CHAPTER - 1

INTRODUCTION

Page 1

1.INTRODUCTION
Creating and managing a risky portfolio is quite a difficult task for a
normal investor or more particularly for a small investor, as it requires a
good amount of time to be spent on it and more requires sound
knowledge and understanding of economics, financial and business
environment. Most investors may not possess the required time or
knowledge to manage risky portfolios.

Naturally in such cases investors should seek the help of a professional

who creates and manages the portfolio for a fee. Similarly, certain
assets or asset classes like debt, securities, call money market, real
estate etc. are beyond the reach of small investors for various reasons.
One such reason is the amount of investment required.

In such cases, a number of investors can pool the money and through a
professional manager, invest the money in such asset classes and reap
its benefits, which otherwise would not have been possible. Mutual fund
houses play this role of a professional money manager.

1.1 MEANING
A mutual fund is a type of professionally managed investment fund that
pools money from many investors to purchase securities. While there is
no legal definition of the term "mutual fund", it is most commonly applied
only to those collective investment vehicles that are regulated and sold
to the general public. They are sometimes referred to as "investment
companies" or "registered investment companies".
Page 2

1.2 HISTORY
The first introduction of a mutual fund in India occurred in 1963, when
the Government of India launched Unit Trust of India (UTI). Until 1987,
UTI enjoyed a monopoly in the Indian mutual fund market. Then a host
of other government-controlled Indian financial companies came up with
their own funds. These included State Bank of India, Canara Bank,
and Punjab National Bank. This market was made open to private
players in 1993, as a result of the historic constitutional
amendments brought forward by the then Congress-led government
under the existing regime of Liberalization, Privatization and
Globalization (LPG). The first private sector fund to operate in India was
Kothari Pioneer, which later merged with Franklin Templeton. In 1996,
SEBI formulated the Mutual Fund Regulation which is a comprehensive
regulatory framework.

1.3 MUTUAL FUNDS ARE AN UNDERTAPPED MARKET IN

INDIA
Despite being available in the market less than 10% of Indian
households have invested in mutual funds. A recent report on Mutual
Fund Investments in India published by research and analytics firm,
Boston Analytics, suggests investors are holding back from putting their
money into mutual funds due to their perceived high risk and a lack of
information on how mutual funds work. There are 46 Mutual Funds as of
June 2013.
The primary reason for not investing appears to be correlated with city
size. Among respondents with a high savings rate, close to 40% of those
who live in metros and Tier I cities considered such investments to be
very risky, whereas 33% of those in Tier II cities said they did not know
how or where to invest in such assets.
Page 3

1.4 FLOW CHART

1.5 ADVANTAGES AND DISADVANTAGES

ADVANTAGES
DIVERSIFICATION- one of the biggest advantages of mutual fund
investment is the instant diversification the investment receives. A
mutual fund invests in a number of securities in order to diversify
the portfolio.
Professional management- the second biggest advantage of
mutual funds is professional management. The money provided to
mutual funds is managed by investment professionals with good
amount of experience. Investments are selected by the funds
based on fundamental and technical research. This expertise of
the fund manager and research personnel along with their services
would be otherwise unavailable for a common investor.

Convenience- with regard to mode of investing, an investor can

choose different mode of investing into the selected funds. An
investor having a lump sum amount of money, can invest as a
Page 4

lump sum in the selected fund. The same investor instead of a

lump sum investment can opt to invest through a Systematic
Transfer Fund (STP). An investor can also invest his monthly
saving through systematic investment plan (SIP). He can even
withdraw a defined sum of money at regular intervals through
systematic withdrawal plan (SWP).

Liquidity- Investors can sell their mutual fund units on any

business day and receive the current market value on their
investments within a short time period (normally three- to fivedays).
Affordability- The minimum initial investment for a mutual fund is
fairly low for most funds (as low as Rs500 for some schemes).

DISADVANTAGES
High
Expense
Ratios
and
Sales
Charges
If you're not paying attention to mutual fund expense ratios and
sales charges, they can get out of hand. Be very cautious when
investing in funds with expense ratios higher than 1.20%, as they
will be considered on the higher cost end. Be weary of 12b1 advertising fees and sales charges in general. There are several
good fund companies out there that have no sales charges. Fees
reduce overall investment returns.

Management
Abuses
Churning, turnover and window dressing may happen if your
manager is abusing his or her authority. This includes
Page 5

unnecessary trading, excessive replacement and selling the

losers prior to quarter-end to fix the books.

Tax
Inefficiency
Like it or not, investors do not have a choice when it comes to
capital gain payouts in mutual funds. Due to the turnover,
redemptions, gains and losses in security holdings throughout the
year, investors typically receive distributions from the fund that are
an uncontrollable tax event.

Poor
Trade
Execution
If you place your mutual fund trade anytime before the cut-off time
for same-day NAV, you'll receive the same closing price NAV for
your buy or sell on the mutual fund. For investors looking for
faster execution times, maybe because of short investment
horizons, day trading, or timing the market, mutual funds provide
a
weak
execution
strategy.

1.6 STRUCTURE OF MUTUAL FUND

Page 6

SPONSOR:
Sponsor is the person who acting alone or in combination with another
body corporate establishes a mutual fund. Sponsor must contribute at
least 40% of the net worth of the Investment Managed and meet the
eligibility criteria prescribed under the Securities and Exchange Board of
India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible
or liable for any loss or shortfall resulting from the operation of the
Schemes beyond the initial contribution made by it towards setting up of
the Mutual Fund.

TRUST:
The Mutual Fund is constituted as a trust in accordance with the
provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed
is registered under the Indian Registration Act, 1908.

TRUSTEE:
Trustee is usually a company (corporate body) or a Board of Trustees
(body of individuals). The main responsibility of the Trustee is to
safeguard the interest of the unit holders and inter alias ensure that the
AMC functions in the interest of investors and in accordance with the
Securities and Exchange Board of India (Mutual Funds) Regulations,
1996, the provisions of the Trust Deed and the offer documents of the
respective Schemes. At least 2/3rd directors of the Trustee are
independent directors who are not associated with the sponsor in any
manner.

