“COMPRATIVE STUDY OF MARKETING STRATEGIES BETWEEN RELIANCE FUND VS SBI MUTUL FUND”

7/29/2019 COMPRATIVE STUDY OF MARKETING STRATEGIES BETWEEN RELIANCE FUND VS SBI MUTUL FUND

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SUMMER TRAINING PROJECTREPORT

ON

COMPRATIVE STUDY RELIANCE MUTUALFUND & THEIR PRODUCTS i.e. SIP, STP &

SWP WITH DESCRIPTION CUSTOMERPERCEPTION TOWARDS MUTUAL FUNDS

In partial fulfillment of the requirement for

MASTER OF BUSINESS ADMIMISTRATION

U.P. Technical University Lukcnow

Submitted by

ANKIT PANDHIJA

MBA (2009-2011)


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HINDUSTAN INSTITUTE OF MANAGEMENT AND

COMPUTER STUDIES FARAH MATHURA (U.P.)

ACKNOWLEDGMENT

I am grateful to all those who have helped me directly or indirectly in

company this project. I firmly believe that there is always scope for

improvement and accordingly. I shall took forward to received

suggestions.

First of all I would like to thank God for his grace .I am further

thankful to Reliance Mutual Fund, Agra which give me chance to

held my project study upon of it

. I further want to thank to Mr. Brijesh Dwevedi who guide me

and help taking right direction in field work. I further welcome

inspiration and suggestion to make it best.

I sincerely believe that the road of improvement is never ending.

Hence I shall forward to end gratefully acknowledge all suggestions

received. I am highly grateful to Mrs. Abhilasha Singh faculty of

HIMCS Agra for acting as a Guiding star for me. Who helped me in

their own way to complete this interim report. my sincere apologies is

who helped me in a variety of wage and Whose name could not be

individually acknowledged.

ANKIT PANDHIJA


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DECLARATION

I hereby declare that this Project Report entitled Comparativestudy reliance mutual fund & their products i.e.SIP, STP & SWP with description customer

perception towards mutual funds submitted in the partialfulfillment of the requirement of Master of Business Administration

(MBA) of Hindustan Institute of Management & Computer Studies is

based on primary & secondary data found by me in various departments,

books, magazines and websites & Collected by me in under guidance of

Brijesh Dwevedi (R.M).

DATE: 13/08/2010 ANKIT

PANDHIJA

PLACE AGRA MBA


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TABLE OF CONTENTS

CHAPTER I.

Objective

Limitation

Methodology

CHAPTER II

Industry profile

History and organization of Mutual Fund in India

Mutual Fund companies in India

Recent trend in Mutual Fund Industry

CHAPTER III..

Introduction about Mutual Funds

Mutual fund : why?

Mutual fund :what is it ?

Mutual fund :what is it made of?

Different type of MF

CHAPTER IV.

Company profile


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Introduction

Product and service of reliance MF

Why Reliance Mutual Fund ?

CHAPTER V..

SWOT Analysis

CHAPTER VI.

Analysis and interpretation of Mutual of data

CHAPTER VI ..

Findings

CHAPTER VIII

Recommendation

CHAPTER IX..

Conclusion

CHAPTER X. .

Objectives

Limitation

CHAPTER XI..

Questionnaire

Bibliography.


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ABSTRACT

Probably nothing can define the spirit of being mutual better than this

verse. And who else to understand it better than the mutual fund industry. It

seems the mutual fund industry in India is slowly but surely beginning to

recognize this aspect for the better. Today, there is greater emphasis on the

role of the industry, the regulator. Securities and Exchange board of India

(SEBI) and industry body, Association of Mutual Funds in India (AMFI) on

creating awareness among investors and improving investor services. In

fact, the efforts of both the regulator as well as AMFI are laudable for

promoting the cause of investor education religiously. The one product

caters to all needs approach has given way to offering products which suite

the specific needs of investors ala product innovation. There is also

increased emphasis on convenience in terms of comfortable transaction

services to investors by using delivery or distribution platforms like the

Internet, ATMs, Corporate brokers, etc. Infect, distribution innovation has

come to play a key role in the growth of the industry. Industry players are

using different distribution channels to increase their market penetration.

However, a significant change that is being witnessed now is the swift

response on part of the regulator to safeguard investors interests. Thanks to

the collective efforts of SEBI and AMFI, and also the industry players, the

domestic mutual fund industry has been untouched by the depression of late

trading, inside trading etc., which affected the US Mutual Fund industry in

recent times. However, that is not to say that the Indian Mutual Fund

Industry is completely problem-free. Issues such as low penetration in bothsemi urban as well rural areas (mutual funds have so far been largely and


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urban affair that too in big cities), poor investor awareness and exploitation

of this fact by industry players, as demonstrated by the mutual fund IPO

commotion and excessive focus on corporate and other big pocket investors

at the expense of retail investors are some of the issues that industry needs to

address.

With the increase in domestic saving s and improvement in

deployment of investment through markets, the need and scope for mutual

fund operation has increased tremendously. Mutual funds are not only best

suited for the purpose but also are capable of meeting this challenge

effectively. Professionals who manage mutual funds are considered to have

a better knowledge of market behavior. Another important reason is that the

dividends and capital gains are reinvested automatically in mutual funds

and, hence, are not frittered away. Mutual funds also create awareness

among the urban and rural middle-class about the benefits of investments in

capital markets through profitable and safe avenues, and are able to gather a

large amount of the surplus funds available with this section.

Within short span of time mutual fund operation has become an integral part

of the Indian financial scene and is balanced for rapid growth in the near

future. The mutual fund industry has been remarkably flexible over the last

decade in spite of varying economic conditions, capital market scams, and

increasing competition. Today, numerous schemes, tailored to meet the

diversified needs of savers, are being offered by many institutions. In thisproject an attempt has been made to evaluate the awareness and perception

of mutual fund on different parameter


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OBJECTIVES

The main aim of undertaking this study is to accomplish the following

objective:

Conducting a market survey and understanding the customer

perception.

Analyzing the market survey and thereby finding out the investment

pattern of the customer.

Proper understanding and evaluation of mutual funds as an investment

option

Analysis customer awareness about Mutual fund.

