framewor& for the mutual fund industry. Since then several mutual funds have been set u" by the "rivate and 3oint sectors and the share of the "rivate "layers has risen shar"ly. 4hen investors are confronted with an astounding range of "roducts from traditional ban& de"osits to downright shady money multi"lier schemes2 it has to be 3udged on the yardstic&s of return 2 li5uidity2 safety2 convenience and ta$ efficiency . n im"ortant 5uestion facing many investors across the country is whether one should invest in a ban& fi$ed de"osit or should de"osit the amount with a debt oriented %utual Fund.

C,NC-PT AN( R,.- ,0 /UTUA. 0UN(.

mutual fund is a "ool of money collected from investors and is invested according to certain investment ob3ectives. mutual fund is created when investors "ut their money together . It is therefore a "ool of investors# fund. The term mutual means that the investors contribute to the "ool and also benefit from the "ool. There are no other claimants to the funds. The "ool of funds held mutually by investors is the mutual fund. mutual fund#s business is to invest the funds thus collected 2 according to the wishes of the investors who crested the "ool. In many mar&ets these wishes are articulated as 6investment mandates7. The investor a""oints "rofessional investment managers2 to manage their funds. The same ob3ective is achieved when "rofessional investment managers create a "roduct and offer it for investment to the investors. The most im"ortant characteristics of the mutual fund are that the contributors and the beneficiaries of the fund are the same class of "eo"le2 namely the investors. mutual fund belongs to the investors who have "ooled their funds. The ownershi" of the fund is in the hands of investors. Investment "rofessionals and other service "roviders2 who earn a fee for their services2 from the fund2 manage the mutual fund. The "ool of fund is invested in a "ortfolio of mar&etable investments. The value "ortfolio is u"dated everyday.

 The investment "ortfolio of the mutual fund is created according to the stated investment ob3ectives of the fund. The investor#s share in the fund is denominated by 8units# . The value of the units changes with change in the "ortfolio#s value everyday.

A(8ANTAG-S ,0 /UTUA. 0UN(S T, IN8-ST,RS.

*. 9ortfolio diversification 2. 9rofessional management 3. 1eduction in ris& 4. 1eduction of transaction costs 5. :onvenience and fle$ibility ,. ;i5uidity.

(ISA(8ANTAG-S ,0 IN8-STING IN /UTUA. 0UN(.

*. <o control over cost = Since investors do not directly monitor the fund#s o"eration they cannot control the cost effectively . 1egulators therefore usually limit the e$"ense of the mutual funds. 2. <o tailor> made "ortfolios = %utual fund "ortfolios are created and mar&eted by %:S 2 into which investors invest. They s the number of mutual funds cannot create tailor made "ortfolios. 3. %anaging a "ortfolio of funds = increases 2 in order to tailor a "ortfolio for himself2 an investor may be holding a "ortfolio of funds2 with the costs of monitoring them and using them2 being incurred by him.

91?F!SSI?< ; % < -!%!<T %'T' ; F'<@.

. %utual funds are managed by investment managers ( %:) who are a""ointed by trustees and bound by the investment management agreement2 on the hows and investment management functions. 0. %:s are also re5uired to be ade5uately ca"italized2 and are closely regulated by S!0I. management :. therefore %:s com"eting for funds under in significant "rofessional bring whys of their

e$"ertise and are bound by regulatory and trustee su"ervision. %:s are "rohibited by regulation to indulge in other business. "erformance of %:s2 and there are a number of safeguards %FI @. 1egulation also ensures that trustees are able to monitor the and "rudential regulations in the interest of investors. !. Investment managers and funds are also bound by the industry. ;IA'I@ITB F! T'1!S ?F %'T' ; F'<@ I<C!ST%!<T *.%ost of the funds being sold today are o"en>ended . That is2 investors can sell their e$isting units2 or buy new units at any "oint of time2 at "rices that are related to the < C of the fund on the date of the transaction. 2.Since investors continuously enter and e$it funds2 funds are actually able to "rovide li5uidity to investors2 even if the underlying mar&et2 in which the "ortfolio is invested doesn#t have li5uidity. code of ethics2 which foster "rofessional standards in the

*D

I/P,RTANT P9AS-S IN 9IST,RY ,0 /UTUA. 0UN(S IN IN(IA .

