Deepak (Axis) Project Report
Transcript of Deepak (Axis) Project Report
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AUTUMN INTERNSHIP PROJECT
REPORT
Submitted By
DEEPAK M(Reg. No: 5NB11843)
Under The Guidance Of
Mr. JEEMON JOSEPH
(Faculty Guide)
Submitted in the Partial Fulfillment of theRequirements for the Award of the Degree Of
Masters of BusinessAdministration
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ICFAI NATIONAL COLLEGE KANNUR
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PROJECT REPORT ON
A STUDY CONDUCTED TO IDENTIFY THE MOST
EFFECTIVE MARKETING STRATEGIES OF MUTUAL
FUND AMONG COMPETITORS IN KANNUR
A report submitted in the partial fulfillment of the requirements of MBAProgram (2005-2007) ICFAI National College.
SUBMITTED BY: DEEPAK MENROLLMENT NO: 5NB11843
PROGRAM: MBA
ICFAI NATIONAL COLLEGEKANNUR
UNDER THE GUIDANCE OF
FACULTY GUIDE COMPANY
GUIDE
Mr. JEEMON JOSEPH Mr. SABU PETER
Organization: TATA ASSET MANAGEMENT
LIMITED
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This is to certify that the Autumn Internship Project titled A STUDY
CONDUCTED TO IDENTIFY THE MOST EFFECTIVE
MARKETING STRATEGIES OF MUTUAL FUND AMONG
COMPETITORS IN KANNUR, a bonafide work ofDEEPAK M, is
original and has been done under my supervision partial fulfillment of the
requirement for the award of MBA for the period starting from 8th August
2006 to 16th December 2006. I am pleased to say that his performance
during the period was extremely satisfactory.
Mr. Jeemon Joseph
FACULTY GUIDE
Countersigned by
Regional Head
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DECLARATION
I Deepak M here by declare that this report is a true record of
the autumn internship project report done by me at Tata Asset
Management Pvt Ltd, Cochin for the partial fulfillment of my
MBA at ICFAI National College, Kannur. Further, this report
has not been submitted to any other university or educational
institution for the award if any degree or diploma.
Place: Deepak M
Date : Enrollment No: 5NB11843
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TABLE OF CONTENTS
Acknowledgement
7
List of Table8
List of Chart9
Abstract10
Importance of the study11
Scope of the Study12
CHAPTER I14
Introduction
Project title
Objective
Methodology
Defining the problem and the research objective
Developing the research plan
Collection and Sources of data
Analyze the collected information
Report research findings
Limitations
CHAPTER II18
Introduction about Mutual Fund
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The Mutual Fund Industry-History
Fund by types
Recent trends in mutual fund industry Future scenario
Market trends
Performance of mutual funds in India
Association of mutual fund federation of India (amfi)
The objectives of association of mutual funds in India
(amfi)
CHAPTER III38
Company Profile
About TATA
TATA Group Tata Asset Management Pvt. Ltd
About UTI
UTI-Asset Management Company Pvt. Ltd
UTI Bank
About FRANKLIN TEMPLETON
Franklin Templeton Investments Pvt. Ltd
CHAPTER IV54
Analysis and interpretation of data
Findings from 4P,s among companys
Findings from data collected through questionnaire
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Suggestions
ConclusionCHAPTER V 80
OJT titleObjectives
Targets/Tasks
Strategy
Achievements
Mid-course correction
Limitations
Conclusion
REFERENCES86
ANNEXURE: QUESTIONNAIRE87
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ACKNOWLEDGEMENT
It gives me great pleasure to thank and acknowledge all the
concerned people who helped me and are helping me in continuing this
project work successfully.
I extend my sincere gratitude to Mr. Jeemon Joseph (Faculty,
INC Alapuzha), Mr. Hareendran (Faculty, INC Calicut) my faculty
guides for his valuable guidance in steering the course of the study and
in the preparation of this report.
I also express my gratitude towardsMr. Sujith (Regional head,
Kerala Region, TATA Asset Management Limited), my company guide
Mr. Sabu Peter (Banking functional Manager, TATA Asset
Management Limited), Mr. Kishore Krishna (Senior Sales Executive,
TATA Asset Management Limited) under whose valuable guidance and
co-operation I conducted my studies.
Im also gratefulMr.Krishnan (Branch Manager, HDFC),Mr. Regunath (Deputy Manager, HDFC), Mr. Arun Nambiar (Deputy
Manager, HDFC), Mr. Jestin Joseph (Asst Manager, HDFC) and, Mr.
Rakesh Rajan . P.T (Sales Officer, HDFC) and all at bankfor their
support and encouragement.
Last, but not the least my heart felt gratitude to all my teachers of ICFAI
Kannur and friends for their constant encouragement, support, help andvaluable advice to make this project in the way of success.
Name: DEEPAK M
Enrollment No: 5NB11843
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Sl.
No.
Table
. No.List of Tables
Pg.
no.
Comparing 4 Ps
1 1 Comparing Products 56
2 2 Comparing Price 57
3 3 Comparing Place 57
Analysis and Interpretation of Data
4 1 Customer awareness about mutual funds 60
5 2 Awareness Media 60
6 3 Customers invested in mutual funds 61
7 4Customers preference of schemes in mutualfunds
62
8 5 Investment pattern of the customers 63
9 6 Customers objective of saving 64
10 7 Factors influencing investments 65
11 8 Knowledge about Mutual Fund schemes 66
12 9 Preference for Equity schemes 67
13 10 Reason to choose Mutual Fund 68
14 11Customers preference regarding SIP andLump sum
69
15 12Category of customers investing in Mutual
Fund (Employment)70
16 13Category of customers invested/interested inMutual Fund (Age)
71
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Sl.
No.
Chart
. No.List of Charts
Pg.
no.
Comparing 4 Ps
1 1 Comparing Products 56
Analysis and Interpretation of Data
2 1 Customer awareness about mutual funds 60
3 2 Awareness Media 61
4 3 Customers invested in mutual funds 62
5 4 Customers preference of schemes in mutualfunds
62
6 5 Investment pattern of the customers 63
7 6.A Customers objective of saving 64
8 6.B Customers objective of saving 65
9 7 Factors influencing investments 66
10 8 Knowledge about Mutual Fund schemes 67
11 9 Preference for Equity schemes 68
12 10 Reason to choose Mutual Fund 69
13 11Customers preference regarding SIP and Lumpsum
70
14 12Category of customers investing in Mutual Fund
(Employment)
71
15 13.ACategory of customers invested/interested inMutual Fund (Age)
72
16 13.BCategory of customers invested/interested inMutual Fund (Age)
72
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ABSTRACT
The present study A study conducted to identify the most
effective marketing strategies of mutual fund among competitors inKannuris based on mutual funds and various schemes provided by Tata
Asset Management Private Limited. The on-the-job training task
assigned is Sale of 30 mutual fund applications per month.