Proper understanding and analysis of the perspective investor about

this financial product .


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LIMITATIONS

Though the present study aimed to achieve the above-

mentioned objectives in full earnest and accuracy, it was

in a weak position due to certain limitations. Some of the

limitations of this study may be summarized as follows :

Getting accurate responses from the respondents due

to their inherent problems was difficult. They were

partial, and refused to cooperate.

Very few people have knowledge about Mutual funds and the other

products of the Mutual Funds .

Locating the target respondents was very time

consuming.

Sample size was limited due to the limited period of

days allocated for the survey.

The selection of respondents to cover the various strata of the society

was tedious and time consuming.


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METHODOLOGY

The objective of the present study can be accomplished by conducting asystematic market survey. Market Research is a systematic design,

collection, analysis and reporting of data and finding that are relevant to

different market situation facing by the company. The marketing

research process that will be adopted in the present study consist of the

following stages:

1. Defining the problem and research objective:

The research objective state that what information is needed to solve the

problem. Here the objective of other research is awareness and

perception of Mutual fund as an Investment option and what are the

benefits that the investor will get by investing in Mutual funds.

2. Developing research plan:

Once the problem is defined, the next step is to prepare a plan for getting

the information needed for the research. The present study will adopt

exploratory approach where in there is a need to gather a large amount

of information before making a conclusion if required. The descriptive

and casual approaches may also be used.

3. Collection and Sources of Data:


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To collect the data, relevant information is necessary as regards to the

project; as a result data was collected by using two ways:

Primary Data

Secondary Data.

Primary Data:

In this the information is being possessed with first hand information,

which is new and fresh.

The tools used by us for the primary data are:

Questionnaire

Face-to-Face Interview

Observation

Secondary data:

The information that is received with the help of Journals, Magazines,Financial reports or which is already present with the company.

References used from management books

Gathered information through World Wide Web (www).

Support and knowledge provided by Faculty and Company guide.

4. Sampling Plan:

Sampling unit: The customers will be stratified and segmented

according to their age, income, cultural background, gender,

education, etc(Demography).

Sampling size: A survey was conducted for one hundred respondents.

5. Analyze the collected information:


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This involves converting raw material in to useful information. It

involves tabulation of data and using statically measures on them for

developing frequency distribution and calculating the averages and

dispersions.

6. Report research findings:

This phase will mark the culmination of the marketing research efforts.

The report with the research finding is a formal written document.

INDUSTRY PROFILE

HISTORY AND ORGANIZATION OF MUTUAL FUNDS IN

INDIA

The mutual fund industry in India started in 1963 with the formation of Unit Trust

of India, at the initiative of the Government of India and Reserve Bank the. The

history of mutual funds in India can be broadly divided into four distinct phasesFirst 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 launchedby UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of

assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds):

1987 marked the entry of non- UTI, public sector mutual funds set up by public

sector banks and Life Insurance Corporation of India (LIC) and General Insurance

Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund


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established in June 1987 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 established its

mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of

Rs.47,004 crores.

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.

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:

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit

Trust of India with assets under management of Rs.29,835 crores as at the end of


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January 2003, representing broadly, the assets of US 64 scheme, assured return and

certain other schemes. The Specified Undertaking of Unit Trust of India,

functioning under an administrator and under the rules framed by Government of

India and does not come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund 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 assets under management and with the setting up of a UTI Mutual Fund,

conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking

place among 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.

The graph indicates the growth of assets over the years.


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Graph 1: The graph showing Growth in assets under management through

Mutual Funds

What is Systematic Transfer Plan (STP)Imagine a scenario when you want to invest a big lump sum amount in stock

market ? As markets are volatile and can go up or down very soon , there is

always risk of loosing a big chunk of your investment (Learn about Stock

Markets) . Take a case where you want to invest 10 lacs in Equity Mutual

funds and suddenly market crashes for next 2 months, In this case a big

chunk of your investment will be lost, on the other hand if market moves uppretty fast, you can make a good profit. Here you have to decide your main
http://www.jagoinvestor.com/2009/06/8-most-important-rules-in-stock-market.htmlhttp://www.jagoinvestor.com/2009/06/8-most-important-rules-in-stock-market.htmlhttp://www.jagoinvestor.com/2009/08/list-of-best-equity-diversified-mutual.htmlhttp://www.jagoinvestor.com/2009/08/list-of-best-equity-diversified-mutual.htmlhttp://www.jagoinvestor.com/2009/06/8-most-important-rules-in-stock-market.htmlhttp://www.jagoinvestor.com/2009/06/8-most-important-rules-in-stock-market.htmlhttp://www.jagoinvestor.com/2009/08/list-of-best-equity-diversified-mutual.htmlhttp://www.jagoinvestor.com/2009/08/list-of-best-equity-diversified-mutual.html


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focus. If its minimizing risk and getting good decent returns in long-term,

You should use something called Systematic Transfer Plan (STP) .

What is STP (Systematic TransferPlan)

You should first understand SIP . SIP is way of investing in Mutual funds

monthly, where a fixed amount of money goes from your Bank Account to

Mutual funds, so if you do a SIP of 1,000 for 1 yr, it means that every month

on a fixed date (chosen by you) 1,000 will be invested in a Fixed Mutual

fund you choose. Lets understand STP now, In STP we invest a lump sum

amount in some Mutual Fund and then a fixed sum is transferred from that

mutual fund to another mutual fund .

Mutual Fund and then a fixed sum is transferred from that mutual fund to

another mutual fund .
http://www.jagoinvestor.com/2008/04/all-about-sip-systematic-investment.htmlhttp://www.jagoinvestor.com/2008/04/all-about-sip-systematic-investment.html


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Why and When to use STP

When will it work : STP will make sense from DEBT -> EQUITY when

markets are mayvery volatile and you dont want to take risk with your

money in a short span of time, If you invest through STP in markets and

markets fall or have lots of volatile moves, then this situation will be better

than the one time investment option. This is still better than putting money

in Bank and doing a SIP, because at least you money is earning some returns

on debt part in STP .

