STUDY OF MUTUAL FUNDS IN INDIA A PROJECT REPORT

Submitted by

SUMIT BANSAL

In partial fulfillment for the award of the degree Of MASTER OF BUSINESS ADMINISTRATION (MBA) In FINANCE DOON VALLEY INSTITUTE OF MANAGEMENT KURKSHETRA UNIVERSITY, KARNAL (HR) 15 JUNE 30 JULY 2011

DECLARATION

I, hereby, declare that the Project titled Study of Mutual Funds in India is original to best to my knowledge & has not published elsewhere. This is for the purpose of partial fulfillment of kurkshetra university requirement for the award of the degree of Master of Business Administration.

SUMIT BANSAL

KURKSHETRA UNIVERSITY KURKSHETRA

BONAFIDE CERTIFICATE

Certified that this project report STUDY OF MUTUAL FUNDS IN INDIA is the bonafide work of SUMIT BANSAL. Who carried out the project work under my supervision.

MR. RAVINDER KUMAR TEAM LEADER KARVY STOCK BROKING LTD. GURGAON, HARYANA

ACKNOWLEDGEMENT

It is my proud privilege to release the feelings of my gratitude to several persons who helped me directly or indirectly to conduct this project work. I express my heart full intentness and owe a deep sense of gratitude to my teachers and to my corporate guides MR. NITIN SAXENA(Branch Manager, GURGAON), MR. RAVINDER KUMAR(Team Leader,Gurgaon Branch), MR.BISHNU PRASAD (personal finance executive) for his sincere guidance and inspiration to complete this project. I am extremely thankful to the Director, Dean, Chairman and faculties of the DITM for their coordination and cooperation. I am also extremely thankful to all those persons who have positively helped me and customers who responded my questionnaire, around whom the whole project cycle revolves. I also thank my family and all my friends who have more or less contributed to the preparation of this project report. I will be always indebted to them.

SUMIT BANSAL

RESEARCH METHODOLOGY

Primary Objectives The main objective of this study is doing an In-depth analysis of working of Mutual Fund by taking sample of funds.

Secondary objectives To understand the portfolio management process in mutual fund To know the effects of political, economical, social and technological factors on Mutual Fund Industry in India. Evaluating fund performance Collection of data For the complete study I required data of Mutual Fund and getting from the secondary data base. Sources of the data collection will be, (1) Internet (2) Various magazines/bulletins (3) News papers (4) Related books

Limitations Portfolio Management In Mutual Funds It is based on Secondary Data. Time Constraint Lack of resources

EXECUTIVE SUMMARY

As a part of my study curriculum it is necessary to conduct a grand project. It provides us an opportunity to understand the particular topic in depth and which leads to through to that topic. My topic for the grand project is titled as Working of mutual funds in India in which emphasis given to the study of different mutual funds in respect to the risk and return involved in it. Since mutual funds are a relatively recent phenomenon in India, general public or investors dont have clarity about this concept. As we have started witnessing the concept of more saving now being entrusted to the funds than to keeping it in banks. So it is very important to manage investors portfolio efficiently. By efficient we mean which reduces the risk of investor and increases return on the other hand. This project is all about what actually a mutual fund is and how to invest in mutual fund to get maximum return. How to diversify the investments into different schemes of funds. To manage clients portfolio efficiently we first need to understand the industry, current economic condition of the economy, investors behavior, their objective, risk apatite. This report has divided into two phases. First phase covered investors portfolio part where we have included, Introduction of mutual funds, Indian mutual fund industry, Investment options available with individuals and at last techniques of managing a clients portfolio in mutual funds. Second phase of the report covered schemes portfolio part, where we have compared HDFC Equity Fund and HDFC Core & Satellite Fund with their competitors. It also included funds portfolio part where we have given information about the different funds available to investor for investment

TABLE OF CONTENTS Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Title ABOUT THE COMPANY CONCEPT OF MUTUAL FUND TYPES OF MUTUAL FUND DIFFERENT STYLES OF MUTUAL FUNDS PROCESS OF MUTUAL FUNDS NET ASSET VALUE(NAV) TYPES OF RETURN IN MUTUAL FUND HOW TO INVEST IN MUTUAL FUND BEST MUTUAL FUNDS RELIANCE GOLD SAVING FUND PROS & CONS OF MUTUAL FUNDS MUTUAL FUND INDUSTRY IN INDIA MUTUAL FUND COMPANIES IN INDIA ASSOCIATION OF MUTUAL FUNDS(AMFI) SAMPLE QUESTIONNAIRE CONCLUSION MY LEARNING FROM THBE PROJECT WEBOGRAPHY BIBLIOGRAPHY Page No. 8 10 11 17 19 20 22 23 24 25 35 36 38 46 49 53 54 55 56