The Autumn Internship Program (AIP) commenced from the 8th of
August 2006 and will formally close on the 16 th of December 2006. The
duration of the present study is 4 months. The project work and the OJT
should be done simultaneously during the AIP program. The main
objective of this AIP program is to fill the gap between academic
institution and the corporate world. The company I have got for doing my
AIP is Tata Asset Management Private Limited. It is one of the best
companies in the field of asset management and its my pleasure to work
with such a well-reputed company like Tata.
The company, TataAsset Management Private Limitedconducted
orientation and training sessions, where in a briefing about the company
and its working was given. Then on 03rd September Company placed me
in HDFC Bank, Kannur branch. My OJT task is to sit inside the bank and
make telecalls to the bank account holder and to approach the walk-in-
clients.
The primary data for the study project is obtained from the survey
conducted using well-structured questionnaires. The sample on which the
survey was conducted consists of 100 HDCF account holders feed back.
Interaction with the company officials and bank employees helped a lot
for the study. Secondary data for the study was got from the various
brochures and fact sheets distributed by the company and from related
websites.
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Importance of the study
This study is being conducted to increase the customer base
of as well as to suggest the best marketing strategy for TATA AMC.
Taking in to consideration the other AMCs TATA MUTUAL FUND has
got tough time to play in the market, why because there are other AMCs
in the market which has got good market share as well as given a higher
returns than TATA AMC. So this study would help TATA AMC to opt
the best for their move in the market. Regarding service TATA AMC has
got a good remark from the customer. As now a days technology is
increasing so the usage of internet is also increasing. So the information
is at the tip of finger of the people. So the people are now more in to
shares, mutual funds, web trades etc. So a study and formulation of an
effective marketing strategy would really help TATA to perform better.
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Scope of the Study
The mutual fund industry in India is still young. MUTUAL
FUND Worldwide, Mutual Fund or Unit Trust as it is referred to in some
parts of the world, has a long and successful history. The popularity of
Mutual Funds has increased manifold in developed financial markets, like
the India. In India, the mutual fund industry started with the setting up of
the Unit Trust of India in 1964. Public sector banks and financial
institutions were allowed to establish mutual funds in 1987. Since 1993,
private sector and foreign institutions were permitted to set up mutual
funds.
In February 2003, following the repeal of the Unit Trust of
India Act 1963 the erstwhile UTI was bifurcated into two separate entities
viz. The Specified Undertaking of the Unit Trust of India, representing
broadly, the assets of US 64 scheme, assured returns and certain other
schemes and UTI Mutual Fund conforming to SEBI Mutual Fund
Regulations.
As at the end of March 2006, there were 29 mutual funds,
which managed assets of Rs. 2,31,862 crores ( US $ 52 Billion) under
592 schemes. This fast growing industry is regulated by the Securities
and Exchange Board of India (SEBI).
So in this aggressive Indian share market an effective
marketing strategy would make TATA AMC to reach up to heights i.e.
among top 5 mutual fund companies in India. The company can improve
its position in the industry if it adopts an effective marketing tool. The
study is upon whether to enrich the existing marketing channel or to
adopt a new marketing tool.
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PART 1
PROJECT WORK
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CHAPTER I
Introduction
Project title
Objective
Methodology
Defining the problem and the research objective
Developing the research plan
Collection and Sources of data
Analyze the collected information
Report research findings
Limitations
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INTRODUCTION
PROJECT TITLE:A STUDY CONDUCTED TO IDENTIFY THE MOST
EFFECTIVE MARKETING STRATEGIES OF MUTUAL FUND
AMONG COMPETITORS IN KANNUR
OBJECTIVE
To find out effective marketing strategy of mutual fund for TATA
ASSET MANAGEMENT in relation with 4P'.
SUB OBJECTIVES
To find the prospective customer segment.
To know about the investment pattern of customers in different
portfolios.
To make necessary recommendations to improve the marketing
strategies of the company.
METHODOLOGY
The objectives of the present study were accomplished by conducting a
systematic market research. Market research is the systematic design,
collection, analysis and reporting of data and findings that are relevant to
different marketing situations facing the company. The marketing
research process adopted in the present study consisted of the following
stages: -
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a. Defining the problem and the research objective: The
research Objective states what information is needed to solve the
problem. The objective of the research was to find out effective
marketing strategy of mutual fund for the company where I am doing my
internship in comparison with UTI Mutual Fund and Franklin Templeton
Investments.
b. Developing the research plan: Once the problem is identified,
the next step is to prepare a plan for getting the information needed for
the research. The present study adopted the exploratory approach wherein
there was a need to gather large amount of information before making a
conclusion.
c. Collection and Sources of data: Market research requires two
kinds of data, i.e., primary data and secondary data. Well-structured
questionnaires were prepared for to collect data from the customers.
Secondary data was collected from various journals, books and web sites.
Sampling Technique:
Sample Size : 100nos
Sample Method : Random sampling method.
Samples were taken out of 100 HDFC customers whose age is above
18yrs. Samples were taken out on random basis because any one who iscapable of investing can be a customer to the company.
Method of collection of data:
1. Primary Data
A. Data is collected through questionnaire method from the
customers.
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B. Direct interview with the bank managers, employees of
stock broking firms and amfi agents.
2. Secondary Data
The study is mainly based on the data provided by fact sheets,
broachers, official internet sites and advertising media. This is
supplemented by information gathered during discussions with the
company officials.
d. Analyze the collected information: This involved converting
raw data into useful information. It involved tabulation of data,Correlation and finding out the percentages.
e. Report research findings: This phase marked the culmination of
the marketing research effort. This report with the research findings is a
formal written document. The research findings and personal experience
were used to propose the recommendations to develop an effective
marketing strategy for to improve the companys market share in Kannur.
Limitations
Every effort has been made to make the study as exhaustive as possible.
But the study is not free from limitations
The confidentiality of some facts and figures.
Time limitation.
All values related to mutual funds changes from day to day.
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Confined geographical location.
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CHAPTER II
Industry Profile
Introduction about Mutual Fund
The Mutual Fund Industry-History
Fund by types
Recent trends in mutual fund industry
Future scenario
Market trends
Performance of mutual funds in India
Association of mutual fund federation
of India (amfi)
The objectives of association of
mutual funds in India (amfi)
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Introduction
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 appreciations 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 toinvest 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:
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The Mutual Fund Industry in India-History
Between 1964 and 1987, the industry was a 'one-man show', with
UTI being the only player in the market.
In the following six years, the industry was opened up but limited
to state-run players. Six state-run banks and two government
insurance firms established asset management companies.
The industry remained a public-sector preserve till 1993, when the
first private mutual fund - the Kothari Pioneer Mutual Fund --
launched one closed- and one open-ended fund.
Nevertheless, about two-thirds of the industry's assets are managed
by state-run AMCs and the remainder by privately run asset
management companies.
UTI alone controls about 60 per cent of the industry's assets; 17.6
per cent is managed by AMCs that are largely foreign owned and
10.4 per cent by Indian-owned AMCs.
