Am It

A
SUMMER TRAINING PROJECT REPORT ON
GOAL PLANNING TO MUTUAL FUND IN
Submitted to:GAUTAM BUDDHA TECHNICAL UNIVERSITY LUCKNOW SHERWOOD COLLEGE OF ENGEENIRING RESEARCH AND TECNOLOGY BARABANKI
SUBMITTED BY AMIT RAI MBA III SEM ROLL NO: - 1028170003
ReLIANCe Mutual Fund

Anil Dhirubhai Ambani Group
ACKNOWLEDGEMENT
Ones mind, once stretched by a new idea; never regains its original dimensions -Oliver Windell Holmes
Preservation, inspiration and motivation have always played a key role in the success of any venture. In the present world of competition and success, training is like a bridge between theoretical and practical working; willingly I prepared this particular Project. First of all I would like to thank the supreme power, the almighty god, who is the one who has always guided me to work on the right path of my life. I would like to thank Mr. Amit Prakash (Assistant Manager) for granting me permission to undertake the training in their esteemed organization. I also thank the other staff of Reliance Money, Lucknow who devoted their valuable time by helping me to complete my project. I express my sincere thanks to V.K. Verma (Vice-Chairman) and Ms. Sana, Mr. R.K. Srivastav (Faculty Guide) of M.B.A. department, for the valuable suggestion and making this project a real successful.
Last but not least, my sincere thanks to My Parents and Friends who directly or indirectly helped me to bring this project into the final shape.
AMIT RAI

PREFACE A good broker system must be able to cope with an extremely complex and dynamic environment. The microstructure of the stock market in which brokers work is highly dynamic and volatile. Many stocks are available to be bought and sold, each exhibiting its own patterns and characteristics that are highly unpredictable. With so many options and considerations that need to be taken into account, it is an extremely difficult task for a broker to investigate aspects of the stock market and consistently provide effective advice to their clients. Thus, brokers perform their day-to-day tasks with the aid of a broker system. Such a system should provide tools for interacting with exchanges and performing analysis. As a consequence, these broker systems are quite large and complicated by themselves. This research aims to analysis Stock broker on the basis of their services, products, growth, and their competitiveness. Because Stockbrokers are one of the main participants in stock exchanges worldwide, they often act as an agent for their clients, making trades on their behalf. They also act as advisors, providing suggestions to their clients on what stocks to buy and sell.


EXECUTIVE SUMMARY
TITLE OF PROJECT COMPANY NAME
Goal planning to Mutual Fund Reliance Capital Asset Management Ltd.
DURATION GUIDE
45 days Mr.Amit prakash
The main objective to study goal planning to Mutual Fund to know about the market position of the Reliance Mutual Funds to the opinion of customers and respondents about the Reliance Mutual Fund as well as the marketing & promotion of Reliance Mutual Fund. The respondents were the customers as well as the non-customers. The project titled "Goal planning to Mutual Funds" is encountered by keen competition. In such a scenario my study is limited to explore the possibilities of trapping the competitive market. This is covered under the study is confined to lucknow.
To make People aware of Reliance Mutual Fund. To promote Reliance Mutual Fund. To study the behavior of market.
To study the behavior of investors & general Mass.

ABSTRACT
I joined RELIANCE MUTUAL FUND for internship program (as a part of MBA), I only had a theoretical knowledge of related subjects, thanks to my Faculty Guide and my Company Mentor for giving me an opportunity to implement my theoretical knowledge in practical aspect. My Company mentor Mr.Amit Prakash has given me the project to manage awareness of union bank investors about mutual fund, updating all the necessary information to them & to empanel new investors by visiting banks with Reliance Mutual Fund in Lucknow. I started this project by understanding the concept & technicalities of Mutual Fund. Analysis of Lucknow market through Primary & Secondary data helped me for further strategy. I have collected the secondary data of different ratios, portfolios, volatility measures, NAVs performance & returns of all the leading AMCs from the net and other source to make my analysis more effective. For the analysis of services & overall quality of Reliance AMC with other leading AMCs, I collected the Primary Data through Questionnaire. It helped me a lot to complete my project on time. Interaction with IFAs (Individual Financial Adviser) also helped me to understand more the concept & technicalities of mutual funds & also, compare our AMC with other AMCs because these are the persons who have enough knowledge about the investment market and investor behavior.
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INDEX
S.No. Company introduction 1)
TOPIC About Reliance Group Reliance capital asset management ltd
2)
Brief of mutual fund What is mutual fund Mutual Fund Industry in india
3)
Introduction About Reliance Mutual Fund Schemes
4) 5) 6) 7) 8) 9)
Research Methodology Data collection & Analysis SWOT Analysis Conclusion Limitation Recommendation
10) Questionnaire 11) Bibliography

COMPANY INTRODUCTION


ABOUT RELIANCE GROUP

The Reliance Group founded by Dhirubhai H. Ambani (1932-2002) is India's largest business house with total revenues of over Rs 99,000 crore (US$ 22.6 billion), cash profit of Rs 12,500 crore (US$ 2.8 billion), net profit of Rs 6,200 crore (US$ 1.4 billion) and exports of Rs 15,900 crore.
The Group's activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers, and
intermediates), textiles, financial services and insurance, power, telecom and infocom initiatives. The Group exports its products to more than 100 countries the world over. Reliance emerged as India's Most Admired Business House, for the third successive year in a TNS Mode survey for 2003. Reliance Group revenue is equivalent to about 3.5% of India's GDP. The Group contributes nearly 10% of the country's indirect tax revenues and over 6% of India's exports. Reliance is trusted by an investor family of over 3.1 million - India's largest.
THE GROUP CONTRIBUTES

5 per cent of India's total exports 10 per cent of the Government of India's indirect tax revenues

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COMPANY STRUCTURE
RELIANCE INDUSTRIES LTD. ALONE ACCOUNTS FOR

30 per cent of the total profits of the private sector in India 10 per cent of the profits of the entire corporate sector in India 7 per cent of the total market capitalization in India Weightage of 15 per cent in the BSE Sensex Weightage of 12 per cent in the Nifty Index

