Summer Training Project

Report

on the topic

‘INTER FIRM COMPARISON BETWEN

MUTUAL FUND INDUSTRY
(2005-2009)’

Submitted in partial fulfillment of the requirements of

Master of Business Administration (MBA)
Kurukshetra University, Kurukshetra

Training Supervisor: Submitted By:

Mr. Sachin Sachdeva Ankit Chhabra
(Relationship Manager) MBA: 3rd Semester
Roll. No.08/48

Department of Management Studies

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 NC College of Engineering
Israna, Panipat
SESSION 2008 – 2010

ACKNOWLEDGEMENT

The success behind the completion of any good job is the support and the joint
team effort of a number of people. There are many persons, whose help &
cooperation, made this project successful.

My deepest sense of gratitude, profound respect and sincere thanks to Mr. Mani
shreshtha ( Faculty member, M.B.A. Deptt., N.C. College of Engineering) my
project guide & also give special thanks to Mr. Lalit Asija ( Faculty member,
M.B.A. Deptt., N.C. College of Engineering) for his valuable assistance, keen
interest and constant motivation at each step of the project. It would not have
been possible for me to reach this stage without my faculty’s support & guidance.

My special thanks to Mr. Sachin Sachdeva (Relationship Manager –

AnandRathi Financial services Ltd.) & Mr. Sumit Matta (Assistant-
Relationship Manager - AnandRathi Financial Services Ltd.), my company
guide who has been there with me throughout the entire project. He always had
the answers to my queries, be it regarding any concept related to mutual funds.
His warmth support, practical guidance and easy explanations not only regarding
the project matters but others too add to the success of my project. His
continuous interaction and support made it possible for the successful completion
of the project.

I would also like to thank my parents and my friends for all their time-to-time
assistance. Last but not the least I would like to thank God because without his
divine grace nothing would have been possible.

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 ANKIT

Chapter 1 – Introduction page no.

Overview of industry 5
Introduction of Mutual fund CONTENTS 7
History of Mutual fund DD 8
Profile of the company 32
Services offered by company 36
Problems of the Organization 38
Competitors of Anand Rathi 38
S.W.O.T Analysis of the Organization 39

Chapter 2 - Objective & Methodology

Significance 41
Managerial usefulness of the study 41
Objectives 42
Scope of the study 43
Methodology 44

Chapter 3 - Data Analysis and Interpretation

Data Analysis 45
Interpretation 60
.
Chapter 4 - Findings and Recommendations
Findings 67

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Recommendation 68
Learning 69

BIBLIOGRAPHY 73

CHAPTER -1

INTRODUCTION

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 OVERVIEW OF INDUSTRY

Indian Stock market has undergone

tremendous changes over the years.
Investment in Mutual Funds has become a
major alternative among Investors. The
project has been carried out to have an
overview of Mutual Fund Industry and to
understand investor’s perception about Mutual Funds in the context of their
trading preference, explore investor’s risk perception & find out their preference
over Top Mutual funds.

Individuals or institutions when have surplus money, i.e. savings, would like to
invest with the common and logical motive of growing money by getting returns
on the investments. There are various avenues to park money towards fulfillment
of your objective of return on investment.

One can invest money either where you can get assured returns & hence the risk
is low but returns also are low compared to the high risk investments.

The other way is through investing in shares i.e. equity market. Generally the
returns on equity investments are higher than debt investment but risk also is
higher. To get good returns one really needs to understand the economy and
performance of companies where you are investing money. For a common man it
may be cumbersome while managing own profession, job or business.

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Hence the concept of mutual fund has evolved to manage the funds i.e. on behalf
of the investor; fund managers will be taking decisions to maximize the investor’s
returns.

The concept of mutual funds in India dates back to the year 1963. The era
between 1963 and 1987 marked the existence of only one mutual fund company
in India with Rs. 67bn assets under management (AUM), by the end of its
monopoly era, the Unit Trust of India (UTI). By the end of the 80s decade, few
other mutual fund companies in India took their position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund,
Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual
Fund, Bank of India Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund industry. By
the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private
sector funds started penetrating the fund families. In the same year the first
Mutual Fund Regulations came into existence with re-registering all mutual funds
except UTI. The regulations were further given a revised shape in 1996.
Kothari Pioneer was the first private sector mutual fund company in India which
has now merged with Franklin Templeton. Just after ten years with private sector
player penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 34
mutual fund companies in India.

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 MUTUAL FUND

A mutual fund is a professionally-managed firm of collective investments that

pools money from many investors and invests
it in stocks, bonds, short-term money market
instruments, and/or other securities.in other
words we can say that A Mutual Fund is a trust
registered with the Securities and Exchange
Board of India (SEBI), which pools up the
money from individual / corporate investors and invests the same on behalf of the
investors /unit holders, in equity shares, Government securities, Bonds, Call
money markets etc., and distributes the profits.
The value of each unit of the mutual fund, known as the net asset value (NAV),
is mostly calculated daily based on the total value of the fund divided by the
number of shares currently issued and outstanding. The value of all the securities
in the portfolio in calculated daily. From this, all expenses are deducted and the
resultant value divided by the number of units in the fund is the fund’s NAV.

NAV = Total value of the fund……………….

No. of shares currently issued and outstanding

Advantages of a MF
– Mutual Funds provide the benefit of cheap access to expensive
stocks

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 – Mutual funds diversify the risk of the investor by investing in a
basket of assets

– A team of professional fund managers manages them with in-depth

research inputs from investment analysts.

– Being institutions with good bargaining power in markets, mutual

funds have access to crucial corporate information, which individual
investors cannot access.

MUTUAL FUND INDUSTRY

The Phases of Growth

The Indian mutual industry has come a long way since the inception of UTI in
1963.According to AMFI, the evolution of the industry can be classified broadly into four
phases, which mark its transition from a period when UTI ruled the roost to a period of
competition and increased awareness among investors.

i) First Phase (1964-87) – UTI all the way

This phase begin with the inception of the Unit Trust of India (UTI). It remained the only
mutual fund player in the country till 1987. UTI started its operation in July 1964 “with a
view to encouraging savings and investments and participation in income, profits and
gains accruing to the corporation from acquisition, holding, management and disposal of
securities.” In short, it was set up by Indian government with a view to augment small
savings in the country and to channelize these savings to the capital markets. UTI
witnessed a slow and steady growth over the 1970s and the 1980s and by the end of
1988 it had an AUM of Rs.67bn. It still continues to be the largest player in the domestic
mutual fund industry with an AUM of Rs. 23,500 cr as on March 31, 2008.

ii) Second Phase (1987-1993) – Enter Public sector Mutual Funds

8
Public sector mutual funds set up by public sector banks, Life insurance Corporation of
India (LIC) and the General insurance Corporation of India (GIC) entered in the market in
1987. The first non mutual fund was the SBI Mutual Fund established in June 1987,
followed by Canbank Mutual Fund in December 1987, Punjab National Bank Mutual
Fund in August 1989, India Bank Mutual Fund in Nov 1989, Bank of India Mutual Fund in
June 1990 and Bank of Baroda Mutual Fund in Oct 1992. LIC set up its mutual Fund in
Jun e 1989 while GIC established its Mutual Fund in Dec 1990. During this period, the
total asset of the industry grew to about Rs. 610bn with the total number of schemes
increasing to about 167 by the end of 1994.

iii) Third Phase of (1993-2003) – Private players enter the scene

This phase marked the entry of private sector funds. The phase also signaled the
intensification of competition. Both domestic and foreign players entered the market,
offering a wide variety of schemes to investors. Kothari Pioneer Mutual Fund was the
first private sector fund to establish in association with the foreign fund. Private players
like Morgan Stanley, Jardine Fleming, JP Morgan, George Soros and Capital
International entering the market. The total AUM by the end of Jan 31, 2003 increased to
$ 34,927mn from $23,260mn in March 1995 with a CAGR of 6.92%.

iv) Fourth Phase (since Feb 2003)– UTI’s restructuring and beyond

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust
of India with assets under management of Rs.29,835 crores as at the end of January
2003, representing broadly, the assets of US 64 scheme, assured return and certain
other schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of
assets under management and with the setting up of a UTI Mutual Fund, conforming to
the SEBI Mutual Fund Regulations, and with recent mergers taking place among

9
different private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth.