CUSTODIAN
The mutual fund appoints a custodian to carry out custodial services for
the schemes of the fund. The custodian on behalf of the fund receives
and delivers securities, collects income and corporate acions.
Page 7

ASSET MANAGEMENT COMPANY (AMC):

The Trustee as the Investment Manager of the Mutual Fund appoints the
AMC. The AMC is required to be approved by the Securities and
Exchange Board of India (SEBI) to act as an asset management
company of the Mutual Fund. At least 50% of the directors of the AMC
are independent directors who are not associated with the Sponsor in
any manner. The AMC must have a net worth of at least 50 crores at all
times.

REGISTRAR AND TRANSFER AGENT:

The AMC if so authorized by the Trust Deed appoints the Registrar and
Transfer Agent to the Mutual Fund. The Registrar processes the
application form; redemption requests and dispatches account
statements to the unit holders. The Registrar and Transfer agent also
handles communications with investors and updates investor records.

1.7 TYPES OF MUTUAL FUNDS

Based on the maturity period:
Open-ended Fund
An open-ended fund is a fund that is available for subscription and
can be redeemed on a continuous basis. It is available for
subscription throughout the year and investors can buy and sell
units at NAV related prices. These funds do not have a fixed
maturity date. The key feature of an open-ended fund is liquidity.
Close-ended Fund
Page 8

A close-ended fund is a fund that has a defined maturity period, e.g. 3-6
years. These funds are open for subscription for a specified period at the
time of initial launch. These funds are listed on a recognized stock
exchange.
Interval Funds
Interval funds combine the features of open-ended and close-ended
funds. These funds may trade on stock exchanges and are open for
sale or redemption at predetermined intervals on the prevailing NAV.
Based on investment objectives:
Equity/Growth Funds
Equity/Growth funds invest a major part of its corpus in stocks and
the investment objective of these funds is long-term capital growth.
When you buy shares of an equity mutual fund, you effectively
become a part owner of each of the securities in your funds portfolio.
Equity funds invest minimum 65% of its corpus in equity and equity
related securities. These funds may invest in a wide range of
industries or focus on one or more industry sectors. These types of
funds are suitable for investors with a long-term outlook and higher
risk appetite.
Debt/Income Funds
Debt/ Income funds generally invest in securities such as bonds,
corporate debentures, government securities (gilts) and money
market instruments. These funds invest minimum 65% of its corpus in
fixed income securities. By investing in debt instruments, these funds
provide low risk and stable income to investors with preservation of
capital. These funds tend to be less volatile than equity funds and
produce regular income. These funds are suitable for investors whose
main objective is safety of capital with moderate growth.
Page 9

 Balanced Funds
Balanced funds invest in both equities and fixed income instruments
in line with the pre-determined investment objective of the scheme.
These funds provide both stability of returns and capital appreciation
to investors. These funds with equal allocation to equities and fixed
income securities are ideal for investors looking for a combination of
income and moderate growth. They generally have an investment
pattern of investing around 60% in Equity and 40% in Debt
instruments.
Money Market/ Liquid Funds
Money market/ Liquid funds invest in safer short-term instruments
such as Treasury Bills, Certificates of Deposit and Commercial Paper
for a period of less than 91 days. The aim of Money Market /Liquid
Funds is to provide easy liquidity, preservation of capital and
moderate income. These funds are ideal for corporate and individual
investors looking for moderate returns on their surplus funds.
Gilt Funds
Gilt funds invest exclusively in government securities. Although these
funds carry no credit risk, they are associated with interest rate risk.
These funds are safer as they invest in government securities.

Some of the common types of mutual funds and what they typically
invest in:
Type of Fund
Typical Investment
Equity
Fund

or

Growth Equities like stocks

Page 10

Fixed Income Fund

Fixed income securities like government and

corporate bonds

Money Market Fund

Short-term fixed income securities like treasury

bills

Balanced Fund

A mix of equities and fixed income securities

Sector-specific Fund Sectors like IT, Pharma, Auto etc.

Index Fund

Equities or Fixed income securities chosen to

replicate a specific Index for example S&P CNX
Nifty

Fund of funds

Other mutual funds

Other Schemes
Tax-Saving (Equity linked Savings Schemes) Funds
Tax-saving schemes offer tax rebates to investors under specific
provisions of the Income Tax Act, 1961. These are growth-oriented
schemes and invest primarily in equities. Like an equity scheme, they
largely suit investors having a higher risk appetite and aim to
generate capital appreciation over medium to long term.
Index Funds
Index schemes replicate the performance of a particular index such
as the BSE Sensex or the S&P CNX Nifty. The portfolio of these
schemes consist of only those stocks that represent the index and the
weightage assigned to each stock is aligned to the stocks weightage
in the index. Hence, the returns from these funds are more or less
similar to those generated by the Index.
Sector-specific Funds
Sector-specific funds invest in the securities of only those sectors or
Page 11

industries as specified in the Scheme Information Document. The

returns in these funds are dependent on the performance of the
respective sector/industries for example FMCG, Pharma, IT, etc. The
funds enable investors to diversify holdings among many companies
within an industry. Sector funds are riskier as their performance is
dependent on particular sectors although this also results in higher
returns generated by these funds.

1.8 TAXATION BENEFITS IN MUTUAL FUNDS

100% Income Tax exemption on all Mutual Fund dividends
Equity Funds - Short term capital gains are taxed at 15%. Long term
capital
gains
are
not
applicable.
Debt Funds - Short term capital gains is taxed as per the slab rates
applicable to you. Long term capital gains tax to be lower of - 10% on
the capital gains without factoring indexation benefit and 20% on the
capital gains after factoring indexation benefit.

1.9 Managed by an Asset Management Company (AMC)

The company that puts together a mutual fund is called an AMC. An
AMC may have several mutual fund schemes with similar or varied
investment objectives. The AMC hires a professional money manager,
who buys and sells securities in line with the fund's stated objective

1.10 All AMCs Regulated by SEBI, Funds governed by

Board of Directors
The Securities and Exchange Board of India (SEBI) mutual fund
regulations require that the funds objectives are clearly spelt out in the
prospectus. In addition, every mutual fund has a board of directors that
is supposed to represent the shareholders' interests, rather than the
AMCs.
Page 12

1.11 METHODS OF INVESTING IN MUTUAL FUNDS

Systematic Investment Plan (SIP):
An SIP is a method of investing a fixed sum, on a regular basis, in a
mutual fund scheme. It is similar to regular saving schemes like a
recurring deposit. An SIP allows one to buy units on a given date
each month or quarter, so that one can implement a saving plan for
themselves.