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RELIANCE INDUSTRIES LIMITED Reliance Industries Limited (RIL) is India's largest private sector company on all major financial parameters with gross turnover of Rs 74,418 crore (US$ 17 billion), cash profit of Rs 9,197 crore (US$ 2.1 billion), net profit of Rs 5,160 crore (US$ 1.2 billion), net worth of Rs 34,452 crore (US$ 7.9 billion) and total assets of Rs 71,157 crore (US$ 16.3 billion). RIL emerged as the only Indian Company in the list of global companies that create most value for their shareholders, published by financial Times based on a global survey and research conducted by PricewaterhouseCoopers in 2004. RIL features in the Forbes Global list of world's 400 best big companies and in FT Global 500 list of world's largest companies. RELIANCE CAPITAL ASSET MANAGEMENT LTD. Reliance Capital Asset Management Ltd. is a wholly owned subsidiary of Reliance Capital Limited, the sponsor. Reliance Capital Ltd. holds the entire paid-up capital (100%) of Reliance Capital Asset Management Ltd. Reliance Industries Ltd. has promoted reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd., one of India's largest private sector enterprises. Reliance Industries Ltd. has a net worth of Rs.34, 452 crores as on March31, 2004 and currently has a large family of shareholders. Reliance Capital limited is a Non Banking Finance Company engaged in leasing, investment and other fund based activities. The net worth of Reliance Capital Ltd. is Rs. 1,399.81 crores as on March 31, 2004 Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to the corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible for discharging its functions and responsibilities towards the Fund in accordance with the Securities and Exchange Board of India (SEBI) Regulations.
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The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond the contribution of an amount of Rupees one Lac made by them towards the initial corpus for setting up the Fund and such other accretions and additions to the corpus. Reliance Capital Asset Management Ltd. (RCAM), a company registered under the Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Capital Mutual Fund. It is a wholly owned subsidiary of Reliance Capital Ltd.
Reliance Capital Asset Management Ltd. was approved as the Asset Management Company for the Mutual Fund by SEBI vide letter no IIMARP/265/95 dated February 1, 1995. The Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM will act as Investment Manager of the Mutual Fund. The net worth of the Asset Management Company as on 30 th June 2005 is Rs. 9907.89 crores.

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BRIEF OF MUTUAL FUND

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Mutual Fund
Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities according to the objective. A mutual fund is created when investors put their money together a pool of
the investors funds. The most important characteristic of a mutual fund is that the contributors and the beneficiaries of the fund are the same class of people, namely the investors. The term mutual means that investors contribute to the pool, and also benefit from the pool. There are no other claimants to the funds. The pool of funds held mutually by investors is the mutual fund. A mutual funds business is to invest the funds thus collected, according to the wishes of the investors who created the pool. In many markets these wishes are articulated as investment mandates. Usually, the investors appoint professional investment managers create a product, and offer it for investment to the investor. For e.g., a mutual fund, which sells a money market mutual fund, is actually seeking investors willing to invest in a pool that would invest predominantly in money market instruments. Mutual funds issues units to investors in accordance with quantum of money invested by them. A mutual fund is required to be registered with SEBI, which regulates markets before it can collect funds from the public.

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What is a mutual fund?

A mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. Important Characteristics of a Mutual Fund 1A mutual fund actually belongs to the investors who have pooled their funds is in the hands of the investors. 2Investment professionals and other service providers, who earn a free for their services, from the fund, manage a mutual fund. 3The pool of funds invested in a portfolio of marketable investments. The value of the portfolio is updated every day. 4The investors share in the fund is denominated by units. The value of the units changes in the portfolios value, every day. The value of one unit of investment is called as the net asset value of NAV. 5The investment portfolio of the mutual fund is created according to the stated investment objectives of the fund.

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SET UP OF A MUTUAL FUND

A mutual fund set up in the form of a trust, which has sponsor, trustees, Asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The trustees of the mutual fund hold its property for the benefit of the unitholders. Asset Management Company approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual fund. Mutual Fund Structure:

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The structure consists of: Sponsor: Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment Managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund. Trust: The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.

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

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Asset Management Company (AMC): The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the Mutual Fund. At least 50% of the directors of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of at least 10 crore at all times. Registrar and Transfer Agent: The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form, redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.

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TYPES OF MUTUAL FUNDS Mutual Funds schemes may be classified on the basis of its structure and its investment objectives. I Open-ended Funds/Schemes An open ended fund or schemes is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices that are declared on a daily basis. The key feature of open-end scheme is liquidity. II Close ended Funds/ Schemes A closed ended fund or scheme has a stipulated maturity period of 5-7 year. The fund is open for subscription only during a specified period at the time of launch of the scheme. They can buy or sell the units of the scheme On the stock exchange where the units are listed. In order to provide an exit route to the investors some close ended funds give an option of selling back the units to the mutual fund periodic repurchase of NAV related prices SEBI Regulations stipulate that at least one of the two exit route is provided to the investor i.e. either repurchase facility or through listing on stock exchange. III. Interval Funds These funds combine the feature of both open ended and close ended funds wherein the fund is close ended for the first couple of years and open ended thereafter. Some funds allows fresh subscription and redemption at fixed times every year (say every six months) in order to reduce the administrator aspects of daily entry or exit yet providing reasonable liquidity.

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By Investment Objective:
A scheme can be also be classified as growth scheme income scheme, or balanced scheme considering its investment objective. Such scheme may be I. Growth / Equity Oriented Schemes The aim of the growth funds is to provide capital appreciation over the medium to long-term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc, and the investors may choose an option depending on their preferences. II. Income / Debt Oriented Schemes The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debenture, Government Securities and money market instruments. Such funds are less risky compare to equity schemes. The Net Asset Values of such funds are affected because of change in interest rate in the country. III Balanced Funds The aim of balanced funds is to provide both growth and regular income such as schemes invest both in equities and fixed income-securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40 -60% in equity and debt instruments. However, Net Asset Values of such funds are likely to be same volatile compared to pure-equity funds.

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IV. Money Market / Liquid Funds These funds are also income funds and their aim is to provide easy liquidity presentation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposits, commercial paper and inter -bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for shot periods. V. These Gilt Funds funds invest exclusively in Government securities.
Government securities have no default risk. Net Asset Values of these schemes also fluctuate due to changes in invest rates and other economic factors as in the case with income or debt oriented schemes VI. Load Funds A load fund is one that changes a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically, entry or exit loads range from 1% to 20%.
VII. No-Load Funds A No-load fund is one that does not change a commission for entry or exit. That is no commission is payable on sale or purchase of units in the fund.

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* Other Schemes I. Tax Saving Fund/ Schemes
These funds offer tax benefits to investors under the Income Tax Act opportunities provided under these schemes are in the form of tax rebates U/S 88 as well as saving in Capital Gains U/S54EA and 54EB. Investments made in Equity Linked Saving allowed as deduction U/S 88 of the Income Tax Act, 1961. They are rests suited for investors seeking tax concessions. II. Index Funds
Index fund replicate the portfolio of a particular index such as BSE Sensitive Index, S&P NSE 50 Index (Nifty), etc. These schemes invest in the securities in the same Weightage comprising of an index. NAVs index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. III. Industry specific Schemes
Industry Specific Schemes invest only in the industry specified in the offer document. The investment of these funds is limited to specific industries like Info. Tech, FMCG, Pharmaceuticals, etc. Index fund replicate the portfolio of a particular index such as BSE Sensitive Index, S&P NSE 50 Index (Nifty), etc. These schemes invest in the securities in the same weightage comprising of an index. NAVs index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms.