ABOUT THE COMPANY INTRODUCTION

The Karvy group was formed in 1983 at Hyderabad, India. Karvy ranks among the top player in almost all the fields it operates. Karvy Computershare Limited is Indias largest Registrar and Transfer Agent with a client base of nearly 500 blue chip corporates, managing over 2 crore accounts. Karvy Stock Brokers Limited, member of National Stock Exchange of India and the Bombay Stock Exchange, ranks among the top 5 stock brokers in India. With over 6,00,000 active accounts, it ranks among the top 5 Depositary Participant in India, registered with NSDL and CDSL. Karvy Comtrade, Member of NCDEX and MCX ranks among the top 3 commodity brokers in the country. Karvy Insurance Brokers is registered as a Broker with IRDA and ranks among the top 5 insurance agent in the country. Registered with AMFI as a corporate Agent, Karvy is also among the top Mutual Fund mobilizer with over Rs. 5,000 crores under management. Karvy Realty Services, which started in 2006, has quickly established itself as a broker who adds value, in the realty sector. Karvy Global offers niche off shoring services to clients in the US. Karvy has 575 offices over 375 locations across India and overseas at Dubai and New York. Over 9,000 highly qualified people staff Karvy.

ORGANIZATION:

Karvy was started by a group of five chartered accountants in 1979. The partners decided to offer, other than the audit services, value added services like corporate advisory services to their clients. The first firm in the group, Karvy Consultants Limited was incorporated on 23rd July, 1983. In a very short period, it became the largest Registrar and Transfer Agent in India. This business was spun off to form a separate joint venture with Computershare of Australia, in 2005. Karvys foray into stock broking began with marketing IPOs, in 1993. Within a few years, Karvy began topping the IPO procurement league tables and it has consistently maintained its position among the top 5. Karvy was among the first few members of National Stock Exchange, in 1994 and became a member of The Stock Exchange, Mumbai in 2001. Dematerialization of shares gathered pace in mid-90s and Karvy was in the forefront educating investors on the advantages of dematerializing their shares. Today Karvy is among the top 5 Depositary Participant in India. While the registry business is a 50:50 Joint Venture with Computershare of Australia, we have equity participation by ICICI Ventures Limited and Barings Asia Limited, in Karvy Stock Broking Limited. Karvy has always believed in adding value to services it offers to clients. A top-notch research team based in Mumbai and Hyderabad supports its employees to advise clients on their investment needs. With the information overload today, Karvys team of analysts help investors make the right calls, be it equities, mf, insurance. On a typical working day Karvy: 1. 2. 3. 4. 5. 6. 7. Has more than 25,000 investors visiting our 575 offices Publishes / broadcasts at least 50 buy / sell calls Attends to 10,000+ telephone calls Mails 25,000 envelopes, containing Annual Reports, dividend cheques / advises, allotment / refund advises Executes 150,000+ trades on NSE / BSE Executes 50,000 debit / credit in the depositary accounts Advises 3,000+ clients on the investments in mutual funds

CONCEPT OF MUTUAL FUNDS A Mutual Fund is a body corporate that pools the savings of a number of investors and invests the same in a variety of different financial instruments, or securities. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Mutual funds can thus be considered as financial intermediaries in the investment business that collect Portfolio Management In Mutual Fund from the public and invest on behalf of the investors. The losses and gains accrue to the investors only. The Investment objectives outlined by a Mutual Fund in its prospectus are binding on the Mutual Fund scheme. The investment objectives specify the class of securities a Mutual Fund can invest in. Mutual Funds invest in various asset classes like equity, bonds, debentures, commercial paper and government securities. Mutual funds are commonly categorized by their general investment objectives. Equity funds consist mainly of common stocks and are organized primarily to achieve capital appreciation, or growth, rather than periodic distribution of income. Bond funds, on the other hand, are composed predominantly of corporate, Government, or municipal bonds and emphasize regular income rather than growth. Income funds have the same objective as bond funds but include Government National Mortgage Association securities, Government securities, and common and preferred stocks as well as bonds. Money market mutual funds consist of short-term instruments, such as Government securities, bank CDs, and commercial paper. Short-term municipal bond funds are composed predominantly of tax-exempt, short-term municipal securities.

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Types of Mutual Funds

Mutual Fund schemes may be classified on the basis of its structure and its investments. 1. By Structure:-

Open-End Funds: 1. Available for sale and repurchase at all times based on the net asset values 2. 3. Unit capital of the fund is not fixed Fund size and its total investment go up if more new subscriptions come in than redemptions and vice versa.
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Close-End Funds: 1. 2. One time sale of fixed number of units. Investors are not allowed to buy or redeem the units directly from the funds. Some funds offer repurchase after a fixed period. 3. Listed on stock exchange and investors can buy or sell units through exchange. May be traded at a discount or premium to NAV based on investors perception about the funds future performance and other market factors. A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue

and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some closeended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. Interval Funds: Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.

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By Investment Objective: Money/Cash Market Funds: Instruments having less than one year maturity; I. II. III. IV. V. Treasury bills issued by government Certificates of deposit issued by governments Commercial paper issued by companies Interbank call money Aim to provide easy liquidity, preservation of capital and moderate income. Gilt Funds: Securities maturity over a year; 1. 2. 3. Invested in government securities are called dated securities Virtually zero risk of default it is backed by the government It is more sensitive to market interest rates

Debt/Income Funds: Investment in debt instruments issued not only by

Government but also by private companies, banks and financial institution and other entities such as infrastructure companies.