*+,3 E *+./ = The 'nit Trust of India was the sole "layer in the industry. It was created by an ct of 9arliament in *+,32 'TI launched its first "roduct2 the 'nit Scheme *+,42 which even today is the single largest mutual fund scheme. 'TI created a number of "roducts such as monthly income "lan2 children#s "lan2 e5uity oriented schemes and offshore funds during this "eriod. 'TI managed assets of ,/*D :r 1s *+./ E *++3 = In *+./ "ublic sector ban&s and financial institutions entered the mutual fund industry. S0I mutual fund was the first non E 'TI fund to be set u" in *+./. Significant shift of investors from de"osits to mutual fund industry ha""ened during this "eriod. %ost funds were growth E oriented closed> ended funds. 0y the end of this "eriod2 assets under 'TI#s management grew to 1s. 3.224/ :r and "ublic sector funds managed 1s. ./5D :r. *++3 E *++, = In *++32 mutual fund industry was o"en to "rivate sector "layers2 both Indian and foreign. S!0I#sfirst set of regulations for the industry were formulated in *++32 and substantially revised in *++,. Significant innovations in servicing2 "roduct design and information disclosure ha""ened in this "hase2 mostly initiated by "rivate sector "layers.

**

 *++, E *+++ = The im"lementations of the new S!0I regulations and the restructuring of the mutual fund industry led to ra"id assed growth. 0an& mutual funds were re>cast according to the S!0I recommendation structure2 and 'TI came under voluntary S!0I su"ervision. *+++ E 2DD3 = This "hase was mar&ed by very ra"id growth in industry 2 and significant increase in mar&et shares of "rivate sector "layers. ssets crossed 1s. *2DD2DDD :r. The ta$ brea& offered to mutual funds in *+++ created arbitrage o""ortunities for a number of institutional "layers. 0ond funds and li5uid funds registered the highest growth in this "eriod 2 accounting for nearly ,DF of the assets. 'TI#s share of the industry dro""ed5DF.

*2

R-GU.AR P-RI,(IC SA8ING IN /UTUA. 0UN(S )

%utual funds units in modern times are issued as account statements2 with the facility to hold units in fractions u" to 4 decimal "oints. It is also sim"ler for investors to ma&e additional investments2 tore>invest dividends2 to converts their holding in one fund into a holding in another2 and to alter the investment o"tions regarding their "eriodical dividends. These facilities ma&e it "ossible for small investors to regularly save a fi$ed amount in a mutual fund2 and create saving "lans that suit their saving habits and financial goals.

RIS+ 0ACT,R )
%utual funds invest in a "ortfolio of securities. This means that all funds are not invested in the same investment avenue. It is well &nown that ris& and returns of various investment o"tions do not uniformly or in sym"athy with one another. If a 9harma com"any share is going down2 an InfoTech com"any#s may be moving u". Therefore holding a "ortfolio that is diversified across investment avenues is a wise way to manage ris&. 4hen such a "ortfolio is li5uid and mar&eted to mar&et2 it enables investors to continuously evaluate the "ortfolio and manage their ris&s more efficiently.

*3

*4

91?@':T#S ?F %'T' ; F'<@ :

%utual funds are investment "ortfolios that invest financial mar&et instrument .These "ortfolio are created by "ooling investor contributors2 usually denominated in units. There are a variety of ways which mutual funds are created2 to cater to varied ris& and return re5uirement of investors. @e"ending on the investment "ortfolio that is created2 and the segment of the various mar&ets in which funds are invested2 there is a choice of funds to investors.

-!<!1I: :G?I:!S T? %'T' ; F'<@ I<C!ST?1

Nature of participation :
*. ?9!<> !<@!@ F'<@S = In an o"en ended fund2 investors can buy and sell units of the fund2 at < C related "rices2 at any time directly from the fund. This is called an o"en ended fund because the "ool of funds is o"en for additional sales and re"urchases. Therefore2 both the amount of funds2 that the mutual fund manages and the number of units2 vary everyday. The "rice at which investors buy or sell units is lin&ed to the < C. ?"en>ended funds have to balance the interests of the investors who come in2 investors who go out and investors who stay invested. 2. :;?S!@>!<@ F'<@S = closed>end fund is o"en for sale to investors for a s"ecific "eriod2 after which further sales are closed. ny further transaction for buying the units or re"urchasing them2 ha""en in the secondary mar&ets2 where closed end funds are listed. Therefore 2 new investors buy from the e$iting investors
*5

2and e$iting investors can li5uidate their units by selling them to other willing buyers . In closed end fund2 thus the "ool of funds can technically be &e"t constant . Investors in close end funds receive either certificates or de"ository recei"ts2 for their holding in a close end mutual funds.