“AMFI (Association of Mutual Funds in India)” is the industry

association for the mutual fund industry in India which was
incorporated in the year 1995.

The graph indicates the growth of assets over the years.

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Categories of mutual funds:

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Mutual funds can be classified as follow:

 Based on their structure:

• Open-ended funds: Investors can buy and sell the units from the fund, at
any point of time.

• Close-ended funds: These funds raise money from investors only once.
Therefore, after the offer period, fresh investments can not be made into the
fund. If the fund is listed on a stocks exchange the units can be traded like
stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund
Offers of close-ended funds provided liquidity window on a periodic basis
such as monthly or weekly. Redemption of units can be made during specified
intervals. Therefore, such funds have relatively low liquidity.

 Based on their investment objective:

Equity funds: These funds invest in equities and equity related instruments.
With fluctuating share prices, such funds show volatile performance, even losses.
However, short term fluctuations in the market, generally smoothens out in the
long term, thereby offering higher returns at relatively lower volatility. At the same
time, such funds can yield great capital appreciation as, historically, equities have
outperformed all asset classes in the long term. Hence, investment in equity
funds should be considered for a period of at least 3-5 years. It can be further
classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is
tracked. Their portfolio mirrors the benchmark index both in terms of composition
and individual stock weightages.

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ii) Equity diversified funds- 100% of the capital is invested in equities spreading
across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that
they invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related
through some theme.
e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking
sector fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund: Their investment portfolio includes both debt and equity. As a
result, on the risk-return ladder, they fall between equity and debt funds.
Balanced funds are the ideal mutual funds vehicle for investors who prefer
spreading their risk across various instruments. Following are balanced funds
classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt funds: They invest only in debt instruments, and are a good option for
investors averse to idea of taking risk associated with equities. Therefore, they
invest exclusively in fixed-income instruments like bonds, debentures,
Government of India securities; and money market instruments such as
certificates of deposit (CD), commercial paper (CP) and call money. Put your

13
money into any of these debt funds depending on your investment horizon and
needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large
portion being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of
and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt
instruments which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities due to
mis-pricing between cash market and derivatives market. Funds are allocated to
equities, derivatives and money markets. Higher proportion (around 75%) is put
in money markets, in the absence of arbitrage opportunities.

v)Gilt funds LT- They invest 100% of their portfolio in long-term government
securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio
in long-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an
exposure of 10%-30% to equities.

viii)FMPs- fixed monthly plans invest in debt papers whose maturity is in line with
that of the fund.

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Investment strategies:

1. Systematic Investment Plan: Under this a fixed sum is invested each month
on a fixed date of a month. Payment is made through post dated cheques or
direct debit facilities. The investor gets fewer units when the NAV is high and
more units when the NAV is low. This is called as the benefit of Rupee Cost
Averaging (RCA)

2. Systematic Transfer Plan: Under this an investor invest in debt oriented fund
and give instructions to transfer a fixed sum, at a fixed interval, to an equity
scheme of the same mutual fund.
3. Systematic Withdrawal Plan: If someone wishes to withdraw from a mutual
fund then he can withdraw a fixed amount each month.

WHAT IS AN ENTRY LOAD?

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Investors have to bear expenses for availing of the services (professional
management) of the mutual fund. The first expense that an investor has to incur
is by way of Entry Load. This is charged to meet the selling and distribution
expenses of the scheme. A major portion of the Entry Load is used for paying
commissions to the distributor. The distributor (also called a mutual fund advisor)
could be an Independent Financial Advisor, a bank or a large national distributor
or a regional distributor etc. They are the intermediaries who help an investor with
choosing the right scheme, financial planning and investing in scheme s from
time to time to meet one’s requirements.

WHAT ARE EXIT LOADS?

As there are Entry Loads, there exist Exit Loads as well. As Entry Loads
increase the cost of buying, similarly Exit Loads reduce the amount received
by the investor. Not all schemes have an Exit Load, and not all schemes have
similar exit loads as well. Some schemes have Contingent Deferred Sales
Charge (CDSC). This is nothing but a modified form of Exit Load, wherein the
investor has to pay different Exit Loads depending upon his investment
period.
If the investor exits early, he will have to bear more Exit Load and if he
remains invested for a longer period of time, his Exit Load will reduce. Thus
the longer the investor remains invested, lesser is the Exit Load. After some
time the Exit Load reduces to nil; i.e. if the investor exits after a specified
time period, he will not have to bear any Exit Load.

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Risk v/s. return:

17
Working of a Mutual fund:

18
ORGANIZATIONAL STRUCTURE OF MF’S:
There are
many entities
involved
and the diagram
below

illustrates the organizational set up of mutual fund:

ADVANTAGES OF INVESTING IN A

MUTUAL FUND

• Diversification: Since mutual funds invest in a variety of securities the

risk of sustaining great losses due to a decrease in the price of a particular
share is significantly decreased, because it is compensated by an increase in

19
another share. By participating in a mutual fund you become an owner of just
one security, but at the same time enjoy the positive effects of diversification.

• Cost efficiency: Putting your money together with other investors

creates collective buying power that may help you achieve more than you
could on your own. As a group, mutual fund investors can buy a large variety
and number of specific investments. They can also afford to pay for
professional money managers and fund operating expenses, where they
wouldn't be able to afford it on their own.

• Professional Management: Most mutual funds pay topflight

professionals to manage their investments. These managers decide what
securities the fund will buy and sell. Many people don't have the time or
expertise to make investment decisions. A mutual fund's investment
managers, however, are trained to search out the best possible returns,
consistent with the fund's strategies and goals. In essence, your mutual fund
investment brings you the services of a professional money manager.

• Liquidity: With most funds, you can easily sell your fund shares for cash.
Some mutual fund shares are traded only once a day at a fixed price, while
stocks and bonds can be bought or sold any time the markets are open at
whatever price is then available. It's easy to get your money out of a mutual
fund. Write a check, make a call, and you've got the cash.
• Economies of Scale: The easiest way to understand economic of scale is
by thinking about volume discounts: in many stores the more of one product
you buy, the cheaper that product becomes. For example, when you buy a
dozen donuts, the price per donut is usually cheaper than buying a single
one. This occurs also in the purchase and sale of securities. If you buy only
one security at a time, the transaction fees will be relatively large. Mutual
funds are able to take advantage of their buying and selling size and thereby
reduce transaction cost for investors.

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• Regulatory oversight: Mutual funds are subject to many government
regulations that protect investors from fraud.

• Low cost: By embarking on establishing on your own portfolio of

investments your will incur many commission fees that will decrease the
amount of money you can invest. On the other hand, mutual funds charge a
small fee for the service of creating the diversified portfolio you need. There
are even no load mutual funds on which there is no sales charge.

• Minimum initial investment: Most funds have a minimum initial purchase

of $2,500 but some are as low as $1,000. If you purchase a mutual fund in
an IRA, the minimum initial purchase requirement tends to be lower. You can
buy some funds for as little as $50 per month if you agree to dollar-cost
average, or invest a certain dollar amount each month or quarter.

• Online service: Mutual fund companies provide many online services,

which allow for convenient access to financial information.

• Convenience: You can usually buy mutual fund shares by mail, phone, or
over the Internet.

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 DISADVANTAGES OF MUTUAL FUNDS

Limitations of Mutual funds:

• Investors pay management fees so long as they remain invested in

the fund.

• No tailor made portfolios

• Investors end up delegating investment decisions to fund

managers and have no say/control on their decisions

• The availability of a large number of mutual fund schemes means

that, except for the empowered investor, others require advice when selecting
a fund which best meets their investment objectives

These are some of the basic problems in mutual funds:

• No Control: Unlike picking your own individual stocks, a mutual fund puts
you in the passenger seat of somebody else's car.

• No Guarantees: The value of your mutual fund investment, unlike a bank

deposit, could fall and be worth less than the principle initially invested. And,
while a money market fund seeks a stable share price, its yield fluctuates,
unlike a certificate of deposit. In addition, mutual funds are not insured or
guaranteed by an agency of the U.S. government. Bond funds, unlike
purchasing a bond directly, will not re-pay the principle at a set point in time.