Systematic Withdrawal Plan (SWP):

SWP is a smart way to plan for your future needs by withdrawing
amounts systematically from your existing portfolio either to reinvest
in another portfolio or to meet your expenses. Your savings no longer
remain idle. Your money can earn better returns if reinvested, instead
of lying idle in a savings account for meeting your regular payments.

Systematic Transfer Plan (STP):

A plan that allows the investor to give a mandate to the fund to
periodically and systematically transfer a certain amount from one
scheme to another.

1.12 CURRENT SCENARIO OF MUTUAL FUNDS IN INDIA

The countrys mutual fund assets under management (AUM) closed at a
new high of Rs 13.17 trillion in July. According to data released by the
Association of Mutual Funds in India (AMFI), a 12.3 percent surge in
AUM was led by inflows into liquid, income and equity funds. A Crisil
report reveals that assets in liquid funds grew by Rs 936.03 billion and
in equity funds rose by 5.67 percent to a record high of Rs 3.93 trillion in
Page 13

the month gone by. Equities aided balanced funds, which invest its
assets majorly in equity, reported inflows worth Rs 13.59 billion. The
total valuation grew 7.10 percent to Rs 345.50 billion.

Page 14

CHAPTER - 2
COMPANY PROFILE

Page 15

2.COMPANY PROFILE

Established in the year 1994, Bonanza developed into one of the largest
financial services and broking house in India within a short span of time.
Today, Bonanza is the fastest growing financial service with 5 mega
group companies under it. With diligent effort, acknowledged industry
leadership and experience, Bonanza has spread its trustworthy
expertise all over the country with pan-India presence across more than
1784 outlets spread across 560 cities.

With a smorgasbord of services across all verticals in finance, Bonanza

offers you the perfect blend of financial services right from Equity
Broking, Advisory Services that cover Portfolio Management Services,
Mutual Fund Investments, Insurance to exceptional Depository Services.

Bonanza believes in being technologically advanced so that we can offer

you our tech-savvy customers - an integrated and innovative platform
to trade online as well as offline. Besides, we also have one of the finest
and most dedicated research teams with experts who have in-depth,
unsurpassed knowledge of the market place. All this and more makes
Bonanza the perfect place for you to take your first step in the direction
of financial success.
Bonanza is affiliated with the best in the industry right from the NSE,
BSE MCX, MCX-SX to CDSL, NSDL, ICEX and USE etc. These
affiliations prove our worth in the market and make Bonanza a name to
reckon with.

2.1 Group of companies

Bonanza Portfolio ltd.
Page 16

 Bonanza Commodity brokers (P) ltd.

Bonanza Insurance brokers (P) ltd.
Bonanza Global DMCC, Dubai
Sunglow Fininvest pvt. Ltd
Bonanza Corporate Solution Pvt. Ltd
Bonanza Human Resource Solution Pvt. Ltd.
Bonanza Medicaltourism Pvt. Ltd
Bonanza buildtech Pvt. Ltd
Bonanza Bullions Pvt. Ltd

2.2 VISION
To be one of the most trusted and globally reputed financial distribution
companies.

2.3 VALUES

Customer-centric approach
At Bonanza, customers come first. And their satisfaction is not just
our top priority but also the driving force for us, every single day.

Transparency
Honesty is our forte. We believe in dealing on thoroughly ethical
grounds, being fair and transparent with our customers.

Page 17

Meritocracy
We recognize and appreciate efforts put in by our employees. And
we, as a matter of fact, reward and distinguish each one of them,
ceaselessly.

Solidarity
We believe in sharing a forthright and respectful relationship with
our business partners and employees. We consider them both as
our team associates, who work together. Succeed together.

2.4 MILESTONES

Awarded by BSE as Major Volume Driver - 04-05, 06-07, 07-08

Best Web Portal providing Integrated Property Services, 2013

Ranked amongst the Top 3 National Level Financial advisors 3

years in a row - 2008 - 2009 - 2010 by UTI MF & CNBC TV 18

7th in terms of Sub Brokers for the year 2012-2013

3rd in terms of trading terminals for the year 2012-2013

Indias NO. 1 Valuable Financial Advisory & Stock Broking

Company

Top performer in Equity Segment (Retail), 2012

Ranked amongst the TOP 3Best Equity Brokers in 2013-2014 by

UTI MF & CNBC TV 18

2nd in terms of number of offices for the year 2012-2013

Top 4 in Commodity Segment in Bloomberg UTI

Page 18

Top equity Broking House in terms of branch expansion for 2008

3rd in terms of number of trading accounts for 2008

2.5 STRENGTHS
Bonanza has over 1756 outlets in more than 617 cities in India (as

on 31st September 2013)

Bonanza has more than 4,91,498 clients comparing of corporate
financial institutions and investors, Mutual funds, High Net-Worth
individuals and retail investors
Bonanza has a young dynamic team of 2600 professionals and
6000 off roll employees
Strong infrastructure supporting over 4000 trading terminals
supporting more than 350 VSATs to support geographic reach
and servicing capabilities
24*7 service and support via our federal support system

2.6 PILLARS MANAGEMENT TEAM

Meet the mind behind the corporation Bonanza-the Directors who are
leading this gigantic force.

S.P GOEL
The founder director of bonanza who has been instrumental in
chartering critical and strategic initiatives. With an experience of 25
years in the finance business. Mr. Goel has also been appointed as the
director of the OTC Exchange of India. He representing NSEIL for the
SEBI constituted Dr. JR Verma Advisory
Page 19

ShivKumar Goel
Being the founder director of bonanza, he has been handling IT and risk
initiatives since inception. Formerly designated as the CEO of SRF
Finance Limited, Delhi; Mr. ShivKumar Goel had also spearheaded the
IT committee of the DELHI Stock Exchange. A CA and CS with more
than 30 years of experience, he recently was nominated as the
executive committee member of Depository Participants Association of
India. He is currently a functional member with Association of national
Exchange Member of India

S.K. GOEL
Mr. S.K Goel has been Bonanza Founder Director and a prominent CA
for more than 35 years. He has been mainly heading Bonanzas
northern and eastern zone. He was formerly with the Modis and
OSWAlS- one of the leading manufacturing companies, in addition to
being empanelled with various major banks as their Internal Auditor

VISHNU KUMAR AGARWAL

The founder director of bonanza with over 30 years of experience, Mr
Vishnu has proficiently taken charge of administration, Real Estate
Investments and initiatives for all the group companies of Bonanza

Anand Prakash Goel

He had been playing a pivotal role as Bonanzas founder director by
resourcefully managing taxation, compliance and DP.A qualified CA with
Page 20

more than 30 years of experience in his stride, he has undertaken audits

for leading bank across India.