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Target low risk and stable income for investors. I. Have higher price fluctuation as compared to money market funds due to interest rate fluctuation. II. Have higher risk of default by borrowers as compared to Gilt funds. III. Debt funds can be categorized further based on their risk profiles. IV. Carry both credit risk and interest rate risk. Equity Funds: I.Invest a major portion of their surplus in equity shares issued by cost, acquired directly in initial public offering or through secondary market and keep a part in cash to take care of redemption. II.Risk is very high than debt funds but offer very high growth potential for the capital. III.It can be further categorized based on investment strategy. IV.It must have a long term objectives. Balanced Funds: Has a portfolio of debt instrument, convertible securities and preference and equity shares. 1. Almost equal proportion of debt/money market securities and equities. Normally funds maintain a ratio of 55:45 or 60:40 some funds allocate a flexible proportion based on market conditions. 2. Aim is to gain income, capital appreciation and preservation of capital.
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3. Ideal for investors for a conservative and long term orientation.

Further the mutual funds can be broadly classified on the basis of investment parameter viz, Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own investment needs with the funds objective and invest accordingly.

BY INVESTMENT OBJECTIVE 1. Growth Schemes: Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation. 2. Income Schemes: Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited. 3. Balanced Schemes: Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).

4.Money Market Schemes: Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.
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Other Schemes:Tax saving Schemes These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA by investing in Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the amount is invested before September 30, 2000.

Special Schemes: Industry Specific Schemes Industry Specific Schemes invest only in the industries specified in the offer document. The investment of these funds is limited to specific industries like InfoTech, FMCG and Pharmaceuticals etc. Index Schemes Index Funds attempt to replicate the performance of a particular index such as the BSE Sense or the NSE 50

Sector Schemes Sector Funds are those, which invest exclusively in a specified industry or a group of industries or various segments such as 'A' Group shares or initial public offerings.
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Different styles of Mutual Funds Different Mutual Funds have very different investing styles. These styles are a function of the individuals managing the fund with the overall investment objectives and policies of the organization acting as a constraint. These are manifest in things like:Portfolio turnover Buy and hold strategy versus frequent investment changes. Kind of investments made small versus large companies, multi baggers (investments which yield high gains) versus percentage players (investing in shares which will give small gains in line with the market), high quality low yield bonds versus low quality high yield bonds. Asset allocations Varying percentage of cash depending on aggressive views on markets The following examples serve to illustrate a few styles of equity fund managers: Some fund managers are passive value seekers and some are value creators. The former type buys undervalued assets and patiently waits for the market to discover the value. The latter aggressively promote the undervalued stocks that they have bought. Some fund managers restrict themselves to liquid stocks while some thrive on illiquid stocks which offer themselves easily to large price changes. Some fund managers are masters of the momentum game and seek to buy stocks that are in market fancy. They attach lesser importance to fundamentals and believe that a rising stock price and favorable momentum indicators imply that fundamentals are changing. In effect, they are following the philosophy, "The trend is my friend". Other fund managers go more by deep fundamental analysis completely ignoring price movements. They do not mind price going down and are in fact happy to buy more.
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Some fund managers are growth investors i.e. they buy stocks with a high P/E using the forecasted growth to justify the high valuation. Others are value investors who buy shares with low P/E or P/BV multiples - typically companies rich with undervalued assets. Process of Mutual Fund

In the above graphs shows how Mutual Fund works and how investor earns money by investing in the Mutual Fund. Investors put their saving as an investment in Mutual Fund. The Fund Manager who is a person who takes the decisions where the money should be invested in securities according to the schemes objective. Securities include Equities, Debentures, Govt. Securities, Bonds, and Commercial Paper etc. These Securities generates returns to the Fund Manager. The Fund Manager passes back return to the investor.

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NET ASSET VALUE (NAV)

The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in the fund, this is the amount that the shareholders would collectively own. This gives rise to the concept of net asset value per unit, which is the value, represented by the ownership of one unit in the fund. It is calculated simply by dividing the net asset value of the fund by the number of

units. However, most people refer loosely to the NAV per unit as NAV, ignoring the "per unit". We also abide by the same convention. Calculation of NAV The most important part of the calculation is the valuation of the assets owned by the fund. Once it is calculated, the NAV is simply the net value of assets divided by the number of units outstanding. The detailed methodology for the calculation of the asset value is given below.