When will it not work : Incase markets are already at the end of a Bear

market and markets can starts it upmove anytime, in that case STP will not

deliver the best returns like SIP, one time investment is a good choice in that

case. But then you never know that when will markets start go up. Given

that a retail investor does not have all the tools and time to research the

markets, its not advisable to invest lump sum in any case. Its better to get

4-5% less returns than to see a huge downside of your money in short time,

Smart investors think about returns, Smartest ones take care of risk first .

Understand How to time markets using Nifty PE analysis

SWP : However If you redeem your units in mutual funds every

month and get it deposited in your Bank accounts , its called SWP

(systematic Withdrawal Plan) , which is recommended to liquidate

your mutual funds corpus after you see a good bull market to protect

your investment .
http://www.jagoinvestor.com/2009/06/value-investing-by-using-nifty-pe.htmlhttp://www.jagoinvestor.com/2009/06/value-investing-by-using-nifty-pe.html


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4 advantages of STP

STP has 4 advantages and works in 4 ways for you . They are :

Works as SIP : You can invest in a Debt funds and from there you can start

a STP to an Equity Fund , so it works like a systematic Investment Plan

(SIP) .

Works as SWP : So STP can also work like SWP, because with some funds

you can do transfer from Equity funds to Debt Funds, so when markets look

risky to you, you can start a STP from Equity -> Debt funds, which will act

like SWP .

Liquidity : Generally one does STP from Debt -> Equity funds, so your

money is invested in Debt fund. This means you can sell it anytime if you

want. Hence it works like a Emergency Fund also. Incase you need money

urgently, it can act like a liquid asset (at least for the time being in the start

when you have more money in Debt fund)

Growth in Money : Not to forget that your money is invested in Debt

funds, so your money is also growing at debt returns , at least the part which

is lying in the debt funds .
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Some Helpful Tips

Invest in ELSS , If you want to invest in ELSS schemes and have

lump sum money , better put it in a debt funds and do a STP .

Rebalance your portfolio, Use STP as a tool to rebalance your asset

allocation, when your equity part goes up , start STP from Equity-

Debt for 6 months or 1 yr, and bump up your debt part and if your

Debt part goes up, do Debt -> Equity STP . Power of Asset Allocation

and Portfolio Rebalancing

Take advantage of market condition , If markets have gone too

high now and every other person on the road is talking about Stock

and stock markets are more famous than Saas Bahu Serials,

immediately start your STP from Equity to Debt (literally Rush) . On

the other hand when markets are deep down and Why dont you buy

stocks is feels abusive and everyone face looks like some body hasdied at home when you mentions stock markets, know that its a time

to start a STP from your Debt > Equity (Literally rush again) . You

dont need to see any indicators to predict the markets, the two real

life scenarios I have described here are enough, try to remember

markets around 2007 End(bull market) and Jan 2009 (markets lowest

point) . STP can be used as switching mechanism in ULIP , though

its very restrictive and with less choices .

Using STP when an important goal is near, If you are saving for

some important goal like Child Education , Buying Home or

Retirement and your goal is approaching near by , dont wait till

target date , you dont want to see your Money dip by 40-50% within
http://www.jagoinvestor.com/2009/07/power-of-asset-allocation-and-portfolio.htmlhttp://www.jagoinvestor.com/2009/07/power-of-asset-allocation-and-portfolio.htmlhttp://www.jagoinvestor.com/2010/01/5-easy-steps-to-do-your-childs-education-planning.htmlhttp://www.jagoinvestor.com/2009/12/returns-of-real-estate-in-india.htmlhttp://www.jagoinvestor.com/2009/07/6-steps-of-doing-retirement-planning-by.htmlhttp://www.jagoinvestor.com/2009/07/power-of-asset-allocation-and-portfolio.htmlhttp://www.jagoinvestor.com/2009/07/power-of-asset-allocation-and-portfolio.htmlhttp://www.jagoinvestor.com/2010/01/5-easy-steps-to-do-your-childs-education-planning.htmlhttp://www.jagoinvestor.com/2009/12/returns-of-real-estate-in-india.htmlhttp://www.jagoinvestor.com/2009/07/6-steps-of-doing-retirement-planning-by.html


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6 months or so if markets suddenly crash , start moving your money

out of equity and transfer it to Debt now through STP .

Two types of STP

There are two types of STP plans , Fixed and Capital Appreciation. In Fixed

Plan means a fixed sum will be transfered to the target mutual funds , on the

other hand in Capital Appreciation , only the amount of capital which is

appreciated gets transferred , that was the original lumpsum amount invested

in the start is protected . Capital Appreciation choice is only with Growth

Plan and not dividend plan . Here is the list of all the STP Plans as of now .

Important Points

Typically, a minimum of six such transfers are to be agreed on by

investors in STP , just like SIP

Generally most of the mutual funds allow Debt -> Equity STP and not

reverse , Only handful of Mutual Funds like Kotak allows it .

STP is a facility for convenience , when the transfer happens from one

mutual funds to another its still considered as selling of mutual funds

and then buying another one , so tax rules applies in the same way .

Most of the funds allow only Monthly and Quarterly STP , some

allow weekly and fortnightly also .

There can be some minimum amount requirement for starting an STP

like say at least 1,00,000 needs to be invested in Debt funds to start a

STP to Equity . Some restriction like this will be there .

There can be additional Switching Charges for availing STP facility

Entry load and Entry load may still apply while buying and selling of

mutual funds through STP.


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Securities Transaction Tax @ 0.25% will be deducted on equity

oriented funds at the time of redemption or switch to another scheme

in STP .

CONSUMER PERCEPTION TOWARDS MUTUAL

FUNDS CLASSIFIED AS FOLLOW Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at

any point of time.


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Close-ended funds: These funds raise money from investors only once.

Therefore, after the offer period, fresh investments can not be made into the

fund. If the fund is listed on a stocks exchange the units can be traded like

stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New

Fund Offers of close-ended funds provided liquidity window on a periodic

basis such as monthly or weekly. Redemption of units can be made during

specified intervals. Therefore, such funds have relatively low liquidity.

