Comprative Study Reliance and Hdfc

8/10/2019 Comprative Study Reliance and Hdfc

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Preface

The Project work is field which uses tools and techniques to transfer

subjectivity in the environment into objectives, also the findings of the research,

when applied show results, which can be measured and evaluated so there is

feedback this is what makes it a dynamic activity.

This survey is an analytical study of a different facts of the product. The focus is

given on the COP!"!T#$% &T'() O* +(*C 'T'! *'-( !-(

"%#!-C% 'T'! *'-( is for the partial fulfillment of ..!. ##-(&%.

(egree.

The idea behind this project is to give practical knowledge and to make

them to face real life situation. The project survey is commonly used for the

collection from the respondents through questionnaire. #n this method statistical

techniques have been used systematically. This project survey is not only with

my own efforts but also that of others.

P"#)!-/! &!+'

..!. ##"( &%.


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ACKNOWLEDGEMENT

I would like to whole hearty thank and express my sincere gratitude to (".

0!)!-T ('%)Head of the Department of Busines Studies, Babulal Tara Bai

Institute of Research and Technology , Sagar for suggesting me this problem and

for giing an insight in dealing with the sub!ect

"astly, I #ust express my gratitude to all the elders of the family and

citi$en of the city who blessed me in course of discussion% I also extend my sincere

thanks to my family and my friends for their encouragement and support%

PRIYANKA SAHU


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CERTIFICATE

This to certify that #ISS PRIYANKA SAHU Student of M.B.A. IIND

Sem.(epartment of usiness &tudies abulal Tarabai #nstitute of "esearch and

Technology Has diligently worked on the Report of the 1COP!"!T#$%

&T'() O* +(*C 'T'! *'-( !-( "%#!-C% 'T'! *'-(2% He

has done this &ork under #y 'uidance and Superision% This pro!ect work is

original and not submitted earlier for the award of any degree or associate ship of

any other (niersity%

During this study he made meticulous efforts for its completion% I wish him

all the best in this sincere endeaors for a bright and successful future%

&ignature of the &ignature of the &ignature of the

&upervisor +ead of the (epartment %3aminer

)


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DECLARATION

I hereby declare that the work entitled COP!"!T#$%

&T'() O* +(*C 'T'! *'-( !-( "%#!-C% 'T'! *'-(.

submitted to the(epartment of usiness &tudies abulal Tarabai #nstitute

of "esearch and Technology, is a record of an original work done by me

under the guidance ofMR. MANISH SHRIASTAA "ecturer * +aculty

#ember at the (epartment of usiness &tudies abulal Tarabai #nstitute

of "esearch and Technology% I also ensure that this work done by me is

purely original and is my own creatiity%

Da!e " PRIYANKA SAHU

P#ace "


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$.$ PURPOSE OF THE STUDY

$.% SCOPE OF THE STUDY

$.& RESEARCH OB'ECTIE OF THE STUDY

$.( RESEARCH METHODOLOGY OF THE STUDY

$.(.( LIMITATIONS

Re)*e+ Of L*!era!,re

COMPANY PROFILEReliance Mutual Fund


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bout TopicINTRODUCTION

#utual +und is a trust that pools the saings of a number of inestors who share a

common financial goal% The money thus collected is then inested in capital market

instruments such as shares, debentures and other securities% The income earned through

these inestments and the capital appreciations reali$ed are shared by its unit holders in

proportion to the number of units owned by them% Thus a #utual +und is the most

suitable inestment for the common man as it offers an opportunity to inest in a

diersified, professionally managed basket of securities at a relatiely low cost% The flow

chart below describes broadly the working of a #utual +und%


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#utual +und is a body corporate registered with the Securities and -xchange Board of

India .S-BI/ that pools up the money from indiidual0corporate inestors and inests the

same on behalf of the inestors0unit holders, in -1uity shares, 'oernment securities,

Bonds, 2all #oney #arkets etc, and distributes the profits% In the other words, a #utual

+und allows inestors to indirectly take a position in a basket of assets% #utual +und is a

mechanism for pooling the resources by issuing units to the inestors and inesting funds

in securities in accordance with ob!ecties as disclosed in offer document% Inestments in

securities are spread among a wide cross)sectionof industries and sectors thus the risk is

reduced% Diersification reduces the risk because all stocks may not moe in the same

direction in the same proportion at same time% Inestors of mutual funds are known as

unit holders%

The inestors in proportion to their inestments share the profits or losses% The mutual

funds normally come out with a number of schemes with different inestment ob!ecties

which are launched from time to time% #utual +und is re1uired to be registered with