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Asset value is equal to Sum of market value of shares/debentures + Liquid assets/cash held, if any + Dividends/interest accrued Amount due on unpaid assets Expenses accrued but not paid Details on the above items For liquid shares/debentures, valuation is done on the basis of the last or closing market price on the principal exchange where the security is traded. For illiquid and unlisted and/or thinly traded shares/debentures, the value has to be estimated. For shares, this could be the book value per share or an estimated market price if suitable benchmarks are available. For debentures and bonds, value is estimated on the basis of yields of comparable liquid securities after

adjusting for illiquidity. The value of fixed interest bearing securities moves in a direction opposite to interest rate changes Valuation of debentures and bonds is a big problem since most of them are unlisted and thinly traded. This gives considerable leeway to the AMCs on valuation and some of the AMCs are Believed to take advantage of this and adopt flexible valuation policies depending on the situation. Interest is payable on debentures/bonds on a periodic basis say every 6 months. But, with every passing day, interest is said to be accrued, at the daily interest rate, which is calculated by dividing the periodic interest payment with the number of days in

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each period. Thus, accrued interest on a particular day is equal to the daily interest rate multiplied by the number of days since the last interest payment date. Usually, dividends are proposed at the time of the Annual General meeting and become due on the record date. There is a gap between the dates on which it becomes due and the actual payment date. In the intermediate period, it is deemed to be "accrued". Expenses including management fees, custody charges etc. are calculated on a daily basis. Types of returns: There are three ways, where the total returns provided by mutual funds can be enjoyed by investors: 1. Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution. 2. If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution.

3. If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares.

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HOW TO INVEST IN MUTUAL FUNDS

One can invest in Mutual Funds by following ways: 1. Lump-sum 2. SIP(systematic investment plan) 3. MIP(monthly investment plan) 4. FMP(fix maturity plan)

1.LUMPSUM: In Lump-sum you have to make one time investment at the time of filling the application form. Minimum amount of investment in Lump-sum is Rs. 5,000. 1. SIP(systematic investment plan): SIP stands for systematic investment plan. In SIP you have to invest monthly. Four dates selected in a month to pay the installment. Installment is automatically deducted from unit holders bank account. Minimum amount needed to invest in SIP is Rs. 1,000 per installment. 2. MIP(monthly income plan): As the name indicates this plan gives a monthly income. In MIP dividend is declared every month. This plan gives approximately 8 to 10% returns. In last 3 years HDFC gave handsome return in MIP about 6% pm.

3.

FMP(fix maturity plan): In this plan time and return both are fixed in mutual funds. This plan gives approximately 9.5% return.

This plan is useful in tax deduction also. 1. If you invest your money in this plan for 365 or more days than tax deducted 10%. 2. If investment made for less than 365 days than tax deducted 33%. 3. If dividend reinvest scheme has been chosen then tax deduction will be 14%.
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INVESTMENT IN MUTUAL FUND WITH TAX SAVING PURPOSE: ELSS (Equity Link Saving Scheme): In this scheme time period in fix to 3 years. It is very useful in tax saving. If you invest in this scheme you will get tax saving UNDER 80 C (up to Rs. 10,000). NOTE:
Every company has at least 1 ELSS fund. HDFC has 4 ELSS fund and SBI has 2 ELSS fund.Up to Rs. 10,000 you will have tax saving in ELSS Fund, under 80, C and from 10,000 to Rs. 1, 20,000 you will have tax saving in INFRASTRUCTURE BOND, under 80, CCF.

NECESSATIY FOR INVESTING IN MUTUAL FUNDS 1. 2. 3. PAN CARD KYC( know your customer) FORM ADDRESS PROOF

NOTE: Address proof and pan card must be notaries otherwise bring original while come to submit the form. KYC is must to invest in MUTUAL FUNDS.

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BEST MUTUAL FUNDS EQUITY FUNDS: 1. 2. 3. 4. 5. HDFC TOP 200 HDFC EQUITY FUND DSP TOP 100 FIDILITY EQUITY FUND RELIANCE EQUITY OPPORTUNITY FUND

BALANCE: 1. 2. HDFC PRUDENCE FUND RELIANCE BALANCE FUND

GOLD: 1. 2. RELIANCE GOLD FUND KOTAK GOLD FUND

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Reliance Gold Savings Fund (An open ended Fund of Fund Scheme)

What is Reliance Gold Savings Fund? Reliance Gold Savings Fund is the first gold fund of fund in India which opens a new avenue for investing in gold as an asset class. The Fund seeks to provide returns that closely correspond to returns provided by Reliance Gold Exchange Traded Fund (RGETF) which in turn invests in physical gold. It enables to reap returns of gold in paper form without the need of a de-mat account It is a passively managed fund which would enable an investor to save for gold in a convenient manner either through lump sum investment or through systematic investment - the mutual fund way from a long term perspective. It will give investors the opportunity to participate in the bullion market in a relatively cost effective and convenient way. Why is it important to add gold to your portfolio? Gold has been considered amongst the best asset class over a period both in terms of return as well as stability of performance. Gold continues to breach its high (YOY) since 2001 till date .It is regarded as a foundation asset for wealth creation. From being an alternative investment option, gold has gained the status of must have in any portfolio due to its following unique benefits: Gold has a low / negative correlation with other asset class offering diversification to the portfolio Gold is a less volatile than equity as an asset class and thereby helps to stabilize portfolio returns Gold over centuries has maintained its value against inflation. It has kept the purchasing power intact and it has even increased it gradually. Gold has stood the test of times repeatedly and has outlasted all other financial and monetary assets during various periods of financial crisis.