Based on their investment objective:

Equity funds: These funds invest in equities and equity relatedinstruments. With fluctuating share prices, such funds show volatile

performance, even losses. However, short term fluctuations in the market,

generally smoothens out in the long term, thereby offering higher returns

at relatively lower volatility. At the same time, such funds can yield great

capital appreciation as, historically, equities have outperformed all asset

classes in the long term. Hence, investment in equity funds should be

considered for a period of at least 3-5 years. It can be further classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex

or Nifty is tracked. Their portfolio mirrors the benchmark index both in

terms of composition and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities

spreading across different sectors and stocks.


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iii|) Dividend yield funds- it is similar to the equity diversified funds

except that they invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related

through some theme.

e.g. -An infrastructure fund invests in power, construction, cements

sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A

banking sector fund will invest in banking stocks.

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

investors.

Balanced fund:Their investment portfolio includes both debt and equity. As

a result, on the risk-return ladder, they fall between equity and debt funds.

Balanced funds are the ideal mutual funds vehicle for investors who prefer

spreading their risk across various instruments. Following are balanced funds

classes:

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

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

debt.

Debt fund:They invest only in debt instruments, and are a good optionfor investors averse to idea of taking risk associated with equities.

Therefore, they invest exclusively in fixed-income instruments like bonds,

debentures, Government of India securities; and money market


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instruments such as certificates of deposit (CD), commercial paper (CP)

and call money. Put your money into any of these debt funds depending on

your investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a

large portion being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government

securities of and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest

in debt instruments which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities

due to mis-pricing between cash market and derivatives market. Funds are

allocated to equities, derivatives and money markets. Higher proportion

(around 75%) is put in money markets, in the absence of arbitrage

opportunities.

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

government securities.

vi) Income funds LT- Typically, such funds invest a major portion of the

portfolio in long-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt

and an exposure of 10%-30% to equities.


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viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in

line with that of the fund.

CONSUMER INVESTMENT STRATEGIES

1. Systematic Investment Plan: under this a fixed sum is invested each

month on a fixed date of a month. Payment is made through post dated

cheques or direct debit facilities. The investor gets fewer units when the


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NAV is high and more units when the NAV is low. This is called as the

benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt

oriented fund and give instructions to transfer a fixed sum, at a fixed

interval, to an equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a

mutual fund then he can withdraw a fixed amount each month.

RISK V/S. RETURN

RECENT TRENDS IN MUTUAL FUND INDUSTRY

The most important trend in the mutual fund industry is the aggressive

expansion of the foreign owned mutual fund companies and the decline

of the companies floated by nationalized banks and smaller private


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sector players. Many nationalized banks got into the mutual fund

business in the early nineties and got off to a good start due to the stock

market boom prevailing then. These banks did not really understand the

mutual fund business and they just viewed it as another kind of banking

activity. Few hired specialized staff and generally chose to transfer staff

from the parent organizations. The performance of most of the schemes

floated by these funds was not good. Some schemes had offered

guaranteed returns and their parent organizations had to safekeeping out

these AMCs by paying large amounts of money as the difference

between the guaranteed and actual returns. The service levels were also

very bad. Most of these AMCs have not been able to retain staff, float

new schemes etc. and it is doubtful whether, barring a few exceptions,

they have serious plans of continuing the activity in a major way. The

experience of some of the AMCs floated by private sector Indian companies was

also very similar. They quickly realized that the AMC business is a business, which

makes money in the long term and requires deep-pocketed support in the

intermediate years. Some have sold out to foreign owned companies, some have

merged with others and there is general restructuring going on The foreign owned

companies have deep pockets and have come in here with the expectation of a long

pull. They can be credited with introducing many new practices such as new product

innovation, sharp improvement in service standards and disclosure, usage of

technology, broker education and support etc. In fact, they have forced the industry

to upgrade itself and service levels of organizations like UTI have improved

dramatically in the last few years in response to the competition provided by these.

MUTUAL FUND COMPANIES IN INDIA

List of Some of the AMCs Operating in India


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Name of the AMC Nature of

ownership

Alliance Capital Asset Management (I) Private

Limited

Private Foreign

Birla Sun Life Asset Management Company Limited Private Indian

Bank of Baroda Asset Management Company

Limited

Banks

Bank of India Asset Management Company Limited Banks

Canbank Investment Management Services Limited Banks

Cholamandalam Cazenove Asset Management

Company Limited

Private Foreign

Dundee Asset Management Company Limited Private Foreign

DSP Merrill Lynch Asset Management Company

Limited

Private Foreign

Escorts Asset Management Limited Private Indian

First India Asset Management Limited Private Indian

GIC Asset Management Company Limited Institutions

IDBI Investment Management Company Limited Institutions

Indfund Management Limited Banks

ING Investment Asset Management Company

Private Limited

Private Foreign

J M Capital Management Limited Private Indian

Jardine Fleming (I) Asset Management Limited Private Foreign

Kotak Mahindra Asset Management Company

Limited

Private Indian

Kothari Pioneer Asset Management Company Private Indian


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Limited

Jeevan Bima Sahayog Asset Management Company

Limited

Institutions

Morgan Stanley Asset Management Company

Private Limited

Private Foreign

Punjab National Bank Asset Management Company

Limited

Banks

Reliance Capital Asset Management Company

Limited

Private Indian

State Bank of India Funds Management Limited Banks

Shriram Asset Management Company Limited Private Indian

Sun F and C Asset Management (I) Private Limited Private Foreign

Sundaram Newton Asset Management Company

Limited

Private Foreign

Tata Asset Management Company Limited Private Indian

Credit Capital Asset Management Company Limited Private Indian

Templeton Asset Management (India) Private

Limited

Private Foreign

Unit Trust of India Institutions

Zurich Asset Management Company (I) Limited Private Foreign

The sponsorers of Association of Mutual Funds in India

Bank Sponsored :

SBI Fund Management Ltd.

BOB Asset Management Co. Ltd.

Canbank Investment Management Services Ltd.


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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.

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.


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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 publishes 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 know-how of their parked

money.


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INTRODUCTION ABOUT MUTUAL FUND

Mutual Funds :Why ?

Professional management

Diversification and Lowered risks

Low costs

Liquidity

Transparency

Flexibility

Choice of schemes

Tax benefits

regulation

The advantages of investing in a Mutual Fund are:

Professional Management


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Mutual funds hire full-time, high-level investment professionals. Funds

can afford to do so as they manage large pools of money. The managers

have real-time access to crucial market information and are able to

execute trades on the largest and most cost-effective scale.