• Professional Management: Did you notice how we qualified the

advantage of professional management with the word "theoretically"? Many
investors debate over whether or not the so-called professionals are any

22
better than you or I at picking stocks. Management is by no means infallible,
and, even if the fund loses money, the manager still takes his/her cut. We'll
talk about this in detail in a later section.
• Costs: Mutual funds don't exist solely to make your life easier--all funds
are in it for a profit. The mutual fund industry is masterful at burying costs
under layers of jargon. These costs are so complicated that in this tutorial we
have devoted an entire section to the subject.

• Dilution: It's possible to have too much diversification (this is explained in

our article entitled "Are You Over-Diversified?"). Because funds have small
holdings in so many different companies, high returns from a few investments
often don't make much difference on the overall return. Dilution is also the
result of a successful fund getting too big. When money pours into funds that
have had strong success, the manager often has trouble finding a good
investment for all the new money.

• Taxes: When making decisions about your money, fund managers don't
consider your personal tax situation. For example, when a fund manager sells
a security, a capital-gain tax is triggered, which affects how profitable the
individual is from the sale. It might have been more advantageous for the
individual to defer the capital gains liability.

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RISKS ASSOCIATED WITH MUTUAL FUNDS

The most important relationship to understand is the risk-return trade-off. Higher

the risk greater the returns/loss and lower the risk lesser the returns/loss.
Hence it is upto you, the investor to decide how much risk you are willing to take.
In order to do this you must first be aware of the different types of risks involved
with your investment decision.

MARKET RISK

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Sometimes prices and yields of all securities rise and fall. Broad outside
influences affecting the market in general lead to this. This is true, may it be big
corporations or smaller mid-sized companies. This is known as Market Risk. A
Systematic Investment Plan (“SIP”) that works on the concept of Rupee Cost
Averaging (“RCA”) might help mitigate this risk.

CREDIT RISK

The debt servicing ability (may it be interest payments or repayment of principal)

of a company through its cashflows determines the Credit Risk faced by you. This
credit risk is measured by independent rating agencies like CRISIL who rate
companies and their paper. An ‘AAA’ rating is considered the safest whereas a
‘D’ rating is considered poor credit quality. A well-diversified portfolio might help
mitigate this risk.

INFLATION RISK

Things you hear people talk about: “Rs. 100 today is worth more than Rs. 100
tomorrow.” “Remember the time when a bus ride costed 50 paisa?” “Mehangai
Ka Jamana Hai.”
The root cause , Inflation. Inflation is the loss of purchasing power over time. A lot
of times people make conservative investment decisions to protect their capital
but end up with a sum of money that can buy less than what the principal could at
the time of the investment. This happens when inflation grows faster than the
return on your investment. A well-diversified portfolio with some investment in
equities might help mitigate this risk.

INTEREST RATE RISK

In a free market economy interest rates are difficult if not impossible to predict.
Changes in interest rates affect the prices of bonds as well as equities. If interest

25
rates rise the prices of bonds fall and vice versa. Equity might be negatively
affected as well in a rising interest rate environment. A well-diversified portfolio
might help mitigate this risk.
POLITICAL RISK

Changes in government policy and political decision can change the investment
environment. They can create a favorable environment for investment or vice
versa.

LIQUIDITY RISK

Liquidity risk arises when it becomes difficult to sell the securities that one has
purchased. Liquidity Risk can be partly mitigated by diversification, staggering of
maturities as well as internal risk controls that lean towards purchase of liquid
securities. You have been reading about diversification above, but what is it?
Diversification The nuclear weapon in your arsenal for your fight against Risk. It
simply means that you must spread your investment across different securities
(stocks, bonds, money market instruments, real estate, fixed deposits etc.) and
different sectors (auto, textile, information technology etc.). This kind of a
diversification may add to the stability of your returns,

26
 Major Mutual Fund Companies in India:

Kotak Mahindra Asset Management Company (KMAMC) is a

subsidiary of Kotak Mahindra Bank Limited (KMBL). It is presently having more
than 1,99,800 investors in its various schemes. KMAMC started its operations in
December 1998. Kotak Mahindra Mutual Fund offers schemes catering to
investors with varying risk - return profiles. It was the first company to launch
dedicated gilt scheme investing only in government securities.

HDFC Asset Management Company Ltd (AMC) was

incorporated under the Companies Act, 1956, on December 10, 1999, and was
approved to act as an Asset Management Company for the HDFC Mutual Fund
by SEBI vide its letter dated June 30, 2000. HDFC Mutual Fund was setup with
two sponsors namely Housing Development Finance Corporation Limited and
Standard Life Investments Limited.

UTI Asset Management Company Private Limited,

established in Jan 14, 2003, manages the UTI Mutual Fund
with the support of UTI Trustee Company Private Limited. UTI Asset
Management Company presently manages a corpus of over Rs.20000 Crores.
The sponsors of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National
Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India
(LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset
Management Funds, Index Funds, Equity Funds and Balance Funds.

27
 The mutual fund of ICICI is a joint venture with Prudential
Plc. of America, one of the largest life insurance companies in the US of A.
Prudential ICICI Mutual Fund was setup on 13th of October, 1993 with two
sponsors, Prudential Plc. and ICICI Ltd. The Trustee Company formed is
Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management
Company Limited incorporated on 22nd of June, 1993.

Reliance Mutual Fund (RMF) was established

as trust under Indian Trusts Act, 1882. The sponsor of RMF is Reliance Capital
Limited and Reliance Capital Trustee Co. Limited is the Trustee. It was registered
on June 30, 1995 as Reliance Capital Mutual Fund which was changed on March
11, 2004. Reliance Mutual Fund was formed for launching of various schemes
under which units are issued to the Public with a view to contribute to the capital
market and to provide investors the opportunities to make
investmentsindiversifiedsecurities.

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN
AMRO Trustee (India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO
Asset Management (India) Ltd. was incorporated on November 4, 2003.
Deutsche Bank AG is the custodian of ABN AMRO Mutual Fund.

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla
Group and Sun Life Financial. Sun Life Financial is a global organization evolved

28
in 1871 and is being represented in Canada, the US, the Philippines, Japan,
Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a
conservative long-term approach to investment. Recently it crossed AUM of Rs.
10,000 crores.

Bank of Baroda Mutual Fund or BOB Mutual Fund was

setup on October 30, 1992 under the sponsorship of Bank of Baroda. BOB Asset
Management Company Limited is the AMC of BOB Mutual Fund and was
incorporated on November 5, 1992. Deutsche Bank AG is the custodian.

HSBC Mutual Fund was setup on May 27, 2002 with HSBC
Securities and Capital Markets (India) Private Limited as the
sponsor.

ING Vysya Mutual Fund was setup on February 11, 1999

with the same named Trustee Company. It is a joint venture of Vysya & ING. The
AMC, ING Investment Management Pvt. Ltd. was incorporated on April 6, 1998.

Sahara Mutual Fund was set up on July 18, 1996 with

Sahara India Financial Corporation Ltd. as the sponsor. Sahara Asset
Management Company Private Limited incorporated on August 31, 1995 works
as the AMC of Sahara Mutual Fund. The paid-up capital of the AMC stands at Rs
25.8 crore.

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 State Bank of India Mutual Fund is the first Bank
sponsored Mutual Fund to launch offshore fund, the India Magnum Fund with a
corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored
Mutual Fund in India. They have already launched 35 Schemes out of which 15
have already yielded handsome returns to investors. State Bank of India Mutual
Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base of
over 8 Lakhs spread over 18 schemes.

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act,
1882. The sponsors for Tata Mutual Fund are Tata Sons Ltd., and Tata
Investment Corporation Ltd. The investment manager is Tata Asset Management
Limited and Tata Trustee Company Pvt. Ltd. Tata Asset Management Limited's is
one of the fastest in the country with more than Rs. 7,703 Crores (on April 30,
2005).

Standard Chartered Mutual Fund was set up on March 13,

2000 sponsored by Standard Chartered Bank. The Trustee is Standard
Chartered Trustee Company Pvt. Ltd. Standard Chartered Asset Management
Company Pvt. Ltd. is the AMC which was incorporated with SEBI on December
20, 1999.

The group, Franklin Templeton Investments is a California

(USA) based company with a global AUM of US$ 409.2 bn. (as of April 30, 2005).
It is one of the largest financial services groups in the world. Investors can buy or
sell the Mutual Fund through their financial advisor or through mail or through
their website. They have Open end Diversified Equity schemes, Open end Sector
30
Equity schemes, Open end Hybrid schemes, Open end Tax Saving schemes,
Open end Income and Liquid schemes, Closed end Income schemes and Open
end Fund of Funds schemes to offer.