Nature of income distribution :

*. @ividend ?"tion= Investors2 who choose a dividend o"tion on their investments2 will receive dividend from mutual fund2 as and when such dividends are declared. 2. -rowth ?"tion= Investors who do not re5uire "eriodic income distributions can choose the growth o"tion2 where the incomes earned are retained in the investment "ortfolio2 and allowed to grow2 rather than being distributed to investors. 3. 1e>investment ?"tion= %utual funds also "rovide another o"tion to investors in the form of re>investment. Investors re>invest the dividends that are declared by the mutual fund2 bac& into the fund itself at < C that is "revalent at the time of re>investment.

*,

TB9!S

?F

91?@':T

?FF!1!@

0B

%'T' ; F'<@=
*. !A'TIB F'<@S= !5uity funds are those that invest "re> dominantly in e5uity share of com"anies. There is variety of ways in which an e5uity "ortfolio is created for the investors. Ty"es of Schemes in !5uity Funds=

1!;I <:! -rowth Fund 1!;I <:! ;ong Term dvantage Fund 1!;I <:! Inde$ Fund 1!;I <:! !5uity Fund 1!;I <:! :a"ital 0uilder Fund 1!;I <:! Ta$ saver Fund 1!;I <:! To" 2DD Fund 1!;I <:! :ore H Satellite Fund 1!;I <:! 9remier %ulti>:a" Fund 1!;I <:! ;ong Term !5uity Fund 2. @!0T F'<@= @ebt funds are those that invest "re>dominantly in debt securities. Since most securities "ay "eriodic interest to investors2 these funds are also &nown as income funds. Gowever2 it must be remembered that funds investing in debt securities com"romise of long term instruments such as bond issues by central and state government2 "ublic sector organizations2 "ublic financial institutions and "rivate sector com"anies2 and short term
*/

instruments such as call money lending 2 commercial "a"ers2 certificates of de"osits and treasury bills. Ty"es of Schemes in @ebt Funds= 1!;I <:! Income Fund 1!;I <:! ;i5uid Fund 1!;I <:! -ilt Fund Short Term 9lan 1!;I <:! ;i5uid Fund E 91!%I'% 9;'S 1!;I <:! Short Term> 91!%I'<% 9;'S 9; < 1!;I <:! Gigh Interest Fund 1!;I <:! :ash %anagement Fund 1!;I <:! %onthly Income 9lan 1!;I <:! %ulti"le Bield Fund 1!;I <:! Fi$ed %aturity 9lan 3. 0 ; <:!@ F'<@= Funds that invest both in e5uity and debt mar&ets are called balanced funds. ty"ically balanced fund would be almost e5ually invested in both the mar&ets. The variations are funds that invest "re>dominantly in e5uity (about /DF) and &ee" smaller "art of their "ortfolios in debt securities. balanced fund also tends to "rovide investors e$"osure to both e5uity and debt mar&ets in one "roduct.

Ty"es of Schemes in 0alanced Fund=

*.

 1!;I <:! :hildren#s -ift Fund Investment 9lan 1!;I <:! :hildren#s -ift Fund Savings 9lan 1!;I <:! 0alanced Fund 1!;I <:! 9rudence Fund

.,A( 0UN(S AN( N,:.,A( 0UN(S :

