mutual funds.doc

download mutual funds.doc

of 71

  • date post

  • Category


  • view

  • download


Embed Size (px)


study of mutual funds in india

Transcript of mutual funds.doc


A Project Report On INVESTMENT ANALYSIS AND PROSPECT OF MUTUAL FUNDSubmitted for the partial fulfillment of






ACKNOWLEDGEMENTThe satisfaction which accompanies the successful completion of any task would be incomplete without the mention of people who made it possible. Because the success is the epitome of hard work, perseverance, undeterred missionary zeal, determination and most encouraging guidance and advice serving as a beacon light and crowing out effort with success. I express my sincere thanks to my project guide Mrs. Priyanka Thakur for his whole-hearted support, inspiring guidance and encouragement throughout the project work



TABLE OF CONTENTSS.No.1 2 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

ParticularsExecutive Summary Company profile Objective &scope of study Introduction to the topic Concept of mutual fund Organization of mutual fund Advantages of mutual Funds. Drawbacks of mutual Funds. Evolution of mutual Funds Types of mutual Funds Major mutual Fund companies How to compare mutual fund Future of mutual fund Regulatory aspects Research Methodology Questionnaire & Information Analysis Through Graphical Representation Observation & Findings Suggestions Limitations Bibliography & References

Page No.4 5 7 9 12 15 16 18 20 23 26 34 36 39 43 46 65 66 68 69



4 The project titled INVESTMENT ANALYSIS AND PROSPECT OF MUTUAL FUND was carried out for ANANDRATHI FINANCIAL SERVICES. Anand Rathi Financial Services is the brokerage firm. In this project report I have made an analysis that what is the investment pattern, what is the prospect and how Mutual Funds have emerged a better investment option in India in recent years giving the investors higher returns, liquidity, safety against traditional investment avenues like- bank FD, post office savings, investment in volatile stock market etc. With the growth of the Indian economy due to various economic factors including industrialization, growth of infrastructure & services industries, increased foreign direct investment & foreign institutional investments, the Indian companies have grown to become Global Business Giant . So, the market capitalization of the Indian companies has grown which has resulted in the building of a strong capital market. People are also now more willing to invest and are ready to take risk. All this development has proved to be a good atmosphere for Mutual Fund investments in India. Now a days investment of savings has assumed great importance. Mutual Funds offer a wide array of schemes to suit the customers different investment objectives as per their financial position, risk taking capability, age etc.




Anand Rathi (AR) is a leading full service securities firm providing the entire gamut of Financial Services. The firm, founded in 1994 by Mr. AnandRathi, today has a pan India presence as well as an international presence through offices in Dubai and Bangkok. AR provides a breadth of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and insurance - all of which are supported by powerful research teams. The firm's philosophy is entirely client centric, with a clear focus on providing long term value addition to clients, while maintaining the highest standards of excellence, ethics and professionalism. The entire firm activities are divided across distinct client groups: Individuals, Private Clients, Corporate and Institutions. 1994: Started activities in consulting and Institutional equity sales with staff of 15 . 1995: Set up a research desk and empanelled with major institutional investors 1997: Introduced investment banking businesses Retail brokerage services launched. 1999: Lead managed first IPO and executed first M & A deal



2001: Initiated Wealth Management Services 2002: Retail business expansion recommences with ownership model. 2003: Wealth Management assets cross Rs1500 croreRetail Branch network exceeds 50 Insurance broking launched Launch of Wealth Management services in Dubai.

2004: Retail Branch network expands across 100 locations within Indian Commodities brokerage and real estate services introduced Wealth Management assets cross Rs3000croresInstitutional equities business relaunched and senior research team put in place.2005:

Retail Branch network expands across 180 locations within India Real Estate Private Equity Fund Launched.



7 The objective is to check the popularity & growth of Mutual Funds and whether Mutual Funds are really having a better prospect in India. The needs and wants of the client is taken into consideration In this project the great emphasis is given to understand what investor want out of their investments in different schemes of Mutual Fund, how they compare it with traditional investment instruments, what is the number of increase in the investor base.



8 The scope of the study is inform & guide the investors about the various Mutual Fund Schemes and helps them to select the best scheme as per their requirement. Investors are the customers of the different companys mutual funds schemes during my project I worked with Anand Rathi Financial Services, Bhilwara.

Reasons For Selecting The TopicTo Study the Investment Pattern and what is the prospect of mutual fund.

In the primary capital market, Mutual Funds serve as a link between the saving public and the corporate sector, as they channelize savings from investors and corporations. In the secondary capital markets, they participate as investors and trade with other investors. By the very nature of their activities and by virtue of being knowledgeable and informed investors, they influence the markets and play an active role in promoting good corporate governance, investor protection and the health of capital markets.

Mutual funds have imparted much needed liquidity into the financial system and have provided an alternative to the dominant role of banking and financial institutions in the financial markets.

INTRODUCTIONWe can study the growth of Mutual Funds in broadly two parts :1. Global Scenario 8

9 2. Indian scenario

Global ScenarioMutual Funds have emerged as relatively new attractive option for the investments worldwide in recent years. The traditional investment options Like- Bank FD, post office Savings, Govt. Bonds and Investment in the Shares are no longer very attractive , because Govt. deposits give lesser returns and Stock market is very much volatile which makes the investments risky . So, all this has resulted into the emergence of Mutual Funds which gives Comparatively Higher returns with safety. Mutual Funds now represent the most appropriate investment opportunity for the small investors. As financial markets become more sophisticated and complex, investors need a financial intermediary who provides the required knowledge and professional expertise on successful investing. The popularity of Mutual Funds can be imagined from the fact that in the birthplace of Mutual Funds the U.S.A. - the fund industry has already overtaken the banking industry, with more money under Mutual Fund management than deposited with banks.

Indian ScenarioThe Indian Mutual Fund industry has opened up many exciting opportunities to Indian investors. A new phenomenon has started under which more savings now being entrusted to the funds .Despite the expected continuing growth in the industry, Mutual Fund is still a new financial intermediary in India. 9


Hence, it is important that the investors, the Mutual Fund agents/distributors, financial planners, investment advisors and even the fund employees acquire the better knowledge of what Mutual Funds are, what they can do for investors and what they cannot, and how they function differently from other financial intermediaries such as banks. Place of Mutual Funds in Financial Markets Indian households started allocating more of their savings to the capital markets in 1980s, with investments flowing into equity and debt instruments, besides the conventional mode of bank deposits. With greater volatility in the stock markets, many investors who bought highly priced shares lost money, and withdrew from the markets altogether. Even those investors who continued as the direct investors in the stock markets realized that the key to successful Besides, selecting the securities with growth and income potential from the capital market involved careful research and monitoring of the market , which was not possible for all investors. Under similar circumstances in other countries, Mutual Funds had emerged as professional intermediaries. Besides providing the expertise in the stock market investing, these funds allow investing in small amounts and yet holding a diversified portfolio to limit risk, while providing the potential for income and growth that is associated with debt and equity instruments.


11 Investment Features Risk/return High potentialStocks Fixed-Income Investments Annuities Money Market Funds Time Deposits (CDs)


Low (fixed)High (variable)



Key objective

Growth of capital

Regular income

Retirement income

Competitive interest on cash reserves

Competitive interest on cash reserves Conservative investors