Morgan Stanley is a worldwide financial services company and its

leading in the market in securities, investment management and credit services.
Morgan Stanley Investment Management (MISM) was established in the year
1975. It provides customized asset management services and products to
governments, corporations, pension funds and non-profit organizations. Its
services are also extended to high net worth individuals and retail investors. In
India it is known as Morgan Stanley Investment Management Private Limited
(MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF).

Escorts Mutual Fund was setup on April 15, 1996 with Escorts
Finance Limited as its sponsor. The Trustee Company is Escorts Investment
Trust Limited. Its AMC was incorporated on December 1, 1995 with the name
Escorts Asset Management Limited.

Alliance Capital Mutual Fund was setup on December 30, 1994 with
Alliance Capital Management Corp. of Delaware (USA) as sponsor. The Trustee
is ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asset
Management India Private Ltd. with the corporate office in Mumbai.

31
 Chola Mutual Fund under the sponsorship of Cholamandalam
Investment & Finance Company Ltd. was setup on January 3,
1997. Cholamandalam Trustee Co. Ltd. is the Trustee Company and AMC is
Cholamandalam AMC Limited.

Life Insurance Corporation of India set up LIC Mutual Fund on

19th June 1989. It contributed Rs. 2 Crores towards the corpus of the Fund. LIC
Mutual Fund was constituted as a Trust in accordance with the provisions of the
Indian Trust Act, 1882. . The Company started its business on 29th April 1994.
The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset
Management Company Ltd as the Investment Managers for LIC Mutual Fund.

GIC Mutual Fund, sponsored by General Insurance Corporation of

India (GIC), a Government of India undertaking and the four
Public Sector General Insurance Companies, viz. National Insurance Co. Ltd
(NIC), The New India Assurance Co. Ltd. (NIA), The Oriental Insurance Co. Ltd
(OIC) and United India Insurance Co. Ltd. (UII) and is constituted as a Trust in
accordance with the provisions of the Indian Trusts Act, 1882.
SOME OTHER MUTUAL FUNDS IN INDIA AS SHOWN BELOW….

32
The Players in the Mutual Fund Industry
The players in the Indian Mutual Funds Industry are similar to some extent to the players
in other financial services industry. The players are as follows:

SEBI
The Securities Exchange Board of India (SEBI) is the regulatory authority for all the
mutual funds sponsored by the public/private sector banks, financial institutions, private
sector companies, non- banking finance companies and foreign institutional investors.
SEBI has laid down the rules and regulations regarding the obligations of the entities
involves in a mutual fund, its establishment and launch of different schemes, investments
and valuation, financial reporting, conduct and operations of mutual funds.

Asset Management Company (AMC)

Its role is highly significant in the mutual funds operation. They are the fund managers
i.e. they invest the investors money in various securities after proper research and
analysis. They also look after the administrative functions of a mutual fund for which they
charge management fee.

Intermediaries
They act as a link between the mutual fund companies and the investors. The
intermediaries include brokers, sub- brokers, and investment houses. The other
intermediary- registrar and transfer agents perform activities, which are associated with
maintaining records concerning units already issued or to be issued by the company.
The registrar also performs other activities such as dividend payment, investor
grievance, etc.

Investors
Investors subscribe to the units issued by the mutual funds in the hope of getting a return
commensurate with the risk involved. SEBI protects the interest of the investors through
the guidelines laid down under SEBI (Disclosure and Investor Protection) Guidelines,
2000. The mutual fund investor mainly includes individual, HUF, corporate and trusts.

PROFILE OF THE ORGNAISATION

33
ABOUT ANANDRATHI

AnandRathi (AR) is a leading full service securities firm providing the entire
gamut of financial services. The firm, founded in 1994 by Mr. AnandRathi, today
has a pan India presence as well as an international presence through offices in
Dubai and Bangkok. AR provides a breadth of financial and advisory services
including wealth management, investment banking, corporate advisory,
brokerage & distribution of equities, commodities, mutual funds and insurance,
structured products - all of which are supported by powerful research teams.

The firm's philosophy is entirely client centric, with a clear focus on providing long
term value addition to clients, while maintaining the highest standards of
excellence, ethics and professionalism. The entire firm activities are divided
across distinct client groups: Individuals, Private Clients, Corporate and
Institutions and was recently ranked by Asia Money 2006 poll amongst South
Asia's top 5 wealth managers for the ultra-rich.

In year 2007 Citigroup Venture Capital International joined the group as a

financial partner.

AR VISION

“TO BE A SHINING EXAMPLE AS A LEADER IN

INNOVATION AND THE FIRST CHOICE FOR CLIENTS
AND EMPLOYEES”

34
Milestones
AR CORE STRENGTHS
• 1994:
Started activities in consulting and Institutional equity sales with staff of 15

• 1995:
Set up a research desk and empanelled with major institutional investors

• 1997:
Introduced investment banking businesses
Retail brokerage services launched

• 1999:
Lead managed first IPO and executed first M & A deal

• 2003:
Wealth Management assets cross Rs1500 crores
Insurance broking launched
Launch of Wealth Management services in Dubai
Retail Branch network exceeds 50

• 2004:
Commodities brokerage and real estate services introduced
Wealth Management assets cross Rs3000crores
Retail Branch network expands across 100 locations within India

• 2005:
Real Estate Private Equity Fund Launched
Retail Branch network expands across 200 locations within India

• 2006:
Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia
Ranked 6th in FY2006 for All India Broker Performance in equity distribution in the
Ranked 9th in the Retail Category having more than 5% market share
Completes its presence in all States across the country with offices at 300+
locations within India

• 2007:
Citigroup Venture Capital International picks up 19.9% equity stake
Retail customer base crosses 200 thousand
Establishes presence in over 450 locations

35
Breadth of Services

In line with its client-centric philosophy, the firm offers to its clients the entire
spectrum of financial services ranging from brokerage services in equities and
commodities, distribution of mutual funds, IPOs and insurance products, real
estate, investment banking, merger and acquisitions, corporate finance and
corporate advisory.

Clients deal with a relationship manager who leverages and brings together the
product specialists from across the firm to create an optimum solution to the
client needs.

Management Team

AR brings together a highly professional core management team that comprises

of individuals with extensive business as well as industry experience.

In-Depth Research

Our research expertise is at the core of the value proposition that we offer to our
clients. Research teams across the firm continuously track various markets and
products. The aim is however common - to go far deeper than others, to deliver
incisive insights and ideas and be accountable for results.

MANAGEMENT TEAM

36
Board Of Directors

 Anand Rathi, Founder & Chairman

 Pradeep Gupta, Co-founder & Vice chairman
 Amit Rathi, Managing Director
 P G Kakodkar, Director
 Dr. S A Dave, Director
 C D Arha, Director
 Ajit Bhushan, Director

Key Business Heads

 Ratnesh Kumar, Head – Institutional Equities

 Rakesh Rawal, Head -Wealth Management
 Roy Rodrigues, Head -Investment Banking
 Amandeep S Chahal Head – Retail

SERVICES

 Call N Trade
 Mutual Fund
 Depository Services
 Commodities
 Insurance
 IPOs
 Online Reports

37
In India where ANANDRATHI is present in 21 STATES:

- Andhra Pradesh - Jammu & Kashmir - Punjab

- Assam - Jharkhand - Rajasthan
- Bihar - Karnataka - Tamil Nadu
- Chhattisgarh - Kerela - Uttar Pradesh
- Delhi - Madhya Pradesh - Uttaranchal
- Goa - Maharashtra
- Gujrat - Orissa
- Haryana - West Bengal

Mutual fund

AR is one of India's top mutual fund distribution houses. Our success lies in our
philosophy of providing consistently superior, independent and unbiased advice
to our clients backed by in-depth research. We firmly believe in the importance of
selecting appropriate asset allocations based on the client's risk profile.

Depository Services

AR Depository Services provides you with a secure and convenient way for
holding your securities on both CDSL and NSDL. Our depository services include
settlement, clearing and custody of securities, registration of shares and
dematerialization. We offer you daily updated internet access to your holding
statement and transaction summary.
CDSL Depository
NSDL Depository

38
Commodities

Commodities broking - a whole new opportunity to hedge business risk and an

attractive investment opportunity to deliver superior returns for investors.