Investment managers charge a fee for managing funds2 and also im"ose certain o"erational costs on the investment income of a fund. These are usually called load. 4hether the investors or the %:s bear these costs in what differentiates a load fund and a no>load fund. ;? @ = ;oad is the factor that is a""lied to the < C of a scheme to arrive at the "rice. If a commission is "aid to agents2 to bring in new business2 this re"resents a cost incurred by the mutual fund2 for the additional sales. The fund may therefore decide that investors2 who are already in the scheme2 need not bear this cost. Therefore it may decide to im"ose this cost on the new investors2 by increasing the "rice at which they can buy units. This is called the 8entry load# or the 8sales load# . Similarly2 if investors stays in a fund for a short while2 and decided to re"urchase his units2 the fund may incur same costs in li5uidating the "ortfolio and "aying off this investor. The fund may want to im"ose the costs of this o"eration on the e$iting investor2 in form of a load. This is called an 8e$ist load# . S ;! <@ 1!9'1:G S! 91I:! = The sale "rice is that "rice at which a mutual fund is willing to sell the units to investors. n

*+

investor2 who buys or invests in a mutual fund2 "ays the sales "rice. The re"urchase "rice re"resents the "rice at which the mutual fund is willing to buy the units bac& from the investor. That is the "rice at which the investor can sell his holdings to mutual fund. The mutual fund decided the sale and re"urchase "rice2 based on the < C of the scheme. Gowever2 mutual funds did not ma&e units available for sale and re"urchase at the < C of the scheme. They can alter the < C by a factor called the 8load# and charge a different sale and re"urchase "rices.

2D

0UN( STRUCTUR- )
The structure of mutual funds in India is governed by the S!0I 1egulations2 *++,. The regulations ma&e it mandatory for mutual funds to have a three>tier structure of S"onsor E Trustee E %: . The s"onsor %: is the "romoter of the mutual fund2 and a""oints the Trustee. The trustees are res"onsible to the investors in the mutual fund2 and a""oint the for managing the investment "ortfolio. The %: is the business face of

the mutual fund2 as it manages all the affairs of the mutual fund. The mutual fund and the %: have to be registered with S!0I.

SPONSOR TRUSTEE AMC-ASSET MANAGEMENT COMPANY.

2*

1.

Sponsor :

The S"onsor is the "romoter of the mutual fund. The s"onsor establishes the mutual fund and registers the same with S!0I. @'TI!S ?F S9?<S?1 = *) S"onsor a""oints the trustees2 custodians and the %: with "rior

a""roval of S!0I and in accordance with S!0I regulations. 2) S"onsor must be carrying on business in financial services for a minimum "eriod of five years. 3) <et worth of s"onsor is "ositive in all "receding five years. 4) <et worth in immediately "roceeding year is more than ca"ital. 5) S"onsor must have been "rofit ma&ing in at least 3 of the immediately "receding 5 years including the 5th year. ,) S"onsor must contribute at least 4DF of the net worth of the %:. ST1'T'1! ?F %'T' ; F'<@ = *. :om"any form2 in which investors hold shares of the mutual fund. In this structure2 management of the firm is in the hands of an elected board2 which in turns a""oints investment managers to manage the fund.
22

2. Trust form2 in which the funds of investors are held by a trust2 on behalf of the investors. The trust a""oints investment managers and monitors their functioning in the interest of investors. % < -I<- TG! %'T' ; F'<@ = The s"onsor acting through the trustee a""oints all the functionaries re5uired for managing the investor#s money. The functionaries are as follows = *. Investment managers &nown as the %:. 2. 1egistrars H transfer gents. 3. 0ro&ers 4. Selling H @istribution gents . 5. :ustodians ,. @e"ository 9artici"ants. /. ;egal dvisor and uditors.

23

2. Trustees :
The mutual fund2 which is a trust is managed either by a Trust com"any or a 0oard of Trustees. 0oard of trustees and trust com"anies re governed by the "rovisions of the Indian Trust ct. If the trustee is a com"any2 it is also sub3ected to the "rovisions of the Indian :om"anies ct. It is res"onsibility of the trustees to "rotect the interest of the investors2 whose fund is managed by the %:. 1I-GTS ?F TG! T1'ST!!S = *. Trustees a""oint the 2. %:2 in consultation with the s"onsor %: have to be %: on the and according to S!0I regulations. ll mutual fund schemes floated by the a""roved by trustees 3. Trustees can see& information from the o"erations and com"liance of the mutual fund2 with "rovision of the trust deed2 investment management agreement and the S!0I regulations. These mandatory reviews and monitoring are to be made on 5uarterly basis.