Securities -xchange Board of India .S-BI/ which regulates securities markets before it

can collect funds from the public%

ORGANISATION OF A MUTUAL FUND"-

There are many entities inoled and the

diagram below illustrates the organi$ational set up of a #utual +und3


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#utual +unds diersify their risk by holding a portfolio of instead of only one asset% This

is because by holding all your money in !ust one asset, the entire fortunes of your

portfolio depend on this one asset% By creating a portfolio of a ariety of assets, this riskis substantially reduced% #utual +und inestments are not totally risk free% In fact,

inesting in #utual +unds contains the same risk as inesting in the markets, the only

difference being that due to professional management of funds the controllable risks are

substantially reduced% ery important risk inoled in #utual +und inestments is the

market risk% Howeer, the company specific risks are largely eliminated due to

professional fund management%

CHARACTERISTICS OF A MUTUAL FUND:-

#utual +und actually belongs to the inestors who hae pooled their funds% The

ownership of the mutual fund is in the hands of the Inestors%

#utual +und is managed by inestment professional and other Serice

proiders, who earns a fee for their serices, from the funds%

The pool of +unds is inested in a portfolio of marketable inestments%

The alue of the portfolio is updated eery day%

The inestor4s share in the fund is denominated by 5units6% The alue of the units

changes with change in the portfolio alue, eery day% The alue of one unit of

inestment is called net asset alue .78/%

The inestment portfolio of the mutual fund is created according to the stated

Inestment ob!ecties of the +und%


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OB'ECTIES OF A MUTUAL FUND"-

To 9roide an opportunity for lower income groups to ac1uire without much

difficulty, property in the form of shares%

To 2ater mainly of the need of indiidual inestors, whose means are small:

To #anage inestors portfolio that proides regular income, growth, Safety,

li1uidity, tax adantage, professional management and diersification%

STRUCTURE OF A MUTUAL FUND"-

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 ;??@% The sponsor is

not responsible or liable for any loss or shortfall resulting from the operation of the


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Schemes beyond the initial contribution made by it towards setting up of the #utual

+und%

TRUST" The #utual +und is constituted as a trust in accordance with the proisions of

the Indian Trusts ct, >AA by the Sponsor% The trust deed is registered under the Indian

Registration ct, >?


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open)ended debt funds at lower risk, this risk of default by any company that one has

chosen to inest in, can be minimi$ed by inesting in #utual +unds as the fund managers

analy$e the companies financials more minutely than an indiidual can do as they hae

the expertise to do so% #oing up the risk spectrum, there are people who would like to

take some risk and inest in e1uity funds0capital market% Howeer, since their appetite for

risk is also limited, they would rather hae some exposure to debt as well% +or these

inestors, balanced funds proide an easy route of inestment, armed with expertise of

inestment techni1ues, they can inest in e1uity as well as good 1uality debt thereby

reducing risks and proiding the inestor with better returns than he could otherwise

manage% Since they can reshuffle their portfolio as per market conditions, they are likely

to generate moderate returns een in pessimistic market conditions%

7ext comes the risk takers, risk takers by their nature, would not be aerse to inesting in

high)risk aenues% 2apital markets find their fancy more often than not, because they

hae historically generated better returns than any other aenue, proided, the money was

!udiciously inested% Though the risk associated is generally on the higher side of the

spectrum, the return)potential compensates for the risk attached%


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FACTORS IMPACTING THE INDUSTRY (PEST Analysis) :-

P0#*!*ca# Fac!0r1"

a/ 'oernment Regulation3 S-BI regulates the industry and eery decision taken by themimpact the industry ery 1uickly%b/ Stable constituency3 The mutual fund industry can take long term decision if the

goernment is stable%

c/ +iscal policy3 tax structure plays a ery important role in the growth of the industry %Ifthe tax structure will be high than there will be less saings and inestment% &e hae seen

the interest rate reducing continuously which boost the industry to sell products which are

better than the +Ds, 9+, 7S2 and F89s%

Ec020m*c fac!0r1"

d/ #arket performance3 The last fie years witnessed a sharp rise in the markets% The

mutual fund industry basically works parallel with the markets% Suppose, if the marketsalways be on downside, then the inestors will not be so comfortable to inest% This will

reduce the market si$e drastically%

e/ 'lobal Standards3 s the industry will grow better, India being a global economy, the

#+ industry has to match to the global mature #+ markets% They hae to gie dueemphasis on product innoation, cost reduction and penetration%

f/ Inflation3 price rise affects interest rate and reduces the chances of inestment%