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Terms associated with mutual fund 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.
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

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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 tradedFor 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.
Loads: Entry Load/Sale Load Thus, the investor has to pay for the value of the units plus an additional charge. This additional charge is called the entry/sale load.
Exit Load/Repurchase Load It is the charge imposed on the investor at the time of his exit from the scheme. Operationally, therefore, the mutual fund will pay back to the investor the value of the units reduced by the charge levied on exit. Contingent Deferred Sales Charge A mutual fund may not want to charge an exit load in all the cases. In such a case the mutual fund may impose charges based on the time of withdrawal. Thus, a fund desirous of long-term investors may stipulate that the exit charge will keep reducing with duration of investment.

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Such a charge is called Contingent Deferred Sales Charge. The asset management company is entitled to levy a contingent deferred sales charge for redemption during the first four years after purchase, not exceeding 4% of the redemption proceeds in the first year, 3% in the second year, 2% in the third year and 1% in the fourth year. In order to charge a CDSC the scheme has to be a no load scheme as per the regulation laid down by SEBI. The idea behind charging CDSC is the recovery of expenses incurred on promotion or distribution of the scheme Switchover/Exchange Fee It is the fees charged by a fund when the investor decides to switch his investment from one scheme of the fund to another scheme from the same fund family. Recurring Expenses: Apart from loads, mutual funds also charge some other expenses. Even here regulations stipulate the ceiling on each head. Some of the fees charged by the fund are: Investment Management & Advisory Fees - As the name explains this is meant to remunerate the asset management company for managing the investor's money. Trustee Fees - is the fees payable to the trustees for managing the trust. Custodian Fees - is the fees paid by the fund to its custodians, the organization which handles the possession of the securities invested in by the fund. Registrar and Transfer Agents Charges - is the fees payable to the registrar and the transfer agents for handling the formalities related to the transfer of units and other related operations.

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Broker/Dealer Remuneration, Audit Fees, Cost of Funds Transfer, Cost of providing a/c statements, Cost of Statutory
Advertisements.

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ASSET MANAGEMENT COMPANY (AMC)

Mutual Funds Assets under management (Rs.Cr) March 2011 Reliance Mutual Fund HDFC Mutual Fund ICICI Prudential Mutual Fund UTI Mutual Fund Birla Sun Life Mutual Fund SBI Mutual Fund Franklin Templeton Mutual Fund Kotak Mahindra Mutual Fund DSP BlackRock Mutual Fund IDFC Mutual Fund Tata Mutual Fund Sundaram Mutual Fund Religare Mutual Fund Deutsche Mutual Fund Fidelity Mutual Fund LIC NOMURA Mutual Fund Canara Robeco Mutual Fund Axis Mutual Fund JM Financial Mutual Fund BNP Paribas Mutual Fund PRINCIPAL Mutual Fund L&T Mutual Fund IDBI Mutual Fund Taurus Mutual Fund Peerless Mutual Fund HSBC Mutual Fund Baroda Pioneer Mutual Fund Benchmark Mutual Fund JPMorgan Mutual Fund 101,577 86,282 73,466 67,189 63,696 41,672 37,883 32,202 30,601 21,019 22,681 14,479 11,505 8,187 9,074 11,196 7,824 8,302 5,918 4,674 5,246 4,030 3,528 2,560 4,202 4,452 2,585 3,404 3,410 June 2011 101,25 9 92,033 79,759 69,105 67,475 47,874 34,729 33,994 30,022 27,849 25,006 14,541 11,342 11,084 9,347 9,338 8,625 7,453 5,850 5,723 5,434 5,215 5,124 5,021 4,908 4,855 4,430 4,115 3,724 Change -317 5,751 6,293 1,916 3,779 6,203 -3,153 1,791 -579 6,830 2,325 63 -162 2,897 272 -1,857 801 -849 -68 1,049 187 1,185 1,596 2,461 706 403 1,845 711 315
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% Change -0.31 6.66 8.57 2.85 5.93 14.88 -8.32 5.56 -1.89 32.49 10.25 0.43 -1.41 35.39 3.00 -16.59 10.24 -10.22 -1.15 22.45 3.57 29.40 45.25 96.16 16.80 9.06 71.38 20.90 9.23

Morgan Stanley Mutual Fund Pramerica Mutual Fund ING Mutual Fund AIG Global Investment Group MF Daiwa Mutual Fund Mirae Asset Mutual Fund Motilal Oswal Mutual Fund Sahara Mutual Fund Edelweiss Mutual Fund Bharti AXA Mutual Fund Escorts Mutual Fund Quantum Mutual Fund Total
2,076 1,629 1,301 796 244 380 301 179 182 289 197 124 700,538
2,053 1,684 993 716 665 425 345 265 258 216 209 139 743,20 3
-24 54 -308 -80 421 46 45 86 76 -72 13 15 42,666
-1.13 3.33 -23.68 -9.99 172.48 12.06 14.82 48.08 41.99 -25.01 6.39 12.33 5.74

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ASSET MANAGEMENT COMPANY (AMC)

Asset Management Company controls the operations and functioning of a mutual fund. It is very critical to the performance of a mutual fund as it decided on the style of functioning people who are going to manage the funds, the commitment to service quality and overall supervision. The financial strength and the commitment of the AMC sponsors to the business are very key issue. This is because most AMC's lose money in the first few years of operations. In most cases, these losses are much more than the capital requirements stipulated by SEBI Hence, a sponsor which is financially weak or which cannot capital to the business either because of its inability or unwillingness will result in an unhealthy operation. This is the last place where high quality persons would want to remain and work. The Asset Management Company then remains stunted and the sponsors lose interest. The worst affected are the investors. This is exactly what has happened with some AMC's promoted by Indian business houses. OPTIONS AVAILABLE TO INVESTORS: Each plan of every mutual fund has three options Growth, Dividend and dividend reinvestment. Separate NAV are calculated for each scheme. Dividend Option: Under the dividend plan dividend are usually declared on quarterly or annual basis. Mutual fund reserves the right to change the frequency of dividend declared. Dividend Reinvestment Option: Instead of remittances of units through payouts, Units holder may choose to invest the entire dividend in additional units of the scheme at NAV related