24

4. Trustees can see& remedial action from dismiss the %:.

%: and in the

e$treme situation of dissatisfaction with "erformance2

;.A/C: Asset /anage ent Co pan! )

The trustees on the advice of the usually a""oints the deed authorizes the trustees to a""oint the %:. The %:. The trust %: is usually a

"rivate limited com"any 2 in which the s"onsors and their associates or 3oint venture "artners are shareholders. The %: has to be a S!0I with the %:2 registered entity2 and should have minimum net worth of 1s. *D :r. The trustees sign an investment management agreement which s"ells out the functions of the %:. 1!-'; T?1B 1!A'I1!%!<T F?1 TG! %: = *. ?nly S!0I registered 2. 3. 4. %:s can be a""ointed as investment

managers of mutual funds. %: must have a minimum net worth of 1s. *D :r. at all times n %: cannot be an %: or Trustees of another mutual fund. t least half of the members of the board of an inde"endent . 5. The investment management agreement entered into the trustees and the %:2 s"ells out the rights and obligations of both "arties. %: have to be

25

TB9!S ?F %:s. =
%:s owned by ban&s . %:s owned by financial institutions. %:s owned by the Indian "rivate sector com"anies. %:s owned by the foreign institutional investors. %:s owned 3ointly by Indian and foreign s"onsors.

?0;I- TI?<S ?F TG! %:s = *. Investments have to be according to the investment management agreement and the S!0I regulations. 2. The actions of its em"loyees and its associates have to be as mandated by the trustees. 3. %:s have to submit detailed 5uarterly re"orts on the wor&ing and "erformance of the mutual fund2 and com"liance with S!0I regulations.

2,

4.

%:s have to ma&e the necessary statutory disclosures on "ortfolio2 < C and "rice to investors.

1!ST1I:TI?<S ?< TG! 0'SI<!SS :TICITI!S ?F %:s = *. The %: shall not act as a trustee of any mutual funds. 2. %: shall not underta&e any business activity e$ce"t in the nature of "ortfolio management services2 management and advisory services to offshore funds etc2 "rovided these activities are not in conflict with activities of mutual fund. 3. %: shall not invest in any of its scheme unless full disclosure of its intention to invest has been made in the offer document.

,00-R (,CU/-NT AN( +-Y IN0,R/ATI,N /-/,RAN(U/)

The mutual fund is re5uired to file with the S!0I a detailed information memorandum in a "rescribed format that "rovides all the information about the fund and the scheme. This document is also called as the 9ros"ectus or the offer document and is very detailed and contains most of the relevant information that an investor would need. n abridged version of the offer document2 in a "rescribed format2 is a""ended to the a""lication form. Investors can get a summary of the other document2 in the abridged version2 which is also called as the &ey information memorandum. Investors have the right to as& for a free co"y of the offer document.

2/

I/P,RTANC- ,0 ,00-R (,CU/-NT T, IN8-ST,RS)

?ffer document is very im"ortant for the following reasons= *. Information about the scheme2 and is fundamental attributes2 are s"ecified in the offer document. Therefore it forms the basis for the investor#s decisions. 2. ?ffer document is a legal document that s"ecifies the details of the offer made by the mutual fund2 and before buying the mutual fund "roduct2 and investor must read and understand the terms of the offer.

2.

BROAD CONTENTS OF THE OFFER DOCUMENT:

*. 9reliminary Information. 2. Fund>s"ecific Information 3. Scheme attributes 4. @etails of the scheme being offered 5. ;oads2 fee structure and e$"enses ,. 'nit holders rights /. ssociate transaction

SUMMARY DISCLOSURE OF THE OFFER DOCUMENT:

*. <ame of the mutual 2. <ame of the Scheme 3. Ty"e of the Scheme (growth2 income 2 balanced ) 4. <ame of the %: 5. :lasses of units offered for sale ,. 9rice of units /. <ame of the guarantor in case of assured return schemes .. The o"ening2 closing and earliest closing date of the offer +. %andatory statements