2.7 PRODUCTS AND SERVICES

Bonanza Offers an array of services encompassing varied means of
wealth creation finance management and accretion .

Prime Brokerage Services ;

Equity and Equity Derivatives
Commodity Derivatives
Currency Derivatives
Fixed Deposits ;
Bonds
Investment Banking
Corporate Fund Raising
Strategic Business Advisory
Service For Investors
Asset Management
PMS
Advisory

Custody Service
Depository Service

Page 21

 Wealth Management

Medical Tourism

Real Estate Broking

Distribution
Mutual Funds
Insurance
IPO
Gold Coins

2.8 SERVICES PROVIDED

SERVICES PROVIDED Prime Brokerage Services

Equity and Equity derivatives
Trading Platform offers online Equity and Equity Derivatives trading
facilities for investors. The high end efficiently integrated applications
makes trading convenient9, Quick and hassle free .

Added advantages
Having Access to resources like research charts , Live Quotes online
assistance to take versed decisions.
Page 22

Trading through our branch network or phone available by simply

registering with us .

Commodity Derivates
The company Offers to future trading via multiple exchanges in wideranging commodities like agricultural commodities , base metals , energy
and precious metals.
The Company also provides investment
commodities futures and currency market.

opportunities

in

gulf

Currency Derivatives
Known as being the predecessors in contributing to unique financial
products, they have now added to their stable Currency Derivatives.
The service is provide both offline and online.

2.9 Services Provided

Asset Management
DISTRIBUTION
FIXED DEPOSITS
INVESTMENT BANKING
SERVICES TO INVERSTORS
WEALTH MANGEMENT

SERVICES PROVIDED- ASSET MANAGEMENT

Portfolio management system
Page 23

The Team of portfolio managers design portfolios to suit every

customers needs.
Constantly Scrutinizing the development in market and moving stocks.
They also aim for maximum capitalization .
We suggest the most appropriate product to customers based on factors
like their investment spheres, return expectations and risk tolerance.
Their experience, expertise and research helps us give our customers
investments the best upshots .
Advisory
Bonanza guides and supports its clients to re-structure and streamline
their portfolios based on changing market condition and client objective .

Depository Services ;
Bonanza is a depository participant with NSDL and CDSL.

SERVICES PROVIDED- DISTRIBUTION

INITIAL PUBLIC OFFER (IPO)
We offer our customers online investment access for
public offerings.
In-depth research advice for the forthcoming IPOs
MUTUAL FUNDS
Bonanza is one of the largest distributors of mutual funds in India.
With the help of our in-depth research across categories covering
covering 20 parameters and our expertise, we guide our clients to
take appropriate investments decisions.
Page 24

 Keeping in mind customers budget, need and securities, our NISM

certified investment advisors offer the best offers the best deals.

INSURANCE
Bonanza offers insurance in life and general insurance.
Our IRDA certified advisors offer prudent advice on policy
selection and assists through the claim redressal process. Our
advisory team matches the insurance products to financial profiles
of customers to offer the best solution options, the best solution
options, maintaining transparency and professionalism.

SERVICES PROVIDED- FIXED DEPOSITS

Bonds
Bonanza offers capital gain bonds u/s 54SEC (REC & NHAI) and
RBI 8% taxable savings.

SERVICES PROVIDED- INVESTMENT BANKING

Investment banking
The company offer financial consultancy and strategic business
advisory services to our clients.
The offerings include private equity placement, M&A structured
Finance, Debt syndication and Corporate Advisory.
The team consists highly experienced professionals who have
worked with leading PE/VC funds and banks.
The services are offered through our corporate office at Mumbai
and branch offices at Ahmadabad, Delhi, Bangalore and Jaipur
Branch offices at Ahmadabad, Delhi, Bangalore and Jaipur.

Page 25

CORPORATE FUND RAISING

Debt Term loans, working capital, ECB/ Foreign currency loan,
BG, LC factoring, buyers credit, loan against property, ICDs,
unsecured loans.
Equity, private equity placements, pre- IPO placements, venture
capital, seed capital funding.

STRATEGIC BUSINESS ADVISORY:

JV M&A: Identifying strategic partner, tangible/intangible assets
valuations, post-investment monitoring exit strategy.

SERVICES FOR INVESTORS:

Fund raising, deal flow, pre-investment, due diligence, valuator,
post-investment monitoring, exit strategy.

SERVICES PROVIDED- INVESTMENT BANKING

We offer financial consultancy and strategic business advisory
services to our clients.
The offering include private equity placement, M&A structural
finance, debt syndication and corporate advisory.
The team consists highly experienced professionals who have
worked with leading PE/EV Funds and banks.
The services are offered through our corporate office at Mumbai
and branch offices at Ahmedabad, Delhi, Bangalore and Jaipur.

SERVICES PROVIDED- WEALTH MANAGEMENT

Tax planning
Page 26

 Business planning
Asset protection
Equity advisory
Investment planning
Retirement planning
Estate planning
Insurance planning

2.10 BONANZA INFRASTRUCTURE

Bonanza has one regional office in every state and having not less than
15 offices in each state with the carpet area of more than 400sq ft for
smaller location and 10000+ sq ft in the rest.
Using the best technology we have minimum 3-5 computers in smaller
outlet which is mandatory for business development. Bigger outlets have
roughly more than 500 computers.

2.11 BONANZAS GROWTH

GROWING MARKET SHARE
Bonanza has been capturing the market scenario and growing
rapidly to make sure we offer more to our clients, again and again.

