A PROJECT REPORT ON

A study of preferences of the investors for investment in mutual funds.

(Reliance Mutual Fund, Surat.)
{From 19TH FEB, 2010 to 5TH APRIL, 2010} A project report submitted in partial fulfillment of the requirement For the award of the degree of MASTER OF BUSINESS ADMINISTRATION TO SIKKIM MANIPAL UNIVERSITY Submitted By: PRASHANT B PATEL
MBA (FINANCE) (Sem. IV) Roll No. : - 520843826

Under the Guidance of

MR.PRADIPKUMAR MITRA

Submitted To:
NG-IITM (LC CODE:-01561) SIKKIM MANIPAL UNIVERSITY

-1-

SIKKIM MANIPAL UNIVERSITY

CERTIFICATE OF FACULTY GUIDE

This is to certify that the project report entitled

study of preferences of the investors for investment in mutual funds. submitted in partial
fulfillment of the requirement for the award of the degree of MASTER OF BUSINESSADMINISTRATION to SIKKIM MANIPAL UNIVERSITY, is a recordof bonafideresearch work carried outbyTUSHAR

BALVANTBHAI LADunder my supervise guidance.

Signature (MR.PRADIPKUMAR MITRA) MITRA) Project Guide

Signature (MR.PRADIPKUMAR HEAD OF DEPARTMENT

DECLARATION
-2-

I, PRASHANT B PATEL , here by declare that the project report entitled A study of preferences of the investors for investment in mutual funds. under the guidance of MR.PradipkumarMitra submitted in partial fulfillment of the requirements for the award of the degree of Master of Business Administration to Sikkim maniple University, Surat is my original work carried out during 19th FEB, 2010 to 5thApril, 2010 and not submitted for the award of any other degree of other similar titles or any other institution or organization or university by any other person.

Signature Place: Date: IV) Roll 520843826

(PRASHANT B

PATEL)

MBA. (Sem. No. -

PREFACE

-3-

In this period fast developing and changing world, I am proud for a study of M.B.A. full time course offered by SIKKIM MANIPAL UNIVERSITY. Finance is most important part of economics activity. Today the financial management is the branch of business ND administration. The firm or management can accept or reject proposal on the basis of financial statement. So I am selecting the specialization subject of Finance. Today, finance markets is more dynamic with changing the environment and changing in to SEBI rules, regulation and structure and depend to the capital market & securities market to SEBI. Hence with a view to know more about investment practice and to get practical knowledge of what we learn in the college and class, I have decided to do my project work at RELIANCE MUTUAL FUND , SURAT . I studied A study of preferences of the investors for investment in mutual funds. in which study first about Reliance Mutual fund, capital asset manegment investment individual. &research Company then about & also prepare a methodology

questionnaire for the study of investment pattern of On the bases of questionnaire in the last my analysis, findings & suggestions are mention.

ACKNOWLEDGEMENT
-4-

This report is written in accordance with the master of Business Administration course prescribed by Sikkim Maniple University for two months project training while working on this project every effort has been made to help in view the objective of the study set out in the training. I have also tried my level best to maintain a simple and clear style in presenting the subject matter of project report. I am thankful MR. PRADIPKUMAR MITRA, the HOD of NGIITM center 01561 Surat, for giving me an opportunity to do project work. I am highly in debited to MR. PRADIPKUMAR MITRA who guided me and helped me in bringing out this report in the midst of various odds and constraints. I am also thankful to MS SEJAL SHAH, faculty of our college for making support for preparing questionnaire I express my heartfelt gratitude to MR.PRASHANT B PATEL who provided me all the knowledge about my project report topic and also help me in the difficulty and also thankful them who gave me the precious opportunity to take training at SHARE KHAN LTD I am also thankful to the staff of the SHAR KHAN LTD for give me a practical knowledge and help me for satisfactory completing my project report. I am also thankful to my parents and many other colleagues who have directly or indirectly helped me in bringing out this project report. I am confident that this study meets the complete requirement of the M.B.A. course. It is quite possible that there may be some error of omission for the improvement of this project.
PRASHANT B PATEL

-5-

TABLE OF CONTENTS Acknowledgement.

CHAPTER 1

INDUSTRY PROFILE

CHEPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 7 CHAPTER 8

COMPANY PROFILE THEORETICAL ASPECT RESEARCH METHODOLOGY DATA ANALYSIS FINDINGS RECOMANDATION CONCLUSION

CHAPTER 9

QUESTIONNAIRE

-6-

-7-

-8-

HISTORY OF MUTUAL FUND

When three Boston securities executives pooled their money together in 1924 to create the first mutual fund, they had no idea how popular mutual funds would become. The idea of pooling money together for investing purposes started in Europe in the mid-1800s. The first pooled fund in the U.S. was created in 1893 for the faculty and staff of Harvard University. On March 21st, 1924 the first official mutual fund was born. It was called the Massachusetts investors trust. After one year, the Massachusetts investors trust grew from $50000 in assets in 1924 to $392000 in assets (with around 200 shareholders). In contrast, there are over 10000 mutual funds in the U.S. today totaling around $7 trillion (with approximately 83 million individual investors) according to the investment company institute.

FUTURE AND SCOPE OF MUTUAL FUND INDUSTRY IN INDIA

By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore. It is estimated that by 2010 March-end, the total assets of all scheduled commercial banks the annual composite rate of growth is expected 13.4% during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%. According to the current growth rate, by year 2010, mutual fund assets will be double. Banks should be Rs 40, 90,000 crore.

-9-

SOME FACTS FOR THE GROWTH OF MUTUAL FUNDS IN INDIA

100% growth in the last 6 years. Number of foreign AMC's are in the queue to enter the Indian markets like Fidelity Investments US based, with over US $1 trillion assets under management worldwide. Our saving rate is over 23%, highest in the world. Only channelizing these savings in mutual funds sector is required. We have approximately 33 mutual funds which is much less than US having more than 800. There is a big scope for expansion. 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the 'A' class cities. Soon they will find scope in the growing cities. Mutual fund can penetrate rural like the Indian insurance industry with simple and limited products. SEBI allowing the MF's to launch commodity mutual funds. Emphasis on better corporate governance. Trying to curb the late trading practices. Introduction of Financial Planners who can provide need based advice.

- 10 -

- 11 -

WHAT IS A MUTUAL FUND?