2+

STANDARD RISK FACTORS: Standard ris& factors are S!0I sti"ulated factors that a""ly for mutual fund "roducts as a category. These have to be stated in the first section of the offer document .The standard ris& factors are= %utual fund and securities investments are sub3ect to mar&et ris&s and there is no assurance or guarantee that the ob3ectives of the mutual fund will be achieved. s with any investment in securities2 the < C of units issued under the scheme can go u" or down2 de"ending on factors and forces affecting ca"ital mar&ets. 9ast "erformance of the s"onsorI %:I%utual fund dose not indicate the future "erformance of the scheme. The name of the scheme does not in any manner indicate other 5uality of the scheme or its future "ros"ects and returns. 1is& associated with the use of derivative instruments2 if the fund "lans to use such instruments. SCHEME SPECIFIC RISK FACTORS: *. 1is& arising from investment ob3ective2 investment strategy and asset allocation of a scheme. 2. 1is& arising from non>diversification. 3. If a scheme offers assured returns2 the scheme must state that the assurance is on the basis of guarantees "rovided by s"onsorI %:. The net worth and li5uidity of such guarantor should also be disclosed.

3D

4. If the

%: has no "revious e$"erience in managing a

mutual fund2 a disclosure to the affect that this is the first scheme being launched under its management should be made. KEY INFORMATION MEMORANDUM:

Since the offer document is very detailed2 it is not feasible for mutual funds to "rovide them to all "ros"ective investors. S!0I regulation allows mutual funds to summarize the &ey "oints in a summary document called the &ey information memorandum. It is mandatory that the &ey information to all investors2 along with the a""lication forms.

3*

IN8-ST/-NT P.ANS )

Investment "lans are the different ways to reinvest in a scheme by investor. These are services offered by different mutual funds to their investors. These "lans "rovide variable degree of convenience and fle$ibility to the investors. *. Systematic investment "lan (SI9) 2. utomatic 1einvestment "lan ( 19) 3. Systematic Transfer "lan (ST9) 4. Systematic 4ithdrawal "lan (S49)

LARGE-CAP AND SMALL-CAP :

The size of the com"any in the e5uity mar&ets is determined by the number of the shares issued by the com"any times the mar&et "rice at which the shares are traded. This number is called as mar&et ca"italization. If the mar&et ca"italization of the com"any is high2 we call such a com"any as a large>ca" com"any. :om"anies which are closely held2 or are very small 2 tend to have a smaller mar&et ca"italization.

32

These are called as small>ca" com"anies. 1esearch has shown that small> ca" com"anies tend to be higher than that of large>ca" com"anies.

REQUIREMENTS FOR INVESTMENTS IN MUTUAL FUND :

S!0I regulations "rovide "rudential guidelines regarding the investment management function of the mutual fund . The following are some of the significant regulatory re5uirements = *. %utual fund can invest only in mar&etable securities. 2. ll investment by the mutual fund has to be the delivery basis that is a mutual fund has to "ay for each buy transaction2 and delivery securities for every sell transactions. It cannot enter into trades with the view to s5uaring off the "ositions. 3. mutual fund under all its schemes cannot hold more than *DF of the "aid>u" ca"ital of a com"any. 4. !$ce"t in the case of Sectoral funds and inde$ funds2 a mutual fund scheme cannot invest more than *DF of its < C in a single com"any. 5. Investments in rated investment grade issues of a single issuer cannot e$ceed *5F of the net assets can be e$tended to 2DF 2 with the a""roval of the trustees.

33

,. Investment in unlisted shares cannot e$ceed 5F of net assets for an o"en>ended scheme2 and *DF of net assets for a closed end scheme. /. %utual funds invest in a limited manner in treasury bonds and rated cor"orate debt issued outside India.

34

PROMOTIONAL ACTIVITIES
fter the "roduct has been "lanned2 the channels of distribution of the "roduct decided and the "rice structure evolved the ne$t ste" is to decide u"on the "romotional activities that the firm may follow . It has rightly been said2 6<othing ha""ens until somebody sells something.7 This gives in a nutshell the "hiloso"hy of "romotional activities . The "romotional activities are concerned with . = (*) I<F?1%I<- the "eo"le about "roducts distinctive want satisfying characteristics and its availability2 (2) 1!%I<@I<- "eo"le "eriodically about the "roduct and its role and (3) 9!1S' @I<- the "eo"le I "ros"ective buyers that ma&e "eo"le to do what they might not otherwise do what they don#t really want to do. 69romotion is the all inclusive term re"resenting the broad field> advertising2 "ersonal selling and sales "romotion.