S0c*a# fac!0r1"

g/ 2onsumer behaiour3 this is ery unpredictable and based on sentiments gets changed

ery fre1uently, which sometimes makes selling of products difficult%

h/ Income3 The rich people are in bigger cities, so the mutual fund industry is much moreconcentrated there%

Tec320#04*ca# fac!0r1"

This is the era of information technology and due to net banking, online transaction,online RT'S, clearing system helps the industry a lot%


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BENEFITS OF MUTUAL FUND

There are numerous benefits of inesting in mutual funds and one of the key reasons for

its phenomenal success in the deeloped markets like (S and (F is the range of benefits

they offer, which are unmatched by most other inestment aenues% &e hae explainedthe key benefits in this section% The benefits hae been broadly split into uniersal

benefits, applicable to all schemes and benefits applicable specifically to open)ended

schemes%

CATEGORIES OF MUTUAL FUNDS"


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M,!,a# F,25 ca2 6e c#a11*f*e5 a1 f0##0+1"-

Ba1e5 02 !3e S!r,c!,re"-$. OPEN-ENDED MUTUAL FUNDS"

The holders of the shares in the +und can resell them to the issuing #utual +und

company at the time% They receie in turn the net assets alue .78/ of the shares at the

time of re)sale% Such #utual +und 2ompanies place their funds in the secondary

securities market% They do not participate in new issue market as do pension funds or life

insurance companies% Thus they influence market price of corporate securities% Cpen)end

inestment companies can sell an unlimited number of Shares and thus keep going larger%

The open)end #utual +und 2ompany Buys or sells their shares% These companies sell

new shares 78 plus a "oading or management fees and redeem shares at 78%In other

words, the target amount and the period both are indefinite in such funds%

%. CLOSED-ENDED MUTUAL FUNDS"-

closedGend +und is open for sale to inestors for a specific period, after which further

sales are closed% ny further transaction for buying the units or repurchasing them,

Happen in the secondary markets, where closed end +unds are listed% Therefore new

inestors buy from the existing inestors, and existing inestors can li1uidate their units


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by selling them to other willing buyers% In a closed end +unds, thus the pool of funds can

technically be kept constant%

The asset management company .#2/ howeer, can buy out the units from the

inestors, in the secondary markets, thus reducing the amount of funds held by outside

inestors% The price at which units can be sold or redeemed Depends on the market

prices, which are fundamentally linked to the 78% Inestors in closed end +unds receie

either certificates or Depository receipts, for their holdings in a closed end mutual +und%

Ba1e5 02 !3e*r *2)e1!me2! 067ec!*)e"

$/E8UITY FUNDS3)

These funds inest in e1uities and e1uity related instruments% &ith fluctuating share

prices, such funds show olatile performance, een losses% Howeer, short term

fluctuations in the market, generally smoothens out in the long term, thereby offering

higher returns at relatiely lower olatility% t the same time, such funds can yield great

capital appreciation as, historically, e1uities hae outperformed all asset classes in the

long term% Hence, inestment in e1uity funds should be considered for a period of at least

)E years% It can be further classified as3

*/ I25e9 f,251) In this case a key stock market index, like BS- Sensex or 7ifty is

tracked% Their portfolio mirrors the benchmark index both in terms of composition and

indiidual stock weightages%

**/ E:,*!; 5*)er1*f*e5 f,251- >


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Their inestment portfolio includes both debt and e1uity% s a result, on the risk)return

ladder, they fall between e1uity and debt funds% Balanced funds are the ideal mutual

funds ehicle for inestors who prefer spreading their risk across arious instruments%

+ollowing are balanced funds classes3

*/ De6!-0r*e2!e5 f,251 -Inestment below @E= in e1uities%

**/ E:,*!;-0r*e2!e5 f,251 -Inest at least @E= in e1uities, remaining in debt%

&. DEBT FUND"

They inest only in debt instruments, and are a good option for inestors aerse to idea of

taking risk associated with e1uities% Therefore, they inest exclusiely in fixed)income

instruments like bonds, debentures, 'oernment of India securities and money market

instruments such as certificates of deposit .2D/, commercial paper .29/ and call money%

9ut your money into any of these debt funds depending on your inestment hori$on and

needs%

*/ L*:,*5 f,251- These funds inest >


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#utual funds normally come out with an adertisement in newspapers publishing the

date of launch of the new schemes% Inestors can also contact the agents and distributors

of mutual funds who are spread all oer the country for necessary information and

application forms% +orms can be deposited with mutual funds through the agents and

distributors who proide such serices% 7ow days, the post offices and banks also

distribute the units of mutual funds% Howeer, the inestors may please note that the

mutual funds schemes being marketed by banks and post offices should not be taken as

their own schemes and no assurance of returns is gien by them% The only role of banks

and post offices is to help in% distribution of mutual funds schemes to the inestors%