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Past Performance may or may not be sustained in future. The above table and graph gives an illustration of the performance of Gold on the basis of historical data, if invested directly. The same should not be construed as an indication, promise, guarantee or a forecast of any returns. The details may not necessarily provide a basis for comparison with any other investment avenues. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments.

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Source: Bloomberg, *Equity Returns refers to returns of MSCI World Index. ** Returns for MSCI Asia Pacific Ex Japan Index, *** Returns of Nikkei 225 stock average ^Returns of Dow Jones Industrial Average Past Performance may or may not be sustained in future. The above table and graph gives an illustration of the performance of Gold on the basis of historical data, if invested directly. The same should not be construed as an indication, promise, guarantee or a forecast of any returns. The details may not necessarily provide a basis for comparison with any other investment avenues. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments.

Is there any requirement for opening a de-mat account for purchase and sale of units of Reliance Gold Savings Fund It is not necessary to have a de-mat account for purchase and sale of Reliance Gold Savings Fund units. The investor can directly purchase and sale the units through physical application and online mode What are the benefits of investing in Reliance Gold Savings Fund? Reliance Gold Savings Fund opens a new avenue for investing in gold. This fund enables to reap returns closely to returns provided by Reliance Gold ETF. (i) Open door for non de-mat a/c holders: Investors can invest in this fund through the physical mode across the country thereby making it easily available and convenient for non de-mat a/c Holders (ii) Systematic Investment Plan (SIP): a long term disciplined investment technique under which you invest a fixed sum of money on a monthly or quarterly basis in a scheme at the prevailing NAV. This allows you to save and invest regularly while you are earning. This investment technique enables you the following benefits: Small, regular investments: A simple way to enter the market by investing small amounts. Small but regular investments go a long way in creating wealth over time Rupee cost averaging: Fewer units during rising markets and more units during falling markets, thereby reduces the average cost per unit
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 No need for timing the markets: No need to select the right time and quantity to buy and sell as timing the market is time consuming and risky. It eliminates the need to actively track the markets (iii) Availability of add-on facilities: Ease of availing add on facilities like Systematic Transfer Plan/ Systematic Withdrawal Plan / Systematic Investment Plan/ auto switch /trigger facility etc. (iv) Liquidity: An investor of Gold Savings Fund can subscribe and redeem units on all business days directly from the AMC, while purchase and sale of gold ETF units is a factor of liquidity on the exchange. (v) Ease of investing: Investing in gold through Reliance Gold Savings Fund, the investor can directly subscribe/ redeem units through the physical mode at the various designated investor service centre across the country thereby making it easily accessible and convenient. (vi) Cost Effective: Investing in gold through the Reliance gold Savings Fund in physical application mode enables you invest in a low cost manner as the investor does not have to incur charges like.

annual maintenance charges for demat account , delivery brokerages charges, transaction charges incurred for investing through the dematerialized mode. The investors will be bearing the recurring expenses of the scheme, in addition to the expenses of underlying Scheme. (vii) Taxation Benefits: Investments in the fund are eligible for long term capital gains tax after 1 year of investments whereas in case of physical gold the investor is eligible for long term capital gains after a period of 3 years. The investments in the fund get similar taxation as debt mutual fund schemes. Reliance Gold Savings Fund invests in equity stocks of gold mining companies or directly into physical gold? No. Reliance Gold Savings Fund will not invest in equity stocks of gold mining companies or
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directly into physical gold. Reliance Gold Savings Fund is a fund of fund which invests exclusively in Reliance Gold Exchange Traded Fund which in turn invests in physical gold. It offers investors a pure play on the asset through investments in Reliance Gold ETF whose investment objective is to provide Returns closely to the returns of the prices of gold.

The tax benefits are as per the current Income Tax laws & rules and any other law for the time being in force. Please refer to Statement of Additional Information for more details. Readers are advised to seek independent professional advice and consult their tax advisors and arrive at an informed investment decision before making any investments. What is the investment philosophy of Reliance Gold Savings Fund? The fund would seek to provide returns that closely correspond to returns provided by Reliance Gold Exchange Traded Fund. What will be the asset allocation of Reliance Gold savings Fund? Under normal circumstances, the anticipated asset allocation would be:
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*The Fund Manager may invest in Liquid Schemes of Reliance Mutual Fund. However, the Fund Manager may invest in any other scheme of a mutual fund registered with SEBI, which invest predominantly in the money market securities. The deviation from the underlying ETF may occur mainly on account of the receipt of cash flows which on an average takes 5 days given the existing operation a procedure. What will be the benchmark of Reliance Gold Savings Fund The Schemes performance will be benchmarked against the price of physical gold. Why should one invest in Reliance Gold Savings Fund? Reliance Gold Savings Fund provides an easy and a convenient way for Portfolio Diversification It endeavors to inculcate a regular savings habit to accumulate gold in small amounts through MICRO Systematic Investment Plan and Systematic Investment Plan Opens doors for non de-mat account holders as it provides the facility to invest through the online medium and through physical application mode. It enables you to avail long term taxation benefits from 1 year unlike physical gold wherein long term taxation can be availed after 3 years.