Services provided :

Risk Management
Due diligence and research on policies available
Maintain proper records of client policies
Assist client in paying premiums
Continuous monitoring of client account

IPOS

We are a leading primary market distributor across the country. Our strong
performance in IPOs has been a result of our vast experience in the Primary
Market, a wide network of branches across India, strong distribution capabilities
and a dedicated research team. We have been consistently ranked among the
top 10 distributors of IPOs on all major offerings. Our IPO research team provides
clients with indepth overview of forthcoming IPOs as well as investment
recommendations. Online filling of forms is also available

PROBLEMS OF THE ORGANISATION

• Communication gap
• No clear polices, rules and regulation
Lack of motivation factors d depository services through CDSL. Commodities
broking is supported by a dedicated research cell that provides both technical as
well as fundamental research. Our research covers a broad range of traded

39
commodities including precious and base metals, Oils and Oilseeds, agri-
commodities such as wheat, chana, guar, guar gum and spices such as sugar,
jeera and cotton.

Insurance Broking

• As an insurance broker, we provide to our clients comprehensive risk

management techniques, both within the business as well as on the
personal front. Risk management includes identification, measurement
and assessment of the risk and handling of the risk, of which insurance is
an integral part. The firm deals with both life insurance and general
insurance products across all insurance companies.

Our guiding philosophy is to manage the clients' entire risk set by

providing the optimal level of cover at the least possible cost. The entire
sales process and product selection is research oriented and customized
to the client's needs. We lay strong emphasis on timely claim settlement
and post sales services.
• HR weak
• No proper staff

List of Competitors
 Karvy
 Smc
 India Bulls
 Unicon
 Parasram
 Arihant

40
  Annagram
 Religare
 Kotak Securities
 R.K Global
 Angel Broking
 Reliance money
 ICICI Direct

SWOT ANALYSIS
STRENGTH

• Excellent internal processes

• Good plans are offered
• Established Brand Image
• Largest Distribution network
• High levels of professionals are there.

WEAKNESS
• Customer dose not try to understand that what actually mutual fund is?
• Through-cut competition.
• Skillful labor is required.
• Need efficient persons to work
• High level of competition.

OPPORTUNITIES
• Target customers are large in number
• Customer is ready to purchase the product if right approach is taken
• Good Financial Position.
• It is taken as investment source
41
 • It is a way to save the taxes.

THREATS
• Growing Market with lots of competitors.
• Promotion Scheme of Competitors.
• Less publicity may decrease its market share.
• Changing government policies will affect whole mutual fund plans.

42
 CHAPTER-2

OBJECTIVE
&
METHDOLOGY

43
SIGNIFICANCE:

Significance of the project is to find out prospect investors of Mutual Funds and
also to provide key information about the investor’s perception and preferences
by Mutual Fund industry. The study will help in getting information about their
performance at distributors as well as at their own investment center or why
people go for Mutual Fund for investments. Study will also helps in finding out the
problems related to distribution.

MANAGERIAL USEFULNESS OF THE STUDY

 The study also provides the problems related to distribution of Mutual

Fund so that they can improve the service rendered by them as a
distributor.

 The study will also give information about prospective investors both
individual as well as institutional clients in areas of surrey where they can
get lead.

 The study provides the complete information about all close competitors in
Mutual Fund investment.

 It provides the AMC a feedback from customers regarding their problems

and perception about investing in mutual funds so that they can improve
their services

44
OBJECTIVES:

 To study the Mutual funds industry in detail

 To study the Investment procedure in Mutual funds

 To compare Individual plan with SIP in between different AMCs .

 To Find out the relationship between MARKET MOVEMENT and SIP

RETURN.

 To find out MARKET RISK of SIP PLAN.

 To suggest better Investment option according to market behaviour.

SCOPE OF THE STUDY

In current scenario, the bank rates have been cut down rapidly due to severe
competition, so people are not going for contemporary deposits because that
cannot provide them the better returns or the desired interest rates. So, they can
look for some other investment options like Mutual Funds, which can provide
them higher returns in medium to long term and can easily meet their financial
goals.

To look out for new prospective customers who are willing to invest in Mutual
Funds.

45
A big boom has been witnessed in Mutual Fund Industry in resent times. A large
number of new players have entered the market and trying to gain market share
in this rapidly improving market.
.
I surveyed on my Project Topic “INTER FIRM COMPARISON BETWEEN
MUTUAL FUND INDUSTRY (2005-09)”

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.

RESEARCH METHODOLOGY

1. Research Problem: “INTER FIRM COMPARISON BETWEEN

MUTUAL FUND INDUSTRY(2005 to 2009)”.
2. Research Design: ANALYTICAL

3. Sample Size: 8

4. Sampling Technique: JUDGEMENTAL

5. Data Collection Method: PRIMARY AND SECONDARY DATA

6. Sampling Methods: TABLES , CHARTS, CORRELATION, BETA,

GRAPHS.

46
 CHAPTER-3

DATA ANALYSIS

&
INTERPRETATION

47
 (A)EQUITY DIVERSIFIED

PLAN-1 TATA INFRASTRUCTURE FUND(G)

According to Systematic investment plan method

DATE NAVs UNITS

10/6/2005 11.296 88.53
11/7/2005 11.718 85.34
10/8/2005 12.531 79.8
12/9/2005 13.434 74.44
10/10/2005 13.748 72.74
11/11/2005 13.469 74.24
12/12/2005 14.735 67.86
10/1/2006 15.544 64.33
10/2/2006 17.045 58.67
10/3/2006 19.614 50.98
10/4/2006 21.466 46.58
10/5/2006 22.717 44.02
12/6/2006 16.051 62.3
10/7/2006 17.818 56.12
10/8/2006 18.419 54.29
11/9/2006 19.516 51.24
10/10/2006 21.249 47.06
10/11/2006 22.905 43.66
11/12/2006 23.336 42.85
10/1/2007 23.427 42.68
12/2/2007 23.678 42.23
12/3/2007 21.453 46.61
10/4/2007 22.314 44.81
10/5/2007 23.702 42.19
11/6/2007 25.123 39.8
10/7/2007 28.028 35.68
10/8/2007 28.159 35.51
10/9/2007 29.848 33.5
10/10/2007 35.843 27.9
12/11/2007 39.802 25.12
10/12/2007 43.131 23.18
10/1/2008 43.381 23.05
11/2/2008 33.864 29.53
10/3/2008 32.639 30.64
10/4/2008 31.225 32.03
12/5/2008 33.047 30.26

48
 10/6/2008 29.809 33.55
10/7/2008 27.823 35.94
11/8/2008 30.312 32.99
10/9/2008 28.513 35.07
10/10/2008 20.631 48.47
10/11/2008 20.371 49.09
10/12/2008 18.031 55.46
12/1/2009 17.514 57.09
10/2/2009 17.857 56
12/3/2009 15.857 63.06
13/04/2009 19.971 50.07
11/5/2009 21.014 47.58
TOTAL 2314.14

AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM

= 2314.14 x 21.014
=Rs. 48629.34

PLAN-2 UTI INFRASTRUCTURE FUND(G)

According to Systematic investment plan method

DATE NAVs UNITS

10/6/2005 13.08 76.45
11/7/2005 13.63 73.36
10/8/2005 15.13 66.09
12/9/2005 16.3 61.35
10/10/2005 16.36 61.12
11/11/2005 16.02 62.42
12/12/2005 17.04 58.68
10/1/2006 18.48 54.11
10/2/2006 19.52 51.23
10/3/2006 22.07 45.31
10/4/2006 24.98 40.03