Page 27

3.5
3
2.5
2

NSE & BSE

1.5

F&O
MCX & NCDEX

1
0.5
0

Clientele Growth
500000
450000
400000
350000
300000

250000

CLIENTS

200000
150000
100000
50000
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2.12 AFFILIATIONS
Page 28

 Equity
National Stock Exchange of India Ltd. (NESIL)
The Bombay Stock Exchange Ltd. (BSE)
OTC Exchange of India (OTCEIL)
Commodity
Multi Commodity Exchange (MCX)
National Commodity and Derivatives Exchange Ltd (NCDEX)
Dubai Gold Commodities Exchange (DGCX)
National Multi Commodity Exchange (NMCE)
Currency
National Stock Exchange of India ltd. (NSEIL)
The Bombay Stock Exchange Ltd. (BSE)
United Stock Exchange (USE)
MCX-SX
Depository participant with CDSL and NSDL

2.13 Technology
Single VSAT connectivity for NSE/BSE/F&O/NCDEX/MCX/MCXSX through, virtual private network (VPN). Other connectivity links
to branch through leased lines, ISDN, Radio Frequency and
Broadband.
High speed and streaming live quote access via internet for
NCDEX/MCX/MCXSX for branches and retail clients.
Internet based Depository access (speed-e/easiest) to offer DP
services for retail investors.
24*7 online access to a centralized support structure for all
product offerings.

2.14 SWOT ANALYIS

Page 29

STRENGTHS
Brand name of BONANZA:- The name of BONANZA is known in
all over the country as number one broker in private sector and this
is the name which people have trusted for many years, which is
mainly due to BONANZA broker. So BONANZA PORTFOLIO LTD.
Do not have the crisis of brand name.
STRONG FINANCIAL BACKING:- The BONANZA PORTFOLIO
LTD had a strong financial backing from promoter,(BONANZA
BROKER and PORTFOLIO LTD),which help the company to build
trust on the mind of the people
STRONG SALES FORCE:- The company has a very strong force
of good marketing brain, which gives an edge over the other
competitors especially nationalized insurance company like LIC
and secondary it has a very good distribution channel which helps
the company to get more clients from those reliable resources
These channel include:
Allied Brokers like:

BONANZA Broker
Federal Broker
South India Broker
Broker Of India
Lord Krishna Broker
Some Co-operative Broker
India Infoline
Way 2 Wealth
Advance Financial Service( Karvy)
AHS
APS
Strategic Marketing Pvt.Ltd
S M Insurance
Investment managers
Allied Corporation Agencies
Page 30

 Strong Marketing and Sales Promotion Team

ULIP`s: Almost 90% of the total business of BONANZA METLIFE is the

business with the sale of ULIP`s and only 10% of the products are the
traditional insurance policies. So this is strength which BONANZA
MetLife can work upon more to get maximum positives results.
WEAKNESS:
Lack of information about the product: most of the product of
BONANZA PORTFOLIO LTD are not known by people, this is
because of lack of information about the product and bad
marketing strategies by the company mainly in small cities.
Focusing mainly on the urban sector: BONANZA PORTFOLIO
PVT LTD mainly focus on the urban sector of the country, where
the competition is very tuff and are not concentrating on the other
sector of the country mainly in the rural sector
Most of the plan are to complicated: BONANZA PORTFOLIO LTD
insurance plan are to complex to understand for a layout person,
and this makes most of the people to void this plan because they
feel difficulties to understand. The same in the case of mutual
funds.

OPPORTUNITIES:
A large part of cities are un covered: a large part of cities are un
covered by BONANZA PORTFOLIO LTD, life insurance where
they do not have any branches
Some top Nationalized Broker should be make allies: there are
large part of cities were Nationalized Broker have large number of
clients in compare to private Brokers have large number of clients
in compare to private broker, this is mainly because they are
operating for such a long time and there is a good opportunity to
Page 31

converted those customers into BONANZA PORTFOLIO LTD

customer by making them allies.
There is a good opportunities to increase the advisor base: when
we compare the ratio with LIC, then we will find that there is a
large gap between them, so there is an opportunity to increase the
advisor base by breaking the agent of LIC

THREATS
LIC- LIC is the greatest threat to BONANZA PORTFOLIO LTD in
the area of insurance sector, because it is one of the oldest
insurance company in the country, and have a large size of
customer base
Threats with some private brokers : There is some brokers which
are providing these services to their customer and slowly taking
away a good market share
Some parts of cities are uncovered.

Page 32

ORGANIZATION STRUCTURE

National Head
(distribution)
Mr Rakes Goyal

Vice President

Business Head

( Operations)

( Wealth Mgt.)

Mr Manoj Goel

Mr Achin Goel

Zonal Heads
1) Central Mr Dinesh
2) Southern Mr Raju
Joseph

Branch Managers of each branch

Employees
Page 33

CHAPTER 3
METHODOLOGY OF THE
STUDY

Page 34

CHAPTER: - 3 Research Design

TITLE
A comparative study between the performance of HDFC mutual fund
and reliance mutual fund.

STATEMENT OF THE PROBLEM

Mutual funds are one of the safest ways to invest in the lucrative yet
risky stock market. In India there is a preconception that mutual funds
are all about stocks and are very risky. There is lack of knowledge
among them as to how the mutual funds work. Also, there are many
mutual funds working in India who offer many schemes which actually
confuses the investors as to where to invest. This report aims to make
things easier by comparing the schemes of two prominent mutual funds.

OBJECTIVE
To find out which mutual fund is performing better than the other.

METHODOLOGY OF STUDY
This is an exploratory research in which no hypothesis has been tested.
It does not include any primary data. The data has been collected from
secondary sources.

Page 35

COLLECTION OF DATA
Only secondary data was used in the study as the comparison of mutual
funds are based on facts which are already available in different
sources.
Secondary data- Secondary data is information that is already available
somewhere, whether it be in journals, on the internet, in a company's
records or, on a larger scale, in corporate or governmental archives.
Secondary data allows for comparison of, say, several years worth of
statistical information relating to, for example, a sector of the economy,
where the information may be used to measure the effects of change or
whatever it is that is being researched.
This data was collected from:

Newspaper
Journals
Websites of mutual funds
Internet

LIMITATIONS
Lack of experience
Since there are too many schemes to be compared, only few were
compared.
Comparing all the schemes would be a time consuming and a
costly affair.
The company officials did not reveal important information.
The secondary data has been collected from various sources.
There might be a conflict in data presented.