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prices of the next working day after the record date. No sales or entry load is levied on dividend reinvest. Growth Option: Under this plan returns accrue to the investor in the form of capital appreciation as reflected in the NAV. The scheme will not declare the dividend under the Growth plan and investors who opt for this plan will not receive any income from the scheme. Instead of income earned on their units will remain invested within the scheme and will be reflected in the NAV.
Plans Available To Investors: In Mutual Funds, other than one time investment, some other plans are available for the investor today. These are: Systematic Investment Plan (SIP) Systematic Transfer Plan (STP) Systematic Withdrawal Plan (SWP)M
Systematic Investment Plan: It is a disciplined way of investing, where an investor invests fixed amounts at a regular frequency. Systematic Investment Plan is available for planned and regular investments. Under this plan unit holders can benefit by investing specified rupee amounts periodically for a continuous period. This concept is called Rupee Cost Averaging. This program allows Unit holders to save a fixed amount of rupees every month/ quarter by purchasing additional units of the Scheme(s). Rupee cost averaging does not guarantee a profit or protect against a loss. Rupee cost averaging can smooth out the markets ups and downs and reduce the risk of investing in volatile markets.

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Rupee Cost Averaging Month Amount One Invests NAV 1 2 3 4 5 Total Rs. 1000 Rs. 1000 Rs. 1000 Rs. 1000 Rs. 1000 Rs. 5000 No. of Units
Rs. 10 100.00 Rs. 12 83.33 Rs. 10 100.00 Rs. 8 125.00 Rs. 10 100.00 Rs. 50 508.33
The Average NAV = 50/5 = Rs. 10 The Average Price = Total Investments / Total No. of Units = 5000/508.33 = Rs. 9.84 What we see from the table is the fascinating aspect of Rupee Cost Averaging. It makes us buy fewer units when the price is high and more units when the price is low, thereby bringing down our average cost. Systematic Transfer Plan: The Systematic Transfer Plan gives investors the option of systematic transfer of fixed amounts/ capital appreciation on a periodic basis to another Plan/ Scheme of the Mutual Fund. STP can availed of as a monthly or quarterly basis from one plan to another plan in the same scheme or to another scheme within the fund All transfers will take place on the 30th/ 31st of every Month/ Quarter based on the NAV of that day.

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Systematic Withdrawal Plan: SWP is a Tax efficient way of obtaining regular income. Investor can opt for SWP for periodic withdrawal of sums from their accounts. Investor can opt for any one of the following two options offered by the Schemes. Fixed Amount Encashment Under this facility, the unit holders can opt to redeem/ switch (transfer) fixed amount of money from their accounts at periodic intervals. Capital Appreciation Encashment Under this facility, the unit holders can opt to redeem amounts equivalent to the appreciation in their investment value at periodic intervals. Thus the appreciation, if any, earned by the Scheme during the specified period shall be automatically redeemed and paid to the investors at the Applicable NAV. Presently this option is available only for investors in Growth Plan/Option The amount thus withdrawn / switched shall be converted into units at the Applicable NAV, subject to load, if any, and such units shall be subtracted from the Unit balance of that unit holder. This facility shall be subject to the terms and conditions contained in the SWP / STP enrollment form. The Registrar may terminate SWP/ STP on receipt of appropriate notice from the unit holder. It will terminate automatically if all Units are liquidated or withdrawn from the account or upon the receipt of notification of death or incapability of the Unit holder.

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HOW A MUTUAL FUND WORK

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Benefits of Mutual Fund
Reduction in risk: Mutual funds invest in a portfolio of securities. This means that all funds are not invested in the same Investment Avenue. Holding a portfolio that is diversified across investment avenues is a wise way to manage risk.
Reduction in transaction costs: Through the individual investors contribution may be small; the mutual fund itself is large enough to be able to reduce costs in its transactions. These benefits are passed on to the investors.
Portfolio Diversification: By offering readymade diversified portfolios, mutual fund enables investors to hold diversified portfolios. Through investors can create their own diversified portfolios.
Liquidity: Open-ended funds are very liquid as the Mutual Fund companies offer an open window for redemption on all working days.
Professional fund management: Investing in markets requires both knowledge and expertise. Experienced fund managers are able to trade or negotiate better deals, manage the price risk effectively, exploit trends and opportunities and constantly monitor the environment.

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Tax efficiencies: Investing in mutual funds is tax efficient. If investors choose the growth option and stay invested for a year, they only pay long term Capital Gains of 20.4% of indexed returns or 10.2% of un indexed returns (whichever is lower).
Diversification: Diversification is the core of any investment strategy. It allows you to minimize the risks associated with any investment. However, it is very difficult for individuals to have the requisite diversification for your investment given smaller portfolios and transaction costs

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MUTUAL FUND INDUSTRY IN INDIA

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MUTUAL FUND IN INDIA

UTI was the first mutual fund set up in India in the year 1963. In early 1990s government allowed public sector banks and institutions to set up mutual fund. In year 1992, SEBI Act was passed to protect the interest of investors in securities and to promote the development of and to regulate the securities market. As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds to protect the interest of investors. SEBI notified regulations for the mutual fund in year 1993. Thereafter, mutual fund sponsored by private sector entities was allowed to enter the capital market. The regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the interest of investors. All investors whether promoted by public sector of private sector entities including those promoted by foreign entities are governed by the same set of regulations. There is no distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. The risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar type. UTI is not registered with SEBI as mutual funds.

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Distribution Under different Categories Of Indian Mutual Industry
2%
2%
Income Funds
Growth Funds
24%
Balanced Funds
33%
Liquid/Money Market Funds Gilt Funds
36% 3%
ELSS Funds

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Views of the Investors if the stock market crashed down
Invest 29%
Withdraw 19%
Wait 52%

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HISTORY OF MUTUAL FUND IN INDIA

PHASE 1- 1964-87 (UTI) MF Industry started in India in 1963 with formation of UTI. Asset under management in 1987-88: Rs. 6700 crores Launch of First scheme- US64 Followed by ULIP in 1971, CGGA (1986), Mastershare(1987) UTI was the only player in the market enjoying monopoly position Huge mobilization of funds.
PHASE II- 1987- 93 (Entry of Public Sector Funds) Establishments of SBI MF the first non UTI MF. Followed by Canbank MF, LIC MF, and BOI MF. Change in the mindset of the investors UTI was still the undisputed leader of the market.
PHASE III 1993-1996 (Emergency of Pvt.funds) Entry of the Pvt. Sector funds in 1993 JV of foreign fund management companies with Indian promoters Competition increased investors servicing techniques Investors started becoming selective.
PHASE IV- (SEBI Regulation for MF) 1996 SEBI the regulatory authority UTI comes under SEBI regulation voluntarily Governments step for investors protection