35

CATALOGUES
These are "rinted in form in four to si$ "ages or even more. They give information about the goods and services in greater details with the hel" of figures and illustrations in blac& and white or colors. 9ublishers2 travel agencies2 tourist de"artments 2 life insurance com"anies2 medical firms or "restigious industrialists etc often use them. t the last "age of browsers they are giving information related to 1!;I <:! %utual Fund and services offered by them and about all branches.

3,

3/

PROBLEM FORMULATION :
It has been "erceived that there is huge "otential mar&et in 1a3&ot city. The strategy is to &now the consumer needs H their behavior towards various available Investment o"tions such as Secured Investment CIs 1is& ta&ing Investment. This is an analytical research. The consumer behavior towards %utual Funds is to find out when they have different o"tions available in the mar&et for investment . @uring the time of recession in the mar&et there was a serious shortage of short term management of funds in the hands of "eo"le .

3.

RESEARCH OBJECTIVE :
9rimary ?b3ectives = The study of %utual Funds mar&et in 1a3&ot was conducted with the "rimary ob3ective to &now the reason why do "eo"le "refer %utual Funds during the time of recession in mar&et. Secondary ?b3ectives = *. To &now the awareness of %utual Funds in the mar&ets of 1a3&ot 2. To generate the awareness about %utual Funds . 3. To &now the investment ob3ective2 safety level and time "eriod of investment 4. To &now the share of %utual Funds in investment "ortfolio of investors.

3+

SAMPLE SIZE :
S %9;! SIJ! = *DD 1es"ondents. 1! :?C!1!@ = 1a3&ot

I<ST1'%!<T 'S!@ = Auestionnaire.

Auestionnaire Structure =
Auestionnaire Structure refers to the se5uence in which the various sub3ects should a""ear on the 5uestionnaire. The Auestionnaire Structure is generally divided into five ste"s. *). ?"ening or ;ead in Auestions = To start the flow of the res"onse and gain ra""ort. 2). Aualifying Auestions = To find out whether a "erson is of the right ty"e to "rovide the correct information. 3). 4arm> '" Auestions = To direct the thin&ing and memory. 4). S"ecifies = To find out the real information sort by the study. 5). @emogra"hic study = To describe the "erson who res"onded study.

4D

4*

A*. ge -rou" of 1es"ondents.

Age group
60 50 40 Age 30 20 10 0 Results (percentage) Below 25 25-35 36-45 above 45

The above findings show that most of the res"ondents are of age of 3,>45 because they have more &nowledge about the investment criteria in %utual funds H other investment instruments. nd second age grou" is below 25.

42

A2. verage Bearly Income.

Average yearly income

35 30 Respondents 25 20 15 10 5 0 Results (percentage) Below 100000 100000-200000 200000-400000 400000 & more

The findings "resented in the above gra"h show that more res"ondents have there yearly income between 22DD2DDD>42DD2DDD. s they more investment re5uirement so they more interest in investment.

43

A3. ?ccu"ation of res"ondents.

0.35 0.3 0.25 0.2 0.15 0.1 0.05 0

es s on %e nt ro "e ss us & t' er s n #o b tu

The above gra"h shows that the most of the res"ondents a""roached are of business class as they have to watch more about the investment "ortfolio and other sector "eo"le li&e 3ob H "rofessionals have a fi$ed income level so they are less interested in ta&ing ris&.

44

A4. Investment Instruments.

Investment

)es *o

The data above shows that today everyone is interest in investing in different instruments "rovided by the different institutions. %ore H more "eo"le are investing in different o"tions of investments.

45

A5. Investment ?"tions "rovided to 1es"ondents.

Investment Options
30( 25( 20( 15( 10( 5( 0(
+n su ra nc , e ut ua lun R % ea l. st B at an e / 0 ep os t $ to c/ s & t' er s

$er es1

The more "referred investment o"tion by the res"ondents is %utual fund as it "rovides more safety on investments done.

4,

A,. Fre5uency of investments.