A mutual fund pools the money of people with similar investment goals. The money in turn is invested in various securities depending on the objectives of the mutual fund scheme. The profits (or loss) from such investments are shared among investors in proportion to their investments. Thus, depending on your investment horizon, risk tolerance and required rate of return, you can choose from mutual fund schemes that are: 1. Fixed income oriented, i.e. those that do not invest in shares, but focus on fixed income instruments 2. Equity oriented i.e. those that invest predominantly in shares 3. Hybrid i.e. invest in a combination of equity and fixed income instruments A mutual fund scheme normally issue units at Rs.10 during the initial offer. Thereafter, the profits (or loss) on your investment is reflected in the Net Asset Value (NAV) of the mutual fund scheme. The NAV is the actual value of a unit of a scheme on a given day. Open end schemes allow you to buy fresh units or sell your existing units back to the fund on any working day at a NAV based price.

- 12 -

HOW IS MUTUAL FUND STRUCTURED?

A mutual fund is set up as a trust or trustee company and may be sponsored by individuals or corporate. SEBI has prescribed the duties and responsibilities of the trustees/board of directors of the trustee company, which includes appointing an Asset Management Company (AMC) to manage the assets of the various schemes floated by it. The assets of the various schemes are held in custody of a SEBI approved custodian and all purchases/sales of securities by the AMC are routed through the custodian. All these entities - the fund, AMC, custodian etc. are governed by SEBI (Mutual Funds) Regulations and each of them have separate internal and external auditors, in addition to special SEBI inspections, to ensure that they work in line with SEBI Regulations and in the best interest of investors.

- 13 -

- 14 -

HISTORY OF RELIANCE MUTUAL FUND

Reliance mutual fund, promoted by the Anil Dhirubhai Ambani (ADAG) group, is one of the fastest growing mutual funds in India having doubled its assets over the last one year. In March, 2006, the Reliance mutual fund emerged as the largest private sector fund house in the country, overtaking Prudential ICICI which has been holding that position for many years.

The sponsor of the fund is Reliance Capital Limited, the financial services arm of ADAG. Reliance Capital Asset Management Limited, a wholly owned subsidiary of Reliance Capital Limited, acts as the AMC to the fund. Directors of the company include Amitabh Jhunjhunwala, a senior executive of ADAG. Amitabh Chaturvedi is the managing director of the AMC. The Reliance Mutual Fund is headed by Mr. Sundeep Sikka - the CEO of the company. As of end August 2006, Reliance mutual fund has Rs 28,753 crore of assets under management. Reliance Equity Fund, launched by Reliance MF in early 2006, is the largest mutual find scheme in the country with a fund size of over Rs 5,500crore. Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Average Assets Under Management (AAUM) of Rs. 1,17,249 Crores and an investor base of over 70.97 Lacs. (AAUM and investor count as of January 2010) Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and has presence in 159 cities across the country. Reliance Mutual Fund constantly - 15 -

endeavors to launch innovative products and customer service initiatives to increase value to investors. "Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders."

Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services. Sponsor: Reliance Capital Limited Trustee: Reliance Capital Trustee Co. Limited Investment Manager: Reliance Capital Asset Management Limited Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956.

Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond their initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the - 16 -

corpus. The NAV of the Scheme may be affected, interalia, by changes in the market conditions, interest rates, trading volumes, settlement periods and transfer procedures. The Mutual Fund is not assuring that it will make periodical dividend distributions, though it has every intention of doing so. All dividend distributions are subject to the availability of distributable surplus in the Scheme. For details of scheme features and for scheme specific risk factors, please refer to the Scheme Information Document.

REGISTRAR
Reliance Capital Asset Management Limited has appointed M/s. Karvy Computer share Pvt. Limited to act as the Registrar and Transfer Agent to the Schemes of Reliance Mutual Fund. M/s. Karvy Computer share Pvt. Limited (KCL) having their office at Karvy Plaza .21, Road No. 4, Street No.1, Adjacent to Rainbow Hospital, Banjara Hills, Hyderabad - 500 034, is a Registrar and Transfer Agent registered with SEBI under registration no. INR000000221. Reliance Capital Asset Management Ltd. and the Trustee have satisfied themselves, after undertaking appropriate due diligence measures, that they can provide the services required and have adequate facilities, including systems facilities and back up, to do so. The Trustee has also laid down broad parameters for supervision of the Registrar. As Registrar to the Schemes, KCL will accept and process investor's applications, handle communications with investors, perform data entry services, dispatch Account Statements and also perform such other functions as agreed, on an ongoing basis.

The Registrar is responsible for carrying out diligently the functions of a Registrar and Transfer Agent and will be paid fees as set out in the agreement entered into with it and as per any modification made thereof from time to time.

VISION & MISSION STATEMENT

- 17 -

Vision Statement

Mission Statement

To be a globally respected wealth To create and nurture a world-class, creator with an emphasis on customer high performance environment aimed care and a culture of good corporate at delighting our customers. governance.

DETAILS OF RELIANCE MUTUAL FUND:

The schemes of Reliance Mutual Fund are being managed by Reliance Capital Asset Management Ltd, which is a subsidiary of Reliance Capital Limited. Reliance Capital Ltd holds 93.37% of the paid-up capital of the Reliance Capital Asset Management Ltd. The value of the cumulative assets that are being managed (also called Assets Under Management (AUM)) amounted to Rs. 1,17,249 crores, as on Jan 2010. The investor base of Reliance Mutual Fund is over 70.97 lakhs.

- 18 -

STRUCTURE OF RMF

Board of Directors

Mr. Soumen Ghosh Mr. Kanu Doshi Mr. Manu Chadha Mr. Sushil Tripathi
Management Team

Mr. Sundeep Sikka Mr. Madhusudan Kela Mr. Amitabh Mohanty

Equity Fund Managers

Mr. Sunil B. Singhania Mr. Shailesh Raj Bhan Mr. Krishan Daga

Mr. Ashwani Kumar Mr. Shiv Chanani Mr. Govind Agrawal

Mr. Omprakash S. Kuckian

Debt Fund Managers

Mr. Amit Tripathi Mr. Prashant Pimple

Ms. Anju Chhajer Mr. Arpit Malaviya

- 19 -

- 20 -

TYPES OF MUTUAL FUNDS

In the investment market, one can find a variety of investors with different needs, objectives and risk taking capacities.