49
 10/5/2006 26.36 37.93
12/6/2006 18.58 53.82
10/7/2006 20.36 49.11
10/8/2006 21.6 46.29
11/9/2006 22.63 44.19
10/10/2006 24.73 40.43
10/11/2006 26.54 37.68
11/12/2006 27.58 36.26
10/1/2007 27.97 35.75
12/2/2007 28.13 35.55
12/3/2007 25.39 39.38
10/4/2007 26.34 37.96
10/5/2007 28.34 35.28
11/6/2007 29.68 33.69
10/7/2007 32.69 30.59
10/8/2007 32.72 30.56
10/9/2007 34.76 28.77
10/10/2007 41.63 24.02
12/11/2007 44.47 22.48
10/12/2007 48.04 20.81
10/1/2008 48.69 20.54
11/2/2008 37.86 26.41
10/3/2008 36.27 27.57
10/4/2008 34.42 29.05
12/5/2008 35.39 28.25
10/6/2008 31.53 31.71
10/7/2008 29.79 33.57
11/8/2008 32.14 31.11
10/9/2008 30.52 32.76
10/10/2008 23.03 43.42
10/11/2008 22.73 43.99
10/12/2008 20.97 47.68
12/1/2009 20.5 48.78
10/2/2009 21.07 47.46
12/3/2009 19.31 51.78
13/04/2009 23.21 43.08
11/5/2009 24.25 41.23
TOTAL 1999.09

AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM

= 1999.09 X 24.25
=Rs. 48477.93

COMPARISON IN “TATA INFRASTRUCTURE FUND” & “UTI INFRASTRUCTURE FUND”

50
 “PLAN-1” Vs. “PLAN-2”

PLAN-1 PLAN-2

Amt. invested - Rs 48000 Amt. invested - Rs 48000

Amt. Received after 4 years Rs 48629.34 Amt. received- Rs 48477.93

RETURNS Rs 629.34 RETURNS Rs 477.93

CONCLUSION: In SIP, plan-1 exceeds from plan-2 with the amount of Rs 151.41
CORRELATION

YEAR NIFTY (X) PLAN-1 PLAN-2

2005-06 4447.1 6344.65 6137.78

2005-07 4908.99 8793.37 9434.96

2005-08 6105.53 21824.65 17174.18

2005-09 4377.93 693.37 477.93

CORRELATION 0.97464 0.943018

CORRELATION BETWEEN NIFTY & PLAN-1 = 0.97464

CORRELATION BETWEEN NIFTY & PLAN-2= 0.943018

BETA( MARKET RISK)

β(Beta) of PLAN-1=6.01

β(Beta) of PLAN-2=5.06
51
RESULT:
AS ABOVE STATED, WE CAN SEE THAT TATA INFRASTRUCTURE
FUND HAVE GOT MORE RETURNS WITH THEIR MORE RISK AS
COMPARABLE TO UTI INFRASTRUCTURE FUND

(B) EARNING LINKED SAVING SCHEMES

According to Systematic investment plan method

PLAN-1 Canara Robeco Equity Tax Saver (G)

DATE NAVs UNITS

10/6/2005 6.777 147.56
11/7/2005 7.414 134.88
10/8/2005 8.523 117.33
12/9/2005 9.652 103.61
10/10/2005 9.726 102.82
11/11/2005 9.129 109.54
12/12/2005 9.846 101.56
10/1/2006 10.189 98.15
10/2/2006 11.243 88.94
10/3/2006 11.844 54.43
10/4/2006 12.121 82.5
10/5/2006 12.922 77.39
12/6/2006 9.182 108.91
10/7/2006 9.875 101.26
10/8/2006 10.167 98.36
11/9/2006 10.562 94.68
10/10/2006 11.405 87.68
10/11/2006 12.647 79.07
11/12/2006 12.682 78.85
10/1/2007 12.934 77.32
12/2/2007 13.489 74.13
12/3/2007 12.3 81.3
10/4/2007 12.777 78.27
10/5/2007 13.579 73.64
11/6/2007 14.203 70.41
10/7/2007 15.671 63.81
10/8/2007 15.266 65.51

52
10/9/2007 16.068 62.23
10/10/2007 18.38 54.4
12/11/2007 19.781 50.55
10/12/2007 20.811 48.05
10/1/2008 21.646 46.19
11/2/2008 19.98 50.05
10/3/2008 16.245 61.56
10/4/2008 15.6 64.1
12/5/2008 16.77 59.63
10/6/2008 14.82 67.47
10/7/2008 13.85 72.2
11/8/2008 14.93 66.98
10/9/2008 14.32 69.83
10/10/2008 10.96 91.24
10/11/2008 11.35 88.1
10/12/2008 10.84 92.25
12/1/2009 11.03 90.66
10/2/2009 10.91 91.66
12/3/2009 9.27 107.87
13/04/2009 12.24 81.7
11/5/2009 13.32 75.07
TOTAL 3943.7

AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM

= 3943.7 X 13.32
=Rs. 52530.8

PLAN-2 Sundaram BNP Paribas Tax Saver (OE) (G)

According to Systematic investment plan method

DATE NAVs UNITS

10/6/2005 14.458 69.16

53
11/7/2005 15.014 66.6
10/8/2005 16.373 61.07
12/9/2005 17.786 56.22
10/10/2005 18.298 54.65
11/11/2005 17.923 55.79
12/12/2005 19.754 50.62
10/1/2006 21.818 45.83
10/2/2006 23.137 43.22
10/3/2006 23.781 42.05
10/4/2006 26.123 38.28
10/5/2006 28.1 35.59
12/6/2006 19.298 51.82
10/7/2006 20.79 48.1
10/8/2006 21.494 46.52
11/9/2006 22.528 44.39
10/10/2006 24.388 41
10/11/2006 25.995 38.47
11/12/2006 26.542 37.67
10/1/2007 28.269 35.37
12/2/2007 27.66 36.15
12/3/2007 25.419 39.34
10/4/2007 26.334 37.97
10/5/2007 27.281 36.65
11/6/2007 27.707 36.09
10/7/2007 29.884 33.46
10/8/2007 29.521 33.87
10/9/2007 31.482 31.76
10/10/2007 37.132 26.93
12/11/2007 40.196 24.88
10/12/2007 44.947 22.25
10/1/2008 45.54 21.95
11/2/2008 36.482 27.41
10/3/2008 34.323 29.13
10/4/2008 33.573 29.78
12/5/2008 35.37 28.27
10/6/2008 32.092 31.16
10/7/2008 30.582 32.7
11/8/2008 32.329 30.93
10/9/2008 31.751 31.49
10/10/2008 26.146 38.24
10/11/2008 25.146 39.76
10/12/2008 23.653 42.27
12/1/2009 23.587 42.39
10/2/2009 23.477 42.59
12/3/2009 20.653 48.42
13/04/2009 25.208 39.67
11/5/2009 26.926 37.14
TOTAL 1915.07

AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM

54
 = 1915.07 X 26.926
=Rs. 51565.17

PLAN-3 HDFC Tax Saver (G)

According to Systematic investment plan method

DATE NAVs UNITS

10/6/2005 77.931 12.83
11/7/2005 83.804 11.93
10/8/2005 91.578 10.92
12/9/2005 97.619 10.24
10/10/2005 98.909 10.11
11/11/2005 99.516 10.05
12/12/2005 108.628 9.2
10/1/2006 111.085 9
10/2/2006 117.182 8.53
10/3/2006 124.534 8.03
10/4/2006 139.276 7.18
10/5/2006 147.511 6.78
12/6/2006 104.817 9.54
10/7/2006 115.497 8.65
10/8/2006 119.767 8.35
11/9/2006 124.933 8
10/10/2006 134.582 7.43
10/11/2006 141.588 7.06
11/12/2006 142.885 7
10/1/2007 143.355 6.97
12/2/2007 143.742 6.95
12/3/2007 130.973 7.63
10/4/2007 133.862 7.47
10/5/2007 142.22 7.03
11/6/2007 150.674 6.63
10/7/2007 159.668 6.26
10/8/2007 159.139 6.28
10/9/2007 164.106 6.09
10/10/2007 182.664 5.47
12/11/2007 190.489 5.25
10/12/2007 201.949 4.95
10/1/2008 203 4.92
11/2/2008 161.888 6.17
10/3/2008 154.161 6.48
10/4/2008 149.893 6.67
12/5/2008 154.205 6.48
10/6/2008 138.446 7.22

55
10/7/2008 130.304 7.67
11/8/2008 146.634 6.82
10/9/2008 145.154 6.89
10/10/2008 109.499 9.13
10/11/2008 106.985 9.34
10/12/2008 94.449 10.58
12/1/2009 95.425 10.48
10/2/2009 96.25 10.39
12/3/2009 85.204 11.73
13/04/2009 106.932 9.35
11/5/2009 115.32 8.67
TOTAL 386.8

AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM

= 386.8 X 115.32
=Rs. 44605.77

COMPARISON IN PLAN-1, PLAN-2 & PLAN-3

“PLAN-1” Vs. “PLAN-2” Vs. “PLAN-3”