Inestors should not be carried away by commission0gifts gien by agents0distributors for

inesting in a particularscheme% Cn the other hand they must consider the track record of

the mutual fund and should take ob!ectie decision%

LEGAL FRAME WORK OF SEBI < AMFI

REGULATORY ASPECTS OF MUTUAL FUNDS" In the year >??, Securities and

exchange Board of India .S-BI/ ct was passed% The ob!ecties of S-BI are G to protect

the interest of inestors in securities and to promote the deelopment of and to regulate

the securities market% S-BI formulates policies and regulates the mutual funds to protect

the interest of the inestors%

GUIDELINES OF SEBI < AMFI

#utual funds are regulated by the S-BI .mutual +und/ Regulations, >??@%

S-BI is the regulator of all funds, except offshore funds%

JBank)sponsored mutual funds are !ointly regulated by S-BI and RBI%

JThe bank)sponsored fund cannot proide a guarantee without RBI 9ermission%

JRBI regulates money and goernment securities markets, in which mutual +unds are

inested%

J"isted mutual funds are sub!ect to the listing regulations of stock exchange%


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JSince the #2 and Trustee 2ompany are companies, the Department of 2ompany

affairs regulate them% They hae to send periodic reports to the RC2 .Register of

2ompanies/ and the 2"B .2ompany "aw Board/ is the appellate authority%

JInestors cannot sue the trust, as they are the same as the trust and can4t sue

themseles%

J(TI does not hae a separate sponsor and #2%

J(TI is goerned by the (TI ct, >?@ and is oluntarily under S-BI Regulations%

J(TI can borrow as well as lend also engage in other financial serices actiities%

JCnly #+I certified agents can sell #utual +und units%

#utual +unds 2ompany is re1uired to update the 78 of the scheme on the #+I

website on a daily basis in case of open)ended scheme%

MUTUAL FUNDS IN INDIA AT A GLANCE

The mutual fund industry in India started in >?@ with the formation of (nit Trust of

India, at the initiatie of the 'oernment of India and Resere Bank the% The history of

mutual funds in India can be broadly diided into four distinct phases 3)F*r1! P3a1e = $>?(-@

(nit Trust of India .(TI/ was established on >?@ by an ct of 9arliament% It was set up

by the Resere Bank of India and functioned under the Regulatory and administratie

control of the Resere Bank of India% In >?A (TI was de)linked from the RBI and the

Industrial Deelopment Bank of India .IDBI/ took oer the regulatory and administratie

control in place of RBI% The first scheme launched by (TI was (nit Scheme >?@;% t the

end of >?AA (TI had Rs%@,@-$>>& E2!r; 0f P,6#*c Sec!0r F,251/

>?A marked the entry of non) (TI, public sector mutual funds set up by public sector

banks and "ife Insurance 2orporation of India ."I2/ and 'eneral Insurance 2orporation

of India .'I2/% SBI #utual +und was the first non) (TI #utual +und established in Kune


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>?A followed by 2anbank #utual +und .Dec A/, 9un!ab 7ational Bank #utual +und

.ug A?/, Indian Bank #utual +und .7o A?/, Bank of India .Kun ?


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with recent mergers taking place among different priate sector funds, the mutual fund

industry has entered its current phase of consolidation and growth% s at the end of

September, schemes%

The graph indicates the growth of assets oer the years%

N0!e - -rstwhile (TI was bifurcated into (TI #utual fund and the Specified

(ndertaking of the (nit Trust of India effectie from +ebruary


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DATA ANALYSIS AND INTERPRETATION> Do you know, what is mutual fund:

Les ?E

7o E

From the above Pie Chart, it is clear that everyone is not aware about mutual

fund

. 95% people known what is mutual fund because they aware about share

market.


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Is #utual fund always risk free:

Les @

7o

We know that mutual fund is not always risk free. ccordin! to the customers

who know

what is mutual fund, they also know it is not always risk free. Problem has

that some

people are not aware about mutual fund."#% people don$t know it is risk free

or not.


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Do you want to inest your money into the mutual fund:

Les A

7o

s shown above chart &% people want to invest money into the mutual fund

because they have interest in mutual fund, ma'imum customers want to

invest their money into the mutual fund because their interest decreased in

e(uity market as they know that in this )eld, risk is low compare to share

market.


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; %If yes, Which AMC (asset Management Company) will you prefer?

Reliance #utualfund

E

Comprative Study Reliance and Hdfc

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