Indian private mutual funds have 4.9 per cent of the industry's
AUM; state-run institutions control 3.8 per cent and bank-
sponsored AMCs have a 3.6 per cent share of the pie.
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The origin of mutual fund industry in India is with the introduction
of the concept of mutual fund by UTI in the year 1963. Though the
growth was slow, but it accelerated from the year 1987 when non-UTI
players entered the industry.
In the past decade, Indian mutual fund industry had seen a dramatic
improvement, both quality wise as well as quantity wise. Before, the
monopoly of the market had seen an ending phase; the Assets Under
Management (AUM) was Rs. 67bn. The private sector entry to the fund
family rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it
reached the height of 1,540 bn.
Putting the AUM of the Indian Mutual Funds Industry into
comparison, the total of it is less than the deposits of SBI alone,
constitute less than 11% of the total deposits held by the Indian banking
industry.
The main reason of its poor growth is that the mutual fund industry
in India is new in the country. Large sections of Indian investors are yet
to be intellectuated with the concept. Hence, it is the prime responsibility
of all mutual fund companies, to market the product correctly abreast of
selling.
The mutual fund industry can be broadly put into four phases
according to the development of the sector. Each phase is briefly
described as under.
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The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The
industry now functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many
foreign mutual funds setting up funds in India and also the industry has
witnessed several mergers and acquisitions. As at the end of January
2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.
The Unit Trust of India with Rs.44,541 crores of assets under
management was way ahead of other mutual funds.
Fourth Phase - since February 2003
This phase had bitter experience for UTI. It was bifurcated into two
separate entities. One is the Specified Undertaking of the Unit Trust of
India with AUM of Rs.29,835 crores (as on January 2003). The Specified
Undertaking of Unit Trust of India, functioning under an administratorand 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 inMarch 2000 more than Rs.76,000 crores of AUM and with the setting up
of a UTI Mutual Fund, conforming to the SEBI Mutual Fund
Regulations, and with recent mergers taking place among different
private sector funds, the mutual fund industry has entered its current
phase of consolidation and growth. As at the end of September, 2004,
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there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.
Types of Mutual Funds Schemes in India
Wide variety of Mutual Fund Schemes exists to cater to theneeds such as financial position, risk tolerance and return expectationsetc. The table below gives an overview into the existing types of schemesin the Industry.
TYPES OF MUTUAL FUND SCHEMES
By Structure
Open - Ended Schemes
An open-end fund is one that is available for subscription allthrough the year. These do not have a fixed maturity.Investors can conveniently buy and sell units at Net AssetValue (NAV) related prices. The key feature of open-endedscheme is liquidity.
Close - Ended Schemes
A closed-ended scheme has a stipulated maturity periodwhich generally ranging from three to fifteen years. Thefund 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 ofthe scheme on the stock exchanges where they are listed. In
order to provide an exit route to the investors, some closed-ended schemes give an option of selling back the units to themutual fund through periodic repurchase at NAV related
prices. SEBI regulations stipulate that at least one of the twoexit routes is provided to the investor.
Interval Schemes
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Interval funds combine the features of open-ended andclosed-ended schemes. They are open for sale or redemptionduring pre-determined intervals at NAV related prices.
By Investment Objective
Growth Schemes
The aim of growth funds is to provide capital appreciationover the medium to long-term. Such schemes normallyinvest a majority of their investments in equities. It has been
proven that returns from stocks, have outperformed mostother kinds of investments held over the long-term. Growth
schemes are ideal for investors having a long-term outlookseeking growth over a period of time.
Income Schemes
The aim of income funds is to provide regular and steadyincome to investors. Such schemes generally invest in fixedincome securities such as bonds, corporate debentures andgovernment securities. Income funds are ideal for investors
who look for capital stability and regular income.
Balanced Schemes
The aim of balanced funds is to provide both growth andregular income. Such schemes periodically distribute a partof their earning and invest both in equities and fixed incomesecurities in the proportion indicated in their offerdocuments. In a rising stock market, the NAV of these
schemes may not normally keep pace, or fall equally whenthe market falls. These are ideal for investors looking for acombination 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
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treasury bills, certificates of deposit, commercial paper andinter-bank call money. Returns on these schemes mayfluctuate depending upon the interest rate prevailing in themarket. These are ideal for corporate and individual
investors as a means to park their surplus funds for shortperiods.
Other Schemes
Tax Saving Schemes
These schemes offer tax rebates to the investors underspecific provisions of the Indian Income Tax laws as the
Government offers tax benefits for investments in specifiedavenues. Investments made in Equity Linked SavingsSchemes (ELSS) and Pension Schemes are allowed incometax benefits as per Section 88 of the Income Tax Act.
Special Schemes Industry Specific SchemesIndustry Specific Schemes invest only in the industriesspecified in the offer document. The investment of these
funds is limited to specific industries like InfoTech,FMCG, and Pharmaceuticals etc.
Index schemesIndex schemes attempt to replicate the performance of a
particular index such as the BSE Sensex or the NSE 50.
Sectoral schemesSectoral funds are those, which invest exclusively in a
specified industry or a group of industries or varioussegments such as A Group shares or initial publicofferings (IPO).
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Tax benefits
Tax Laws governing investments in mutual funds Under
Income Tax Act, 1961:
I. To Unit-holders (Resident)
Section 94(6) of the Income Tax Act, 1961
Section 94(6) of the Income Tax Act 1961 now provides that any
person who buys or acquires any securities or unit within a period of
three months prior to the record date and such person sells or transfers
such securities or unit within a period of three months after such date and
the dividend or income on such securities or unit received or receivable
by such person is exempt, then, the loss, if any, arising to him on account
of such purchase and sale of securities or unit, to the extent such loss does
not exceed the amount of dividend or income received or receivable on
such securities or unit, shall be ignored for the purposes of computing his
income chargeable to tax.
Section 10(33) of the Income Tax Act, 1961
The dividend received by the investors from the scheme will be
exempt from income tax for all categories of investors under Section
10(33) of the Income Tax Act, 1961. The scheme will pay a distribution
tax currently @10% plus surcharge if the portfolio holds less than 50
percent debt securities on an average during the last one year period.
Section 88 of the Income Tax Act, 1961
Specified units of mutual fund schemes qualify for rebate under
Section 88 of the Income Tax Act, 1961, subscription to the Units of the
Scheme by Individuals and Hindu Undivided Families, not exceeding
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Rupees ten thousand would be eligible to a deduction, from income-tax,
of an amount equal to 20% of the amount so subscribed. In the case of
subscription by an individual, whose income is derived from the exercise
of his profession as an author, playwright, artist, musician, actor or
sportsman (including an athlete), the deduction admissible would be at
the rate of 25%.
Tax Deducted at Source (TDS)
There will not be any Tax Deduction at Source on payment to
resident unit-holders towards redemption or dividends.