- 21 -

MUTUAL FUND

ON THE BASIS OF EXECUTION AND OPERATION

ON THE BASIS OF YIELD AND INVESTMENT PATTERN

CloseEnded

Open Ended

Equity

Hybrid

Debt

Mutual Fund schemes can classify into many types as given below: Close-ended Funds:-

- 22 -

The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed number of units. These schemes are launched with an initial public offer (IPO) with a stated maturity period after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy or sell units on the stock exchanges where they are listed. Unlike open-ended schemes, the unit capital in closed-ended schemes usually remains unchanged. After an initial closed period, the scheme may offer direct repurchase facility to the investors. Closed-ended schemes are usually more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends towards the NAV closer to the maturity date of the scheme. Features: - The main features of the close-ended funds are: The period and/or the target amount of the fund are definite and fixed beforehand. Once the period is over and/or the target is reached, the door is closed for the investors. They cannot purchase any more units. These units are publicly traded through stock exchange and generally, there is no repurchase facility by the fund. The main objective of this fund is capital appreciation. The whole fund is available for the entire duration of the scheme and there will not be any redemption demands before its maturity. At the time of redemption, the entire investment pertaining to a closed-end scheme is liquidated and the proceeds are distributed among the unit holders.

Open-ended Funds:An open-end fund is one that is available for subscription all through the

year. These do not have a fixed maturity. Investors can conveniently buy and sell

- 23 -

units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. Features: - The main features of the Open-ended funds are: There is complete flexibility with regard to one's investment or disinvestment. These units are not publicly traded but the Fund is ready to repurchase them and resell them at any time. The investor is offered install liquidity in the sense that the unit can be sold on any working day to the Fund. The main objective of this fund is income generation. The inventors get dividend, right or bonuses as rewards for their investment. Generally, the listed prices are close to their Net Asset Value. The Fund fixes a different price for their purchases and sales.

- 24 -

Equity: In equity sector fund of investor will invest in the share market by the fund

manger. The fun managers are the expert in that so that investor gets benefit. Equity investors invest for a longer period of time so they will get high return on that security and less risky. Features: The period of (rolling) return is T+3. Debt: In debt fund most of those investor are invest how are aged of how have less fund and they want their fixed return then bank, FDs, or post form that return they can do their daily expanses after their income will stop. And it also for those investors who wants to invest their money for short period. The period of ( rolling ) return is T+1. Hybrid: Hybrid is a combination of debt and equity. Long term investment gets high return. Investor gets high return or then debt. Gets the benefit of fun experts.

- 25 -

TYPE OF FUNDS, AS PER INVESTMENT OBJECTIVE

Equity
Equity Funds Index Funds Sector Funds

Debt
Fixed Income Funds

Money Market
Money Market Mutual Funds

Balanced Funds

Liquid Funds

- 26 -

SCHEME OF RMF

Equity/Growth Schemes

Debt/Liquid Schemes

Interval Fund / Fixed Maturity Plan

Exchange Traded Fund

- 27 -

1.Equity / Growth SCHEMES

EQUITY/GROWTH SCHEMES AND OBJECTIVE

Equity/Growth Schemes
Reliance Growth Fund (An Open-ended Equity Scheme)

Objective
to achieve long term growth of capital Growth by investing in equity and equity related securities through a research based investment approach.

Reliance Vision Fund (An Open- to achieve long-term growth of capital ended Equity Growth Scheme) by investment in equity and equity related securities through a research based investment approach.

Reliance Equity Opportunities Fund to seek to generate capital appreciation (An Open-ended Diversified Equity & Scheme) provide long-term growth opportunities by investing in a portfolio constituted of equity securities & equity related securities and the secondary objective is to generate consistent returns by investing in debt and money market Reliance Quant Plus Fund (An Open- to ended Equity Scheme) generate securities. capital appreciation

through investment in equity and equity related instruments. The Scheme will seek to generate capital appreciation by investing in an active portfolio of

- 28 -

stocks selected from S & P CNX Nifty on the basis of a mathematical model. Reliance NRI Equity Fund (An Open- the scheme is to generate optimal ended Diversified Equity Scheme) returns by investing in equity and equity related instruments primarily drawn from the Companies in the BSE 200 Index. Reliance Tax Saver (ELSS) Fund (An to generate Scheme) long-term capital

Open-ended Equity Linked Savings appreciation from a portfolio that is invested predominantly in equity and equity Reliance Regular Savings Fund (An open ended Scheme) Equity Option related instruments.

to generate consistent returns by actively investing in securities. Balanced equity related Option: The

primary investment objective of this Option is to generate consistent return and appreciation of capital by investing in mix of securities comprising of Equity, Equity related Instruments & Fixed income instruments. Reliance Equity Fund (An open- to generate capital appreciation & ended Diversified Equity Scheme) provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate securities. consistent returns by investing in debt and money market

- 29 -

Reliance Equity Advantage Fund (An to generate capital appreciation & Open ended Diversified Equity provide long-term growth opportunities by investing in a portfolio predominately of equity & equity related instruments with investments generally in S & P CNX Nifty stocks and the secondary objective is to generate consistent returns by investing in debt and money market Reliance Long Term Equity Fund(An to open ended Diversified Scheme) generate & securities. long term capital long-term Scheme)

Equity appreciation

provide

growth opportunities by investing in a portfolio constituted of equity & equity related securities and Derivatives and the secondary objective is to generate consistent returns by investing in debt and money generate market long-term in securities. capital equities benefit.