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 the fund invests in Reliance Gold ETF which in turn invests in physical gold of purity of 99.5 % or higher, thereby relieves you of any impurity concerns. the gold invested in Reliance Gold ETF is stored with the custodian; hence you need not worry about the storage cost. what is the minimum lump sum investment amount? What is the minimum investment amount through SIP? Minimum investment for lump sum investment amount is Rs. 5,000 and in multiples of Re.1 thereafter. Minimum investment amount for investing SIP route is as follows: (1) Rs.100/- per month and in multiples of Re. 1/- thereafter for minimum 60 months (2) Rs.500/- per month and in multiples of Re. 1/- thereafter for minimum 12 months (3) Rs.1000/- per month and in multiples of Re. 1/- thereafter for minimum 6 months (4) Rs.500/- per quarter and in multiples of Re. 1/- thereafter for minimum 12 quarters (5) Rs.1500/- per quarter and in multiples of Re. 1/- thereafter for minimum 4 quarters what is the minimum additional investment amount? Rs.1000 and in in the multiple of Re 1 is there any option of doing SIP during the NFO? Yes, SIP option is available during the NFO & subsequently as well. SIP debit dates shall be02nd, 10th, 18th or 28th. This facility of investing in a systematic way would enable you to accumulate gold at regular intervals for long term commitments. Investors without PAN can invest through the MICRO SIP route in Reliance Gold Savings Fund. What are the applicable loads during and after the NFO? The following Load Structure is applicable during the new fund offer and continuous offer including SIP installments in the scheme. Entry Load* Nil Exit Load -, 2%- If redeemed or switched out on or before completion of 1 year from the date of allotment of units.

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- Nil - If redeemed or switched out after the completion of 1 year from the date of allotment of units. *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 with respect to applications for registrations under systematic investment plans/ systematic transfer plans accepted by the Fund with effect from August 01, 2009. What facilities are available for investing in Reliance Gold savings Fund? The investor can avail of following facilities during the NFO period: Systematic Investment Plan (SIP) MICRO SIP Investing through the stock exchange platform Online Transaction through the website. i.e www.reliancemutual.com Auto switch facility Application Supported By Blocked Amount facility ( ASBA) Facilities available during the ongoing period: Systematic Investment Plan (SIP) MICRO SIP Investing through the stock exchange platform Online Transaction through the website. i.e. www.reliancemutual.com Salary Advantage Systematic Transfer Plan Systematic Withdrawal Plan Auto switch facility Trigger Facility Invest Easy

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What is the expense charged for investing in Reliance Gold savings Fund? The investors in the Scheme will be charged a maximum of 1.5% of the daily or average weekly net assets of Reliance Gold Savings Fund including the expenses charged in its underlying investments in Reliance Gold ETF. To explain this further with a hypothetical example: If an investor is subscribing Rs 50,000/- in Reliance Gold savings Fund the annual scheme recurring expense would amount to Rs 750/-. (I.e. Expense levied to Reliance Gold ETF is 1% p.a. as on 31/12/2010, thereby the expense charged to Reliance Gold Savings Fund would be 0.50% as the total expense under both the schemes would not exceed 1.5% p.a.The calculation of the same is given below: Investment in Reliance Gold Savings Fund 50,000 * 0.5% + Reliance Gold Savings Funds Investments in Reliance Gold ETF 50,000 * 1% = Rs 750. Note: The investors will be bearing the recurring expenses of the scheme, in addition to the expenses of underlying Scheme.

what is the best mode of investing in this fund? We recommend a combo approach for wealth creation. Lump sum investment is for wealth creation and required asset allocation and for portfolio diversification as per your risk appetite and investment objective. To fulfill your long term needs through gold accumulation plan a Systematic Investment Plan (SIP) is recommended An overall allocation of around 10% to this fund in your investment portfolio is recommended. Please consult your financial advisor for determining your individual gold allocation

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Pros & cons of investing in mutual funds: For investments in mutual fund, one must keep in mind about the Pros and cons of investments in mutual fund.

Advantages of Investing Mutual Funds: 1. Professional Management - The basic advantage of funds is that, they are professional managed, by well qualified professional. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio. A mutual fund is considered to be relatively less expensive way to make and monitor their investments. 2. Diversification - Purchasing units in a mutual fund instead of buying individual stocks or bonds, the investors risk is spread out and minimized up to certain extent. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others. 3. Economies of Scale - Mutual fund buy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors. 4. Liquidity - Just like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want. 5. Simplicity - Investments in mutual fund is considered to be easy, compare to other available instruments in the market, and the minimum investment is small. Most AMC also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis.

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Disadvantages of Investing Mutual Funds: 1. Professional Management- Some funds dont perform in neither the market, as their management is not dynamic enough to explore the available opportunity in the market, thus many investors debate over whether or not the so-called professionals are any better than mutual fund or investor himself, for picking up stocks. 2. Costs The biggest source of AMC income is generally from the entry & exit load which they charge from investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon. 3. Dilution - Because funds have small holdings across 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. 4. 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.