Capital Gains benefit under Section 112 of the Income Tax Act, 1961
Long-term capital gains in respect of Units held for a period of
more than 12 months will be chargeable under Section 112 of the Income
Tax Act, 1961, at a concessional rate of tax @ 20% (excluding surcharge)
From the full value of consideration, the following amounts would
be deductible to arrive at the amount of capital gains:
Cost of acquisition as adjusted by Cost Inflation Index notified by
the Central Government and expenditure incurred wholly and exclusively
in connection with such transfer.Investors can also opt to pay tax @10%
(excluding surcharge) on such Long Term Capital Gains, but without the
cost inflation indexation benefit.
Wealth Tax Benefits
Mutual Fund units are exempt from Wealth Tax.
To Non-Residents/OCBs
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a) Capital Gains under Section 112 of the Income Tax Act,
1961
Long-term capital gains in respect of Units held for a period ofmore than 12 months will be chargeable under Sec 112 of the Income Tax
Act, 1961 at a concessional rate of tax of 20%. The capital gains would
be calculated after indexation of the cost of acquisition.
Investors can also opt to pay tax @10% (excluding surcharge) on
Long Term Capital Gains, but without the cost inflation indexation
benefit.
b) Tax Deduction at Source (TDS)
Redemptions/Exchanges/Switches by non-residents/OCBs/FIIs will
be subjected to tax deduction at source at the rates in force and
certificates for tax deducted will be issued.
To Charitable Trusts
Investment in the units of the scheme is an eligible mode of
investment under Section 11(5) of the Income Tax Act read with Income
Tax Rule 17 C.
II. To the Fund
Open Ended Mutual Funds are exempt from income tax under
Section 10 [23D] of the Act.
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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 floated by
nationalized banks and smaller private sector players.
Many nationalized banks got in to the mutual fund business in the early
nineties and got off to a good start due to the stock market boom
prevailing there. 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 theparent organizations. The performance of most of the schemes floated by
these funds was not good. Some schemes has offered guaranteed returns
and their parent organizations had to bail out these AMCs by paying
large amounts of money as the difference between the guaranteed and
actual returns. The services levels were also very bad. Most of these
AMC s have not been able to retain staff, float new schemes etc. and it isdoubtful whether, barring a few expectations, they have serious plans of
the activity in a major way.
The experience of some of the AMCs floated by private sector Indian
companies was also similar. They quickly realized that AMC business is
business, which makes money in the long term and requires deed
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 expectation of long haul. They can be credited with introducing
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many new practices such as new product innovation, sharp improvement
in service standards and disclosure, usage of technology broken 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.
Future scenario
The asset base will continue to grow at an annual rate of about 30 to 35%
over the next few years as investors shift their assets from banks and
other traditional avenues. Some of the older public and private sector
players will either close shop or be taken over.
Out of 10 public sector players 5 will sell out, close down or merge with
stranger players in 3 to 4 years. In the private sector this trend has already
started with two mergers and one take over. Here too some of them will
down their shutters in the near future to come.
But this does not mean there is no room for other players. The market
will witness a flurry of new players entering the arena. There will be a
large number of offers from various asset management companies in the
time to come. Some big names like fidelity principal, old mutual etc. are
looking at Indian market seriously one important reason for it is that most
major players already have presence here and hence these big names
would hardly like to get left behind.The mutual fund industry is awaiting the introduction of derivatives in
India as this should be enable it hedge its risk and this in turn would be
reflected in its Net Asset Value (NAV).
SEBI is working out the norms for enabling the existing mutual fund
schemes to trade in derivatives. Importantly, many market players have
called on the regular to initiate the process immediately, so that the
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mutual funds can implement the changes that are required to trade in
derivatives.
Market trends
Alone UTI with just one scheme in 1964, now competes with as many as
400 odd products and 34 players in the market. In spite of the stiff
competition and losing market share UTI still remains a formidable force
to reckon with.
Last six years have been the most turbulent as well as exiting ones for the
industry. New layers have come in , while others have decided to close
shop by either selling off or merging with others. Product innovation is
now pass with the game shifting to performance delivery in fund
management as well as service. Those directly associated with the fund
management industry like distributors, registrars and transfer agents and
even the regulators have become more mature and responsible.
The industry is also having a profound impact on financial markets.
While UTI has always been a dominant player on the bourses as well as
the debt markets, the new generations of private funds which have gained
substantial mass are now seen flexing their muscles. Fund managers by
their selection criteria for stocks have forced corporate governance on the
industry. By rewarding honest and transparent management with higher
valuations a system of risk reward has been created where the corporatesector is more transparent management with higher valuations a system
of risk reward has been created where the corporate sector is more
transparent than before.
Funds have shifted their focus to the recession froe sectors like
pharmaceuticals. FMCG and technology sector fund performance are
improving funds convection which averaged less than Rs. 100bn. Per
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annum over five years period spanning 1993-98 doubted to Rs. 210bn. in
1998-99. Total collection for the current financial year ending March
2000 is expected to reach Rs. 450bn.
What is particularly noteworthy is that bulk of the mobilization has been
by the private sector mutual funds rather than public sector mutual funds.
Indeed private
Mutual funds saw a net inflow of Rs. 7819.34 crores during the first nine
months of the year as against a net inflow of Rs. 604.40 crores in the case
of public sector funds.
Mutual funds are now also competing with commercial banks in the race
for retail investors saving & corporate float money. The power shift
towards mutual funds has become obvious. The coming few years will
show that the traditional saving avenues are closing out in the current
scenario. Many investors are realizing that investments in saving account
are as good as locking up their deposits in a close. The fund mobilization
trend by mutual funds in a big way. The collection in the first half of thefinancial year 1999-2000 matches the 1998-1999. India is at first stage of
a revolution that has already peaked in U.S. boasts of an assets are not
even 10% of the bank deposits, but this trend is beginning to change.
Recent figure indicate that in the first quarter of the current fiscal year
mutual fund assets went up by 115% where as bank deposits rose by only
17% (Source: Think tank. The Financial Express. September 1999). Thisis forcing a large number of banks to adopt the concept of narrow
banking where in the deposits are kept in the Gilt and some other assets
which improves liquidity and reduces risk. The role as intermediaries
cannot be ignored. It is just that mutual funds are going to change the way
banks do business in the future.
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Performance of mutual funds in India
The discussion of the performance of mutual funds in India from the day
the concept of mutual fund took birth in India. The year was 1963. UnitTrust of India invited investors or rather to those who believed in savings,
to park their money in UTI Mutual Fund. For 30years it goaled without a
single second player. Though the 1988-year saw some new mutual fund
companies, but UTI remained in a monopolyposition.