Reliance Equity Linked Saving Fund to Equity Linked Savings Scheme)

Series I (A 10 year close-ended appreciation from a portfolio that is invested along predominantly income tax with

GROWTH SCHEMES
HIGHLIGHTS/SUMMARY OF THE SCHEME
1. INVESTMENT OBJECTIVE

- 30 -

The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities. The fund will have the flexibility to invest in a range of companies as mentioned above with an objective to maximize the returns, at the same time trying to minimize the risk by reasonable diversification. However there can be no assurance that the investment objective of the scheme will be realized, as actual market movements may be at variance with anticipated trends. 2. LIQUIDITY The Scheme will offer for Sale / Switch-in and Redemption / Switch-out of Units on every Working Day on an ongoing basis. As per SEBI Regulations, the Mutual Fund shall despatch Redemption proceeds within 10 Working Days of receiving a valid Redemption request. A penal interest of 15% per annum or such other rate as may be prescribed by SEBI from time to time, will be paid in case the Redemption proceeds are not made within 10 Working Days of the date of receipt of a valid Redemption request. However, under normal circumstances, the Mutual Fund will endeavor to despatch the Redemption cheque within 3 4 Working Days from the receipt of a valid Redemption Request. 3.BENCH MARK

- 31 -

S&P CNX Nifty 4. LOADS a) Entry Load Retail Plan: Nil

Institutional Plan: Nil In accordance with the requirements specified by the SEBI circular no. SEBI/IMD/CIR No.4/168230/09 dated June 30, 2009 no entry load will be charged for purchase / additional purchase / switch-in accepted by RMF with effect from August 01, 2009. Similarly, no entry load will be charged.

b) Exit Load: Retail Plan & Institutional Plan: 1% if redeemed or switched out on or before completion of 1 year from the date of allotment of units. Nil if redeemed or switched out after the completion of 1 year from the date of allotment of units With effect from August 01, 2009, exit load/ CDSC (if any) up to 1% of the redemption value charged to the unit holder by RMF on Redemption. c) Inter Scheme Switch: At the applicable loads in the respective schemes. d) Inter Plan/Inter Option Switch: - 32 -

No load applicable for Inter Plan/Inter Option Switch. e) Contingent Deferred Sales Charge: Nil 5. MINIMUM APPLICATION AMOUNT Retail Plan Rs. 5000 and in multiples of Re.1 thereafter under each option Institutional Plan Rs. 5 crore and in multiples of Re.1 thereafter under each option Minimum Additional Investment Retail Plan Rs. 1,000 (plus in the multiple of Re.1) Institutional Plan Rs. 1, 00,000 (plus in the multiple of Re.1) 6. CHOICE OF INVESTMENT PLANS: Reliance Equity Fund offers two Plans, Retail Plan and Institutional Plan. Each Plan has the following Plans/Options:

- 33 -

a) Growth Plan (i) Growth Option (ii) Bonus Option b) Dividend Plan (i) Dividend Payout Option (ii) Dividend Re-investment Option 7. FLEXIBILITY Unit holders will have the flexibility to alter the allocation of their investments among the scheme(s) offered by the Mutual Fund, in order to suit their changing investment needs, by easily switching between the various scheme(s) / plans of the Mutual Fund. 8. REPATRIATION Full Repatriation benefits would be available to NRIs and FIIs, subject to applicable conditions/regulations.

- 34 -

2.DEBT SCHEMES
DEBT FUND SCHEMES AND OBJECTIVE
DEBT fund Schemes
ended Income Scheme)

Objective
with moderate level of risk. This income may be complemented of the by capital portfolio. shall appreciation Accordingly, Money

Reliance Income Fund (An Open- To generate optimal returns consistent

investments

predominantly be made in Debt & Market Instruments.

Reliance Liquid Fund (An Open- To generate optimal returns consistent ended Liquid Scheme) with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.

Reliance Medium Term Fund (An To generate regular income in order to Open-ended Income Scheme with no make regular dividend payments to unit assured returns) holders and the secondary objective is growth Reliance Short Term Fund of capital.

(An To generate stable returns for investors with a short term investment horizon by investing in fixed income securities of a

Open-ended Income Scheme)

short term maturity. Reliance Gilt Securities Fund (An To generate optimal credit risk-free Open-ended Govt. Securities returns by investing in a portfolio of

- 35 -

Scheme)

securities issued and guaranteed by the Central Government and State Government.

Reliance Monthly Income Plan (An To generate regular income in order to Open-ended Fund-Monthly Income make regular dividend payments to unit is not assured & is subject to the holders and the secondary objective is availability of distributable surplus) growth of capital.

Reliance Floating Rate Fund (An to generate regular income through Open-ended Liquid Scheme) investment in a portfolio comprising substantially of Floating Rate Debt Reliance NRI Income Fund Securities (An To generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, predominantly Instruments. Reliance Money Manager Fund To generate optimal returns consistent with and moderate levels of risk money market and liquidity by investing in debt securities securities. investments be made in shall Debt

Open-ended Income Scheme)

(Open ended income scheme)

Reliance Liquidity Fund (An Open- To generate optimal returns consistent ended liquid scheme) with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.

Reliance Regular Savings Fund (An To generate optimal returns consistent - 36 -

open ended Scheme) Debt Option

with moderate level of risk. This income may be complemented of the by capital portfolio. shall appreciation Accordingly

investments

predominantly be made in Debt & Money Market Instruments.

- 37 -

INCOME SCHEMES
HIGHLIGHTS/SUMMARY OF THE SCHEME 1. Investment Objective The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments. 2. Liquidity The Scheme is open for Subscription/ Switch-in and Redemption / Switch-out of Units on every Business Day on an ongoing basis. As per SEBI Regulations, the Mutual Fund shall despatch redemption proceeds within 10 Business Days of receiving a valid Redemption request. A penal interest of 15% per annum or such other rate as may be prescribed by SEBI from time to time, will be paid in case the redemption proceeds are not made within 10 Business Days of the date of receipt of a valid redemption request. However, under normal circumstances, the Mutual Fund will endeavor to despatch the Redemption cheque within 3 - 4 Business Days from the acceptance of a valid redemption request. 3. Benchmark Crisil Liquid Fund Index

- 38 -

4. Loads Retail Plan and Institutional Plan i. Entry Load Nil In accordance with the requirements specified by the SEBI circular no. SEBI/IMD/CIR No.4/168230/09 dated June 30, 2009 no entry load will be charged for purchase / additional purchase / switch-in accepted by the Fund with effect from August 01, 2009. Similarly, no entry load will be charged ii. Exit Load Nil With effect from August 01, 2009, exit load/ CDSC (if any) up to 1% of the redemption value charged to the unit holder by the Fund on redemption of units shall be retained by each of the schemes in a separate account and will be utilized for payment of commissions to the ARN Holder and to meet other marketing and selling expenses. Any amount in excess of 1% of the redemption value charged to the unit holder as exit load 5. Minimum Application Amount i. For First purchase Treasury Plan Retail Plan All sub options Rs. 5 thousand and in multiples of Re.1 there after. Treasury Plan Institutional Plan All sub options Rs. 1 Crore and in multiples of Re. 1 there after.