Amt. Invested -Rs 48000 Amt. Invested- Rs 48000 Amt. Invested -Rs 48000
Amt. received -Rs 52530.08 Amt. received- Rs 51565.17 Amt. received-Rs 44605.77

RETURNS Rs 4530.08 RETURNS Rs 3565.17 RETURNS Rs (3394.23)

CONCLUSION: In SIP, plan-1 exceeds from plan-2 & plan-3 with the amount of
Rs 964.9 & Rs.7924.3

56
 CORRELATION

YEAR NIFTY (X) PLAN-1 PLAN-2 PLAN-3

2005-06 4447.1 3748.17 5396.14 4934.26

2005-07 4908.99 6582.35 6350.93 5422.47

2005-08 6105.53 13449.19 15580.42 5951.47

2005-09 4377.93 4530.08 3565.17 -3394.22

0.993673 0.986121 0.563035

CORRELATION

CORRELATION BETWEEN NIFTY & PLAN-1 = 0.993673

CORRELATION BETWEEN NIFTY & PLAN-2= 0.986121

CORRELATION BETWEEN NIFTY & PLAN-3 = 0.563035

BETA( MARKET RISK)

β(Beta) of PLAN-1= 3.76
β(Beta) of PLAN-2=4.75
β(Beta) of PLAN-3=1.72

RESULT:
AS ABOVE STATED, WE CAN SEE THAT CANARA ROBECO
EQUITY TAX SAVER HAVE GOT MORE RETURNS WITH THEIR

57
MODERATE RISK AS COMPARABLE TO SUNDARAM BNP PARIBAS
TAX SAVER (OE) & HDFC TAX SAVER.

(C) BALANCED SCHEMES

PLAN-1 Reliance regular savings fund – Balanced option(G)

According to Systematic investment plan method

DATE NAVs UNITS

10/6/2005 10.048 99.52
11/7/2005 10.054 99.46
10/8/2005 10.064 99.36
12/9/2005 10.084 99.167
10/10/2005 10.101 99
11/11/2005 10.118 98.83
12/12/2005 10.137 98.65
10/1/2006 10.14 98.62
10/2/2006 10.159 98.43
10/3/2006 10.184 98.19
10/4/2006 10.291 97.17
10/5/2006 11.166 89.56
12/6/2006 10.825 92.38
10/7/2006 10.91 91.66
10/8/2006 10.928 91.51
11/9/2006 11.026 90.69
10/10/2006 11.221 89.12
10/11/2006 11.365 87.99
11/12/2006 11.401 87.71
10/1/2007 11.534 86.7
12/2/2007 11.471 87.17
12/3/2007 11.026 90.69
10/4/2007 11.187 89.39
10/5/2007 11.699 85.47
11/6/2007 11.798 84.76
10/7/2007 12.39 80.71
10/8/2007 12.629 79.18
10/9/2007 13.461 74.29
10/10/2007 14.919 67.03
12/11/2007 15.703 63.68
10/12/2007 16.391 61.01
10/1/2008 16.927 59.07
11/2/2008 14.616 68.42

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10/3/2008 13.956 71.65
10/4/2008 13.533 73.89
12/5/2008 14.194 70.45
10/6/2008 13.333 75
10/7/2008 12.774 78.28
11/8/2008 13.826 72.32
10/9/2008 13.344 74.94
10/10/2008 10.407 96.09
10/11/2008 11.0871 90.19
10/12/2008 10.38 96.34
12/1/2009 10.551 94.77
10/2/2009 10.478 95.44
12/3/2009 9.463 105.67
13/04/2009 12.054 82.96
11/5/2009 13.021 76.8
TOTAL 4139.377

AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM

= 4139.377 X 13.021
=Rs. 53898.83

PLAN-2 HDFC balanced fund(G)

According to Systematic investment plan method

DATE NAVs UNITS

10/6/2005 20.548 48.67
11/7/2005 21.221 47.12
10/8/2005 22.759 43.93
12/9/2005 23.889 41.86
10/10/2005 24.067 41.55
11/11/2005 23.749 42.11
12/12/2005 25.237 39.62
10/1/2006 25.821 38.73
10/2/2006 26.416 37.86
10/3/2006 27.785 35.99
10/4/2006 29.655 33.72
10/5/2006 30.548 32.73
12/6/2006 25.044 39.93
10/7/2006 26.449 37.81
10/8/2006 27.832 26.43
11/9/2006 28.603 34.96
10/10/2006 30.1 33.22
10/11/2006 31.687 31.56
11/12/2006 31.661 31.58

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10/1/2007 31.961 31.29
12/2/2007 31.298 31.95
12/3/2007 28.675 34.87
10/4/2007 29.59 33.79
10/5/2007 30.714 32.56
11/6/2007 31.41 31.84
10/7/2007 32.97 30.33
10/8/2007 32.594 30.68
10/9/2007 33.292 30.04
10/10/2007 35.968 27.8
12/11/2007 37.146 26.92
10/12/2007 39.281 25.46
10/1/2008 41.002 24.39
11/2/2008 36.655 27.28
10/3/2008 34.839 28.7
10/4/2008 34.362 29.1
12/5/2008 35.593 28.09
10/6/2008 33.257 30.07
10/7/2008 31.771 31.47
11/8/2008 34.63 28.88
10/9/2008 34.541 28.95
10/10/2008 27.49 36.38
10/11/2008 26.95 37.11
10/12/2008 24.951 40.07
12/1/2009 25.443 39.3
10/2/2009 25.84 38.7
12/3/2009 23.525 42.51
13/04/2009 28.242 35.41
11/5/2009 30.008 33.32
TOTAL 1646.64

AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM

=1646.64 X 30.008
=Rs. 49412.37

PLAN-3 ICICI pru balanced fund(G)

According to Systematic investment plan method

DATE NAVs UNITS

10/6/2005 20.5 48.78
11/7/2005 21.84 45.79

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10/8/2005 23.07 43.35
12/9/2005 24.65 40.57
10/10/2005 24.81 40.31
11/11/2005 24.8 40.32
12/12/2005 26.11 38.3
10/1/2006 27.55 36.3
10/2/2006 28.86 34.65
10/3/2006 29.82 33.53
10/4/2006 31.75 31.5
10/5/2006 33.72 29.66
12/6/2006 26.85 37.24
10/7/2006 28.62 34.94
10/8/2006 29.65 33.73
11/9/2006 30.36 32.94
10/10/2006 31.87 31.38
10/11/2006 33.53 29.82
11/12/2006 33.57 29.79
10/1/2007 34.28 29.17
12/2/2007 35.24 28.38
12/3/2007 32.93 30.37
10/4/2007 33.64 29.73
10/5/2007 34.64 28.87
11/6/2007 35.63 28.07
10/7/2007 37.02 27.01
10/8/2007 36.15 27.66
10/9/2007 37.43 26.72
10/10/2007 41.77 23.94
12/11/2007 42.85 23.34
10/12/2007 45.57 21.94
10/1/2008 46.66 21.43
11/2/2008 39.11 25.57
10/3/2008 38.34 26.08
10/4/2008 36.93 27.08
12/5/2008 38.45 26.01
10/6/2008 35.08 30.07
10/7/2008 33.26 30.07
11/8/2008 35.64 28.06
10/9/2008 33.94 29.46
10/10/2008 24.84 40.26
10/11/2008 25.69 38.92
10/12/2008 25.64 39
12/1/2009 25.71 38.9
10/2/2009 26.15 38.24
12/3/2009 24.32 41.12
13/04/2009 27.98 35.74
11/5/2009 29.15 34.3
TOTAL 1568.41

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AMOUNT = TOTAL UNITS X LAST NAV WHEN THE VALUE TO BE REDEEM
=1568.41 X 29.15
=Rs. 45719.15

COMPARISON IN PLAN-1, PLAN-2 & PLAN-3

“PLAN-1” Vs. “PLAN-2” Vs. “PLAN-3”

PLAN-1 PLAN-2 PLAN-3

Amt. Invested -Rs 48000 Amt. Invested- Rs 48000 Amt. Invested -Rs 48000
Amt. received -Rs 53898.83 Amt. received- Rs 49412.37 Amt. received-Rs 45719.15