The performance of mutual funds in India in the initial phase was not
even closer to satisfactory level. People rarely understood, and of course
investing was out of question. But yes, some 24 million shareholders was
accustomed with guaranteed high returns by the beginning of
liberalization of the industry in 1992. This good record of UTI became
marketing tool for new entrants. The expectations of investors touched
the sky in profitability factor. However, people were miles away from the
preparedness of risks factor after the liberalization. The Assets Under
Management of UTI was Rs. 67bn. by the end of 1987. Let me
concentrate about the performance of mutual funds in India through
figures. From Rs. 67bn. the Assets Under Management rose to Rs. 470bn.
in March 1993 and the figure had a three times higher performance by
April 2004. It rose as high as Rs. 1,540bn.The net asset value (NAV) of
mutual funds in India declined when stock prices started falling in the
year 1992. Those days, the market regulations did not allow portfolio
shifts into alternative investments. There were rather no choice apart from
holding the cash or to further continue investing in shares. One more
thing to be noted, since only closed-end funds were floated in the market,
the investors disinvested by selling at a loss in the secondary market.
The performance of mutual funds in India suffered qualitatively. The
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1992 stock market scandal, the losses by disinvestments and of course the
lack of transparent rules in the whereabouts rocked confidence among the
investors. Partly owing to a relatively weak stock market performance,
mutual funds have not yet recovered, with funds trading at an average
discount of 1020 percent of their net asset value.
The supervisory authority adopted a set of measures to create a
transparent and competitive environment in mutual funds. Some of them
were like relaxing investment restrictions into the market, introduction of
open-ended funds, and paving the gateway for mutual funds to launch
pension schemes.
The measure was taken to make mutual funds the key instrument for
long-term saving. The more the variety offered, the quantitative would be
investors.
At last to mention, as long as mutual fund companies are performing with
lower risks and higher profitability within a short span of time, more and
more people will be inclined to invest until and unless they are fully
educated with the dos and donts of mutual funds.
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ASSOCIATION OF MUTUAL FUND FEDERATION OF INDIA
(AMFI)
With the increase in mutual fund players in India, a need for mutual fund
association in India was generated to function as a non-profit
organization. Association of Mutual Funds in India (AMFI) was
incorporated on 22nd August 1995.
AMFI is an apex body of all Asset Management Companies (AMC),which has been registered with SEBI. Till date all the AMCs are that
have launched mutual fund schemes are its members. It functions under
the supervision and guidelines of its Board of Directors. Association of
Mutual Funds India has brought down the Indian Mutual Fund Industry to
a professional and healthy market with ethical lines enhancing and
maintaining standards. It follows the principle of both protecting and
promoting the interests of mutual funds as well as their unit holders.
The objectives of Association of Mutual Funds in India
(amfi)
The Association of Mutual Funds of India works with 30 registeredAMCs of the country. It has certain defined objectives, which juxtaposes
the guidelines of its Board of Directors. The objectives are as follows:
This mutual fund association of India maintains high professional
and ethical standards in all areas of operation of the industry.
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It also recommends and promotes the top class business practices
and code of conduct which is followed by members and related
people engaged in the activities of mutual fund and asset
management. The agencies who are by any means connected or
involved in the field of capital markets and financial services also
involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBI s
guidelines in the mutual fund industry.
Association of Mutual Fund in India do represent the Government
of India, the Reserve Bank of India and other related bodies on
matters relating to the Mutual Fund Industry.
It develops a team of well-qualified and trained Agent distributors.
It implements a programmed of training and certification for all
intermediaries and other engaged in the mutual fund industry.
AMFI undertakes all India awareness programmed for investors in
order to promote proper understanding of the concept and working
of mutual funds.
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CHAPTER III
Company Profile
About TATA TATA Group
Tata Asset Management Pvt. Ltd
About UTI
UTI-Asset Management Company Pvt. Ltd
UTI Bank
About FRANKLIN TEMPLETON
Franklin Templeton Investments Pvt. Ltd
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TATA Group
About the group
The Tata Group comprises 93 operating companies in seven
business sectors: information systems and communications; engineering;
materials; services; energy; consumer products; and chemicals. The
Group was founded by Jamsetji Tata in the mid 19th century, a period
when India had just set out on the road to gaining independence from
British rule. Consequently, Jamsetji Tata and those who followed him
aligned business opportunities with the objective of nation building. This
approach remains enshrined in the Group's ethos to this day.
The Tata Group is one of India's largest and most respectedbusiness conglomerates, with revenues in 2004-05 of $17.8 billion (Rs
799,118 million), the equivalent of about 2.8 per cent of the country's
GDP.
Tata companies together employ some 215,000 people. The Group's 32
publicly listed enterprises among them standout names such as Tata
Steel, Tata Consultancy Services, Tata Motors andTata Tea have a
combined market capitalization that is the highest among Indian business
houses in the private sector, and a shareholder base of over 2 million.
The Tata Group has operations in more than 40 countries across six
continents, and its companies export products and services to 140 nations.
The Tata family of companies shares a set of five core values:
integrity, understanding, excellence, unity and responsibility. These
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values, which have been part of the Group's beliefs and convictions from
its earliest days, continue to guide and drive the business decisions of
Tata companies. The Group and its enterprises have been steadfast and
distinctive in their adherence to business ethics and their commitment to
corporate social responsibility. This is a legacy that has earned the Group
the trust of many millions of stakeholders in a measure few business
houses anywhere in the world can match.
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Tata Asset Management Pvt Ltd
About the Company
Tata Asset Management Ltd. is a part of the Tata group - one of India's
largest and most respected industrial group. The Tata Group is one of
India's best-known conglomerates in the private sector with a turnover of
around US $ 14.25 billion (equivalent to 2.6 % of India's GDP). Long
known for its adherence to business ethics, it is India's most respected
private business group. With 220,000 employees across 91 companies, it
is also India's largest employer in the private sector.
The Group has always believed in returning wealth to the society which it
serves. Thus, nearly two-thirds of the equity of Tata Sons, the Group's
promoter company, is held by philanthropic trusts which have created a
host of national institutions in natural sciences, medical care, energy and
the arts, and which give substantial annual grants and endowments to
deserving individuals and institutions in the areas of education, healthcare
and social upliftment.
By combining ethical values with business acumen, globalization with
national interests and core businesses with emerging ones, the Tata Group
aims to be the largest and most respected global brand from India:
fulfilling its long-standing commitment to improving the quality of life of
its stakeholders.
Tata Asset Management has over Rs 12,341.92 crore (as on 31 July 2006)
of assets under management, from over 800,000 investors. Established in
1995, it is also one of the oldest fund management companies in the
country's private sector. The key objectives for the company are to serve
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various segments of investors, retail and corporate, to identify investment
avenues with an aim of generating medium-term returns for the investors
in line with their objectives.
In its endeavor to minimize risk and maximize delivery of investment
value to its investors, Tata Asset Management has equipped itself with
the latest and the best in risk management as well as fund management
processes and techniques that are available in the world today.
The company offers a wide range of investment products for institutional
and individual investors for varied market conditions. Its schemes
encompass a comprehensive range of solutions across the risk-return
spectrum and can be classified into three categories: equity funds,
balanced funds and debt funds.
Key PersonalsMr.F.K.Kavarana (Chairman)
Mr. Ved Prakash Chaturvedi (Managing Director)
Mr. A. R. Gandhi (Director)
Mr. S. S. Marathe ( Director)
Mr. M. L. Apte ( Director)
Mr. A. Hasib (Director)
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Products
At Tata Asset Management Company, we believe that your
investment needs depend on personal and financial goals. Identifying
your financial goals is the key to achieving the big things in your life, be
it your child's education or a carefree and comfortable retired life.