- 39 -

Cash Plan All options Rs. 25 thousand and in multiples of Re. 1 there after.

ii. For Additional purchase Treasury Plan Retail Plan All sub options Rs. 1 thousand and in multiples of Re.1 there after. Treasury Plan Institutional Plan All sub options Rs. 1 thousand and in multiples of Re. 1 there after. Cash Plan All options Rs. 1 thousand and in multiples of Re. 1 there after. 6. Flexibility Unit holders will have the flexibility to alter the allocation of their investments among the scheme(s) offered by the Mutual Fund, in order to suit their changing investment needs, by easily switching between the scheme(s) / plans/options of the Mutual Fund.

- 40 -

- 41 -

RESEARCH
Research is a search for knowledge through objective and systematic method of findings the solution to a problem. It is a systematic search for pertinent information on specific topic. Research methodology is a way to systematically solve the research problem. In this we study the various steps that are generally adopted by research in studying the research problems along with the logic behind them. Researchers generate information by analyzing data after its collection. It is involves reducing accumulated data to patterns and applying statistical techniques. Researcher must interpret these findings in light of the clients research questions are consists with their hypotheses. Complete the survey and all the questionnaire filled out then after finding form the collected data.

RESEARCH DESIGN
Research design can be described as an outline of a research project working or a pattern. In a research design there are series of prior decision that together provide a master plan for completing a research project. Research design is proved to be a bridge between what has been established and what is to be done in conduct of the studies. Research design should be compressive and it should provide which method to be used and what work to be done. Research design describes as a master plan a series of key decisions that serves a model for conducting a research project. There are the main components of research design. Objective of research Data sources Analysis of data collected

- 42 -

RESEARCH OBJECTIVES
The main aim of undertaking this study is to accomplish the following objective: Conducting a market survey and understanding the customer perception. Analyzing the market survey and thereby finding out the investment pattern of the customer. Proper understanding and evaluation of mutual funds as an investment option Analysis customer awareness about Mutual fund. Proper understanding and analysis of the perspective investor about

financial product .
.

- 43 -

RESEARCH TYPE
The objective of the present study can be accomplished by conducting a systematic market survey. Market Research is a systematic design, collection, analysis and reporting of data and finding that are relevant to different market situation facing by the company. The marketing research process that will be adopted in the present study consist of the following stages:

1. Defining the problem and research objective: The research objective state that what information is needed to solve the problem. Here the objective of other research is awareness and perception of Mutual fund as an Investment option and what are the benefits that the investor will get by investing in Mutual funds. 2. Developing research plan: Once the problem is defined, the next step is to prepare a plan for getting the information needed for the research. The present study will adopt exploratory approach where in there is a need to gather a large amount of information before making a conclusion if required. The descriptive and casual approaches may also be used.

3. Collection and Sources of Data: To collect the data, relevant information is necessary as regards to the project; as a result data was collected by using two ways: Primary Data Secondary Data.

Primary Data:
- 44 -

In this the information is being possessed with first hand information, which is new and fresh. The tools used by us for the primary data are: Questionnaire Face-to-Face Interview Observation

Secondary data: The information that is received with the help of Journals, Magazines, Financial reports or which is already present with the company. References used from management books Gathered information through World Wide Web (www). Support and knowledge provided by Faculty and Company guide

4. Sampling Plan: Sampling unit: The customers will be stratified and segmented according to their age, income, cultural background, gender, education, etc(Demography). Sampling size: A survey was conducted for one hundred respondents.

5. Analyze the collected information: This involves converting raw material in to useful information. It involves tabulation of data and using statically measures on them for
- 45 -

developing frequency distribution and calculating the averages and dispersions. 6. Report research findings: This phase will mark the culmination of the marketing research efforts. The report with the research finding is a formal written document.

WHAT ARE THE BENEFITS OF INVESTING IN MUTUAL FUNDS?

As opposed to investing directly in different asset classes, accessing them through a mutual fund has several advantages: Professional Management: Your money is managed by professionals who have the experience and resources to thoroughly analyze the economy and financial markets, and spot good opportunities. Diversification: With smaller amounts, you can achieve a higher degree of diversification and reduce your risk. Liquidity and Convenience: Investing and getting back your money is easy. Also, there is very little paper work, and it is very easy to track and monitor your investments. Tax Benefits:

- 46 -

Some mutual fund schemes offer you tax rebates under Section 80 [c]. In addition, your returns from mutual funds (dividends and capital appreciation) are also eligible for favorable tax treatment.

- 47 -

ADVANTAGES OF INVESTING IN MUTUAL FUND

1. Investment Options for different investors and Investment needs: 1. Debt Funds for regular income 2. Equity Funds for growth of your capital 3. There are various kinds of funds designed to meet different investment needs; Mutual Funds offer investment options ranging from a day to a decade or more. 4. There are options available for the most risk adverse investor and extremely aggressive investor. 5. Individuals, Corporate, HUFS, Trusts and NRIS can invest and benefit from Mutual Funds. 2. Gain from professional management & risk control 1. Mutual Funds are the ideal investment vehicles that allow you to benefit from the market, since they typically offer market linked or above market average returns. 2. Mutual Funds are not only managed professionally, but also extensively regulated by SEBI. 3. Liquidity 1. Maximum liquidity when compared with any other investment option. 4. Convenience 1. Flexibility in the amount of Investment. 2. Flexibility in the frequency of Investment. 3. Choice of time-horizon of investment: Short Term Medium Term Long Term

- 48 -

4. Choice of type of Investment: Debt Equity Balanced 5. Easy to switch between different schemes/ plans (investor can shift from debt to equity markets and from equity to debt). 6. Different options available for investments: Dividends Growth 7. Option to invest and withdraw systematically over a period of time. 5. Transparency 1. Mutual Fund investing is really simple and transparent. 2. Regular updates from fund houses 3. Portfolio disclosures necessary as per SEBI regulations. 6. Easy to Buy and Sell 1. All it takes is an application form of the fund one wishes to invest in, rest will be taken care by the advisors. 2. Redemption request is processed normally with in 3 working days. 7. Tax Benefits 1. No tax on the dividends in the hands of the investor (Debt funds -12.81% (12.5% distribution tax plus 2.5%) dividend tax paid by the fund before distribution of dividends) 2. No dividend distribution tax for equity mutual funds (completely tax free dividends). 3. Tax liability only when investment is redeemed /withdrawn (not every year) 4. Long term capital gains tax benefits

- 49 -

DRAWBACKS OF MUTUAL FUND

1.