Page 36

CHAPTER - 4
DATA ANALYSIS AND
INTERPRETATION

Page 37

4.ANALYSIS AND INTERPRETATION

In this research, a comparative research has been done between 2

leading mutual funds in India ie; HDFC mutual funds and Reliance
mutual funds.
HDFC MUTUAL FUND

HDFC Mutual Fund is one of the largest mutual funds and wellestablished fund house in the country with focus on delivering
consistent fund performance across categories since the launch of
the first scheme(s) in July 2000.

RELIANCE MUTUAL FUND

Page 38

Reliance Mutual Fund (RMF) is one of India's leading mutual funds,

with Average Assets Under Management (AAUM) of 1,44,693 crores
(April 2015 - June 2015 Quarter) and 56.23 lakh folios (as on 30th
June 2015).

Since there are many mutual fund schemes to be compared, single

mutual scheme has been taken from different categories namely,
growth, income and balanced mutual fund which are based on the
investment objective.
EQUITY- HDFC top 200 v/s Reliance top 200
INCOME- HDFC Income Fund v/s Reliance Income Fund
BALANCED- HDFC Balanced fund v/s Reliance Regular Savings
fund- Balanced Fund

HDFC TOP 200 FUND (G)

Investment Objective
To generate long-term capital appreciation from a portfolio of equity and
equity-linked instruments primarily drawn from the companies in BSE
200 index.
Page 39

Scheme details
Fund Type- Open-Ended
Investment Plan- Growth
Launch date- Aug 19, 1996
Benchmark- S&P BSE 200
Asset Size- Rs 12,486.28 cr (Avg. AUM for qtr Apr-Jun '15)
Minimum Investment- Rs.5000
Bonus- N.A.
Fund Manager- Prashant Jain
Entry Load- N.A.
Exit Load- 1.00%
Exit Load- 1% if units are redeemed / switched-out within 1 year from
the date of allotment.
Dividends- Rs 2.5/unit
Crisil rank- 5
AUM (IN CR)- 12486.28

Performance tracker
PERIOD

RETURNS

1 MONTH

-6.3

3MONTH

-5.4

6 MONTH

-10.2
Page 40

1 YEAR

-1.1

2 YEAR

30.2

3 YEAR

17.4

5 YEAR

9.2

RETURNS
35
30
25

RETURNS (%)

20
15
10
5
0
-5
-10
-15

RETURNS

1
MONTH

3MONTH

6
MONTH

1 YEAR

2 YEAR

3 YEAR

5 YEAR

-6.3

-5.4

-10.2

-1.1

30.2

17.4

9.2

ASSET ALLOCATION
ASSET CLASS

EQUITY

99.2

CASH/CALL

0.8

Page 41

EQUITY
CASH/CALL

RELIANCE TOP 200- DIRECT PLAN (G)

Investment Objective
The primary investment objective of the scheme is to seek to generate
long term capital appreciation by investing in equity and equity related
instruments of companies whose market capitalization is within the
range of highest & lowest market capitalization of BSE 200 Index.The
secondary objective is to generate consistent returns by investing in debt
and money market securities.

Scheme details
Fund Type- Open-Ended
Investment Plan- Growth
Launch date- Jan 01, 2013
Benchmark- S&P BSE 200
Asset Size- Rs 39.48 cr (Avg. AUM for qtr Apr-Jun '15)
Minimum Investment- Rs.5000
Bonus- N.A.
Page 42

Fund Manager- Ashwani Kuma

Shailesh Raj Bhan
Entry Load- N.A.
Exit Load- 1.00%
Exit load - 1% if redeemed/switched out on or before completion of 1
yrs from the date of allotment.
Dividend- Not declared

Performance tracker
PERIOD

RETURNS

1 MONTH

-4.9

3MONTH

-2.9

6 MONTH

-6.3

1 YEAR

-1.1

2 YEAR

13.5

3 YEAR

38.5

Page 43

35

RETURNS

30
25
20
15
RETURNS (%)

10
5
0
-5
-10
-15

RETURNS

1
MONTH

3MONT
H

6
MONTH

1 YEAR

2 YEAR

3 YEAR

-6.3

-5.4

-10.2

-1.1

30.2

17.4

ASSET ALLOCATION
ASSET CLASS

EQUITY

98.58

MONEY MARKET

1.01

OTHERS/UNLISTED 0.41

EQUITY
MONEY MARKET

OTHERS/UNLISTED

Page 44

INTERPRETATION OF HDFC TOP 200 AND RELIANCE TOP 200

At the end of 2nd year it is seen that the returns in HDFC Top
200 is almost 30.2% as compared to 13.5% in Reliance Top
200.
At the end of 3rd year the interest rates fall to about 17.4% in
case of HDFC top 200 but in case of Reliance top 200 it rises to
about 38.5%
Both the funds have almost 99% assets invested in equities.
Dividends of rs2.5/unit are declared in HDFC Top 200 whereas
no dividends are declared in Reliance top 200.

HDFC INCOME FUND

Investment Objective
To optimise returns while maintaining a balance of safety, yield and
liquidity.
Scheme details
Fund Type- Open-Ended
Investment Plan- Dividend
Launch date- Dec 18, 2014
Benchmark- CRISIL Composite Bond Fund
Asset Size- Rs 2,836.42 cr (Avg. AUM for qtr Apr-Jun '15)
Minimum Investment- Rs.5000
Page 45

Last Dividend- Rs.0.20/unit (Sep-25-2014)

Bonus- N.A.
Fund Manager- Shobhit Mehrotra
Notes- N.A.
Entry Load- N.A.
Exit Load- 0.50%
Load Comments- Exit Load 0.50% if units are redeemed / switched-out
within 6 months from the date of allotment.