After identifying and defining your financial goals, you now need to plan
for each of them in an organized and a professional way. Investment
experts around the world advise instruments like equity funds and stocks
for long-term (more than 5 years), income funds for medium-term and
liquid funds for short- term needs.
The investment matrix here depicts the entire available variety of
investment options. Those at the top provide for a greater opportunity for
long-term capital growth while those at the bottom take care of current
income and preservation of capital. Tata Mutual Fund offers a wide range
of funds for different investment instruments designed to cater to your
individual profile and life-stage.
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UTI Mutual Fund Pvt Ltd
The setting up of the Unit Trust of India (UTI) in 1963 heralded the birth
of the Indian mutual fund industry. In 1964, UTI mutual fund launched
its flagship scheme US-64 and went on to become a generic term for the
mutual fund sector till the government allowed public sector banks to
start mutual funds in 1987.
Despite being the trendsetter in the segment, the UTI mutual fund could
not sustain the initial tempo and was on the verge of a collapse in 2001,
before the government bailed it out and restructured the fund. After the
restructuring, the fund has somewhat redeemed its credibility through
professional management and a booming market.
The fund's sponsors are public sector financial giants like Life Insurance
Corporation, SBI, Bank of Baroda and Punjab National Bank. The
sponsors hold equal stakes in the asset management company, UTI Asset
Management Company Private Limited. UTI Mutual Fund remains the
largest fund in the country with assets of over Rs.35,028 crore under
management as of Aug 2006.
In 2003, UTI was divided into two parts, UTI Mutual Fund (UTI MF) and
a specified undertaking of UTI or UTI-I. UTI MF was brought under
SEBI regulations while UTI-I was kept under direct government control
since its schemes offered guaranteed returns.
UTI Mutual Fund is managed by UTI Asset Management Company
Private Limited (Estb: Jan 14, 2003) who has been appointed by the UTI
Trustee Company Private Limited for managing the schemes of UTI
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Mutual Fund and the schemes transferred /migrated from UTI Mutual
Fund.
The UTI Asset Management Company has its registered office at: UTI
Tower, Gn Block, Bandra - Kurla Complex, Bandra (East), Mumbai - 400
051 will provide professionally managed back office support for all
business services of UTI Mutual Fund (excluding fund management) in
accordance with the provisions of the Investment Management
Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations and
the objectives of the schemes. State-of-the-art systems and
communications are in place to ensure a seamless flow across the various
activities undertaken by UTI AMC.
UTI AMC is a registered portfolio manager under the SEBI (Portfolio
Managers) Regulations, 1993 on February 3 2004, for undertaking
portfolio management services and also acts as the manager and marketer
to offshore funds through its 100 % subsidiary, UTI InternationalLimited, registered in Guernsey, Channel Islands.
UTI Mutual Fund has come into existence with effect from 1st February
2003. UTI Asset Management Company presently manages a corpus of
over Rs. 34500 Crore. UTI Mutual Fund has a track record of managing a
variety of schemes catering to the needs of every class of citizenry. It hasa nationwide network consisting 70 UTI Financial Centers (UFCs) and
UTI International offices in London, Dubai and Bahrain. With a view to
reach to common investors at district level, 4 satellite offices have also
been opened in select towns and districts. It has well-qualified,
professional fund management teams, who have been highly empowered
to manage funds with greater efficiency and accountability in the sole
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interest of unit holders. The fund managers are also ably supported with a
strong in-house equity research department. To ensure better management
of funds, a risk management department is also in operation.
It has reset and upgraded transparency standards for the mutual funds
industry. All the branches, UFCs and registrar offices are connected on a
robust IT network to ensure cost-effective quick and efficient service. All
these have evolved UTI Mutual Fund to position as a dynamic,
responsive, restructured, efficient, and transparent and SEBI compliant
entity.
UTI AMC has been promoted by four sponsors each holding 25% paid-up capital :-
Bank of Borada (BOB)Life Insurance Corporation of India (LIC)Punjab National Bank (PNB) andState Bank of India (SBI)
Key People
Shri U.K.Sinha
(Chairman and Managing Director)
Shri A K Sridhar(Chief Investment Officer)
Shri Jaideep Bhattacharya(Chief Marketing Officer)
Shri Imtaiyazur Rahman(Chief Finance Officer, Company Secretary and Head HRD)
Shri S C Dikshit(Chief Legal Advisor and Head of Internal Audit and RiskManagement)
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Shri F Q Kolman(Head of Operations and Investor Service)
Shri Ashish M Ranawade
(Head of Portfolio Management Services Division)
Fund managers
A K Sridhar
Amandeep Chopra
Sanjeev Bhasin
Sanjay Ramdas Dongre
Swati Kulkarni
Siddharth Dembi
Gautami Desai
Harsha Upadhyaya
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UTI Bank
About UTI Bank
UTI Bank was the first of the new private banks to have begun operationsin 1994, after the Government of India allowed new private banks to be
established. The Bank was promoted jointly by the Administrator of the
specified undertaking of the Unit Trust of India (UTI - I), Life Insurance
Corporation of India (LIC) and General Insurance Corporation Ltd. and
other four PSU companies, i.e. National Insurance Company Ltd., The
New India Assurance Company, The Oriental Insurance Corporation and
United Insurance Company Ltd. The Bank today is capitalized to the
extent of Rs. 280.51 Crores with the public holding (other than
promoters) at 72.46 %.
The Bank's Registered Office is at Ahmedabad and its Central Office is
located at Mumbai. Presently the Bank has a very wide network of more
than 469 branch offices and Extension Counters. The Bank has a network
of over 2016 ATMs providing 24hrs a day banking convenience to its
customers. This is one of the largest ATM networks in the country. The
Bank has strengths in both retail and corporate banking and is committed
to adopting the best industry practices internationally in order to achieve
excellence.
Promoters
UTI Bank Ltd. has been promoted by the largest and the best Financial
Institution of the country, UTI. The Bank was set up with a capital of Rs.
115 crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore and
GIC and its four subsidiaries contributing Rs. 1.5 crore each.
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About the Company
Franklin Templeton Investments, global investment management major,
started their India operations in 1996 as Templeton Asset Management
India Pvt. Limited. It flagged off the mutual fund business with the
launch of Templeton India Growth Fund in September 1996.
Over the years, Franklin Templeton has emerged as one of the largest and
renowned mutual funds in the country. Franklin Templeton has over
Rs.24,198 crore under management as of Aug 2006.
Franklin Templeton Asset Management (India) Private Limited acts asthe asset management company with Templeton holding a majority of 75
per cent of the equity. The fund management is headed by Mark Mobius,
who is also a director of the AMC and one of the best fund managers in
the world.