No Guarantees

No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.
2.

Fees and commissions

All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund.
3.

Taxes

During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made.
4.

Management Risk

When you invest in a mutual fund, you depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.

- 50 -

- 51 -

I. AN OVERVIEW :
This section shows an simple overview of respondents like their age ,gender, income profile, saving habits and qualification (a) Age-profile: Table No. I(a) showing age profile of respondents: S. No 1. 2. 3. 4. 5. Age 20-25 25-40 40-55 55-60 60-Above Total No .of respondents 19 40 21 15 5 100 Percentage 19% 40% 21% 15% 5% 100%

INTERPRETATION : In this survey I found the maximum number of respondents belongs to the age group of 25-40 years, followed by 40-55 years of age category.

(b) Gender-wise: - 52 -

Table No. I(b) showing gender wise profile of respondents: S. No 1. 2. Gender Male Female Total No. of respondents 92 8 100 Percentage 92% 8% 100%

INTERPRETATION : Table No.I(b) represents the gender ratio of the respondents in this survey.92%of the covered respondents were male and remaining 8% were female.

(c)Income Profile:

- 53 -

Table No. I(c) showing income wise profile of respondents S. No 1 2. 3 4 5 6 Income Less then 1.0 Lakh 1.0-2.0 Lakh 2.0-3.0 Lakh 3.0-5.0 Lakh More then 5.0 Lakh No response Total No. of respondents 34 38 30 6 4 5 100 Percentage 34% 38% 30% 6% 4% 5% 100%

INTERPRETATION : In this survey I found the break up of the respondents. Around 38%of the respondents have an income between of Rs.1.0-2.0 Lakhs per annum and 30% of respondents in between 2.0-3.0 Lakhs .it display the income profile of respondents.

(d) Saving Habits :

- 54 -

Table No. I(d) showing saving habits profile of respondents: S. No 1. 2. 3. 4. 5. 6. Savings Up to Rs. 2000 Rs.20015000 Rs.500110000 Rs.1000120000 Above Rs.20001 No Response Total No. of respondents 31 33 16 3 1 16 100 Percentage 31% 33% 16% 3% 1% 16% 100%

INTERPRETATION : In this survey around 33% of the respondents reported to have a saving in the range of Rs.2001-5000 per month .only 1% of the respondentsreported having in higher bracket i.e more then 20001 per month.

- 55 -

(e)Qualification : Table No. I(e) showing Qualification profile of respondents: S.No 1 2 3. 4 5 Qualification Undergraduates Graduates Postgraduates Others No response Total No. of respondents 6 39 40 1 14 100 Percentage 6% 39% 40% 1% 14% 100%

INTERPRETATION : The surveyed group are well educated group with 40%being post graduates and 39%being graduates. around 6% of the samples collected were undergraduates.

- 56 -

II. KNOWLEDGE OF MUTUAL FUNDS : In the survey ,I attempted to understand from the investors their knowledge of Mutual fund. (a)Knowledge of Mutual Fund: Table No. II(a) showing knowledge of mutual fund of respondents: S.n No 1. 2. 3. 4. 5. Knowledge of Mutual Funds Very good Good Average Poor No response Total No. of respondents 4 9 19 64 4 100 Percentage 4% 9% 19% 64% 4% 100%

INTERPRETATION : In this survey it was found that 64% of the respondents dont know or their knowledge is very poor about Mutual funds. they ,while 4%

- 57 -

respondents rated their understanding as very good about Mutual funds. It shows knowledge of Mutual funds are very low.. (b) Knowledge related to share market: Table No. II(b) showing knowledge related to share market ofrespondents: S. No 1 2. 3 Knowledge related to share market Yes No Cant say Total No. of respondents 32 64 4 100 Percentage 32% 64% 4% 100%

INTERPRETATION : It was found that 64% of the respondents dont know that the Mutual fund is related to share market. they also dont know that Mutual funds returns is affected by the fluctuation in share market.

- 58 -

III. Investment objective/decisions : This section of survey was aimed at understanding the main reason behind the investment decision made by an individual. I tried to catch the factor that contribute to making of an investment portfolio off an individual. (a) Investment objective: S. No 1 2 3. 4 Investment objective Capital Gain Generate Regular return Secure Future Tax benefits Total No. of respondents 21 6 59 14 100 Percentage 21% 6% 59% 14% 100%

INTERPRETATION : Total number of 100 responses were generated for this question and multiple response were sought for the various investment objectives. The analysis brings out the fact that investor were more concerned about the secure future(59%) and capital gains(21%), and after that they considered tax benefits(14%) and regular return(6%) as their main investment objectives. - 59 -

(b)Decision affecting Factors: S. No 1. 2. 3. 4. 5. Decision affecting Factors Economic scenario Company image Fund performance Fund manager image Tax incentive Total No. of respondents 19 44 21 2 14 100 Percentage 19% 44% 21% 2% 14% 100%

INTERPRETATION : There are certain overall factors that tend to affect the investment decision decision of the investor, such as economic scenario. I tried to know the respondents opinion on these macro factors that further tend to affect their investment decisions. This survey showed that company image acts as the determining - 60 -

factor for their investment with 44%.the second most important factor wasfund performance(21%) and economic scenario(19%). (c)Information sources regarding Mutual Funds: S. No 1. 2. 3. 4. 5. 6. Information sources Print media Electronic media Friends/Relative Financial advisors Personal analysis Personal analysis Total No. of respondents 29 21 6 19 4 21 100 Percentage 29% 21% 6% 19% 4% 21% 100%

INTERPRETATION : In this survey I asked from the respondents about the kind of media thataffect their investment decision.29% of the respondents said that the print media is the major influencer in making their investment

- 61 -

decisions, electronic media(21%) and agents(21%) were the second major influencer in investment decision making. (d)Priority of reason for investment: S. No 1. 2. 3. 4. 5. 6. Priority for investment Saving for future Tax incentive Returns Future outlook Brand value Risk factors Total No. of respondents 51 14 23 7 2 3 100 Percentage 51% 14% 23% 7% 2% 3% 100%

INTERPRETATION: In this survey I found that saving for the future was the foremost important criteria for investment in the minds of investors (51%),while 23%respondents said that they considered the returns before making

- 62 -

investment decisions.