Mutual Funds Industry in India The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry. In the past decade, Indian mutual fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM)

Was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470 in March 1993 and till April 2004, it reached the height of 1,540 bn.

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Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry. The main reason of its poor growth is that the mutual fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectualized with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling. The mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under. First Phase - 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6700 crores of assets under management. Second Phase - 1987-1993 (Entry of Public Sector Funds) Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47004 as assets under management. Third Phase - 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered

and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

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The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds. Fourth Phase - since February 2003 This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as on January 2003). 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 Ltd, 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 AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September,2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

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Mutual Fund Companies in India ABN AMRO Mutual Fund | Birla Sun Life Mutual Fund | Bank of Baroda Mutual Fund (BOB Mutual Fund) | HDFC Mutual Fund | HSBC Mutual Fund | ING Vysya Mutual Fund | Prudential ICICI Mutual Fund | Sahara Mutual Fund | State Bank of India Mutual Fund (SBI) | Tata Mutual Fund 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 players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund companies in India.

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Major Mutual Fund Companies in India ABN AMRO Mutual Fund 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 a G is the custodian of ABN AMRO Mutual Fund. Birla Sun Life 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 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 (BOB Mutual Fund) 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.

HDFC Mutual Fund HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing Development Finance Corporation Limited and Standard Life Investments Limited.

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HSBC Mutual Fund HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund. ING Vysya Mutual Fund ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management (India) Pvt. Ltd. was incorporated on April 6, 1998. Prudential ICICI Mutual Fund 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. Sahara Mutual Fund 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 State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch off short 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 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 its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. 7,703 crores (as on April 30, 2005) of AUM. Kotak Mahindra Mutual Fund Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having more than 1,99,818 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.

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Unit Trust of India Mutual Fund 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. Reliance Mutual Fund 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 investments in diversified securities. Standard Chartered Mutual Fund 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.

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Franklin Templeton India Mutual Fund 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 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 Mutual Fund India 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). This is the first close end diversified equity scheme serving the needs of Indian retail investors focusing on a long-term capital appreciation. Escorts Mutual Fund Escorts Mutual Fund was setup on April 15, 1996 with Excorts 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.

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Alliance Capital Mutual Fund 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 (Pvt) Ltd. with the corporate office in Mumbai. Benchmark Mutual Fund Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as the sponsor and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company. Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Asset Management Company Pvt. Ltd. is the AMC. Canbank Mutual Fund Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai. Chola Mutual Fund 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. LIC Mutual Fund 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
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Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund. GIC 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.

OTHER MUTUAL FUND COMPANIES IN INDIA 1. Fidelity Mutual Fund 2. IL&FS Mutual Fund 3. DSP Merill lynch Mutual Fund 4. Sundaram Mutual Fund 5. Principal Mutual Fund 6. Taurus Mutual Fund 7. Deutsche Mutual fund 8. IDBI Investment Company Ltd. 9. Bank of India Mutual Fund

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Association of Mutual Funds in India (AMFI) With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.

The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows: This mutual fund association of India maintains a high professional and ethical standard in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any

means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Association of Mutual Fund of India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
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 It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds. At last but not the least association of mutual fund of India also disseminate information on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

The sponsors of Association of Mutual Funds in India Bank Sponsored SBI Fund Management Ltd. BOB Asset Management Co. Ltd. Canbank Investment Management Services Ltd. UTI Asset Management Company Pvt. Ltd. Institutions GIC Asset Management Co. Ltd. Jeevan Bima Sahayog Asset Management Co. Ltd.

Private Sector Indian: BenchMark Asset Management Co. Pvt. Ltd. Cholamandalam Asset Management Co. Ltd. Credit Capital Asset Management Co. Ltd. Escorts Asset Management Ltd. JM Financial Mutual Fund Kotak Mahindra Asset Management Co. Ltd. Reliance Capital Asset Management Ltd. Sahara Asset Management Co. Pvt. Ltd Sundaram Asset Management Company Ltd.
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 Tata Asset Management Private Ltd. Predominantly India Joint Ventures: Birla Sun Life Asset Management Co. Ltd. DSP Merrill Lynch Fund Managers Limited HDFC Asset Management Company Ltd. Predominantly Foreign Joint Ventures: ABN AMRO Asset Management (I) Ltd. Alliance Capital Asset Management (India) Pvt. Ltd. Deutsche Asset Management (India) Pvt. Ltd. Fidelity Fund Management Private Limited Franklin Templeton Asset Mgmt. (India) Pvt. Ltd. HSBC Asset Management (India) Private Ltd. ING Investment Management (India) Pvt. Ltd. Morgan Stanley Investment Management Pvt. Ltd. Principal Asset Management Co. Pvt. Ltd. Prudential ICICI Asset Management Co. Ltd. Standard Chartered Asset Mgmt Co. Pvt. Ltd. Association of Mutual Funds in India Publications AMFI publics mainly two types of bulletin. One is on the monthly basis and the other is quarterly. These publications are of great support for the investors to get intimation of the knowhow of their parked money. The mailing address of Association of Mutual Funds in India Association of Mutual Funds in India 106, Free Press House, Free Press Journal Marg, Nariman Point, Mumbai - 400 021, India. Telephone : 91-22-5637 39 07 / 5637 39 08 Fax : 91-22-5637 3909 Website www.amfiindia.com
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QUESTIONNAIRE (A) Que.1 Do you have any investment? Ans. Que.2 Ans. Yes No