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SOME OF THE AMCs CURRENTLY OPERATING ARE
Name of the AMC Alliance Capital Asset Management (I) Private Limited Birla Sun Life Asset Management Company Limited Bank of Baroda Asset Management Company Limited Bank of India Asset Management Company Limited Canbank Investment Management Services Limited
Nature of ownership Private foreign Private Indian Banks Banks Banks
Cholamandalam Cazenove Asset Management Company Private foreign Limited Dundee Asset Management Company Limited DSP Merrill Lynch Asset Management Company Limited Escorts Asset Management Limited First India Asset Management Limited GIC Asset Management Company Limited IDBI Investment Management Company Limited Indfund Management Limited Private foreign Private foreign Private Indian Private Indian Institutions Institutions Banks

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ING Investment Asset Management Company Private Private foreign Limited J M Capital Management Limited Jardine Fleming (I) Asset Management Limited Kotak Mahindra Asset Management Company Limited Kothari Pioneer Asset Management Company Limited Jeevan Bima Sahayog Asset Management Company Ltd. Private Indian Private foreign Private Indian Private Indian Institutions
Morgan Stanley Asset Management Company Private Private foreign Limited Punjab Limited Reliance Capital Asset Management Company Limited State Bank of India Funds Management Limited Shriram Asset Management Company Limited Sun F and C Asset Management (I) Private Limited Sundaram Newton Asset Management Company Limited Tata Asset Management Company Limited Credit Capital Asset Management Company Limited Templeton Asset Management (India) Private Limited Private Indian Banks Private Indian Private foreign Private foreign Private Indian Private Indian Private foreign National Bank Asset Management Company Banks

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Unit Trust of India Zurich Asset Management Company (I) Limited SEBIS REGULATION
Institutions Private foreign
There was no uniform regulation of the mutual funds industry till a few years ago. The UTI was regulated by a special Act of Parliament while funds promoted by public sector banks were subject to RBI Guidelines of July 1989. The Securities & Exchange Board of India (SEBI) was formed in 1993 as a capital market regulator. One of its responsibilities was to regulate the mutual fund industry and it came up with comprehensive regulations for the industry in 1993. The rules for the formation, administration and management of mutual funds in India were clearly laid down. Regulations also prescribed disclosure requirements. The regulations were thoroughly reviewed and re-notified in December 1996. The revised guidelines tighten the accounting and disclosure requirements in line with recommendations of The Expert Committee on Accounting Policies, Net Asset Values and Pricing of Mutual Funds. The SEBI (Mutual Funds) Regulations, 1996 have been further amended in 1997, 1998 and 1999. Today, all mutual funds are regulated by SEBI. Efforts have been made to bring UTI schemes under SEBI's ambit with the result that all schemes, with the exception of Unit 64, are now regulated by the capital market regulator.

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Regulatory Aspects
Schemes of a Mutual Fund The asset management company shall launch no scheme unless the trustees approve such scheme and a copy of the offer document has been filed with the Board. Every mutual fund shall along with the offer document of each scheme pay filing fees. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor A close-ended scheme shall be fully redeemed at the end of the maturity period. "Unless a majority of the unit holders otherwise decide for its rollover by passing a resolution". The mutual fund and asset management company shall be liable to refund the application money to the applicants,(i) If the mutual fund fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1); (ii) If the moneys received from the applicants for units are in excess of subscription as referred to in clause (b) of subregulation(1).

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Rules Regarding Advertisement:

The offer document and advertisement materials shall not be misleading or contain any statement or opinion, which are incorrect or false. Investment Objectives and Valuation Policies: The price at which the units may be subscribed or sold and the price at which such units may at any time be repurchased by the mutual fund shall be made available to the investors.
General Obligations: Every asset management company for each scheme shall keep and maintain proper books of accounts, records and documents, for each scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the fund and intimate to the Board the place where such books of accounts, records and documents are maintained. The financial year for all the schemes shall end as of March 31 of each year. Every mutual fund or the asset management company shall prepare in respect of each financial year an annual report and annual statement of accounts of the schemes and the fund as specified in Eleventh Schedule. Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management company.

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Procedure For Action In Case Of Default: On and from the date of the suspension of the certificate or the approval, as the case may be, the mutual fund, trustees or asset management company, shall cease to carry on any activity as a mutual fund, trustee or asset management company, during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents, or securities that may be in its custody or control, relating to its activities as mutual fund, trustees or asset management company.
Restrictions On Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer, which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the Act. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of asset Management Company. A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. All such investments shall be made with the prior approval of the Board of Trustees and the Board of asset Management Company. No mutual fund under all its schemes should own more than ten per cent of any company's paid up capital carrying voting rights. Such transfers are done at the prevailing market price for quoted instruments on spot basis. The securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made.
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A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging
Any fees, provided that aggregate interscheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund.
The initial issue expenses in respect of any scheme may not exceed six per cent of the funds raised under that scheme.
Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relative securities and in all cases of sale, deliver the securities and shall in no case put itself in a position whereby it has to make short sale or carry forward transaction or engage in badla finance.
Every mutual fund shall, get the securities purchased or transferred in the name of the mutual fund on account of the concerned scheme, wherever investments are intended to be of long-term nature.
Pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. No mutual fund scheme shall make any investment in: i. Any unlisted security of an associate or group company of the sponsor; or ii. Any security issued by way of private placement by an associate or group company of the sponsor; or The listed securities of group companies of the sponsor which is in excess of 30% of the net assets [of all the schemes of a mutual fund]

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No mutual fund scheme shall invest more than 10 per cent of its NAV in the equity shares or equity related instruments of any company. Provided that, the limit of 10 per cent shall not be applicable for investments in index fund or sector or industry specific scheme.
A mutual fund scheme shall not invest more than 5% of its NAV in the equity shares or equity related investments in case of open-ended scheme and 10% of its NAV in case of close-ended scheme.