IV. Risk-Return profile : In my study I also tried to understand the risk and return matrix of an individual investor. this was done in order to obtain information Information on the relationship between the kind of funds an individual investor opts to invest in and the relative expectation he has on the return front. (a)Investment Avenues: S. No Investment Avenues 1. Post office schemes 2. Insurance 3. Banks 4. Share market 5. Mutual funds 6. Govt. securities Total No. of respondents 12 4 66 3 7 8 100 Percentage 12% 4% 66% 3% 7% 8% 100%

INTERPRETATION: The risk return matrix of an individual is the key factor in framing his - 63 -

investment portfolio. I asked the respondents to select the investment avenues they would prefer to keep their investment portfolio. 66% of investor preferred to have banks savings as one of the investment avenue.while 12% of the investor said that they would certainly would like to have post office schemes as one of their preferred investment avenue. (b)Return expectation from Mutual funds: S. No Returnexpecta tion from Mutual funds 5%-10% 11%-15% 16%-20% More then 20% Cant say Total No. of respondents 5 24 31 16 24 100 Percentage

1. 2. 3. 4. 5.

5% 24% 31% 16% 24% 100%

ReturnexpectationfromMutual funds

5%-10% 11% -15% 16% -20% More then 20% Cant say

INTERPRETATION:

- 64 -

In this survey when I came to return expected ,I found that 31% of the investor are expecting a return in range of 16%-20%,while 24%of the investorare expecting 11%-15% rate of return but 24% of investor cant said aboutreturn expectation.

(c) Investment pattern preferred in Mutual fund by investor: S.NO Investment pattern preferred in Mutual fund Growth scheme Balance scheme ELSS Sector specific scheme Liquid scheme Cant say Total No. of respondents 41 18 11 6 7 17 100 Percentage

1. 2. 3. 4. 5. 6.

41% 18% 11% 6% 7% 17% 100%

Investm patternpreferredin Mutual ent fundbyinvestor

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Growth Balanced schem schem es es ELSS Sector Liquid Cant say specific schemes schem es
Investment pattern preferred in Mutual fund by investor

INTERPRETATION:

- 65 -

The type of schemes selected for investment depends largely on the risk return matrix of an individual and the time horizon of his investment. My findings demonstrate that 41% of investors prefer to invest in growth schemes,18% of investor in ELSS schemes. (d) Return in diversified schemes in Mutual fund :

S. No

Return in diversified schemes in Mutual fund Yes No Total

No. of respondents 23 77 100

Percentage

1. 2.

23% 77% 100%

Returnin diversifiedschem in Mutual es fund

Yes No

INTERPRETATION:

- 66 -

In this survey I tried to know the knowledge of investors about the return on diversified schemes .I found that 77%of surveyed people dont know that the return on diversified mutual fund schemes is more then other schemes. so, it shows that vary lake of awareness about mutual funds.

- 67 -

(e) Sources of product information : S. No 1. 2. 3. 4. 5. Sources of product information Company brochures Company websites Investment advisor Newspaper Friends and relatives Total No. of respondents 39 3 14 37 7 100 Percentage 39% 3% 14% 37% 7% 100%

S ourcesof product inform ation

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 0 1 2 3 4 5 6
Sources of product information

INTERPRETATION: This chart represents the different sources of product information, through which investor generally tend to know regarding the mutual funds new schemes and products.39% of the respondents said that they receive the product information from the company brochures and 37% respondents said that they get it from newspaper.

- 68 -

- 69 -

FINDINGS

Out of 100 people being surveyed to know the awareness and perception among people about mutual funds, I found that 14% knew about mutual funds who mostly invest in these funds while 86% where not at all aware about the product and its investments

Some People were less interested in knowing about the product. They have the impression that these funds are not safe, as the money is locked in for a particular period, which is known as the lock in period. Mutual funds, in a country like India is in its growth stage and it would take some time to enter into the maturity stage. People investing into mutual funds basically invest at the financial year-end.

They invest into these funds mostly for tax saving purpose other than investment or return purpose.

- 70 -

- 71 -

RECOMMEND ATIONS &OBJECTIVES

There should be more awareness made about the Reliance Mutual Fund and their services by giving more advertisement. The Reliance Mutual Fund should go for tie-ups with the corporate to invest in RMF. Reliance Mutual Fund should organize some events to build its Brand Image in the minds of the people.

As per customers point of view, they feel that Reliance Mutual Fund should open more number of branches for the convenience of people.

OBJECTIVES
1. The main motive of my job the Reserach is to brand building of Reliance Mutual Fund and creating awareness & sales, that is its an brand building & sales orientated. 2. The objective of the Reliance MF is to create awareness of the products among the general public and to know the perception of the general public regarding the Mutual Funds and try to fulfill their requirement. 3. Analyzing the market survey and thereby finding out the investment pattern of the customer.

- 72 -

- 73 -

CONCLUSION
AS been analyzed people are very rarely aware of mutual funds as people were not properly educated about the policies but when made awarethey wanted to get more information about the funds by this we can say that mutual fund is in its infant stage today but it will reach its growth stage within no time. Mutual fund has been compared to Unit linked polices people are more aware of ULIP than Mutual fund which takes more customer to the insurance sector but slowly as people are getting more aware of the funds they will surely start investing in these funds as some of the mutual fund companies have already started giving more than 30% returns which is really a huge amount being 6% minimum and 10% maximum guidelines given a company. Mutual funds in this competitive world is very helpful for the people who are interested into investments as this particular fund can take less investment but give u hefty.