Diversification

Mutual funds invest in a broad range of securities. This limits

investment risk by reducing the effect of a possible decline in the value

of any one security. Mutual fund unit-holders can benefit from

diversification techniques usually available only to investors wealthy

enough to buy significant positions in a wide variety of securities.

Low Costs

A mutual fund let's you participate in a diversified portfolio for as little

as Rs.5,000/-, and sometimes less. And with a no-load fund, you pay

little or no sales charges to own them.

Liquidity

In open-ended schemes, you can get your money back promptly at net

asset value related prices from the mutual fund itself.

Transparency

You get regular information on the value of your investment in addition

to disclosure on the specific investments made by the mutual fund

scheme.

Convenience and Flexibility

You own just one security rather than many; yet enjoy the benefits of adiversified portfolio and a wide range of services. Fund managers decide


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what securities to trade collect the interest payments and see that your

dividends on portfolio securities are received and your rights exercised.

It also uses the services of a high quality custodian and registrar in order

to make sure that your convenience remains at the top of our mind.

Personal Service

One call puts you in touch with a specialist who can provide you with

information you can use to make your own investment choices. They

will provide you personal assistance in buying and selling your fund

units, provide fund information and answer questions about your

account status. Our Customer service centers are at your service and our

Marketing team would be eager to hear your comments on our schemes.

Mutual Funds : What is it ?

Mutual Fund Operation Flow Chart


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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

are 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. The flow chart below describes

broadly the working of a mutual fund:

Mutual Fund : What is it made of ?


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Investors:

Every investor, given his financial position and personal disposition, has a certain

tendency preference to take risk (risk profile / risk appetite). The hypothesis is

that by taking an incremental risk (of losing capital, wholly or partly), it would

be possible for the investor to earn an incremental return.

But assuming risk without regularly monitoring it is foolhardy. Therefore, it

would be prudent for investors who take a risk to be able to manage this risk.

MF is a solution for investors who lack the time, or the inclination or the skills to

actively manage their investment risk in individual securities. They can delegate

this role to the MF, while retaining the right and the obligation to monitor their

investments in thescheme (which, in turn, invests in individual securities).

In the absence of a MF option, the moneys of such passive these investors

would lie either in bank deposits or other safe investment options, thus

depriving the investors of the possibility of earning a better return.

Investing through a MF would make economic sense for an investor if his

investment, over the medium to long term, fetches a return (net of all costs and

expenses) that is higher than what she would otherwise have earned by investing

directly.

Because the goal of investing is to accumulate real wealth an enhanced ability

to pay for goods and services the ultimate focus of the long-term investor must

be on real, not nominal, returns.

Trustees:

Trustees are the people within the mutual fund organization, who are responsible

to ensure for ensuring that investors interests are properly taken care of In return

for their services, they are paid trustee fees, which is normally charged to the


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scheme.

Asset Management Company (AMC):

AMCs manage the investment portfolios of schemes. An AMCs Income for an

AMC comes through from the management fees that are it charges to the

schemes. The management fee is calculated as a percentage of net assets

managed. Some countries provide forperformance basedmanagement fees as

well.

Distributors

Distributors earn a commission for bringing investors into the schemes of a MF.

This commission is an expense for the scheme,

although there are occasions when the AMC chooses to bear the cost, wholly or

partly.

Depending on the financial and physical resources at their disposal, they

distributors could be:

Tier 1 distributors (having an owned or franchised network reaching out to

investors all across the country); or

Tier 2 distributors (regional players with some reach within their region); or

Tier 3 distributors (marginal players).

It is paradoxical that distributors earn a commission from the AMC, but are

expected to safeguard the financial health of investors from whom they do not

earn a fee.

It is almost like a doctor earning a commission from the pharmaceutical

company, but expected to safeguard the physical health of the patient who does

not pay him anything.


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Registrars

The investors holding in various schemes is typically tracked by the schemes

Registrar and Transfer agent (R&T). Some AMCs prefer to handle this role in-

house. The registrar / AMC maintains an account of the investors investments

in and dis-investment from the scheme. Requests to invest more money into a

scheme, or to recover moneys against existing investments in the scheme are

processed by the R&T.

Custodian / Depository

The custodian maintains custody of thesecurities in which the scheme invests (as

distinct from the registrar who tracks the

investment by investors in the scheme). This ensures an ongoing independent

record of the investments of the scheme. The custodian also follows up on

various corporate actions, such as rights, bonus and dividends declared by

invested companies.

In a situation where securities are increasingly being dematerialized, the role of

the depository for such independent record of investments is increasing growing.


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Different types of Mutual Funds :

Wide variety of Mutual Fund Schemes exists to cater to the needs such

as financial position, risk tolerance and return expectations etc. The table

below gives an overview into the existing types of schemes in the

Industry.

TYPES OF MUTUAL FUND SCHEMESBy Structure:

Open - Ended Schemes : An open-end fund is one that is available for

subscription all through the year. These do not have a fixed maturity.

Investors can conveniently buy and sell units at Net Asset Value

("NAV") related prices. The key feature of open-end schemes is

liquidity.


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Close - Ended Schemes : 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 close-ended 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 routesis provided to the investor.

Interval Schemes: 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.

By Investment Objective :

Growth Schemes: The aim of growth funds is to provide capital

appreciation over the medium to long- term. Such schemes normally

invest a majority of their corpus in equities. It has been proven that

returns from stocks, have outperformed most other kind of investments

held over the long term. Growth schemes are ideal for investors having

a long-term outlook seeking growth over a period of time.

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 and Government

securities. Income Funds are ideal for capital stability and regular

income.


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Balanced Schemes : The aim of balanced funds is to provide both

growth and regular income. Such schemes periodically distribute a part

of their earning and invest both in equities and fixed income

securities in the proportion indicated in their offer documents. In a

rising stock market, the NAV of these schemes may not normally keep

pace, or fall equally when the market falls. These are ideal for investors

looking for a combination of income and moderate growth.

Money Market Schemes: The aim of money market funds is 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. Returns on these schemes may fluctuate depending upon

the interest rates prevailing in the market. These are ideal for Corporate

and individual investors as a means to park their surplus funds for short

periods.