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ABOUT RELIANCE MUTUAL FUND
Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as the Trustee. RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide SEBI's letter no. IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was formed to launch 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. The main objectives of the Trust are:
To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and investments for people in India and abroad and also ensure liquidity of investments for the Unit holders;
To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings and
To take such steps as may be necessary from time to time to realise the effects without any limitation.
Reliance Mutual Funds Schemes Reliance Vision Fund (September 1995) Reliance Growth Fund (September 1995) Reliance Income Fund (December 1997), Reliance Liquid Fund (March 1998)
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Reliance Medium Term Fund (August 2000), Reliance Short Term Fund (December 2002), Reliance Fixed Term Scheme (March 2003), Reliance Banking Fund (May 2003), Reliance Gilt Securities Fund (July 2003), Reliance Monthly Income Plan (December 2003), Reliance Diversified Power Sector Fund (March 2004) Reliance Pharma Fund (April 2004) Reliance Floating Fund (August 2004) Reliance Media & Entertainment (October 2004) Reliance Equity Opportunities Fund (April 2005)
DEBT SCHEMES Reliance Monthly Income Plan Reliance Income Fund Reliance Medium Term Fund Reliance Liquid Fund Reliance Short Term Fund Reliance Gilt Security Fund Reliance Fixed Term Scheme Scheme Options Scheme Options Scheme Options Scheme Options Scheme Options Scheme Options Scheme Options

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EQUITY SCHEMES Reliance Growth Fund Reliance Vision Fund Reliance Equity Opportunities Scheme Options Scheme Options Scheme Options
SECTOR SPECIFIC SCHEMES Reliance Banking Fund Reliance Diversified Power Sector Fund Reliance Pharma Fund Scheme Options Scheme Options Scheme Options

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VARIOUS SCHEMES OF RELIANCE MUTUAL FUND

Equity/Growth Schemes The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Reliance Equity Fund: (An open-ended diversified Equity Scheme.) 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. Reliance Tax Saver (ELSS) Fund: (An Open-ended Equity Linked Savings Scheme.) The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments. Reliance Equity Opportunities Fund: (An Open-Ended Diversified Equity Scheme.) 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 securities & equity related securities and the secondary objective is to generate consistent returns by investing in debt and money market securities.
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Reliance Vision Fund: (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach. Reliance Growth Fund: (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach. Reliance Index Fund: (An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Plan is to replicate the composition of the Nifty, with a view to endeavor to generate returns, which could approximately be the same as that of Nifty. The Investment Objective under the Sensex plan is to replicate the composition of the Sensex, with a view to endeavor to generate returns, which could approximately be the same as that of Sensex. Reliance NRI Equity Fund: (An open-ended Diversified Equity Scheme.) The Primary investment objective of the scheme is to generate optimal returns by investing in equity or equity related instruments primarily drawn from the Companies in the BSE 200 Index. Debt/Income Schemes: The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds.

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The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. Reliance Monthly Income Plan: (An Open Ended Fund. Monthly Income is not assured & is subject to the availability of distributable surplus) The Primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unitholders and the secondary objective is growth of capital.Primarily the investment shall be made in debt and money market securities (i.e. 80%) with a small exposure (i.e. upto 20%) in equity. Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan: Open-ended Government Securities Scheme) The primary objective of the Scheme is to generate Optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the central Government and State Government Reliance Income Fund: (An Open-ended Income Scheme) The primary objective of the scheme is to generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt & Money Instruments. Reliance Medium Term Fund: (An Open End Income Scheme with no assured returns.) The primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unitholders and the secondary objective is growth of capital.
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Reliance Short Term Fund: (An Open End Income Scheme) The primary investment objective of the scheme is to generate stable returns for investors with a short investment horizon by investing in Fixed Income Securities of short term maturity. Reliance Liquid Fund: (Open-ended Liquid Scheme). The primary 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. Reliance Fixed Term Scheme: (Close-ended Income Scheme) The primary objective of the Scheme is to seek to achieve regular returns / growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the plan with the objective of limiting interest rate volatility. Reliance Floating Rate Fund: (An Open End Income Scheme) The primary objective of the scheme is to generate regular income through investment in a portfolio comprising 3 substantially of Floating Rate Debt Securities (including floating rate securitised debt and Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns). The scheme shall also invest in Fixed rate debt Securities (including fixed rate securitised debt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixed returns Reliance NRI Income Fund: (An Open-ended Income scheme) The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risks. This income may be complimented by capital appreciation of the

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portfolio. Accordingly, investments shall predominantly be made in debt Instruments. Reliance Fixed Maturity Fund - Series I: (A Close Ended Income Scheme) The primary investment objective of the Scheme is to seek to achieve regular returns / growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the Plan with the objective of limiting interest rate volatility. Reliance Fixed Maturity Fund - Series II: (A closed ended Income Scheme) The primary investment objective of the Scheme is to seek to achieve growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the respective plans. Reliance Liquidity Fund: (An Open - ended Liquid Scheme) 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. Reliance Regular Savings Fund: (An Open - ended scheme) The Investment Objectives: Debt Option: The primary investment objective of this plan is to generate optimal returns consistent with moderate level of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly
investments shall predominantly be made in Debt & Money Market Instruments.

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Equity Option: The primary investment objective is to seek capital appreciation and or consistent returns by actively investing in equity / equity related securities. Hybrid Option: The primary investment objective is to generate consistent return by investing a major portion in debt & money market securities and a small portion in equity & equity related instruments.
Sector Specific Schemes: These are the funds/schemes which invest in the securities of only those sectors or industries as specified Fast in the offer documents. Goods e.g.
Pharmaceuticals,
Software,
Moving
Consumer
(FMCG),
Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert. Reliance Banking Fund: Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the primary investment objective to generate continuous returns by actively investing in equity / equity related or fixed income securities of banks. Reliance Diversified Power Sector Fund: Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme. The primary investment objective of the Scheme is to seek to generate consistent returns by actively investing in equity / equity related or fixed income securities of Power and other associated companies. Reliance Pharma Fund: Reliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary investment objective of the Scheme is to generate consistent

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returns by investing in equity / equity related or fixed income securities of Pharma and other associated companies. Reliance Media & Entertainment Fund: Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme. The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of media & entertainment and other associated companies. Reliance Equity Advantage (An open-ended Diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio predominantly 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 securities.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY The study undertaken by me was regarding a detailed analysis of MARKETING AND PROMOTION of Reliance Mutual Fund products, studying its current scenario and studying the challenges and difficulties faced by Reliance Mutual Fund Company. RESEARCH DESIGN Research Design is the overall description of all the steps though which the projects have preceded forms the setting of objectives to the writing of the project report. The success of the project depends on the soundness of the research design, which includes problem definition, specific method of data collection and analysis and time required for the project. TYPES OF RESEARCH DESIGN The Research Design is formulated after the formulation objectives and according the requirement of study. The following types of research design are used for the purpose of study with different objectives in frame of mind. DESCRIPTIVE RESEARCH DESIGN Descriptive studies undertaken in such a circumstances where researcher is interested in knowing the demographic characteristic of the consumer of when he is interested in knowing the proportion of people in the given population who behaves in the particular manner making projections of the certain thing or determining relation between two or more variables. SAMPLE PLAN: Data Source: Primary Data: The primary data are which are collected afresh and for the first time, and thus happen to be original in character. A primary survey was conducted at Lucknow city. The survey was carried out at various levels & the target group was retail investors, business men, builders, industrialists, exporters, CAs ,