- 74 -

Questionnaire
Age profile Gender Income profil Saving habits Qualification Q1. Do you know about the Mutual Funds ? (a) Very good (c)Average (e)No response (b)Good (d)Poor

Q2. What is your objective /motive behind investment ? (a)Capital gain (c)Secure future (b)Generate regular (d)Tax benefits

Q3. Where do you generally invest/save ? (a)Post office schemes (c)Banks (e)Mutual funds (b)Insurance (d)Share market (f)Govt. securities

Q4. How do you prioritize the reason for investment ? [rank from 1-5,1 being highest priority] Saving for future __________ Tax incentives __________ Returns __________ Future outlook __________ Brand value __________ Risk factor __________

- 75 -

Q5. How did you come to know about mutual fund ? (a)Print media (c)Friend/relative (c)Personal analysis Q6. What factors affect your decision (a)Economic scenario (c)Fund performance (e)Tax incentive (b)Electronic media (d)Financial advisor/C.A (f)Agents for investment in Mutual Fund ? (b)Company image (d)Fund manager image

Q7. How much return you expect from Mutual Fund ? (a)5%-10% (b)11% -15% (c)16%-20% (d)more than 20% (e)cant say Q8. What kind of investment pattern you prefer in Mutual Fund ? (a)Growth schemes (b)Balanced schemes (c)ELSS (d)Sector specific schemes (e)Income schemes (f)Liquid schemes Q9. What are the sources of information gathering for you regarding fund? (a)Company brochures (b)Company websites (c)Investment advisor (d)Newspaper (e)Friends and relatives mutual

- 76 -

Q10. Are you aware that by investing in diversified investment avenues the average rate of return would considerable go up ? (a)Yes (b)No

Q11. Do you know that mutual fund is related to share market? (a)yes (c)cant say (b)no

- 77 -

A Asset Allocation The process of diversifying the investments in different kinds of assets such as - 78 -

stocks, bonds, real estate, cash in order to optimize risk. Asset Allocation Fund A fund that spreads its portfolio among a wide variety of investments, including domestic and foreign stocks and bonds, government securities, gold bullion and real estate stocks. Some of these funds keep the proportions allocated between different sectors relatively constant, while others alter the mix as market conditions change.

B Balanced Fund Balanced fund include both equity and debt schemes, with 50-75 per cent in equity and the rest in debt. Benchmark An unmanaged group of securities whose performance is used as a standard to measure investment performance. Commonly known as a market index. Some well-known benchmarks are the BSE Sensex and NSE Nifty.

C Closed-End Schemes A mutual fund scheme in which the investors commit their money for a particular period Corpus Total amount of money invested by all investors in a scheme.

D Debt Fund This fund invests in fixed income instruments such as debentures (bonds), Treasury Bills etc. Preferred by investors who want steady income and not willing to take much of risk. Distributor An individual or a corporation serving as principal underwriter of a mutual fund's shares, buying shares directly from the fund, and reselling them to other investors. - 79 -

Dividend Plan In a dividend plan the fund pays dividend from time to time as and when the dividend is declared. Duration Average duration provides a measure of a fund's interest-rate sensitivity the longer a fund's duration, the more sensitive the fund is to shifts in interest rates. The relationship between funds with different durations is straightforward: A fund with a duration of 10 years is twice as volatile as a fund with a five-year duration. Duration also gives an indication of how a fund's NAV will change as interest rates change. A fund with a five-year duration would be expected to lose 5% from its NAV if interest rates rose by one percentage point or gain 5% if interest rates fell by one percentage point.

E Entry Load Mutual Funds charge investors an entry load of upto 2.25% to compensate for distribution costs. It is charged at the time an investor purchases the units of a scheme. Equity Fund This is a scheme that invests only in equity.

Equity-Linked Savings Schemes (ELSS) The major portion of investment in ELSS is in equity. The dividends in this scheme are tax-free.

Exit Load The commission or charge paid when an investor exits from a mutual fund. They are basically imposed to discourage withdrawals.

F Fund Manager - 80 -

The individual responsible for making portfolio decision for a mutual fund. G Growth Plan A mutual fund whose primary investment objective is long-term growth of capital. I Income Fund A mutual fund that primarily seeks current income rather than growth of capital. It will tend to invest in stocks and bonds that normally pay high dividends and interest. Investment Objective The financial goal (long-term growth, current income, etc.) that an investor or a mutual fund pursues. L Liquid Fund A liquid fund is the same as a money market fund, but avoids a lock-in period. Load Commissions an investor pays to a mutual fund on entry (buying units) and exit (selling the units) Long-Term Bond Fund A mutual fund that invests in bonds that mature in more than 10 years.

Long-Term Capital Gain A profit on the sale of a mutual fund share that has been held for more than one year.

- 81 -

Mutual Fund A Mutual Fund (MF) is a form of trust that pools the funds of a whole lot of investors to make more money by investing in an array of financial instruments. N Net Asset Value (NAV) NAV represents the value of a unit in the scheme and is the main performance indicator for a mutual fund.

Net Asset Value Per Unit The current market worth of a mutual fund share. Calculated daily by taking the funds total assets: securities, cash and any accrued earnings, deducting liabilities, and dividing the remainder by the number of units outstanding. No Load Fund Mutual fund that does not impose any sales charge or commission for buying and selling the units. O Open-Ended Schemes Mutual fund schemes that continuously offer new units to the public are called open-ended schemes. They offer units for sale without specifying any duration for redemption. P Portfolio Manager A professional hired by the mutual fund advisor to make investment decisions concerning the purchase and sale of securities for the mutual fund portfolio in accordance with the fund's objectives.

- 82 -

R Risk The measure of an investor's ability to withstand volatility in the markets. Investors with a near-term focus are likely to be more conservative than those with a long-term viewpoint who can benefit from the market's fluctuations by taking advantage of compounding and historical growth of the markets. S Sector Fund An equity scheme that invests in shares of companies operating in specific sector or industries is called a sector fund. For instance, a pharma fund would invest only in pharmaceutical companies. U Unit Just as shares represent the extent of equity ownership in a company, units represent your extent of ownership in a mutual fund. Unload To sell the units of mutual fund.

- 83 -

- 84 -

BIBLIOGRAPHY
http://www.reliancemutualfund.com/Downloads/Factsheets.aspx http://www.reliancemutual.com/OurSchemes/EquityGrowthSchemes.aspx http://www.reliancemutual.com/OurSchemes/DebtLiquidSchemes.aspx http://www.reliancemutual.com/NAV/NAV.aspx http://www.reliancemutual.com/Downloads/Dividends.aspx http://www.reliancemutual.com/Downloads/DividendHistory.aspx http://www.reliancemutual.com/Reliancesip/SIPCalculator.aspx http://www.moneycontrol.com/india/mutualfunds/gainerloser/08/39/snapshot/esp/ab http://www.moneycontrol.com/mf/glossary.php?category=All&subcategory=RSquared#response http://www.moneycontrol.com http://www.moneycontrol.com/mutual-funds/nav/reliance-equity-fund-retailplan/MRC103

- 85 -

- 86 -