Load Funds: A Load Fund is one that charges 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 and exit loads range from 1% to 2%. It

could be worth paying the load, if the fund has a good performance

history.

No-Load Funds: A No-Load Fund is one that does not charge a

commission for entry or exit. That is, no commission is payable on

purchase or sale of units in the fund. The advantage of a no load fund is

that the entire corpus is put to work.

Other Schemes :


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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 and 54EB 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 Sensex or the NSE 50

Sector Specific Schemes: Sectoral 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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COMPANY PROFILE

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.

OUR FOUNDER

Dhirubhai H. Ambani

Founder Chairman,

Reliance Industries Limited,

India

December 28, 1932 - July 6,

2002

Major Group Companies:

Reliance Industries Limited,

India's largest private sector

company.

Birthplace: Chorwad, village in Saurashtra (Gujarat), India

Father's Name: Hirachand Govardhandas Ambani


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Mother's Name: Jamunaben Hirachand Ambani

INTRODUCTION

About Reliance Capital Asset Management Ltd:

Reliance Capital Asset Management Limited (RCAM), a company registered

under the Companies Act, 1956 was appointed to act as the Investment Manager

of Reliance Mutual Fund.Reliance Capital Asset Management Limited is a

wholly owned subsidiary of Reliance Capital Limited, the sponsor. The entire

paid-up capital (100%) of Reliance Capital Asset Management Limited is held by

Reliance Capital Limited.

Reliance Capital Asset Management

Limited was approved as the Asset Management Company for the Mutual Fund

by SEBI vide their letter no IIMARP/1264/95 dated June 30, 1995. The Mutual


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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 is authorized to

act as Investment Manager of Reliance Mutual Fund. The net worth of the Asset

Management Company including preference shares as on March 31, 2005 is

Rs.30.13 crores.

RCAM has been registered as a portfolio manager vide SEBI Registration No.

INP000000423 and renewed effective 1st August, 2003.

RCAM has commenced these activities. It has been

ensured that key personnel of the AMC, the systems, back office, bank and

securities accounts are segregated activity wise and there exists systems to

prohibit access to inside information of various activities. As per SEBI

Regulations, it will further ensure that AMC meets the capital adequacy

requirements, if any, separately for each such activity.

RCAM has been appointed as the Investment

Manager of "Reliance India Power Fund", a Venture Capital Fund registered with

SEBI vide Registration no.IN/VCF/05-06/062 dated June 16, 2005 but this

activity is yet to commence.

Mr. Amitabh Chaturvedi *

Raheja Empress,

Flat No. 1201/1202,

12th Floor, Veer Savarkar Marg,

Opp. Siddhi Vinayak Temple,

Prabhadevi, Mumbai - 400 025

Director:

Reliance Asset Management (Singapore)

Pte Limited,

Reliance Asset Management (Mauritius)

Limited, Reliance Infoinvestments

Limited.

Mr. Kanu Doshi

102, Shivala, Khatau Road,Cuffe Parade, Mumbai - 400 005

Chairman: Matrix Advisors (India)

Private Limited


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Chartered Accountant

Director:

BOB Capital Markets Limited,Peoples

Financial Services Limited

Alphaplus Investment Management

Private Limited.

Mr. Manu Chadha

C-35, Malcha Marg,

Chankyapuri,

New Delhi - 110 021

Chartered Accountant

Director:

TRC Financial Services Ltd,

Himalayan Crest Power Ltd, GIC

Housing Finance Ltd., Kotla Hydro

Power Ltd., Ispat Industries Ltd, SBI

Funds Management Pvt. Ltd.

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.

Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with

Average Assets Under Management (AAUM) of Rs. 88,388 Crs (AAUM

for 30th Apr 09 ) and an investor base of over 71.53 Lacs. Reliance Mutual

Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of thefastest growing mutual funds in the country. RMF offers investors a well-


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rounded portfolio of products to meet varying investor requirements and has

presence in 118 cities across the country. Reliance Mutual Fund constantly

endeavors to launch innovative products and customer service initiatives to

increase value to investors. "Reliance Mutual Fund schemes are managed

by Reliance Capital Asset Management Limited., a subsidiary of Reliance

Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the

balance paid up capital being held by minority shareholders." Reliance

Capital Ltd. is one of Indias leading and fastest growing private sector

financial services companies, and ranks among the top 3 private sector

financial services and banking companies, in terms of net worth. Reliance

Capital Ltd. has interests in asset management, life and general insurance,

private equity and proprietary investments, stock broking and other

financial services

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.

The Sponsors

Reliance Capital Limited Corporate & Registered Office :

Reliance Capital Ltd. H Block, 1st Floor, Dhirubhai Ambani Knowledge

City, Koparkhairne, Navi Mumbai - 400 710.Tel. 022 30327000, Fax. 022

30327202


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PRODUCTS AND SERVICES OF RELIANCE MF

Equity Schemes

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 portfolioconstituted of equity & equity related securities of top 100 companies


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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.

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


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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 Schemes.:

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


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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 unit holders and

the secondary objective is growth of capital

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.


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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 substantially of Floating Rate Debt Securities (including

floating rate securitized 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 securitized 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 portfolio. Accordingly, investments shallpredominantly be made in debt Instruments.


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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.

Equity Option: The primary investment objective is to seek capitalappreciation and or consistent returns by actively investing in equity /


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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

Sector Funds are specialty funds that invest in stocks falling into a

certain sector of the economy. Here the portfolio is dispersed or spread

across the stocks in that particular sector. This type of scheme is ideal

for investors who have already made up their mind to confine risk and

return to a particular sector.

Reliance Banking Fund

Reliance Mutual Fund has an Open-Ended Banking Sector Scheme

which has the primary investment objective to generate continuousreturns 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


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consistent 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 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

WHY RELIANCE MUTUAL FUND ?

Reliance Mutual Fund ,a part of the Anil Dhirubhai Ambani

Group(R-ADAG) is one of the fastest growing mutual fund company

in the country.

Reliance mutual fund offer investors a well rounded portfolio of

products to meet varying investor requirements.

Reliance mutual fund has a presence over 80 cities across the country.