In which instrument have you invested? Equity Debt Mutual funds Any Other

Que.3 Which instrument is best as per your opinion among the following? Equity Debts Que.4 Ans. What is your Annual Income? 50,000 to 1, 00,000 1, 00,000 to 5, 00,000 Mutual Funds Any Other

5, 00,000 to 10, 00,000

10, 00,000 to above

Note: - If you dont have mutual funds than fill part B otherwise fill part C (B) Que.1 Ans. Que.2 Ans. Que. 3 Ans. Do you know about mutual funds? Yes No

Why didnt you invest in mutual funds? ___________________________________________________ Would you like to invest in mutual funds in future? Yes No
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(C) Que. 1 Ans. Que.2 Ans. Which facility are you using in your mutual funds? Lumsum How do you invest? Direct investment Through certified financial advisor Que.3 Ans. Do you agree that there is low risk in mutual funds? Yes No Through CA SIP

Que.1 Ans.

Have you heard about Karvy? Yes No

Que.2 Ans.

How do you rank the services provided by Karvy? Poor Best Average Excellent Good

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Your valuable suggestion about Karvy (if any): ____________________________________________________________________ __ ____________________________________________________________________ __

(E) Personal Information: 1. 2. 3. 4. 5. 6. 7. Name: Age: Occupation: Organization Name: Cont. No.: Email Id(if any): Signature: ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

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CONCLUSION

The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. People rarely understood, and of course investing was out of question. But yes, some 24 million shareholders were accustomed with guaranteed high returns by the beginning of liberalization of the industry in 1992. This good record of UTI became marketing tool for new entrants. The expectations of investors touched the sky in profitability factor. However, people were miles away from the preparedness of risks factor after the liberalization.

The annual composite rate of growth is expected 13.4% during the rest of the decades. 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.

The government is also helping in boosting mutual fund industry. Government is emphasizing a lot on infrastructure development and social spending and yet targeting a lower fiscal deficit. FIIs continued to be positive on emerging markets in general and the Indian markets in particular. FIIs buying have considerable portion in mutual funds buying.

Key Points:

saving rate is over 30%, highest in the world. Only channel zing savings in mutual funds sector is required.

these

more than 800. There is a big scope for expansion.

unds concentrating on the 'A' class cities. Soon they will find scope in the growing cities.

are

market by mutual funds to 33-35%.

25 % and it is expected to grow by 30 % this year.

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MY LEARNING FROM PROJECT

I have learnt many things which I might not be able to learn under Class room training like looking at the stock market terminal and analyzing the stocks and thereby deducing about their performance and thus designing the portfolio on the basis of their performances. I want to share some of experience or learning with you.

1.

First and the most important I learnt about Mutual Fund Industry. Before this project I didnt have much knowledge about Mutual funds. But now I have good knowledge about Mutual Funds.

1.

I learnt about marketing elements also. How the companies, banks and brokerage houses market their products in front of customer in presence of competitors products.

2.

I learnt about mutual funds as well as other products like insurance, DMAT account, IPO, some of banking product and transactions and some financial services offered by KARVY STOCK BROKING LTD.

3.

I also learnt about the risk factor calculation of the mutual funds, how the various broking firms calculate the risk factors of various mutual funds.

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WEBOGRAPHY 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. www.hdfcfund.com www.investmart.com www.icicidirect.com www.amfiindia.com www.nseindia.com www.mutualfundsindia.com www.nseindia.com www.bseindia.com www.capitalmarket.com www.equitymaster.com www.investopedia.com www.valuenotes.com www.karvyonline.com www.cobe.com www.numa.com www.involatility.com www.aantix.com www.pmpublishing.com

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BIBILOGRAPHY

1. 2. 3.

Economics times. Securities Analysis and Portfolio Management< Fischer and Jordan. Options, Features & Derivatives, John C. Hull< Sixth Edition, Published by Pearson Education Co.

4.

Investment Management: Security analysis and Portfolio Management, V.K. Bhalla

5. 6. 7. 8. 1. 2. 3.

Derivatives, T.V. Somanathan, Published by Tata McGraw Hill. Futures & option, N.D. Vohra, B.R. Bagri, Published by Tata McGraw Hill. Futures & option, A.N. Sridhar, Shroff Publisher & Distributors, New Delhi. Options & Futures-An Indian Experience, D.C. Pawari, Jaico Publisher Book on Portfolio Management by ICFAI Press Magazine AAG by HDFC Bank, April issue. Business world

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