The board of directors of the company has Gregory Johnson, president ofFranklin Templeton USA as its chairman. Deepak Satwalekar of HDFC
and Rajan Raheja are the other prominent members.
Franklin Templeton Investments is one of the largest financial
services groups in the world based at San Mateo, California USA. The
group has US$ 511.3 billion in assets under management globally (as of
Sep 30, 2006).
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Franklin Templeton has offices in 33 locations across India and
manages assets of Rs.23060.19 crores for around 19 lakh investors as of
September 30, 2006.
Franklin Templeton Investments offers more than 200 investment
products under the Franklin, Templeton, Mutual Series, Bissett and
Fiduciary Trust names globally, providing investors with the flexibility to
choose from a great variety of goalsfrom value to growth and sector
specific to internationalto meet their individual investment objectives.
The group, Frnaklin Templeton Investments is a California (USA)
based company with a global AUM of US$ 409.2 bn. (as of April 30,
2005). It is one of the largest financial services groups in the world.
Investors can buy or sell the Mutual Fund through their financial advisor
or through mail or through their website. They have Open end Diversified
Equity schemes, Open end Sector Equity schemes, Open end Hybrid
schemes, Open end Tax Saving schemes, Open end Income and Liquid
schemes, Closed end Income schemes and Open end Fund of Fundsschemes to offer.
It has over 50 years of experience in international investment
management and offices in over 20 countries services more than 10
million unit holders.
Templeton Asset Management Company, a company incorporated underthe Companies Act, 1956, is a part of the Franklin Templeton Group. The
sponsor of the Fund Templeton International Inc., is a wholly owned
subsidiary of Templeton Worldwide Inc., which in turn is a wholly
owned subsidiary of Franklin Resources Inc. The Franklin Templeton
Group is one of the world s largest Investment Management Companies.
It has over 50 years of experience in International Investment
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Management with 34 offices in over 23 countries, which service over 10
million unit holders. Templeton started operations in Mumbai, India in
January 1996.Templeton in India has 8 different funds. Templeton has
eleven offices including Mumbai, Delhi, Calcutta, Pune, Chennai,
Bangalore, Cochin and Hyderabad.
Key Personnel
Gregory E. Johnson (Chairman), J. Mark Mobius, Deepak Satwalekar,
Navroz H. Seervai, P. Vaidyanathan, Rajan Raheja, Vijay C. Advani,
Vivek Kudva (President in India), B Swaminathan (Head of Operations),
Vivek Pai (Compliance Officer), Gaurav Nagori.
Fund Managers
J Mark Mobius, K. N. Siva Subramanian, Sukumar Rajah .
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The Marketing Mix
(The 4 P's of Marketing)
Marketing decisions generally fall into the following four controllable
categories:
Product
Price
Place (distribution)
Promotion
The term "marketing mix" became popularized after Neil H. Borden
published his 1964 article, The Concept of the Marketing Mix. Borden
began using the term in his teaching in the late 1940's after James
Culliton had described the marketing manager as a "mixer of
ingredients". The ingredients in Borden's marketing mix included product
planning, pricing, branding, distribution channels, personal selling,
advertising, promotions, packaging, display, servicing, physical handling,
and fact finding and analysis. E. Jerome McCarthy later grouped these
ingredients into the four categories that today are known as the 4 P's of
marketing, depicted below:
The Marketing Mix
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These four P's are the parameters that the marketing manager can control,
subject to the internal and external constraints of the marketing
environment. The goal is to make decisions that center the four P's on the
customers in the target market in order to create perceived value and
generate a positive response.
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CHAPTER IV
Analysis and interpretation of data
Findings from 4P,s among companys
Findings from data collected through
questionnaire
Suggestions
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Analyzing 4Ps
So now taking into consideration about the 4 Ps of marketing of the
AMCs taken for the study.
PRODUCT
TATA ASSET MANAGEMENT PRIVATE LIMITED
FRANKLIN TEMPLETON ASSET MANAGEMENT(INDIA) PVT. LTD.
UTI MUTUAL FUND
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No. of schemes 62
No. of schemes including options 165
Equity Schemes 32
Debt Schemes 130
Equity & Debt 3
Corpus under managementRs.12474.3579 Crs. as on Oct 31, 2006
No. of schemes 55
No. of schemes including options 139
Equity Schemes 37
Debt Schemes 88
Equity & Debt 6
Corpus under management
Rs.23920.2628 Crs. as on Oct 31, 2006
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Table 1
Chart1.
5655
62
50
52
54
56
58
60
62
PRODUCTS
UTI
FRANKLIN
TATA
Interpretation 1: Herewe can see that TATA is having more products
than the other AMCs. But TATA numbers of products increased since
TATA had put concentration on debt products more.
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No. of schemes 56
No. of schemes including options 155
Equity Schemes 31
Debt Schemes 37
Equity & Debt 8
Corpus under management
Rs: 37,789.97 Crs. As on Oct 31, 2006
AMCsPRODUCTS (INCLUDING
OPTIONS)
UTI 56(155)
FRANKLIN TEMPLETON55(139)
TATA62(165)
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PRICE
Table 2
AMCs
PRICE
LUMPSUM (MIN) SIP (MIN)
UTI 5000 1000
FRANKLIN TEMPLETON5000 500
TATA5000 1000
Interpretation 2: Franklin has an advantage over here, why because they
are having SIP (Systematic Investment Plan) starting from Rs: 500. Here
they can cater to average income group as well. So here Franklin has a
competitive advantage over other two AMCs.
PLACE
Table 3
AMCs PLACE
UTIBank Branches 469
AMC Branches 69
FRANKLIN TEMPLETONTOTAL 538
AMC Branches 33
TATA AMC Branches 39
Interpretation 3: Here UTI is having a competitive advantage over the
other two companies. As all the new generation banks deal with all the
AMCs products still the preference is given to the home brand. So here
UTI is have a superiority over the other.
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PROMOTION
Now viewing the promotional side of these mutual funds, first of
all we shall see the ways and method in common to all the 3
AMCs.
COMMON
1. Television advertisement.
2. Advertisement through print media.
3. Broachers and fund fact sheets and Banners
4. Their own official site and advertisement through other
sites.
5. During the launch of NFO (New Fund Offer) the AMCs
conduct meet in which their existing customers, VIPs,
advisors, bank officials etc are invited.
6. Direct mailers to the existing customers.
7. For to motivate the advisors in the bank as well the
employees dealing with mutual fund in stock broking
firms, the AMCs provide the some gift to them.
8. Both Franklin and TATA AMCs appoint executives in
bank branches on a temporary basis.
SPECIAL
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1. UTI has permanent staffs for to deal with mutual fund
section.
2. For to promote their product their own bank is the most
powerful tool with the UTI. As most the people involved
in share trading opens account with UTI as the
transaction processes are very quick. Another advantage
that the UTI Bank has over the other banks is that they
provide AT PAR cheque to the customers opening an SB
account with them. So which is convenient for the other
bankers take the investments.