Reliance mutual fund investor base of over 2 million and manages

assets over Rs.88388 crore as on 30 April 2009,

(source:www.amfiindia.com)

A fund from Reliance mutual fund ,an AMC with a established track

record of consistent return.

Investor friendly personal and technological support.

Strong and consistent fund management team.


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SWOT AnalysisSTRENGTHS

Reliance Mutual Fund ,a part of the Anil Dhirubhai Ambani

Group(R-ADAG) is one of the fastest growing mutual fund

company in the country.


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Reliance mutual fund offer investors a well rounded portfolio of

products to meet varying investor requirements.

Reliance mutual fund has a presence over 118 cities across the

country,with investor base over 71.53 lacs.

Reliance mutual fund investor base of over 2 million and

manages assets over Rs.88388 crore as on April 30,2009

(source:www.amfiindia.com)

A fund from Reliance mutual fund ,an AMC with a established

track record of consistent return.

Strong and consistent fund management team.

Investor friendly personal and technological support.

Ensures better costumer services, conveniences ,communication by efficient

network.

Quality product & services High quality standard maintained.

Brand Name Reliance Mutual Fund is popular brand name

among customers.

Good image between customers.

.

WEAKNESS

Less existence in rural areas

less expenditure on advertising and promotional schemes


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OPPORTUNITIES

Jodhpur is a big industrial area so there is a huge opportunities.

Reliance mutual fund has a very good quality products &schemes

comparison to other competitor.

Reliance is first company which launched Equity fund with hedging

feature which aim to minimize risk..

Good perception among the customer.

THREATS

Less schemes provided by Reliance mutual fund comparison to

competitor.

Lot of competitor in market.

Lot of schemes are provided by competitors.

Share market may be go down in future.

The Mutual Fund is not guaranteeing or assuring any dividend/ bonus.

ANALYSIS AND INTERPRETATION OF

DATA


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Knowing the awareness and perception of the customers is very

important in any industry. this provide insight into the customer

behavior and his expectation from the industry players. a proper

understanding of the awareness and perception would definitely benefit

the players. this survey attempt to know the mutual fund investor better.

it examines some interesting choices of the retail investor including the

reasons behind investing in mutual funds and the risk tolerance levels of

the investors. the investor knowledge about the mutual funds and what

according to him are the best mutual funds is also analyzed. this udaipur

city survey was conducted to know the retail investor awareness and

perception about mutual funds. It is hoped that this survey in udaipur

city would go a long way in benefiting for reliance mutual fund.

The total sample for the study was 100 across Jodhpur city.

I. AN OVERVIEW :

This section shows an simple overview of respondents like their age

,gender, income profile, saving habits and qualification

(a) Age-profile:

Table No. I(a) showing age profile of respondents:

S. No Age No .of

respondents

Percentage

1. 20-25 19 19%

2. 25-40 40 40%

3. 40-55 21 21%

4. 55-60 15 15%

5. 60-Above 5 5%

Total 100 100%


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INTERPRETATION :

In this survey I found the maximum number of respondents belongs to

the age group of 25-40 years, followed by 40-55 years of age category.

(b) Gender-wise:

Table No. I(b) showing gender wise profile of respondents:

S. No Gender No. of

respondents

Percentage

1. Male 92 92%

2. Female 8 8%

Total 100 100%

Age-profile

40-55

21%

55-60

15%

60-Above

5%

25-40

40%

20-25

19%

20-25

25-40

40-55

55-60

60-Above

Gender-wise overview

Male

92%

Female

8%

Male

Female


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INTERPRETATION :

Table No.I(b) represents the gender ratio of the respondents in this

survey.92%of the covered respondents were male and remaining 8%

were female

(c)Income Profile:

Table No. I(c) showing income wise profile of respondents:

S. No Income No. of

respondents

Percentage

1. Less then 1.0Lakh

34 17%

2. 1.0-2.0 Lakh 38 38%

3. 2.0-3.0 Lakh 30 30%

4. 3.0-5.0 Lakh 6 6%

5. More then

5.0 Lakh

4 4%

6. No response 5 5%

Total 100 100%

Income Profile

38%

30%

6%4% 5%

17%

0%

5%

10%

15%

20%

25%

30%

35%

40%

No. of respondents

Less then 1.0 Lakh

1.0-2.0 Lakh

2.0-3.0 Lakh

3.0-5.0 Lakh

More then 5.0 Lakh

No response

INTERPRETATION :


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In this survey I found the break up of the respondents. Around 38%of

the respondents have an income between of Rs.1.0-2.0 Lakhs per annum

and 30% of respondents in between 2.0-3.0 Lakhs .it display the income

profile of respondents.

(d) Saving Habits :

.

Table No. I(d) showing saving habits profile of respondents:

S. No Savings No. of

respondents

Percentage

1. Up to Rs.2000

31 31%

2. Rs.2001-

5000

33 33%

3. Rs.5001-

10000

16 16%

4. Rs.10001-

20000

3 3%

5. Above

Rs.20001

1 1%

6. No Response 16 16%

Total 100 100%

Saving Habits of respondentsRs.10001-

200003%

Rs.5001-1000016%

Rs. 2001-500033%

No response16%

aboveRs.20001

1%

up to Rs.2000

31%up to Rs.2000

Rs. 2001-5000

Rs.5001-10000

Rs.10001-20000

aboveRs.20001

No response


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INTERPRETATION :

In this survey around 33% of the respondents reported to have a saving

in the range of Rs.2001-5000 per month .only 1% of the respondents

reported having in higher bracket i.e more then 20001 per month.

(e)Qualification :

Table No. I(e) showing Qualification profile of respondents:

S.No Qualification No. of

respondents

Percentag

e

1. Undergraduates 6 6%

2. Graduates 39 39%

3. Postgraduates 40 40%

4. Others 1 1%

5. No response 14 14%

Total 100 100%


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INTERPRETATION :

The surveyed group are well educated group with 40%being post

graduates and 39%being graduates. around 6% of the samples collectedwere undergraduates.

II. KNOWLEDGE OF MUTUAL FUNDS :

In the survey ,I attempted to understand from the investors their

knowledge of Mutual fund.