PERFORMANCE TRACKER
PERIOD

RETURNS

1 MONTH

3MONTH

1.2

6 MONTH

1.1

1 YEAR

12.2

2 YEAR

11.6

3 YEAR
5 YEAR

8.4
8

Page 46

RETURNS
14
12

RETURNS(%)

10
8
6
4
2
0
RETURNS

1 MONTH

3MONTH

6 MONTH

1 YEAR

2 YEAR

3 YEAR

5 YEAR

1.1

1.2

12

10.7

8.2

ASSET ALLOCATION
ASSET CLASS %
DEBT

96.6

CASH/CALL

3.4

Page 47

DEBT
CASH/CALL

RELIANCE INCOME FUND (G)

Investment Objective
The primary investment objective of the scheme is to generate optimal
returns consistent with moderate level of risk. This income may be
complemented by capital appreciation of the portfolio.Accordingly,
investments shall predominantly be made in Debt & Money Market
Instruments.
Scheme details
Fund Type- Open-Ended
Investment Plan- Growth
Launch date- Jn 01, 2013
Benchmark- CRISIL Composite Bond Fund
Asset Size- Rs 1,049.37 cr (Avg. AUM for qtr Apr-Jun '15)
Minimum Investment- Rs.5000
Last Dividend- N.A.
Page 48

Bonus- N.A.
Fund Manager- Prashant Pimple
Notes- N.A.
Entry Load- N.A.
Exit Load- N.A.

PERFORMANCE TRACKER
PERIOD

RETURNS

1 MONTH

1.1

3MONTH

1.2

6 MONTH

1 YEAR

12

2 YEAR

10.7

3 YEAR

8.2

5 YEAR

Page 49

RETURNS
14
12
10
8
RETURNS

6
4
2
0
1 MONTH 3MONTH 6 MONTH 1 YEAR

2 YEAR

3 YEAR

5 YEAR

ASSET ALLOCATION
ASSET CLASS

DEBT

98.2

CASH/CALL

MONEY
MARKET

0.8

Page 50

DEBT
CASH/CALL
MONEY MARKET

INTERPRETATION OF HDFC
RELANCE INCOME FUND

INCOME

FUND

AND

The returns in both the schemes are pretty much similar

as both have invested almost 99% in the debt category.
Dividends upto Rs 0.20/unit are declared when it comes to
HDFC Income fund but there are no dividends declared in
Reliance income fund.
There is no exit load in reliance income fund but 0.50%
exit load is charged in HDFC Income fund.

HDFC BALANCED FUND (G)

Investment Objective
To generate capital appreciation along with current income from a
combined portfolio of equity & equity-related and ebt & money market
instruments.
Page 51

Scheme details
Fund Type- Open-Ended
Investment Plan- Growth
Launch date- Sep 11, 2000
Benchmark- CRISIL Balance Fund
Asset Size- Rs 3,555.72 cr (Avg. AUM for qtr Apr-Jun 15)
Minimum Investment- Rs.5000
Last Dividend- N.A.
Bonus- N.A.
Fund Manager- Chirag Setalvad
Notes- N.A.
Entry Load- N.A.
Exit Load- 1.00%
Load Comments- Exit Load 1% if units are redeemed / switched-out
within 18 months from the date of allotment.
PERFORMANCE TRACKER
PERIOD

RETURNS

1 MONTH

-0.7

3MONTH

-0.4

6 MONTH

-2.4

1 YEAR

13.1
Page 52

2 YEAR

37.1

3 YEAR

23.1

5 YEAR

15.3

RETURNS
40
35
30

Axis Title

25
20
15
10
5
0
-5

1 MONTH

3MONTH

6 MONTH

1 YEAR

2 YEAR

3 YEAR

-2.4

-0.3

-2.9

11

33.5

20.4

RETURNS

5 YEAR

ASSET ALLOCATION
ASSET CLASS

EQUITY

68.91

CASH/CALL

7.56

DEBT

23.53
Page 53

%
EQUITY
MONEY
MARKET
DEBT

RELIANCE
FUND(G)

REGULAR

SAVINGS

FUND-

BALANCED

Investment Objective
The primary investment objective of this option is to generate consistent
returns and appreciation of capital by investing in a mix of securities
comprising of equity, equity related instruments & fixed income
instruments.
Scheme details
Fund Type- Open-Ended
Investment Plan- Growth
Launch date- May 10, 2005
Benchmark- CRISIL Balance Fund
Asset Size- Rs 1,083.62 cr (Avg. AUM for qtr Apr-Jun 15)
Minimum Investment- Rs.500
Last Dividend- N.A
Page 54

Bonus- N.A.
Fund Manager- Sanjay Parekh, Amit Tripathi
Entry Load- N.A.
Exit Load- 1.00%
Load Comments- Exit load of 1%, if redeemed/switched out on or
before completion of 1 Year from the date of allotment of units, After 1 Yr
Nil

PERFORMANCE TRACKER
PERIOD

RETURNS

1 MONTH

-2.4

3MONTH

-0.3

6 MONTH

-2.9

1 YEAR

11

2 YEAR

33.5

3 YEAR

20.4

5 YEAR

11.7

Page 55

RETURNS
40
35
30

Axis Title

25
20

15
10
5
0
-5
RETURNS

1 MONTH

3MONTH

6 MONTH

1 YEAR

2 YEAR

3 YEAR

-2.4

-0.3

-2.9

11

33.5

20.4

5 YEAR

ASSET ALLOCATION
ASSET CLASS

EQUITY

72.18

MONEY MARKET 1.63

DEBT

26.19

Page 56

EQUITY
MONEY MARKET
DEBT

INTERPRETATION OF HDFC BALANCED FUND AND

RELIANCE RFS BALANCED FUND
The returns in HDFC Balanced fund is better in all periods than
Reliance RFS balanced fund due to its larger AUM.
HDFC invests almost 68% in equities as compared to 72% in
reliance RFS Balanced fund which is the reason for HDFC
performing better than Reliance as it reduces risk by investing
more in money and debt category.

A minimum of 5000rs is required to invest in HDFC Balanced fund

whereas Reliance RFS Balanced fund requires only rs500 of
investment.