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CSs , etc.Questionnaires were used as an instrument to collect the primary data. This data was obtained by various promotion schemes likeCANNOPIES- We put canopies in front of various financial institutions like banks (hdfc, icici), commercial places, and entertainment places like Sahara tower, Fun Mall, Krishna complex. There people approach us and we give them the questionnaire to fill and provide the details of reliance mutual fund. APPROACHING TO INDUSTRIAL UNITS - We approach to areas like Aliganj, Kapoorthala, Gomti Nagar area and give the questionnaire to fill and explain the details of reliance mutual fund.
Secondary sources: The Secondary data are those which have already been collected and through processed the statiscal process.
We got the secondary data through:PREVIOUS TRANSACTION RECORDS: We got the records of those people who have already invested in mutual funds. Trough directory- We got the records of CAs, architects etc
VARIOUS WALK IN QUIRES RECORDS Marketing Approach: o Directly meeting them o Through telephonic calls o Through Canopies

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Population Definition Element: Retail Investors, Business Men, Builders, Industrialists, Exporters, Senior Citizens, CAs, CSs and otherSample Unit- Lucknow City Sampling Method- Simple Random Sampling Sampling Size- Based on ages, income area etc. Data collection- Through directories, Previous records through friends and relatives.

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Modes of Marketing & Promotion Directly Approaching:We directly approach people to invest like builders, investors, exporters, businessmen,CAs, CSs, & even general mass.
Telephonic Calls:We approach them through telephones and take appointments & then directly contact them for investment.
Canopies:We put canopies in front of Banks, Financial Institutions & other public gathering places. There we approach people and take their telephone numbers. & contact them or even in canopies itself make them invest.
Through Distribution Houses:Even most of our funds are promoted through distribution houses viz. Bajaj Capital, Alliance Capital etc.
Through Brokers:Major part of our promotion & marketing is done through brokers, because they are more reliable for knowledgeable. Thus people trust them.

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LIMITATIONS
UNCERTAINITY OF MARKET:Mutual Funds are 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.
LACK OF PUBLIC AWARENESS:In Lucknow Mutual Fund Industry is in infantry stage so people are unaware of it. So people are afraid to invest & they only trust of some govt funds like UTI , SBI, G. Securitys. Which give assured returns?
HIGH COMPETITION:Due to the existence of large number of AMCs the competition is high. Investors are confused that where they have to invest and where not. Other AMCs offered the same type of product/schemes which diversified the investors.
RIGID AND TRADITIONAL STRUCTURE:The people believe investing in Bank FDs and Post Office saving and are reluctant to invest in Mutual Fund. People like to secure money in terms of lending to the people on high interest they meant their amount is safe.

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SOCIO- ECONOMIC FACTOR:The standard of living is low and people have low saving so investment in Mutual Fund is low. The most of the people of this country are agriculture dependent So they have less to invest
POLITICAL FACTOR:Due to volatile govt & their policies regarding investor & investment, the stock market is not integrated which in turn affects the mutual fund industry.

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FINDINGS
1) Majority of the respondent we met were Male in the age group of 30-40 yrs. 2) More than 65% of the investor invest only about 20% of their total investment in Mutual fund. 3) Majority of investors have invested in LIC, as perhaps its oldest and reliable trust. 4) Amongst the private player, Karvy Mutual fund is rapidly becoming popular among investors. 5) People invest in Mutual Fund Primarily for capital growth and secondarily for tax benefits % liquidity. 6) Majority of the investors opt for equity schemes. 7) Open ended schemes have more preference to close ended schemes. 8) Performance of AMC largely effects the investment.

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DATA COLLECTION & ANALYSIS

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Collection of Data for finding Customer Perception:

Primary sources were used to collect data for finding the customer perception regarding the various factors considered when investing in mutual fund schemes.
Primary data have been collected directly from respondents using data collection methods like survey interviews, questionnaires, measurements and direct observations. For this, I had made a questionnaire, which was filled in by the investors. This questionnaire was carefully prepared and it went through various checks before coming into final shape. Various bank officials were initially filled this questionnaire and feedback were taken from each regarding this and based on their feedback, changes were made again to it and again it was shown to them till it got into final shape. I have included only closed ended questions, which leaves no space for biasness in individuals response. To get every questionnaire filled, I was directly involved with the respondents to help and guide them with regard to any difficulty in filling in the required answer. Various types of questions were included in the questionnaire, which directly asks the respondents why he is investing in mutual funds and how he rates the different mutual fund companies according to perceived value and according to various factors like risks, returns, transparency, convenience and trust.

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Investor's Knowledge about various Investment Schemes

Good 23% Nil 8%
Nil Average Good
Average 69%
In the above table 12 investors were found with no knowledge about various investment schemes, 104 investors were found with average knowledge about various investment schemes, 34 investors were found with good knowledge about various investment schemes. In the above graph out of total surveyed investors 8% were found with nil investment knowledge, 69% were found with average investment knowledge, 23% were found with good investment knowledge.

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Types of Investors
70
60
50
40
30
20
10
0 Aggressive Investors Moderate Investors Conservative Investors Very Conservative Investors
Aggressive Investors Moderate Investors Conservative Investors Very Conservative Investors
18 60 47 25

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18 investors are found Aggressive, 60 investors are found Moderate, and 47 Investors are found Conservative & 25 Investors are found very conservative in the survey.
Views of the Investors if the stock market crashed down
Invest 29%
Withdraw 19%
Wait 52%
Out of the total surveyed investors 28 investors were found in a state of withdrawal of money, 79 investors were found out in the state of wait & watch & 43 investors were found out in the state of more investment in the market if the market crashes down. In the above graph 52% will wait & watch 29% will invest more & 19% investors will withdraw their money.

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What is your annual income?
Annual Income of respondents

124 96
140 120 100 80 60 40 20 0
48 32
60000-1Lakh 1Lakh-2Lakh 2Lakh-3Lakh

38 69 43 How
Upto 5% 5%-10% More Than 10%
3Lakh & Above
much do you invest out of your total income?
Investment made by the Investors of their total income
29%
25%
46%
Upto 5%
5%-10%
More Than 10%

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Which age group you are in?
Age Group of Various Investors

Between 2030 17%
Between 3050 32% Above 50 Between 30-50
Above 50 51%
Between 20-30

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Are you aware of various mutual fund schemes?
Investor's knowledge about various mutual fund schemes

80% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No 20%

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Have you ever invested in mutual funds?
30%
Yes No
70%

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DATA ANALYSIS
To analyze the mutual fund schemes using risks and returns, I have used the various fact sheets of company. A fact sheet is a document containing the past performance of different schemes offered by an AMC. A fact sheet shows the allocation pattern, NAV changes since inception of a scheme and comparative analysis with respect to its benchmark like S&P CNX Nifty and BSE Sensex etc Other than fact sheets of various AMCs, Secondary Data was collected from sources like Internet,Reading Materials of various Investment and Services Products, References and results from similar projects done in the past. Web sites of various AMC and other institution were visited for the data collection of their schemes and past performance. Various reading material was also used for this like material provided by AMCs, business newspapers and business magazines like The Economic Times, Business Standard, and Business World etc.