RETURNS Rs 5898.83 RETURNS Rs 1412.37 RETURNS Rs (2280.85)

CONCLUSION: In SIP, plan-1 exceeds from plan-2 & plan-3 with the amount of
Rs 4486.46 & Rs.8179.68
CORRELATION

YEAR NIFTY (X) PLAN-1 PLAN-2 PLAN-3

2005-06 4447.1 1130.74 2781.87 3614.38

2005-07 4908.99 2281.07 3146.26 5077.51

2005-08 6105.53 8009.6 7582.56 7997.18

2005-09 4377.93 5898.83 1412.37 -2280.85

19839.55
CORRELATION 0.660852 0.979078 0.807867

CORRELATION BETWEEN NIFTY & PLAN-1 = 0.660852

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 CORRELATION BETWEEN NIFTY & PLAN-2= 0.979078

CORRELATION BETWEEN NIFTY & PLAN-3 = 0.807867

BETA( MARKET RISK)

β(Beta) of PLAN-1=2.74

β(Beta) of PLAN-2=4.61

β(Beta) of PLAN-3=0.56

RESULT:
AS ABOVE STATED, WE CAN SEE THAT RELIANCE RSF- EQUITY
OPTION HAVE GOT MORE RETURNS WITH THEIR MODERATE
RISK AS COMPARABLE TO OTHER SCHEMES .

63
INTERPRETATION

 Have you ever invested/ interested to invest in mutual

funds?

64
YES 135
NO 65

Maximum number of persons wants to invest his/her money in mutual

fund.

 Do you know about mutual fund?

Options Percentage
Yes 65

65
 No 35

% OF RESPONDENT

35

Yes
No

65

65%of the people know about the mutual fund, so they want to
invest their money into mutual fund and other 35% don’t know
about mutual fund.

What option will you choose for investment?

Investment Options Percentage

66
 Bank 15
Insurance 22
Mutual Fund 55
Stock Market 8

60 55

50

40 Bank
Percentage

Insurance
30
22 Mutual Fund
20 Stock Market
15

10 8

0
Investment Option

The result is that more than 50% people want to invest their money in
mutual fund and other chooses the bank, insurance and stock market.

 How experienced are you at investing in individual stocks?

A. Very inexperienced 70%

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 B. Moderately inexperienced 05%

C. Moderately experienced 20%

D. Very experienced 05%

experienced at investing in individual

stocks
5

20

very inexperienced
moderately inexperienced
moderately experienced
5 very experienced

70

Interpretation

The above table and chart reveals that the investors are experienced
at investing in individual stocks. Majority of the i.e. 70% investors very
inexperience at investing in individual stocks. While others are 20%
moderately experienced and 5% moderately inexperienced and 5% of
the investors are very experienced

68
 Do you think that mutual fund can give more return then bank

deposit?

Respondent Percentage
Answer
Yes 65
No 35

% OF RESPONDENT

35

Yes
No

65

65% of the respondent said that they think that mutual funds give
more return than other investment like bank deposit.
 According to you what is a systematic Investment Plan?

RESPONDENT ANSWER % OF RESPONDENT

SIP is similar to a regular saving 35
scheme
A specific amount should be 50

69
 invested for a continuous period
SIP allows the investor to buy 15
units on a given date

% OF RESPONDENT

SIP is similar to a
15 regular saving scheme
35
A specific amount
should be invested for a
continuous period
SIP allows the investor
50 to buy units on a given
date

According to 50% respondents Systematic Investment plan is a

specific amount should be invested for a continuous period, 35%
people says that SIP is similar to a regular saving scheme and other
says that SIP is allow the investor to buy units on a given period.

Findings & Conclusion

After going through a two months summer training and survey, I have come to
know about different aspects of mutual funds and mutual funds industry. India is
an emerging market

This study and survey on mutual funds is a small eye hole to see the picture of
mutual funds industry in India. This provides almost clear view to the readers.
70
Mutual funds industry is enlarging its size in India. Number of investors is rising,
and number of AMCs is going up. These changes are likely to happen. Indian
monetary policy is supporting new business. Private sector is aggressively
participating in mutual funds business. Numbers of schemes are much more than
earlier.

With such shining sides, inflation rate, bearish stock market, squeezing liquidity
and other dark sides putting pressure on consumers saving. This situation
pushes investors back from investment. They wait and hold cash rather than
investing. This study found that investors are willing to invest with high rate of
return. They know high return always adhere to high risk but market still is not in
correction mode. It will take time.

Industry need to revise its business strategy. Investor’s perception is not

prioritized yet. Instead of completing targets, advisors working under institutions
should consider the requirement of investors. We need to change pattern of
selling mutual funds schemes
I hope this study will help readers to identify industry’s unidentified areas where
they need to work out.

\
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

71
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.
The advisors may try to highlight some of the value added benefits of MFs such
as tax benefit, rupee cost averaging, and systematic transfer plan, rebalancing
etc. these benefits are not offered by other options singlehandedly. So these are
enough to drive the investors towards mutual funds. Investors could also try to
increase the spectrum of services offered.

One should diversify the investments between a few funds (the actual number
depends entirely on the amount of investment). This strategy ensures that the
portfolio is not dependent on the performance of one single fund. However, one
needs to avoid over-diversification as that would achieve nothing.

Investor can also plan like one mutual fund of diversified equity plan, second
mutual fund of balanced type and third one you can plan of debt type etc. In this
manner the money will get diversified, risk is reduced and the investor will get
excellent profit.

LEARNING

1. Summer Training and this project have enabled me to get Knowledge about
mutual Funds, their operations, schemes and their risk profile.

72
2. Got the opportunity to give presentation which helped me to improve my
communication skill and increase my confidence.

3. Learned how to face customers and how to answer their queries.

4. Got the opportunity to work in Anand rathi (a brokerage company) to interact

with customers and made them aware about Mutual Fund and various
schemes.

5. I learned that real world scenario is all together different from those in
theories, but theories help in guiding you in tough situations.

QUESTIONNAIRE

A study of preferences of the investors for investment in mutual

funds.

1. Personal Details:

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 (a). Name:-

(b). Add: - Phone:-

(c). Age:-

(d). Qualification:-

Graduation/PG Under Graduate Others

(e). Occupation. Pl tick (√)

Govt. Ser Pvt. Ser Business Agriculture Others

2. What kind of investments you have made so far? Pl tick (√). All applicable.

a. Saving account b. Fixed deposits c. Insurance d. Mutual Fund

e. Post Office-NSC, f. g. Gold/ Silver h. Real Estate
etc Shares/Debenture
s

3. While investing your money, which factor will you prefer?

.
(a) Liquidity (b) Low Risk (c) High (d) Trust
Return

74
4.Are you aware about Mutual Funds and their operations? Pl tick (√).
Yes No

5. If yes, how did you know about Mutual Fund?

a. Advertisement b. Peer Group c. Banks d. Financial Advisors

6. Have you ever invested in Mutual Fund? Pl tick (√).

Yes No

7. If not invested in Mutual Fund then why?

(a) Not aware of MF (b) Higher risk (c) Not any specific reason

8. If yes, in which Mutual Fund you have invested? Pl. tick (√). All applicable.

a. SBIMF b. UTI c. d. e. Kotak f. Other. specify

HDFC Reliance
10. When you plan to invest your money in asset management co. which AMC
will you prefer?

Assets Management Co.

a. SBIMF
b. UTI
c. Reliance

75
 d. HDFC
e. Kotak
f. ICICI

12. Which Channel will you prefer while investing in Mutual Fund?

(a) Financial Advisor (b) Bank (c) AMC

13. When you invest in Mutual Funds which mode of investment will you prefer?
Pl. tick (√).

a. One Time Investment b. Systematic Investment Plan (SIP)

14. When you want to invest which type of funds would you choose?

a. Having only debt b. Having debt & equity c. Only equity portfolio.
portfolio portfolio.

15. How would you like to receive the returns every year? Pl. tick (√).

a. Dividend payout b. Dividend re- c. Growth in NAV

investment

16. Instead of general Mutual Funds, would you like to invest in sectorial funds?
Please tick (√).

76
 Yes No

BIBILOGRAPHY:

Websites:

www.rathi.com

77
www.mutualfundsindia.com

www.moneycontrol.com

www.bseindia.com

www.nseindia.com

www.google.com

www.amfiindia.com

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