3. UTI bare the expenses of some activities (party)
conducted by the UTI bank. On other hand the other two
AMCs bare the expenses of the activities of most of the
new generation banks, since the banker over there are the
people who generate business for them.
4. Franklin Templeton has of one the best strategy where
the company has its products where the investment can
be started from Rs: 500. Hence with this strategy is one
of the reason that they are able to grab market share and
their customer base is also large.
Analysis of Data Collected through Questionnaire
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Table1 Customer awareness about mutual funds
Response No. of respondents
Yes 30No 70
Chart1.
AWARENESS
YES
NO
Interpretation 1: In the sample taken of 100 out of HDFC customers,30% were aware of mutual funds.
Table2 Media through which customers came to
know about mutual funds
Chart 2
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Media No. of responseTelevision 7
Newspaper 8
Magazines 12
Others 3
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78
12
3
0
2
4
6
8
10
12
TELEVISION
NEWSPAPER
MAGAZINE
OTHERS
Interpretation 2: Majority of the investors came to know about mutual
funds through Magazines. Some of them came to know from other
sources such as from advertisements through Television, News Papers
etc. While specifically speaking about the channels, it was found that
NDTV PROFIT is the most effective channel that would be mosteffective regarding visual media advertising.
Table3 Customers invested in mutual funds
Response No. of respondentsYes 7
No 93
Chart 3
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CUSTOMERS INVESTED IN MUTUAL FUNDS
7%
93%
YES
NO
Interpretation 3: Regarding investment it was found that only 7% of the
HDFC customers were only had done investments in mutual funds. So
this proves that there is lots of opportunities for the AMCs to exploit the
Kannur market.
Table4 Customers preference of schemes in mutual
funds
Scheme No. of respondentsEquity 79
Debt 0
Balanced 19
Chart 4
PREFERENCE FOR INVESTMENT
79%
21%
EQUITY
BALANCED
Interpretation 4: Many of the investors were interested in equity
schemes. This is because of the tremendous growth in the equity market
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in the recent past. This reveals that investors are looking for more returns.
Only the corporate investors go for debt.
Table5 Investment pattern of the customers
Investments % of respondentsShares 5%
Bank Deposits 62%
Insurance 52%
Bonds 0%
Government Securities 0%
Post Office Savings 58%
Others 18%
Chart 5
2
62
52
0 0
58
18
0
10
20
30
40
50
60
70
PATTERN OF INVESTMENTS
SHARE
BANK
DEPOSITSINSURANCE
BOND
GOVT
SECURITIESP.O.SAVINGS
OTHERS
Interpretation 5: Investment pattern reveals that the customer has more
investments in Bank deposits, Insurance and Recurring Deposits, but if
the AMCs are able to make awareness about the mutual funds and its
returns, the companies can take advantage of the Kannur market well. SIP
can be a really well substitute for RDs.
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31
56
85
0
10
20
30
40
50
60
O BJ E C T IV E S O F S AV I
INCOME
SAFETY
LIQU ID IT
TA X
SAVING
Table 6 Customers objective of saving
Objective No. of respondentsIncome 31
Safety 56
Liquidity 8
Tax Savings 5
Chart 6.A
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Chart6.B
OBJECTIVES OF SAVINGS
31, 31%
56, 56%
8, 8% 5, 5%
INCOME
SAFETY
LIQUIDITY
TAX SAVING
Interpretation 6: From the objectives of investments of the customers
56% of the customers are looking forward for the safety again here there
is much scope for SIPs, since the risks for SIPs are very low. 31% of the
customers are looking forward for the income generation, so in addition
to the existing customers who have invested in mutual fund there is 24%
more customers who are really interested in income generation. 8% of the
customers are looking for liquidity, as mutual fund can be exited at any
time this category of customers are also can be tapped out. And now 5%
of the customers are looking forward for tax benefit. Here the tax benefit
funds have greater importance.
Table 7 Factors influencing investments
Factors No: of Respondent Performance of fund 22
Advertisement 1
Recommendation of Advisors 6
Broachers 1
Chart 7
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FACTORS INFLUENCING INVESTMENT
22, 74%
1, 3%
6, 20% 1, 3%
PERFORMANCE OF
FUND
ADVERTIDSEMENTS
RECOMMENDATION
BROACHERS
Interpretation 7: 74% of the investors decides their investment in
mutual fund based on the performance of the fund and 20% based on
the recommendations of the advisors. Here advertisements of the
AMCs should mainly concentrate on the performance of the rather
than making it colorful and just giving vague about the funds.
Table 8 Knowledge about Mutual Fund schemes
Response No: of Respondent Not at all 70
Fairly 19
Very Good 11
Chart 8
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KNOWLEDGE ABOUT MUTUAL FUND
70%
19%
11%
NOT AT ALLFAIRLY
VERY GOOD
Interpretation 8: Knowledge about the mutual for is very low among
the customers in Kannur (81%). Hence AMCs should give moreimportance for to create awareness rather than directly going into for
sales.
Table 9 Preference for Equity schemes
Preferences No: of Respondent Recommendations of Advisors 18
High Return 8
Low Loads 4
Chart 9
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PREFERENCE FOR EQUITY FUNDS
18, 60%8, 27%
4, 13% RECOMMENDATION
OF ADVISORSHIGH RETURNS
LOW LOADS
Table 10 Reason to choose Mutual Fund
Response No. of respondents
Not at all 1
High Returns 7Liquidity 5
Transparency 4
Diversification 13
Chart 10
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REASON TO CHOOSE MUTUAL FUND
1, 3%7, 23%
5, 17%4, 13%
13, 44%
NOT AT ALL
HIGH RETURNS
LIQUIDITY
TRANSPARENCY
DIVERSIFICATION
Interpretation 10: 44% of the customers will choose mutual fund for
their investment, since its more risk less than share trading and mutual
funds are having diversification. 23% would like to go for more returns
since they are of the reason that its gives more returns than the fixed
deposits and RD of post office.
Table 11 Customers preference regarding SIP and
Lump sum
Response No. of respondentsSIP 92
LUMPSUM 8
Chart 11
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8%
92%
LUMPSUM
SIP
Interpretation 11: At present market condition (14000+ points) 92% of
the customers would like to go for SIP (Systematic Investment Plan).
Since risk factor is less in the case of SIP compared to lump sum
investment.
Table 12 Category of customers investing in Mutual
Fund (Employment)
Category No: of respondent Self Employed 4
Employed 1
Retired 2
Chart 12
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CATAGORY OF CUSTOMERS
4, 57%2, 29%
1, 14%
SELF EMPLOYED
RETIRED
EMPLOYED
Interpretation 12: In Kannur its found that business people are
investing in mutual funds (57%). And following them its the retired
people going for investment (29%).
Table 13 Category of customers invested/interested in
Mutual Fund (Age)
Age No of Response
20-30 3
30-40 9
40-50 11
50-60 5
60< 2
Chart 13. A
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AGE CATEGORY
3, 10%
9, 30%
11, 36%
5, 17%2, 7%
'20-30
30-40
40-50
50-60
60