Frequency of Investment

1-15 0a1s 15-30 0a1s 1-3 ,ont's 3-6 ,ont's 6-12 ,ont's 1- ,ore

The fre5uency in which the more investment is done is between * month to 3months. nd the less fre5uency is *day to *5 days.

4/

A/ wareness about Investment :om"any of %F.

Different MF Investment
&t'ers 4545 ,MF 20-3 ,$B+ ,-ran/l n ,Rel ,0 5 10 15 20 25 30

% Investment

The more awareness and interest for investment in %utual Funds is about 1eliance %utual funds. s more "eo"le are aware about 1eliance %F . Second im"ortant investment interest is in G@:F %F. 4hereas T T %F H S0I %F are having e5ual awareness .

4.

A.. Interested to &now more about %F.

Interest

)es *o

67 21

In today#s business world "eo"le are more interested to &now that how they save there income by investing it into different instruments .So about /+F of "eo"le in 1a3&ot are interested in &nowing more about %F.

4+

5D

COMMENTS.
The res"ondents meet for the research re"ort were mainly of business sector so they were mostly affected by the mar&et trends as they are the "art in which affects the mar&et in a manner so they are directly affected by the mar&et . In such sector to res"ondents they manage their short term cash by using them in their wor&ing cycle or some "art is left idle. 4hile2 the other sectors of the survey were of service H "rofessionals as they are not a "art of business trends they don#t have any wor&ing ca"ital to invest whatever they earn is liable for their "ersonnel use2 e$ce"t their "ersonal e$"enses nothing is don#t by them from their money so they are least affected by the mar&et trends .

5*

52

RECOMMENDATIONS :

%utual fund trend is fast growing trend in the city . s it has develo"ed a lot. There is very huge no. of "eo"le who are aware about %utual fund *. S"read awareness more about %F on larger H "rivate basis. 2. There should be more "rivate a""roaches towards "otential customers. 3. %ore local advertising2 through news"a"er a local means of communication should be used.

53

54

SWOT-ANALYSES
<o firm can wor& for the sha&e of wor&. !ach and every firm wants to have their own "restige in mar&et there can be many other ob3ectives li&e to earn more "rofit to satisfy customers need2 to maintain 5uality . 0ut none of above can be achieved or got without analyzing firms# own "erformance. firm having sound "erformance assessment "olicy will be succeeding in the u" coming future. !very firm wants to com"are its "erformance but we all &now that if any firm will not consider its wea&ness in "erformance assessment2 it cannot say that we are not lac&ing anywhere. In real2 it is lac&ing but due to lac& of vision they are saying so. There fore2 S4?T analysis is one of the tools to measure com"any "erformance. It includes Strengths 4ea&ness2 ?""ortunities and Threats . For any "articular firm this is the "arameter which includes both the as"ects i.e. area which has been already im"roved and areas which are needed to be im"roved . firm has try to develo" its wea& areas retain its strengths loo& for new o""ortunities with considering com"etitors u"coming strategies that is what S4?T is all about.

55

STRENGTHS C ST 1! ?F S!1CI:!S. -??@ I<:1!@I0I;ITB 4!;; @!SI-<!@ :';T'1! WEAKNESS @IS9 T:G @!9 1T%!<T T? 0! SBST!%IJ!@ . OPPORTUNIES

T? I<C!ST I< 1! ; ! ST T!. T? !<T!1 I< :?%%?@ITB % 1K!T.

THREATS @?%!STI: :?%9!TIT?1S @!9!<@S ?< ?TG!1 :?%9 <I!S <@ TG!I1 SIT' TI?<.

5,

5/

CONCLUSION :
fter com"letion of this research re"ort I have found out that the most "art of the "eo"le in 1a3&ot are aware about the conce"t of %utual funds and its wor&ing but they are somewhat not ready to ta&e ris& in investing in %utual funds as the investment o"tion "referred bye the "eo"le are government schemes and ban&s as they bring in sure amount of interest and there is safety in such o"tions . The customers in 1a3&ot are not ready to ta&e high ris& in investment. 0ut segment which suits the %utual Funds conce"t as the right investors so the com"any should try to ta" on such "otential customers H create more surety of returns in their investment.

5.

5+

BIBLOGRAPHY :
%ar&eting %anagement 0y 9hilli" Kotler www.reliance%F.com www.yahoofiance.com

,D