Page 57

CHAPTER 5
SUMMARY OF FINDINGS,
SUGGESTIONS AND
CONCLUSION

Page 58

5.1 SUMMARY OF THE FINDINGS

In the equity category, HDFC outperforms Reliance as it has a
larger AUM and also looks lucrative as it provides dividends of Rs
2.5/unit. Due to its larger AUM it spreads over the risk to a wide
range of portfolios.
In the income category, HDFC has performed better than Reliance
as it has a larger AUM than Reliance. Since the interest are almost
similar in both the funds, investors would choose HDFC over
Reliance, as it has a larger AUM. HDFC can try to remove the exit
load which can make it more appealing.

In the balanced category, HDFC again has outperformed Reliance

as it has better returns in all the periods. It has again played safe
by investing less in equities and more in debt and money market.
Reliance has again made itself more vulnerable by investing more
in equities.

In the balanced fund Reliance looks more attractive to the lower

income group as it has a minimum investment of rs500 by which
even the lower income group can invest in equities as well as debt.

5.2 SUGGESTION
In order to perform better than HDFC mutual funds, Reliance has
to attract investors by giving them attractive dividends.

By increasing their AUM, Reliance will create a good impression

in the minds of the investors.

Page 59

 It is advisable for Reliance to invest less in equities when it comes

to the Income fund as the investors are looking for safety of their
capital and might not be ready to risk it.

HDFC can lower their minimum investment in their Balanced fund

to attract lower income section of the society who want to invest in
equities as well as income funds

HDFC could try to remove the exit load of 0.50% in their Income
fund as the returns in both the fund are similar and moreover
Reliance doesnt have any exit load in their income fund.

5.3 CONCLUSION
This report proves that HDFC mutual fund has an edge over
Reliance Mutual Fund in almost all parameters. With HDFC having
a history of higher returns, it still remains more attractive than
Reliance mutual fund. HDFC has been able to attract investors by
their dividend scheme which Reliance has failed to do. HDFC
mutual fund remains to be one of the most prominent Mutual Fund
in India.

Page 60

ANNEXURE

HDFC TOP 200 V/S RELIANCE TOP 200

Scheme

HDFC Top
200 Fund (G)

Reliance Top
200 Direct (G)

Fund Class

Large Cap

Large Cap

Fund Type

Open-Ended

Open-Ended

Rank 5

Not Ranked

Scheme Asset
Rs in cr

12,486.28
Jun-30-2015

39.48
Jun-30-2015

Inception Date

Aug 19, 1996

Jan 01, 2013

2.500

N.A.

Benchmark

BSE 200

BSE 200

Minimum Investment
Rs

Rs.5000

Rs.5000

HDFC Asset

Reliance Capital

Ranking

Last Dividend
Rs/Units

AMC/Fund

Page 61

Family

Management
Co. Ltd.

Asset
Management
Ltd.

AMC Asset
Rs in cr

165,013.31
Jun-30-2015

144,693.04
Jun-30-2015

3 Months

-5.4

-2.9

6 Months

-10.2

-6.3

1 Year

-1.1

-1.1

2 Years

30.2

13.5

3 Years

17.4

38.5

5 Years

9.2

HDFC INCOME FUND V/S RELIANCE INCOME FUND

Scheme

HDFC Income
Fund (G)

Reliance
Income Fund
Direct (G)

Fund Class

Debt Long Term

Debt Long Term

Fund Type

Open-Ended

Open-Ended

Page 62

Ranking

Rank 3

Not Ranked

Scheme Asset
Rs in cr

2,836.42
Jun-30-2015

1,049.37
Jun-30-2015

Inception Date

Sep 11, 2000

Jan 01, 2013

N.A.

N.A.

Rs.5000

Rs.5000

AMC/Fund
Family

HDFC Asset
Management Co.
Ltd.

Reliance Capital
Asset
Management Ltd.

AMC Asset
Rs in cr

165,013.31
Jun-30-2015

144,693.04
Jun-30-2015

Last Dividend
Rs/Units
Benchmark
Minimum Investment
Rs

Performance Returns as on Aug 31, 15

* Returns over 1 year are Annualised
3 Months

1.2

1.2

6 Months

1.1

1
Page 63

1 Year

12.2

12

2 Years

11.6

10.7

3 Years

8.4

8.2

5 Years

HDFC BALANCED FUND V/S RELIANCE RFS BALANCED FUND

Scheme

HDFC
Balanced
Fund (G)

Reliance RSF Balanced -Direct (G)

Fund Class

Balanced

Balanced

Fund Type

Open-Ended

Open-Ended

Rank 3

Not Ranked

Scheme Asset
Rs in cr

3,555.72
Jun-30-2015

29.56
Jun-30-2015

Inception Date

Sep 11, 2000

Jan 01, 2013

N.A.

N.A.

Ranking

Last Dividend

Page 64

Rs/Units
Benchmark
Minimum Investment
Rs

Rs.5000

Rs.500

AMC/Fund
Family

HDFC Asset
Management
Co. Ltd.

Reliance Capital
Asset Management
Ltd.

AMC Asset
Rs in cr

165,013.31
Jun-30-2015

144,693.04
Jun-30-2015

107.10100

40.31180

Aug-31-2015

Aug-31-2015

112.407

42.467

Aug 19, 15

Aug 07, 15

94.499

36.003

Oct 16, 14

Oct 16, 14

NAV Details
Latest NAV
Rs/Units
52 week high

52 week low

Performance Returns as on Aug 31, 15

* Returns over 1 year are Annualised
3 Months

-0.7

-2.4
Page 65

6 Months

-0.4

-0.3

1 Year

-2.4

-2.9

2 Years

13.1

11

3 Years

37.1

33.5

5 Years

23.1

20.4

Management & Fees

Fund Manager

Entry Load
Exit Load
Load comment

Chirag
Setalvad

Sanjay Parekh, Amit

Tripathi

0%

0%

1.00%

1.00%

Exit Load 1%
if units are
redeemed /
switched-out
within 18
months from
the date of
allotment.

Exit load of 1%, if

redeemed/switched
out on or before
completion of 1 Year
from the date of
allotment of units,
After 1 Yr Nil

Page 66

BIBLIOGRAPHY

WEBSITES REFERREDwww.bonanzaonline.com
www.hdfcfund.com
www.reliancemutual.com
www.moneycontrol.com

NEWSPAPERS AND BOOKS REFERREDTimes of India

Economics times
Fellow Chartered Financial Practitioner- 01
Understanding Mutual Funds by Uma Shashikant

Page 67