6%

39% 40%

1%

14%

0%

10%

20%

30%

40%

No. of respondents

Undergraduates

Graduates

Postgraduates

Others

No response


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(b) Knowledge related to share market:

Table No. II(b) showing knowledge related to share market of

respondents:

S. No Knowledge

related to

share market

No. of

respondents

Percentage

1. Yes 32 32%

2. No 64 64%

3. Cant say 4 4%

Total 100 100%


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Knowledge related to share market:

Yes

32%

No

64%

Can't say

4%

Yes

No

Can't say

INTERPRETATION :

It was found that 64% of the respondents dont know that the Mutual

fund is related to share market. they also dont know that Mutual funds

returns is affected by the fluctuation in share market.

III. Investment objective/decisions :

This section of survey was aimed at understanding the main reason

behind the investment decision made by an individual. I tried to catch

the factor that contribute to making of an investment portfolio off an

individual.

(a)Investment objective:


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S. No Investment

objective

No. of

respondents

Percentage

1. Capital Gain 21 21%2. Generate

Regular

return

6 6%

3. Secure

Future

59 59%

4. Tax benefits 14 14%

Total 100 100%

Investment Objective of Investor

capital gain

21%

generate

reguar return

6%

secure future

59%

tax benefits

14%capital gain

generate reguar return

secure futuretax benefits

INTERPRETATION :

Total number of 100 responses were generated for this question and

multiple response were sought for the various investment objectives. the

analysis brings out the fact that investor were more concerned about the

secure future(59%) and capital gains(21%), and after that they

considered tax benefits(14%) and regular return(6%) as their main

investment objectives.


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(b)Decision affecting Factors:

S. No Decision

affecting

Factors

No. of

respondents

Percentage

1. Economic

scenario

19 19%

2. Company

image

44 44%

3. Fund

performance

21 21%

4. Fund

manager

image

2 2%

5. Tax incentive 14 14%

Total 100 100%

38

88

42

4

28

0

20

40

60

80

100

No. of Respondents

DECISION AFFECTING FACTORS

Economic scenario

Company image

Fund performance

Fund manager image

Tax incentive

INTERPRETATION :

There are certain overall factors that tend to affect the investment decision

decision of the investor, such as economic scenario. I tried to know the


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respondents opinion on these macro factors that further tend to affect

their investment decisions.

This survey showed that company image acts as the determining factor

for their investment with 44%.the second most important factor was

fund performance(21%) and economic scenario(19%).

(c)Information sources regarding Mutual Funds:

S. No Information

sources

No. of

respondents

Percentage

1. Print media 29 29%

2. Electronic

media

21 21%

3. Friends/Relativ

e

6 6%

4. Financial

advisors

19 19%

5. Personal

analysis

4 4%

6. Agents 21 21%

Total 100 100%


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Information sources regarding Mutual Funds

29%

21%6%19%

4%

21% Print mediaElectronic media

Friends/Relative

Financial advisors

Personal analysis

Agents

INTERPRETATION :

In this survey I asked from the respondents about the kind of media that

affect their investment decision.29% of the respondents said that theprint media is the major influencer in making their investment decisions,

electronic media(21%) and agents(21%) were the second major

influencer in investment decision making.

(d)Priority of reason for investment:

S. No Priority for

investment

No. of

respondents

Percentage

1. Saving for

future

51 51%

2. Tax incentive 14 14%

3. Returns 23 23%

4. Future

outlook

7 7%


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5. Brand value 2 2%

6. Risk factors 3 3%

Total 100 100%

Priority of reason for investment

Tax incentive

14%

Returns

23%

Saving for future

51%

Brand value

2%

Future outlook

7%

Risk factors

3%

Saving for future

Tax incentive

Returns

Future outlook

Brand value

Risk factors

INTERPRETATION:

In this survey I found that saving for the future was the foremost

important criteria for investment in the minds of investors (51%),while

23%respondents said that they considered the returns before making

investment decisions.

IV. Risk-Return profile:

In my study I also tried to understand the risk and return matrix of an

individual investor. this was done in order to obtain information

Information on the relationship between the kind of funds an individual

investor opts to invest in and the relative expectation he has on the

return front.


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(a)Investment Avenues:

S. No Investment

Avenues

No. of

respondents

Percentage

1. Post office

schemes

12 12%

2. Insurance 4 4%

3. Banks 66 66%

4. Share market 3 3%

5. Mutual funds 7 7%

6. Govt.

securities

8 8%

Total 100 100%

Investment Avenues

Post officeschemes

12%

Insurance

4%Govt.securities

8%

Mutual funds7%

Share market

3%

Banks

66%

Post office schemes

Insurance

Banks

Share market

Mutual funds

Govt. securities

INTERPRETATION:

The risk return matrix of an individual is the key factor in framing his

investment portfolio. I asked the respondents to select the investment

avenues they would prefer to keep their investment portfolio. 66% of

investor preferred to have banks savings as one of the investment


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avenue., while 12% of the investor said that they would certainly would

like to have post office schemes as one of their preferred investment

avenue.

(b)Return expectation from Mutual funds:

S. No Return

expectation

from Mutual

funds

No. of

respondents

Percentage

1. 5%-10% 5 5%2. 11%-15% 24 24%

3. 16%-20% 31 31%

4. More then

20%

16 16%

5. Cant say 24 24%

Total 100 100%

INTERPRETATION:

Return expectation from Mutual funds

Other

40%

11%-15%

24% 5%-10%

5%

Cant say

24%

More then 20%

16%

16%-20%

31%

5%-10%

11%-15%

16%-20%

More then 20%

Cant say


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In this survey when I came to return expected ,I found that 31% of the

investor are expecting a return in range of 16%-20%,while 24%of the

investor are expecting 11%-15% rate of return but 24% of investor cant

said about return expectation.

(c) Investment pattern preferred in Mutual fund by investor :

S.

No

Investment

pattern

preferred

in Mutual

fund

No. of

respondents

Percentage

1. Growth

schemes

41 41%

“COMPRATIVE STUDY OF MARKETING STRATEGIES BETWEEN RELIANCE FUND VS SBI MUTUL FUND”

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Transcript of “COMPRATIVE STUDY OF MARKETING STRATEGIES BETWEEN RELIANCE FUND VS SBI MUTUL FUND”