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SWOT ANALYSIS

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SWOT ANALYSIS
STRENGTHS:
1. Brand Name: The biggest strength is the tag of Reliance is going to be the largest group of industries.
2. Compatible Price: Prices of different schemes of Reliance Mutual Funds are much more compatible than others.
3. Diversified Schemes: We has diversified schemes which is an exception case of Reliance Mutual Fund.
4. Less Risk: Our debt schemes are 100% free form market risk. Even as our portfolio is that diversified so equities are also less risky than others.
5. Easy procedures of redemption & registration too: We have open ended schemes so Mutual funds are easily redeemable.

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WEAKNESS:-
Prone to Market Risk: Mutual Funds depend on overall macro economic condition and market scenario.
Tough Competitions: There is a very tough competition because of large number of Asset Management Companies.
OPPORTUNITIES:-
Hoarding: Most of the Indians have black money that too in huge amount i.e. the do not have money in banks, so approaching them is beneficial.
Indian Capital Market is Growing: So more & more new investors are interested in investments.
Tailor Made Products: We have tailor made products like sector specified schemes & even diversified schemes.

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Branch Expansion: Large no. of branches are opening day by day and even we are traping the countries having almost same type of socio-economic condition & even same culture etc.
THREATS:-
Tough Competition: As there are so many mutual fund companies having almost same kind of schemes, so its tough to compete with.
Unawareness: Major % of population is not aware of mutual funds and even Reliance Mutual Funds, so its hard to convince people.
Changing Scenario: Our market scenario is changing day by day i.e. our market is fluctuating, so this makes

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CONCLUSION
From the analysis of the responses received from the investors in Jaipur City, a majority of investors are found to be conscious and enlightened regarding their investments, return & growth. We have very good market in Jaipur which comprises potential investors but due to lack of basic promotion & publicity these investors are not fully aware of our company & whosoever is aware of our company. Their investment decisions are done on the basis of security, analysis of risk yield & return few parameters like Demographic, Physiological, Income, etc. So my findings are that Reliance Mutual Fund Company should make little more efforts to trap the potential investors, like Media Advertisement, Paper Advertisement, Seminars & Business Meets & building a good relationship with potential business, moreover friendly guidance.

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RECOMMENDATIONS
1) The investors above the age of 50 years must be taken into consideration they are having great potential regarding investment. 2) Reliance must lay down some sound strategies to trap more customers by giving them more commission in comparison to other investment centers. 3) Reliance must use through Television, marketing Mass tools like like Fairs, point loading SMS of purchase,
advertisement Magazines,
Media
Newspapers, on Mobiles,
Exhibition,
advertisement on the internet. 4) The organization is lacking on the parameters of motivation. It is recommended that the organization must adopt the concept motivation 5) Reliance should organize programs for customer awareness in developing areas and establish a confidence and belief among the customers residing there. of

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QUESTIONAIRE
Dated ........................... Name..Age Address . Tel. Office ..ResMobile..
1 AGE: ______ Years
2. Which type of instruments does you generally preferred for making investment? Bank FDs Shares Debentures Post Office Mutual Funds Any Other
Rank the following, which influence you most while making an
investment? Safety Liquidity Higher Returns Tax Benefits

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4.
Have you ever-invested in Mutual funds? Yes No
5.
If yes, which schemes do you preferred most? Debt fund Gilt fund Equity fund Money market fund Hybrid market fund
6. How much do you invest annually? Below Rs. 25,000 Between Rs. 25000- Rs. 50,000 Between Rs. 50,000 - Rs. 100,000 More Than 1 lakh
You invested through: Your own Through Distribution house Through broker others

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Do you aware of different schemes of Mutual Funds? Yes No
Views of the investor if the stock market crashes down: Wait and Watch State of withdrawal State of more investment
10
How long you are investing in market? 1-5 years 5-10 years Above 10 years
11
INCOME LEVEL ANNUALY: 60,000 1, 00,000 2, 00,000 3, 00,000 1, 00,000 2, 00,000 Above 3, 00,000
12
If yes, Then youre Diversify (Mention your preferences) Equity Debt Cash

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13. How do you come to know about Mutual Funds? TV Magazines and Newspaper Brokers Friends Others
14
Please tick, I Am First time Investor Regular
15
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BIBLIOGRAPHY
BOOKS: C.R Kothari: Research Methodology; Wishva Publication, New Delhi NEWSPAPERS: Economic Times. Business Times. WEBSITES: www.reliancemutualfund.com www.amfindia.com www.google.com MAGAZINES: Business world Fund Fact Sheets of Reliance Mutual Fund.

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SUMMER TRAINING PROJECT REPORT ON

GOAL PLANNING TO MUTUAL FUND IN

SUBMITTED BY AMIT RAI MBA III SEM ROLL NO: - 1028170003

ReLIANCe Mutual Fund

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TITLE OF PROJECT COMPANY NAME

Goal planning to Mutual Fund Reliance Capital Asset Management Ltd.

45 days Mr.Amit prakash

To study the behavior of investors & general Mass.

ReLIANCe Mutual Fund

data might for

and Value Area

ReLIANCe Mutual Fund

S.No. Company introduction 1)

TOPIC About Reliance Group Reliance capital asset management ltd

Introduction About Reliance Mutual Fund Schemes

10) Questionnaire 11) Bibliography

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ABOUT RELIANCE GROUP

THE GROUP CONTRIBUTES

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RELIANCE INDUSTRIES LTD. ALONE ACCOUNTS FOR

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BRIEF OF MUTUAL FUND

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What is a mutual fund?

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SET UP OF A MUTUAL FUND

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* Other Schemes I. Tax Saving Fund/ Schemes

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ReLIANCe Mutual Fund

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ASSET MANAGEMENT COMPANY (AMC)

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-24 54 -308 -80 421 46 45 86 76 -72 13 15 42,666

ReLIANCe Mutual Fund

ASSET MANAGEMENT COMPANY (AMC)

ReLIANCe Mutual Fund

ReLIANCe Mutual Fund

ReLIANCe Mutual Fund

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HOW A MUTUAL FUND WORK